<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
A. M. CASTLE & CO.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
A. M. CASTLE & CO.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
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:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
March 11, 1994
Dear Castle Stockholder:
You are cordially invited to attend A. M. Castle & Co.'s Annual Meeting of
Stockholders which will be held on Thursday, April 28, 1994 at 10:00 a.m. in our
offices at 3400 North Wolf Road, Franklin Park, Illinois.
At the meeting we will report to you on current business conditions and
recent developments at Castle. Members of the Board of Directors and many of our
executives will be present to discuss the affairs of Castle with you.
This year you are being asked to consider an important proposal to amend the
Company's Certificate of Incorporation, authorizing the issuance of an
additional 5 million shares of the Company's common stock. The Company has no
present plans to issue any of the newly authorized shares if the proposal is
adopted.
The Board believes that the proposed amendment to the Company's Certificate
of Incorporation is in your best interests and those of the Company and has
approved it for your consideration. The formal Notice and Proxy Statement which
appear on the following pages contain details and a description of the proposed
amendment. We urge you to read the description carefully and to vote for its
adoption.
Whether or not you attend our Annual Meeting, it is important that you sign,
date and return your Proxy as soon as possible. If you do attend the meeting and
wish to vote in person, your Proxy will then be revoked at your request so that
you can vote personally. Therefore, I urge you to return your Proxy even if you
currently plan to be with us for the meeting.
I look forward, with other members of management, to the opportunity of
meeting you on April 28th.
Sincerely,
/s/ Michael Simpson
<PAGE>
A. M. CASTLE & CO.
3400 North Wolf Road
Franklin Park, Illinois 60131
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------
Franklin Park, Illinois, March 11, 1994
NOTICE IS HEREBY GIVEN, that the Annual Meeting of the Stockholders of A. M.
Castle & Co. will be held at the general offices of the Company, 3400 North Wolf
Road, Franklin Park, Illinois on THURSDAY, APRIL 28, 1994, at 10 o'clock in the
forenoon, Central Daylight Savings Time, for the purposes of considering and
acting upon the following:
1. The election of eleven Directors of the Company;
2. The adoption of an amendment to the Company's Certificate of
Incorporation increasing the number of shares of Common Stock, no par
value, which the Company is authorized to issue to 15,000,000 shares from
10,000,000 shares.
3. The ratification of the appointment of Arthur Andersen & Co. as
independent public accountants for the year 1994; and
4. The transaction of any other business which may properly come before the
meeting.
Stockholders of record at the close of business February 28, 1994, only, are
entitled to notice of, and to vote at, the meeting.
Stockholders who do not expect to attend in person are urged to execute and
return the accompanying Proxy in the enclosed envelope. No postage is needed if
mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
JERRY M. AUFOX
SECRETARY
<PAGE>
A. M. CASTLE & CO.
3400 North Wolf Road
Franklin Park, IL 60131
------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
APRIL 28, 1994
-------------
The enclosed Proxy is solicited by the Board of Directors of A. M. Castle &
Co. for use at the Annual Meeting. Any Proxy given pursuant to such solicitation
may be revoked by the Stockholder at any time prior to the voting of the Proxy.
Holders of shares of Common Stock, the only class of voting security of the
Company, are entitled to one vote per share on all matters to come before the
meeting. As of February 28, 1994, the record date for determining the
Stockholders entitled to notice of and to vote at the meeting, there were
7,296,410 outstanding shares of Common Stock of the Company.
All of the expenses involved in preparing, assembling and mailing this Proxy
Statement and the material enclosed herewith will be paid by the Company,
including upon request, expenses incurred by brokerage houses and fiduciaries in
forwarding Proxies and Proxy Statements to their principals. The original
solicitation of Proxies by mail may be supplemented by telephone, telegraph,
written and personal solicitation by Officers, Directors, and employees of the
Company; however, no additional compensation will be paid to such individuals.
The Annual Report of the Company for the fiscal year ended December 31,
1993, is enclosed with this Proxy Statement. The approximate date of mailing
this Proxy Statement and the enclosed Proxy is March 11, 1994.
CANDIDATES FOR ELECTION AS DIRECTORS
Eleven directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting. Proxies received by the Board of Directors will
be voted for the election of the nominees named below, unless otherwise
specified. In the event any of the nominees shall unexpectedly become
unavailable for election, votes will be cast pursuant to authority granted by
the enclosed Proxy for such persons as may be designated by the Board of
Directors. The persons elected as Directors are to serve a term of one year
until the next Annual Meeting and until their successors are elected and
qualified.
INFORMATION CONCERNING NOMINEES FOR DIRECTORS
The following information is given for individuals who have been recommended
for election by the Human Resources Committee of the Board of Directors. Set
forth below is the name of each nominee, the corporation or other organization
which is the principal employment of the nominee, the year in which each nominee
first became a Director of the Company, the nominee's age and the committees on
which each nominee serves.
1
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
DANIEL T. CARROLL Director since 1982 Age 68
Chairman and President of The Carroll Group, Inc. (Management
Consulting Firm). Mr. Carroll is also a Director of American Woodmark
Corp., Aon Corporation, Comshare, Inc., De Soto, Inc., Diebold,
Incorporated, Michigan National Corp., Oshkosh Truck Corporation, UDC
Homes, Inc. Wolverine World Wide, Inc. and Woodhead Industries, Inc.
Member of Human Resources Committee
- --------------------------------------------------------------------------------------------
EDWARD F. CULLITON Director since 1983 Age 52
Vice President of Finance of A. M. Castle & Co. Mr. Culliton was
elected Secretary in 1972, Treasurer in 1975, and Vice President in
1977.
- --------------------------------------------------------------------------------------------
WILLIAM K. HALL Director since 1984 Age 50
President and Chief Executive Officer of Eagle Industries, Inc.
(Diversified Manufacturing Company). Dr. Hall is also a Director of
Huffy Corporation.
Member of Audit Committee
- --------------------------------------------------------------------------------------------
ROBERT S. HAMADA Director since 1984 Age 56
Dean of the Graduate School of Business, University of Chicago since
1993. Formerly Edward Eagle Brown Professor of Finance of the GSB,
University of Chicago. Dr. Hamada is a Director of National Bureau of
Economic Research, Manville Corporation, the Northern Trust
Corporation and The Chicago Board of Trade.
Chairman of Audit Committee
- --------------------------------------------------------------------------------------------
JOHN P. KELLER Director since 1980 Age 54
President of Keller Group, Inc. (Industrial Manufacturing and Coal
Mining Company). Mr. Keller is also a Director of Old Kent Financial
Corporation, MacLean-Fogg Co. and American Appraisal Associates.
Member of Human Resources Committee
- --------------------------------------------------------------------------------------------
FREDERICK A. KREHBIEL Director since 1988 Age 52
Vice Chairman and Chief Executive Officer of Molex Incorporated
(Electronic Component Manufacturer). Mr. Krehbiel is also a Director
of Molex Incorporated, Nalco Chemical Company, Northern Trust
Corporation, and Tellabs, Inc.
Chairman of Human Resources Committee
- --------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
JOHN W. MCCARTER, JR. Director since 1983 Age 56
Senior Vice President of Booz, Allen & Hamilton, Inc. (Management
Consulting Firm). Mr. McCarter is also a Director of W. W. Grainger,
Inc. and Booz, Allen & Hamilton, Inc.
Member of Audit Committee
- --------------------------------------------------------------------------------------------
WILLIAM J. MCDERMOTT Director since 1975 Age 66
Retired President of Simpson Estates, Inc. (Private Management Firm).
Member of Audit Committee
- --------------------------------------------------------------------------------------------
RICHARD G. MORK Director since 1988 Age 58
President and Chief Executive Officer of A. M. Castle & Co. Mr. Mork
was elected Senior Vice President in 1988, Chief Operating Officer in
1989 and President and Chief Executive Officer in 1990.
- --------------------------------------------------------------------------------------------
MICHAEL SIMPSON Director since 1972 Age 55
Chairman of the Board of A. M. Castle & Co. Mr. Simpson was elected
Vice President of A. M. Castle & Co. in 1977 and Chairman of the
Board in 1979.
- --------------------------------------------------------------------------------------------
RICHARD A. VIRZI Director since 1972 Age 66
Retired President and Chief Executive Officer of A. M. Castle & Co.
Mr. Virzi is also a director of Woodhead Industries, Inc. and
Gottlieb Health Resources.
Member of Human Resources Committee
- --------------------------------------------------------------------------------------------
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has two standing committees -- an Audit Committee,
and a Human Resources Committee.
The Audit Committee of the Board of Directors is comprised of four
Directors, none of whom may be employed on a full-time basis by the Company. The
Audit Committee is charged with recommending appointment of the independent
auditor, consulting with the independent auditors and reviewing the results of
internal audits, and the audit report of the independent auditors engaged by the
Company. Further, the Audit Committee is empowered to make independent
investigations and inquiries into all financial reporting or other financial
matters of the Company as it deems necessary. The Committee meets not less than
twice a year.
The Human Resources Committee, comprised of four directors, reviews and
recommends compensation with respect to the Officers of the Company and
administers and directs operation of the 1989 Long Term Incentive Compensation
Plan, the 1990 Restricted Stock and Stock Option Plan and other compensation
benefits granted to various Officers. The Committee is also charged with making
recommendations to the Board of Directors concerning institution, continuation,
or discontinuation of benefit compensation plans and programs for officers and
succession planning for officers and key managers. In 1992 the Committee took on
the responsibilities formerly handled by the Nominating Committee. Therefore the
Committee also reviews applications, interviews, and recommends nominees to the
Board of Directors to be presented to Stockholders at the Annual Meeting. The
Committee has established standards and criteria for the selection and
nomination of candidates to the Board of
3
<PAGE>
Directors and for membership on the various committees of the Board. Any
Stockholder who wishes to recommend individuals for nomination to the Board of
Directors is invited to do so by supplying in writing to the Human Resources
Committee the name of the individual, and his or her credentials and background
material for review by the Human Resources Committee.
During the last fiscal year, the Board of Directors held its four scheduled
meetings. In addition, there were two meetings of the Audit Committee and four
meetings of the Human Resources Committee. All the Directors attended 75 percent
or more of the aggregate of the total number of meetings of the Board of
Directors and the total number of meetings of each committee on which they
served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Richard A. Virzi who retired as President and Chief Executive Officer of
the Company in 1990 is a member of the Human Resources Committee. As a retired
Chief Executive Officer of the Company, Mr. Virzi brings unique knowledge and
perspective of the functions and duties inherent to the position of President
and CEO, which assists the Committee in fulfilling its functions in establishing
executive compensation.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
STOCK OWNERSHIP OF NOMINEES
The following table sets forth, with respect to the Company's common stock
(the only class of voting securities) the number of shares and percentage of the
Common Stock of the Company owned beneficially, directly, or indirectly by each
Director and nominee as of February 28, 1994:
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY PERCENT OF
NAME OF NOMINEE OR DIRECTOR OWNED(1) CLASS
- --------------------------------------------------------------------------- -------------------- -----------
<S> <C> <C>
Daniel T. Carroll.......................................................... 1,687 0.02%
Edward F. Culliton......................................................... 16,342 0.22%
William K. Hall............................................................ 562 0.01%
Robert S. Hamada........................................................... 843 0.01%
John P. Keller............................................................. 675 0.01%
Frederick A. Krehbiel...................................................... 1,500 0.02%
John W. McCarter, Jr....................................................... 562 0.01%
William J. McDermott....................................................... 967,652(2) 13.30%
Richard G. Mork............................................................ 29,409 0.40%
Michael Simpson............................................................ 359,336(3) 4.93%
Richard A. Virzi........................................................... 48,890(4) 0.67%
<FN>
- ---------
(1) The nature of beneficial ownership of securities is direct unless
otherwise indicated by footnote. Beneficial ownership, as shown in the
table, arises from sole voting power and sole investment power, unless
otherwise indicated by footnote.
(2) Includes 958,983 shares owned by W. B. & Co., an Illinois partnership of
which Mr. McDermott is one of two general partners. W. B. & Co. has sole
voting power over the shares, but no dispositive power. Also includes 560
shares held by Mr. McDermott as custodian.
(3) Includes 242,288 shares which Mr. Simpson also owns beneficially in five
trusts, and 55,981 shares held by another trust in which he is one of five
beneficiaries.
(4) Includes 25,418 shares owned by the estate of Winifred Virzi.
</TABLE>
4
<PAGE>
PRINCIPAL STOCKHOLDERS
The only persons who held of record as of February 28, 1994, or, to the
knowledge of the Management, owned beneficially, more than 5% of the outstanding
shares of Common Stock of the Company are the following:
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS SHARES(1) CLASS
- ------------------------------------------------------------------------------------- ------------- -----------
<S> <C> <C>
Patrick J. Herbert, III.............................................................. 1,498,565(2) 20.59%
Suite 1232
30 North LaSalle Street
Chicago, Illinois 60602-2504
The First National Bank of Chicago, Trustee.......................................... 1,225,554(3) 16.84%
One First National Plaza
Chicago, Illinois 60670-0287
W. B. & Co., an Illinois partnership................................................. 958,983(4) 13.18%
Suite 1232
30 North LaSalle Street
Chicago, Illinois 60602-2504
United States Trust Company of New York.............................................. 511,137(3) 7.02%
114 West 47th Street
New York City, New York 10036-1532
Dimensional Fund Advisors, Inc....................................................... 432,016 5.94%
1299 Ocean Avenue--11th Floor
Santa Monica, California 90401
<FN>
- ---------
(1) The nature of beneficial ownership of securities is direct unless
otherwise indicated by footnote. Beneficial ownership, as shown in this
table, arises from sole voting power and sole investment power unless
otherwise indicated by footnote.
(2) Includes 958,983 shares indicated below as owned by W. B. & Co. Mr.
Herbert has sole voting power with respect to 75,118 shares and shared
voting power with respect to 1,423,447 shares; he has sole dispositive
power with respect to 723,485 shares and shared dispositive power with
respect to 476,274 shares.
(3) Beneficial ownership acquired in behalf of others via either a
trust/fiduciary capacity and/or portfolio management/agency relationship.
(4) See Footnote (2) under "Stock Ownership of Nominees".
</TABLE>
MANAGEMENT STOCK OWNERSHIP
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK
BENEFICIALLY PERCENT OF
NAME OF OFFICER OWNED CLASS
- ------------------------------------------------------------ ---------------- ------------
<S> <C> <C>
Michael Simpson............................................. 359,336 4.93%
Richard G. Mork............................................. 29,409 0.40%
Edward F. Culliton.......................................... 16,342 0.22%
Gise Van Baren.............................................. 7,812 0.11%
Richard G. Phifer........................................... 1,019 0.01%
All Directors and Officers as a Group....................... 1,469,616 20.17%
</TABLE>
SECTION 16(A) EXCHANGE ACT REPORTS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission, the
American Stock Exchange and the Midwest Stock Exchange. Executive officers and
directors are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file. Based solely on a review of the copies of
such forms furnished to the
5
<PAGE>
Company and written representations from the Company's executive officers and
directors, the Company believes that all Section 16(a) filing requirements
applicable to its executive officers and directors were met.
DIRECTORS' COMPENSATION
Directors who are not Officers of the Company, or of a Subsidiary, received
an annual retainer of $12,000 and $500 for each meeting of the Board of
Directors and meetings of committees of the Board attended, except Directors who
Chair a Board committee receive an additional retainer of $1,000 annually.
In 1987, the Board of Directors adopted the Director's Deferred Compensation
Plan. Under the Plan maintained by the Company, Directors who are not Officers
of the Company have the option to defer payments of the retainer and meetings
fees in either a stock equivalent unit account or an interest account. Fees held
in the interest account are credited with interest at the rate of 6 percent per
year compounded annually. Fees deferred in the stock equivalent accounts are
divided by the A. M. Castle & Co. common stock price on the 15th day after the
meeting for which payment is made. The resultant are called share units. The
stock equivalent account will be credited on a dividend payment date with units
equal to the product of the declared dividend per share multiplied by the number
of stock equivalent units in the Director's account on the record date of the
dividend. The share units are maintained until the account is closed.
Disbursement of the interest account and the stock equivalent unit account can
be made only upon resignation or retirement from the Board or upon death of a
Director.
If payment from the stock equivalent unit account is requested to be made in
shares of A. M. Castle & Co. common stock, it will be made as of the date of the
request or termination event, whichever occurs last. The stock distribution will
be treasury shares, shares purchased on the open market, or authorized or
unissued shares as determined under the Plan. If made in cash, the stock
equivalent units are multiplied by the stock price on a date seven days prior to
the date the distribution is made.
Only fees earned as a Director of A. M. Castle & Co. can be deferred under
the Plan. In 1993 $96,000 was paid to Directors and $31,500 was deferred under
the Plan.
COMPENSATION COMMITTEE'S REPORT TO SHAREHOLDERS
The executive compensation program is administered by the Human Resources
Committee of the Board of Directors (the "Committee") which is comprised of the
individuals listed below who are directors of the corporation with
responsibilities for all compensation matters for the corporation's senior
management. The Committee has overall responsibility to review and recommend
broad based compensation plans to the Board of Directors and annual
compensation, including salary, cash bonus programs, long term incentive plans
and executive benefits for the officers of the Company.
The Committee and the management of the Company are committed to the
principle that remuneration should be commensurate with performance and the
attainment of pre-determined financial and strategic objectives, while at the
same time externally competitive in order to keep and attract highly qualified
personnel. In carrying out this objective, the compensation for executives is
broken down into three basic categories: base salary, short term incentive and
long term incentive compensation.
BASE COMPENSATION
The base salary is set in the middle of the range of base salaries offered
by companies of comparable size. In establishing base salaries, the Committee
utilizes outside consultants and industrial surveys to assure that such base
salaries are proper and externally competitive.
SHORT TERM INCENTIVE COMPENSATION
Short term incentive compensation opportunities are provided by the
Company's Management Incentive Plan. The Management Incentive Plan pays annual
cash incentives upon achievement of short term financial objectives which are
set by the Board. Each year the Board establishes an objective for
6
<PAGE>
the rate of return on net worth, after taxes, for the forthcoming fiscal year
for the Company as a whole, and further sets other objectives for each business
unit for the Company. The objectives when met will result in the Company
reaching the established rate of return. An executive's incentive is based upon
performance of the segment for which he is responsible and/or on the Company as
a whole. The incentive is earned on a prorata basis as the established goals are
exceeded. Under the Plan, if the established goals are not reached, no incentive
is paid.
LONG TERM INCENTIVE COMPENSATION
The long term incentive program for executives consists of two types:
Incentive Stock Options granted by the Committee under the 1990 Restricted Stock
and Stock Option Plan approved by the shareholders in 1990 -- and long term
incentive awards under the Company's 1989 Long Term Incentive Plan approved by
the shareholders in 1989.
STOCK OPTIONS
Stock Option Grants provide the right to purchase shares of common stock at
an exercise price (the closing price of Castle common stock on the date of the
grant). Each stock option becomes exercisable after one year following the
grant, and has a five (5) year term. The Committee has typically granted stock
options to senior management, officers and other key employees on a bi-annual
basis. The option grants cover shares of common stock authorized under
stockholder approved plans. No stock options were granted by the Committee in
1993. The last option granted by the Committee was on October 21, 1992. The
Committee granted stock options reflected in the tables that follow this report.
The number of options when granted reflect competitive industry practice as
reported and analyzed by independent industrial surveys, based on position,
responsibilities and performance of the recipient.
LONG TERM INCENTIVE AWARDS
The long term incentive participations are made annually and are awarded at
the end of a three (3) year cycle, subject to the achievement of a three (3)
year compound total return to shareholders which exceeds the compound return of
the S&P 500 by at least 1.5 percentage points. The Committee named and the board
ratified the three key members of senior management Mr. Simpson, Mr. Mork and
Mr. Culliton as participants. The awards are not made if the performance
threshold of compound total rate of return of Castle common stock does not
exceed the S&P 500 by 1.5 percentage points. 100% of the award is attained if
the three (3) year average compound rate of return of the Company stock exceeds
the S&P 500 by 5.5 percentage points. The awards are made in restricted stock
which vests fifty percent (50%) after one year and the remaining fifty percent
(50%) after the second year. During the two (2) year vesting period after the
stock is granted, the participant receives dividends of the shares and also has
a right to vote the awarded shares. For the three (3) year cycle ending with
1993, the Committee reviewed the degree of achievement on cumulative shareholder
return established in the Long Term Incentive Plan for 1991 - 1993, and
determined that the Company's three year compound rate of return exceeded the
S&P 500 by 4.71 percentage points. As a result 85.64% of eligible awards were
made to Messrs. Simpson, Mork and Culliton.
Also for 1993, the corporate performance under the Management Incentive Plan
exceeded the established threshold return on net worth after taxes for the
Company as a whole. Messrs. Simpson, Mork and Culliton received an incentive
award. Messrs. Phifer and Van Baren, who had a portion of their objective based
on the performance of the Eastern Region & Plate and Carbon Products Group and
Hy-Alloy Division & Alloy Products Group, respectively, exceeded their
objectives and attained an incentive award.
THE HUMAN RESOURCES COMMITTEE
Frederick A. Krehbiel, Chairman
Daniel T. Carroll
John P. Keller
Richard A. Virzi
7
<PAGE>
The tables which follow and the accompanying narrative and footnotes reflect
the decisions covered by the above discussion.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows, for the fiscal years ending December 31, 1991,
1992 and 1993 the cash compensation paid by the Company and its subsidiaries, as
well as other compensation paid or accrued for those years, to each of the five
(5) most highly compensated executive officers of the Company in all capacities
in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION --------------------- -------
- ---------------------------------------------------------------------------- RESTRICTED OPTIONS/ ALL OTHER
OTHER ANNUAL STOCK SARS LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD(S) (#) PAYOUTS (2)
- --------------------------------- ---- -------- ------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael Simpson 1993 $237,500 $51,006 $ 17,662 $ 51,836 $40,741
Chairman of the Board 1992 230,000 19,292
1991 226,667 17,497
Richard G. Mork (1) 1993 225,000 48,322 12,386 47,334 37,193
President & CEO 1992 210,000 12,018
1991 206,667 5,550
Edward F. Culliton 1993 157,650 29,021 5,382 37,191 17,841
Vice President & CFO 1992 153,000 6,452
1991 151,000 4,621
Gise Van Baren 1993 123,650 52,795 3,630 5,400
President -- Hy-Alloy Steels Div. 1992 116,917 36,994 4,529
1991 113,333 17,426 2,340
Richard G. Phifer 1993 123,650 34,807 5,404 5,400 10,416
Vice President -- Eastern Region 1992 116,917 28,229 6,080 5,400 14,628
1991 113,333 4,143
<FN>
- ------------
(1) In 1987, the Company made a secured interest free loan of $101,937.92 to
Mr. Mork in connection with the purchase of real estate necessitated by
his relocation at the Company's request. Annual payments are required in
the amount equal to twenty five percent (25%) of Mr. Mork's net earnings
under the Company's Management Incentive Plan. In 1993, no money was paid
under the Plan to Mr. Mork. The outstanding balance of the loan is
$62,904.97.
(2) Consists primarily of one time cash payments to reimburse expenses related
to Company requested relocation.
</TABLE>
STOCK OPTIONS
No grants of stock options or restricted stock grants were made under the
Company's 1990 Restricted Stock and Stock Option Plan to the five (5) most
highly compensated executive officers of the Company during the last fiscal
year.
OPTION EXERCISE AND HOLDINGS
The following table sets forth information with respect to the named
executives concerning the exercise of options during the last fiscal year, and
the unexercised options held as of the end of the fiscal year. The price of A.
M. Castle & Co. common stock as of the close of business at the end of the
fiscal year was $17.25 per share.
8
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END (#) AT FY-END ($)
------------- -------------
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (1) ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------------------------- ----------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Gise Van Baren..................................... 0 0 10,800 $ 51,300
Richard G. Phifer.................................. 0 0 10,800 $ 51,300
<FN>
- ---------
(1) Executives not named neither exercised options or held any unexercised as
of the end of the fiscal year.
</TABLE>
LONG TERM INCENTIVE PLAN
The following table sets forth information with respect to the named
executives concerning awards earned under the Long Term Incentive Plan during
the last fiscal year under the Company's 1989 Long Term Incentive Plan.
LONG TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE
OR OTHER ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
NUMBER OF PERIOD PRICE-BASED PLANS
SHARES, UNITS UNTIL -----------------------------------------
OR OTHER MATURATION THRESHOLD TARGET MAXIMUM
RIGHTS OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
NAME (A) (#) (B) (C) (D) (E) (F)
- ------------------------------------------------------ ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Michael Simpson....................................... 3,005 2 years -- -- --
Richard G. Mork....................................... 2,744 2 years -- -- --
Edward F. Culliton.................................... 2,156 2 years -- -- --
</TABLE>
PENSION PLANS
The following table shows the estimated pension benefits payable to a
covered participant at normal retirement age under the Company's qualified
defined benefit pension plan, as well as nonqualified supplemental pension plans
that provide benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code limitations on qualified plan benefits, based on
remuneration that is covered under the plan and years of service with the
Company and its subsidiaries:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------------------
REMUNERATION 10 15 20 25 30 35 40
- ------------------------------------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$125,000............................. 20,883 31,250 41,667 52,083 62,500 72,917 83,333
145,000............................. 24,167 36,250 48,333 60,417 72,500 84,583 96,667
165,000............................. 27,500 41,250 55,000 68,750 82,500 96,250 110,000
185,000............................. 30,833 46,250 61,667 77,083 92,500 107,917 123,333
200,000............................. 33,333 50,000 66,667 83,333 100,000 116,667 133,333
225,000............................. 37,500 56,250 75,000 93,750 112,500 131,750 150,000
250,000............................. 41,667 62,500 83,333 104,167 125,000 145,833 166,667
275,000............................. 45,833 68,750 91,667 114,583 137,560 160,417 183,333
</TABLE>
The Pension benefits shown in the Pension table above are determined by the
remuneration, which is the average of the highest cash compensation paid
(approximately base salary plus bonus as shown in the Summary Compensation
Table), for any five (5) consecutive years of service prior to retirement.
Pensions are paid as a straight life annuity and subject to reduction for a
joint and survivor benefit, if
9
<PAGE>
elected. The amounts shown in the table above are prior to reduction for social
security benefits. Benefits are reduced based on one-half (1/2) of the social
security benefits for the individual attributable to the working period with the
Company.
The current fully accredited years of services for Messrs. Simpson, Mork,
Culliton, Van Baren and Phifer under the Plan are 25, 37, 29, 15 and 3 years,
respectively.
ITEM 2. INCREASE IN AUTHORIZED SHARES AMENDMENT
The proposed amendment to Article Fourth of the Certificate of Incorporation
would increase the number of shares of common stock, no par value, which the
Company is authorized to issue to 15 million shares from 10 million shares.
As of February 28, 1994, under the present Certificate, stockholders have
authorized the Company to issue 10 million shares of common stock. At present,
there are unissued 2,057,174 shares of common stock which are remaining
unissued, and 329,480 shares of common stock held in treasury.
The additional shares of common stock which this authorization seeks will be
part of the existing class of common stock and if and when issued, will have the
same rights and privileges as the shares of common stock presently outstanding.
The Board of Directors believes that it is desirable to have authorized shares
of common stock available for possible future financing, acquisition
transactions, stock dividends, stock splits, and other general corporate
purposes. Having such additional authorized shares available for issuance in the
future would give the Company greater flexibility and allow shares of common
stock to be issued without expense and delay of a special stockholders' meeting.
The additional shares of common stock would be available for issuance without
further action by the stockholders unless such action is required by applicable
law or rules of any stock exchange, if any, on which the Company's securities
may be listed in the future.
Although the Board has no present intention of doing so, authorized but
unissued shares of common stock and common stock held in treasury could (within
the limits imposed by applicable law or the applicable rules of any stock
exchanges) be issued in one or more transactions which would make more
difficult, therefore less likely, a change in control or takeover of the
Company. Any such issuance of additional stock could have the effect of diluting
earnings per share and book value per share of existing shares of common stock,
and such additional shares could be used to dilute the stock ownership of a
person seeking to obtain control of the Company.
As of the date of this Proxy Statement, the Board of Directors has no
agreements, commitments, or plans with respect to the sale or issuance of shares
of common stock of the Company except pursuant to the Company's 1989 Long Term
Incentive Plan and 1990 Restricted Stock and Stock Option Plan.
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<PAGE>
COMPANY PERFORMANCE
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
The SEC requires that the Company include in this proxy statement a
line-graph presentation comparing cumulative, five-year shareholder total
returns on an indexed basis with the S&P 500 Stock Index and either a nationally
recognized industry standard or an index of peer companies selected by the
Company. Since there is no nationally recognized industry standard consisting of
metal service centers or specialty metal distributors, and only one competitor
of the Company is publicly traded on a national exchange, the Board of Directors
has approved a peer group of durable goods manufacturers and distributors which
have been used for purposes of this performance comparison. These companies were
selected based on comparable market capitalizations (both more and less than the
Company's). A list of these companies follows the graph below:
[GRAPHIC SUBMITTED IN PAPER FORMAT UNDER FORM SE]
PEER GROUP COMPANIES:*
<TABLE>
<S> <C>
Binks Manufacturing Steel Technologies, Inc.
Central Steel & Wire Company Varlen Corporation
Lindberg Corporation Weirton Steel Corporation
SPS Technologies Inc. Wynn's International, Inc.
</TABLE>
*Athlone Industries merged into Allegheny Ludlum Corporation in 1993 and
therefore is no longer included in the Peer Group.
11
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of its Audit Committee, the Board of Directors has,
subject to ratification by the Stockholders, appointed Arthur Andersen & Co. to
examine the consolidated financial statements and other records of the Company
for the fiscal year ending December 31, 1994, and the management will present to
the Annual Meeting a proposal that such appointment be ratified.
During 1993, Arthur Andersen & Co. examined the financial statements of the
Company and its Subsidiaries, including those included in the Annual Report to
Stockholders, and consulted on annual and quarterly reports filed with the
Securities and Exchange Commission and others.
Each year the Audit Committee reviews and approves in advance the scope of
the annual audit by the Company's independent accountant. The Audit Committee
also approves all non-audit professional services including the examination of
the financial statements of the Employee Retirement Plan, Profit Sharing Plan
and review of tax returns. The Audit Committee approved the non-audit services
and considered the possible effect on the accountant's independence at its
October meeting prior to those services being performed.
As at past years' Stockholders meeting, representatives of Arthur Andersen &
Co. are expected to be present at the Annual Meeting of Stockholders with the
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions from Stockholders. The favorable
vote of the holders of a majority of the shares of common stock represented in
person or by Proxy at the meeting will be required for such ratification. If a
negative vote results, the matter will be referred to the Audit Committee for a
recommendation to the Board of Directors.
OTHER MATTERS
The Management does not know of any matters to be presented to the meeting
other than the matters set forth in the Notice of the Meeting. However, if any
other matters come before the meeting, it is intended that the holders of the
Proxies will vote thereon in their discretion.
STOCKHOLDER PROPOSALS
Proposals by Stockholders to be considered for inclusion in the Company's
Proxy Material for the next Annual Meeting of Stockholders must be received by
the Company at its principal executive office not later than December 21, 1994.
JERRY M. AUFOX
SECRETARY
March 11, 1994
12
<PAGE>
EXHIBIT A
INCREASE IN CAPITAL STOCK
First sentence of Article Fourth shall be amended to read as follows:
The total number of shares of stock which the Corporation shall have
authority to issue is Fifteen Million (15,000,000) shares of common stock
without par value.
A-1
