-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Tmd90IP7Zfo3OjxCG9zLybzUW4IKPftha0FDTMXQARrOWfJowWuS6Cnnb2YaVWJ0 uNPfVyoTV/2khSLyIkCV2Q== 0000007649-94-000002.txt : 19940711 0000007649-94-000002.hdr.sgml : 19940711 ACCESSION NUMBER: 0000007649-94-000002 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASARCO INC CENTRAL INDEX KEY: 0000007649 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94536410 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 FORM 11-K FOR SAVINGS PLAN SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 1993 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, 1993 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 Title of each class on 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 March 16, 1994, there were of record 41,800,237 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 $1,108 million. PORTIONS OF THE FOLLOWING DOCUMENTS ARE INCORPORATED BY REFERENCE: Part III: Proxy statement in connection with the Annual Meeting to be held on April 27, 1994. Part IV: Exhibit index is on pages D1 through D3. ASARCO Incorporated and Subsidiaries FORM 10-K/A December 31, 1993 INDEX PAGE NUMBER FORM 10-K/A i ITEM 14 ii EXHIBIT INDEX D1 - D3 FORM 11-K D14 - D28 ASARCO Incorporated and Subsidiaries FORM 10-K/A December 31, 1993 The undersigned registrant hereby amends the 1993 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 Statement 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 29, 1994 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) D1 ASARCO Incorporated EXHIBIT INDEX (Continued) 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 represents long-term debt securities in excess of 10% of the total assets of Asarco as of December 31, 1993 (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) 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) D2 ASARCO Incorporated EXHIBIT INDEX (Continued) Exhibit Indexed No. Description on page 10. (a) Stock Option Plan as amended through November 24, 1987 (Filed as an Exhibit to the Company's 1988 Annual Report on Form 10-K and incorporated herein by reference) (b) Form of Employment Agreement entered into in 1985, as amended in March and April 1989, among the Company and currently 12 of its executive officers, including Messrs. R. de J. Osborne, F.R. McAllister, A.B. Kinsolving, R.J. Muth and R.M. Novotny (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) (c) Deferred Fee Plan for Directors, as amended through January 26, 1994 D9-D13 (d) Supplemental Pension Plan for Designated Mid-Career Officers, as amended through January 31, 1990 (Filed as an Exhibit to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference) (e) Retirement Plan for Non-Employee Directors, as amended through January 25, 1989 (Filed as an Exhibit to the Company's 1988 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 (Filed as an Exhibit to the Company's 1990 Annual Report on Form 10-K and incorporated herein by reference) 11. Statement re Computation of Earnings Per Share D-4 21. Subsidiaries of the registrant D5 - D8 23. Report of Independent Accountants on Financial Statement Schedules and Consent of Independent Accountants are included on page A58 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. D14 - D 28 Copies of exhibits may be acquired upon written request to the Treasurer and the payment of processing and mailing costs. D3 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, 1993 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, 1993 and 1992 Savings Plan of ASARCO Incorporated and Participating Subsidiaries INDEX Page Number ______ Report of Independent Accountants D15 Statement of Net Assets Available for Plan Benefits at December 31, 1993 D16 Statement of Net Assets Available for Plan Benefits at December 31, 1992 D17 Statement of Changes in Net Assets Available for Plan Benefits for the year ended December 31, 1993 D18 Notes to Financial Statements D19-25 Supplemental Schedules: Form 5500 Item 27a-Schedule of Assets Held for Investment Purposes at December 31, 1993 D26 Form 5500 Item 27d-Schedule of Reportable Transactions for the year ended December 31, 1993 D27 Consent of Independent Accountants D28 D14 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 plan benefits of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries (the "Plan"), as of December 31, 1993 and 1992, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1993. 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 plan benefits of the Plan at December 31, 1993 and 1992, and the changes in net assets available for plan benefits for the year ended December 31, 1993 in conformity with generally accepted accounting principles. Our audits were made 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 1, 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 supplemental schedules have been subjected to the auditing procedures applied in the audit 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 New York, New York June 1, 1994 D15
Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Net Assets Available for Plan Benefits at December 31, 1993 (dollars in thousands) Vanguard Index Asarco Short Vanguard Vanguard Vanguard Fixed Trust Common VMMR Term U.S. Vanguard Extended U.S. Windsor Income 500 Stock Prime Treasury Wellington Market Growth II Loan Fund Portfolio Fund Portfolio Portfolio Fund Fund Fund Fund Fund Total _____ _________ ______ _________ _________ _____ _____ _____ _____ _____ ______ ASSETS: Investments, at fair value (Notes 3 and 4): ASARCO Common Stock Fund 1,930,424 units (cost: $17,873) $16,525 $16,525 Vanguard: Money Market Reserves - Prime Portfolio (cost approximates market) $ 2,373 $12,213 14,586 Index Trust - 500 Portfolio 381,714 units (cost: $15,320) $16,731 16,731 Fixed Income Securities Fund - Short Term U.S. Treasury Portfolio 780,443 units (cost: $8,034) $8,101 8,101 Wellington Fund 180,033 units (cost: $3,614) $3,673 3,673 Index Extended Market Fund - 37,276 units (cost: $691) $724 724 U.S. Growth Fund 47,733 units (cost: $712) $713 713 Windsor II Fund 146,987 units (cost: $2,479) $2,505 2,505 Wachovia Bank of North Carolina: Guaranteed Investment Contracts (at cost plus interest) 9,710 9,710 Loans to Participants (Note 6) $3,606 3,606 _______ _________ _______ _________ _________ __________ ________ ________ ________ ______ _______ Total Investments 12,083 16,731 16,525 12,213 8,101 3,673 724 713 2,505 3,606 76,874 Contributions Receivable: Participant 150 20 91 71 73 22 17 59 503 Company 182 182 Interest Receivable 18 18 Loans Receivable 40 6 22 15 22 5 4 21 (135) _______ _________ _______ _________ _________ __________ ________ ________ ________ ______ _______ TOTAL ASSETS 12,083 16,921 16,733 12,326 8,187 3,768 751 734 2,585 3,489 77,577 _______ _________ _______ _________ _________ __________ ________ ________ ________ ______ _______ NET ASSETS AVAILABLE FOR PLAN BENEFITS $12,083 $16,921 $16,733 $12,326 $8,187 $3,768 $751 $734 $2,585 $3,489 $77,577 ======= ========= ======= ========= ========= ========== ======== ======== ======== ====== =======
See notes to financial statements. D16
Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Net Assets Available for Plan Benefits at December 31, 1992 (dollars in thousands) Vanguard Short Term Fixed Index Trust Asarco U.S. Income 500 Common VMMR Prime Treasury Fund Portfolio Stock Fund Portfolio Portfolio Loan Fund Total ______ __________ __________ ___________ _________ _________ ______ ASSETS: Investments, at fair value (Notes 3 and 4): ASARCO Common Stock Fund 1,713,807 units (cost: $16,562) $16,041 $16,041 Vanguard: Money Market Reserves-Prime Portfolio (cost approximates market) $10,879 3,070 13,949 Index Trust - 500 Portfolio 354,343 units (cost: $13,932) $14,518 14,518 Fixed Income Securities Fund - Short Term U.S. Treasury Portfolio 499,912 units (cost: $5,067) $5,154 5,154 Investment Contract Trust (at cost plus interest) 4,088 4,088 Wachovia Bank of North Carolina: Guaranteed Investment Contracts (at cost plus interest) 15,284 15,284 Loans to Participants (Note 6) $3,192 3,192 ___________ ___________ __________ ___________ __________ __________ ___________ Total Investments 30,251 14,518 16,041 3,070 5,154 3,192 72,226 Contributions Receivable: Participant 216 201 24 31 65 537 Company 194 194 Interest Receivable 18 18 ___________ ___________ __________ ___________ __________ __________ ___________ TOTAL ASSETS 30,467 14,719 16,259 3,101 5,219 3,210 72,975 ___________ ___________ __________ ___________ __________ __________ ___________ NET ASSETS AVAILABLE FOR PLAN BENEFITS $30,467 $14,719 $16,259 $3,101 $5,219 $3,210 $72,975 =========== =========== ========== =========== ========== ========== ===========
See notes to financial statements. D17
Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Changes in Net Assets Available for Plan Benefits at December 31, 1993 (dollars in thousands) Vanguard Index Asarco Short Vanguard Vanguard Vanguard Fixed Trust Common VMMR Term U.S. Vanguard Extended U.S. Windsor Income 500 Stock Prime Treasury Wellington Market Growth II Loan Fund Portfolio Fund Portfolio Portfolio Fund Fund Fund Fund Fund Total _____ ________ _____ ________ _________ _____ _____ _____ _____ ____ ______ ADDITIONS: Investment Income (Note 3) Dividends $ 435 $ 339 $ 204 $ 379 $ 168 $ 15 $ 10 $ 122 $ 1,672 Interest $ 1,301 $216 1,517 ________ _________ _______ _________ _________ __________ ________ ________ ________ _______ _______ Total 1,301 435 339 204 379 168 15 10 122 216 3,189 Net Appreciation and Depreciation in the Fair Value of Investments 1,054 (1,116) 24 74 39 (5) 34 104 (Note 3) Contributions (Notes 3, 4 & 5) Participants 2,097 280 2,020 905 475 98 170 340 6,385 Company 2,299 2,299 Loan Repayments 50 593 96 580 242 131 24 45 98 (1,859) (Note 6) Transfer from 19 10 20 12 3 9 73 Other Plan Interfund transfers (16,411) (257) 120 7,700 2,348 3,191 623 552 2,134 ________ _________ _______ _________ _________ __________ ________ ________ ________ _______ _______ TOTAL (15,041) 3,932 2,038 10,516 3,901 4,039 799 772 2,728 (1,634) 12,050 DEDUCTIONS Withdrawals 2,677 1,017 1,486 1,043 757 190 26 12 80 151 7,439 Loans (Note 6) 666 713 77 248 176 81 14 26 63 (2,064) Other 1 8 9 ________ _________ _______ _________ _________ __________ ________ ________ ________ _______ _______ TOTAL 3,343 1,730 1,564 1,291 933 271 48 38 143 (1,913) 7,448 Net Increase (Decrease) (18,384) 2,202 474 9,225 2,968 3,768 751 734 2,585 279 4,602 NET ASSETS AVAILABLE FOR PLAN BENEFITS, BEGINNING OF YEAR 30,467 14,719 16,259 3,101 5,219 3,210 72,975 ________ _________ _______ _________ _________ __________ ________ ________ ________ _______ _______ NET ASSETS AVAILABLE FOR PLAN BENEFITS, END OF YEAR $12,083 $16,921 $16,733 $12,326 $8,187 $3,768 $751 $734 $2,585 $3,489 $77,577 ======== ========= ======= ========= ========= ========== ======== ======== ======== ======= =======
See notes to financial statements. D18 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements 1. Plan Description 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 were 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 a stock interest in the Company. In 1993, participants were able to invest in one or a combination of eight funds: the Vanguard Index Trust-500 Portfolio; the Asarco Common Stock Fund; the Vanguard Money Market Reserves-Prime Portfolio; the Fixed Income Securities Fund-Short Term U.S. Treasury Portfolio; the Vanguard Wellington Fund; the Vanguard Windsor II; the Vanguard U.S. Growth Portfolio; and the Vanguard Index Trust-Extended Market Portfolio. Reference should be made to the Plan document for a complete description of the Plan including eligibility requirements and vesting provisions. 2. Significant Plan Amendments On November 23, 1993, the Plan was amended effective January 1, 1994 to comply with regulations issued by the Department of Labor under Section 404(c) of ERISA and the Omnibus Budget Reconciliation Act of 1993, which limited annual covered compensation to $150,000. On April 28, 1993, the Plan was amended effective January 1, 1993 to permit direct rollover to another qualified plan or IRA and impose a mandatory 20% withholding on the taxable portion of an in-service withdrawal or distribution not utilizing direct rollover. On July 29, 1992, the Plan was amended as follows: to extend to retirees or beneficiaries a ban on transfers between competing fixed dollar investments; to permit the transfer between investment funds of former employer contributions which were merged into the Savings Plan as a result of acquisitions; to require a period of suspended pre-tax contributions following withdrawal of matching Company contributions; and to clarify the right of the Company to recover contributions for which tax deductions have been disallowed. On February 26, 1992 the Plan was amended to reflect the change in trustee, recordkeeper, and investment manager. Other amendments include administrative and technical changes required to comply with the rules of the Internal Revenue Service. D19 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued 3. Summary of Significant Accounting Policies Investments Valuation: Investments in equity securities listed on an exchange are valued at the latest quoted sales price on the valuation date. Securities not traded or unlisted are valued at the mean of the latest quoted bid and asked prices. Bond investments are valued utilizing the latest bid prices. Short-term investments are stated at amortized cost which approximates market. Investments in the Fixed Income Fund are valued by the investment manager at cost plus reinvested interest. Fixed income contracts may be valued below cost plus interest in the event that an issuer defaults under a contract or if a penalty is assessed for early termination of a performing contract. 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. The Plan presents, in the statement of changes in net assets, the net change in the fair value of its investments which consists of realized and unrealized gains or losses on those investments. Realized and unrealized gains and losses disclosed in the Plan's Form 5500 are calculated using revalued cost. Contributions: The Company's matching contributions are measured by reference to the participant's 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. Other: The Plan uses the accrual method for recognizing contributions, withdrawals and investment income. 4. Investment Funds Vanguard Fiduciary Trust Company ("Vanguard") is the investment manager and participant recordkeeper for all investment funds of the Plan. Vanguard is also the trustee of all the funds with the exception of certain investment contracts held in the Fixed Income Fund, for which Wachovia Bank of North Carolina, N.A. is trustee. D20 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued Upon enrollment in the Plan in 1993 participants directed their elected contributions to be invested in one or more of the following funds in multiples of 5%: Fixed Income Fund - A fund which consists of fixed income contracts and money market investments. At times, this fund will maintain a significant portion of its assets in money market investments to provide liquidity for transactions. After January 1, 1993, exchanges and employee elected contributions may no longer be invested in this fund as it will be phased out by December 31, 1994 or shortly thereafter. Vanguard Index Trust-500 Portfolio - A fund invested in all of the stocks included in the Standard & Poor's 500 Composite Index in approximately the same proportions as they are represented in the Index. 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. Vanguard Fixed Income Securities Fund-Short Term U.S. Treasury Portfolio - A fund invested primarily in short-term U.S. Treasury securities with an average maturity of two to three years. 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. Vanguard Index Trust - 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. Vanguard U.S. Growth Fund - A fund invested primarily in a diversified portfolio of common stocks with above-average growth potential. Vanguard Windsor II Fund - A fund invested in common stocks to provide capital appreciation and dividend income. Asarco Common Stock Fund - A fund that invests exclusively in ASARCO common stock with small amounts invested in the Vanguard Money Market Reserves-Prime Portfolio to allow for timely responsiveness to Plan transactions. The Plan also maintains the following fund: Loan Fund - A fund designed to facilitate the record keeping and other administrative functions relating to loans made to participants based on their account balances (See Note 6). These loans are receivables of the Plan. D21 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued There is some degree of risk with any investment, which is generally related to fluctuation in market value or, with respect to the Vanguard Money Market Reserves-Prime Portfolio and Fixed Income Funds, deterioration in credit quality. 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. Participants' net interests in each fund of the Plan are 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 as of December 31, 1993 and December 31, 1992:
1993 1992 Net Net Number Asset Number Asset of Value of Value Units Per Unit Units Per Unit ______ ________ ______ ________ Fixed Income Fund 12,082,786 $ 1.00 Fixed Income Fund 30,251,591 $ 1.00 Asarco Common Stock Fund 1,930,424 $ 8.56 Asarco Common Stock Fund 1,713,807 $ 9.36 Vanguard Index Trust - Vanguard Index Trust - 500 Portfolio 381,714 $43.83 500 Portfolio 354,343 $40.97 Vanguard Money Market Vanguard Money Market Reserves - Prime Portfolio 12,213,498 $ 1.00 Reserves - Prime Portfolio 3,070,332 $ 1.00 Vanguard Fixed Income Vanguard Fixed Income Securities Fund - Short Securities Fund - Short Term U.S. Treasury Portfolio 780,443 $10.38 Term U.S. Treasury Portfolio 499,912 $ 10.31 Vanguard Wellington Fund 180,033 $20.40 Vanguard Windsor II Fund 146,987 $17.04 Vanguard U.S. Growth Fund 47,733 $14.93 Vanguard Index Extended Market 37,276 $19.43 Fund
5. Contributions Each eligible employee wishing to participate in the Plan must elect to authorize pre-tax contributions 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 decrease or suspend the pre-tax contributions once each Plan Year. A participant may not otherwise alter the D22 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued amount of the elected pre-tax contributions until the beginning of the next Plan Year. The Internal Revenue Code of 1986, as amended, (the "Code") limited the maximum amount an employee may contribute on a pre-tax basis to $8,994 in 1993 and $8,728 in 1992. 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 Trustee is required to purchase ASARCO Common Stock. Contributions for the year ended December 31, 1993 consisted of the following: Cash $ 141 Asarco Common Stock 2,298,779 __________ $2,298,920 ========== 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 upon participation. 6. 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 account, or $50,000 reduced by the highest outstanding balance of any other Plan loan to such participant during the prior twelve-month period. A participant's loan is repayable within no more than 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 withholding from the participant's earnings. A participant may pre-pay a loan at any time without penalty. 7. Tax Status The Plan, as amended through July 27, 1988, 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, as last amended, will be submitted to the IRS for a determination. The Company expects that the Plan will continue to be qualified under the Code. D23 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued 8. Plan Expenses The Company pays all administrative expenses of the Plan including trust, recordkeeping, consulting, audit and legal fees. In addition, the Company pays for investment fees related to the fixed income contracts held by the Wachovia Bank of North Carolina. All investment fees related to Vanguard Mutual Funds are paid from the net assets of such funds. All taxes (excluding transfer taxes on shares of Asarco Common Stock distributed to participants or their beneficiaries), brokerage commissions and expenses directly related to the investment of the Plan assets are paid from the assets of the relevant fund of the Plan. 9. Termination Priorities The Company reserves the right to amend or discontinue the Plan by action of the Board of Directors 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 their share of the Plan net assets. 10. Executive Life Contract All contributions and transfers to the Fixed Income Fund made from January to December 1988 were invested in a fixed income contract providing a 9.5% rate of interest maturing December 31, 1992 with Executive Life Insurance Company (ELIC), the California subsidiary of First Executive Corporation. On April 11, 1991, the California State Insurance regulators placed ELIC in conservatorship, freezing its assets and providing time to evaluate alternatives such as selling the Company or rehabilitating it. During 1991, the Company made arrangements to protect participants' interests in this contract through its commitment to pay the full contractual value as of December 31, 1991 plus interest based on the blended rate of all contracts held in the Fixed Income Fund after December 31, 1991. Such rate is adjusted quarterly. The Company also obtained a five-year irrevocable letter of credit from Barclays Bank PLC, to further back this commitment. The Company received an exemption from the Department of Labor (the Exemption) to proceed with this transaction and to obtain an assignment of the contract up to the amount advanced on behalf of ELIC plus the blended rate of interest. The Exemption became effective as of December 2, 1991 and at that time the trustee and investment management responsibilities were transferred from State Street Bank and Trust Company to Wachovia Bank of North Carolina, N. A. (ELIC trustee). On September 3, 1993 the California Superior Court approved a rehabilitation plan for ELIC's successor, Aurora Life Assurance Company, in which plan sponsors were given the choice to participate in or not participate in the rehabilitation plan. As a result of this rehabilitation plan the Fixed Income Fund received a payment from ELIC in the amount of $577,393 on such date. The value of this contract at December 31, 1993 and December 31, 1992 was $1,950,314 and $3,770,858, respectively. D24 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued 11. Subsequent Event During February 1994, the Company and the ELIC trustee elected to not participate in the rehabilitation plan. As a result, on April 4, 1994, a cash payment was received from ELIC and the ELIC trustee forwarded $1,522,386 to the Fixed Income Fund of the Savings Plan. Between January 1994 and April 6, 1994, the Company advanced to the Plan an amount equivalent to the remaining contract value which eliminated the ELIC obligation in the Fixed Income Fund as agreed under the assignment entered into between the Company and the Plan pursuant to the Exemption dated December 2, 1991. Any future recoveries will be paid to the ELIC trustee for further payment to the Company to recover amounts advanced to the Plan since December 2, 1991 or, in the case of any excess amounts, to the Plan participants. D25 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Form 5500 Item 27a Schedule of Assets Held for Investment Purposes at December 31, 1993
Cost or Market Net Rate Maturity Book Value Value of Interest Date ___________ _______ __________ _____ Fixed Income Fund Vanguard Fiduciary Trust Company: Vanguard Money Market Reserves- Prime Portfolio Fund $ 2,373,348 $ 2,373,348 Wachovia Bank of North Carolina, N.A.: 1991 Contract - Aetna Life Insurance 332,227 332,227 7.0 03/31/94 1989 Contract - Hartford Life 3,358,568 3,358,568 8.5 01/03/94 1990 Contract - Principal Mutual 1,855,725 1,855,725 8.9 12/31/94 1991 Contract - Allstate Insurance 2,212,605 2,212,605 8.7 12/31/95 1988 Contract - Executive Life Insurance Company (Notes 10 and 11) 1,950,314 1,950,314 8.5 12/31/94 ___________ __________ Total Fixed Income Fund 12,082,787 12,082,787 * Vanguard Fiduciary Trust Company: Vanguard Index Trust - 500 Portfolio 15,319,586 16,730,520 * Asarco Common Stock Fund 17,873,132 16,524,429 * Vanguard Fixed Income Securities Fund - Short Term U.S. Treasury Portfolio 8,033,734 8,100,995 * Vanguard Money Market Reserves - Prime Portfolio 12,213,498 12,213,498 * Vanguard Wellington Fund 3,613,507 3,672,675 Vanguard Index Extended Market Fund 691,492 724,282 Vanguard U. S. Growth Fund 711,945 712,655 Vanguard Windsor II Fund 2,479,352 2,504,653 Loan Fund Participants' Loans - 3,606,388 6.0%-6.5% ____________ ___________ TOTAL INVESTMENTS $73,019,033 $76,872,882 ============ ===========
* Represents 5% or more of net assets available for plan benefits. D26 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Form 5500 Item 27d Schedule of Reportable Transactions for the year ended December 31, 1993
Number Number of of Purchase Selling Basis of Net Gain Description of Asset Purchases Sales Price Price Asset or (Loss) _____________________ _________ ______ ______ ______ _______ _________ Fixed Income Fund 147 191 $ 1,589,521 $19,754,522 $19,754,522 $ - Common Stock of ASARCO Incorporated 101 159 $ 3,853,540 $ 2,254,134 $ 2,498,374 $(244,240) Vanguard Index Trust- 500 Portfolio 93 184 $ 4,864,718 $ 3,705,416 $ 3,586,273 $ 119,143 Vanguard Money Market Reserves-Prime Portfolio 176 191 $11,888,087 $ 2,744,906 $ 2,744,906 $ - Vanguard Fixed Income Securities Fund-Short Term U.S. Treasury Portfolio 146 155 $ 5,273,692 $ 2,350,600 $ 2,329,247 $ 21,353 Vanguard Wellington Fund 130 67 $ 4,111,804 $ 513,605 $ 498,297 $ 15,308
D27 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 No. 33-45631) and on Form S-8 (File Nos. 2-67732, 2-83782 and 33-34606) of our report dated June 1, 1994 on our audits of the Statements of Net Assets Available for Plan Benefits of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries as of December 31, 1993 and 1992, the Supplemental Schedules as of December 31, 1993 and for the year then ended and the Statement of Changes in Net Assets Available for Plan Benefits for the year ended December 31, 1993, 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 1993 Annual Report on Form 10-K of ASARCO Incorporated. New York, New York June 24, 1994 D28 -----END PRIVACY-ENHANCED MESSAGE-----