<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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
A. M. CASTLE & CO.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
March 10, 1997
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 24, 1997 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.
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 24.
Sincerely,
[SIG]
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 10, 1997
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 24, 1997, 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 ratification of the appointment of Arthur Andersen & Co. as
independent public accountants for the year 1997; and
3. The transaction of any other business which may properly come before the
meeting.
Stockholders of record at the close of business February 24, 1997, 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 24, 1997
-------------
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 24, 1997, the record date for determining the
Stockholders entitled to notice of and to vote at the meeting, there were
14,023,797 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,
facsimile, 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,
1996, is enclosed with this Proxy Statement. The approximate date of mailing
this Proxy Statement and the enclosed Proxy is March 10, 1997.
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>
<CAPTION>
- --------------------------------------------------------------------------------------------
<S> <C>
DANIEL T. CARROLL Director since 1982 Age 71
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.
Chairman of Human Resources Committee
- --------------------------------------------------------------------------------------------
EDWARD F. CULLITON Director since 1983 Age 55
Vice President and Chief Financial Officer of A. M. Castle & Co. Mr.
Culliton was elected Vice President in 1977 and CFO in 1995.
- --------------------------------------------------------------------------------------------
WILLIAM K. HALL Director since 1984 Age 53
President and Chief Executive Officer of Falcon Building Products,
Inc. (Diversified Manufacturer of Building Products). Dr. Hall is
also a Director of Gencorp and Falcon Building Products, Inc..
Member of Audit Committee
- --------------------------------------------------------------------------------------------
ROBERT S. HAMADA Director since 1984 Age 59
Dean and Edward Eagle Brown Distinguished Service Professor of
Finance at the Graduate School of Business, University of Chicago
since 1993. Dr. Hamada is a Director of the National Bureau of
Economic Research, the Northern Trust Corporation and The Chicago
Board of Trade.
Chairman of Audit Committee
- --------------------------------------------------------------------------------------------
PATRICK J. HERBERT, Age 47
III
President of Simpson Estates, Inc. (Private Management Firm).
Member of Human Resources Committee
- --------------------------------------------------------------------------------------------
JOHN P. KELLER Director since 1980 Age 57
President of Keller Group, Inc. (Industrial Manufacturing and Coal
Mining Company). Mr. Keller is also a Director of American Appraisal
Associates, Old Kent Financial Corporation and MacLean-Fogg Co.
Member of Human Resources Committee
- --------------------------------------------------------------------------------------------
JOHN W. MCCARTER, JR. Director since 1983 Age 59
President of Field Museum (Chicago), prior to 1997 Senior Vice
President of Booz, Allen & Hamilton, Inc. (Management Consulting
Firm). Mr. McCarter is also a Director of W. W. Grainger, Inc. and
HT Insight Funds, Inc. and a Trustee of Harris Insight Funds Trust
(Registered Investment Corporation).
Member of Audit Committee
- --------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
RICHARD G. MORK Director since 1988 Age 61
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.
- --------------------------------------------------------------------------------------------
JOHN W. PUTH Director since 1995 Age 68
Principal -- J.W. Puth Associates (a Consulting Firm). Mr. Puth is
also a Director of Allied Products Corporation, Brockway Standard,
Inc., L.B. Foster, Inc., Lindberg Corporation, System Software
Associates, Inc., and U.S. Freightways, Inc.
Member of Human Resources Committee
- --------------------------------------------------------------------------------------------
MICHAEL SIMPSON Director since 1972 Age 58
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 69
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>
3
<PAGE>
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. The committee has oversight responsibilities for investment strategies
of the Company's pension plan investments. 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 five 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 1996 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 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 and two special meetings. In addition, there were two meetings of the
Audit Committee and six 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. Upon the decision of Mr. McDermott to retire
from the Board, the Board of Directors amended the By-Laws of the Company to
reduce the number of directors from twelve to eleven.
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.
4
<PAGE>
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, 1997:
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY PERCENT OF
NAME OF NOMINEE OR DIRECTOR OWNED(1) CLASS
- --------------------------------------------------------------------------- -------------------- -----------
<S> <C> <C>
Daniel T. Carroll.......................................................... 3,162 0.02%
Edward F. Culliton......................................................... 43,528(2) 0.31%
William K. Hall............................................................ 1,053 0.01%
Robert S. Hamada........................................................... 1,580 0.01%
Patrick J. Herbert, III.................................................... 2,886,580(3) 20.58%
John P. Keller............................................................. 1,265 0.01%
John W. McCarter, Jr....................................................... 2,303 0.01%
Richard G. Mork............................................................ 77,956 0.55%
John W. Puth............................................................... 1,625 0.01%
Michael Simpson............................................................ 625,683(4) 4.46%
Richard A. Virzi........................................................... 91,443(5) 0.65%
</TABLE>
- ------------------------
(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 671 shares owned by Mr. Culliton's wife. Mr. Culliton disclaims
any beneficial interest in such shares.
(3) Includes 60,306 shares with respect to which Mr. Herbert has sole voting
power and 2,826,274 shares to which voting power is shared. Mr. Herbert has
sole dispositive power with respect to 1,469,307 shares and shared
dispositive power over 893,006 shares. Mr. Herbert disclaims any beneficial
interest with respect to 2,883,549 shares.
(4) Includes 453,631 shares which Mr. Simpson also owns beneficially in five
trusts, and 67,463 shares held by another trust in which he is one of five
beneficiaries.
(5) Includes 33,872 shares owned by the Winifred Virzi Trust B.
5
<PAGE>
PRINCIPAL STOCKHOLDERS
The only persons who held of record as of February 24, 1997, 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.............................................................. 2,886,580(2) 20.58%
Suite 1232
30 North LaSalle Street
Chicago, Illinois 60602-2504
First Chicago NBD Corporation........................................................ 2,671,103(3) 19.05%
One First National Plaza
Chicago, Illinois 60670-0287
W. B. & Co., an Illinois partnership................................................. 1,955,412(4) 13.94%
Suite 1232
30 North LaSalle Street
Chicago, Illinois 60602-2504
Pioneering Management Corporation.................................................... 1,380,012 9.85%
60 State Street
Boston, Massachusetts 02109-1820
United States Trust Company of New York.............................................. 825,367(3) 5.89%
114 West 47th Street
New York City, New York 10036-1532
</TABLE>
- ------------------------
(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 1,955,412 shares indicated below as owned by W. B. & Co. Mr.
Herbert has sole voting power with respect to 60,306 shares and shared
voting power with respect to 2,826,271 shares; he has sole dispositive power
with respect to 1,469,307 shares and shared dispositive power with respect
to 893,006 shares.
(3) Beneficial ownership acquired in behalf of others via either a
trust/fiduciary capacity and/or portfolio management/agency relationship.
(4) See Footnote (3) and (4) under "Stock Ownership of Nominees".
6
<PAGE>
MANAGEMENT STOCK OWNERSHIP
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK
BENEFICIALLY PERCENT OF
NAME OF OFFICER OWNED CLASS
- ------------------------------------------------------------ ---------------- ------------
<S> <C> <C>
Michael Simpson............................................. 625,683(1) 4.46%
Richard G. Mork............................................. 77,956 0.55%
Edward F. Culliton.......................................... 43,528(1) 0.31%
Alan D. Raney............................................... 12,554 0.09%
M. Bruce Herron............................................. 11,862 0.08%
All Directors and Officers as a Group....................... 3,877,012 27.65%
</TABLE>
- ------------------------
(1) See Footnotes under "Stock Ownership of Nominees".
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 Chicago 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 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 $14,000 and $1,000 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.
Payment from the stock equivalent unit account is 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.
Only fees earned as a Director of A. M. Castle & Co. can be deferred under
the Plan. In 1996 $127,750 was paid to Directors and $75,750 was deferred under
the Plan.
In 1995, the Board of Directors adopted the 1995 Directors Stock Option
Plan, which authorized the issuance of up to 150,000 shares of common stock of
the Company to outside (non-employee) directors. This Plan was approved by the
shareholders at the annual meeting held in April of 1995. Under the Plan,
non-employee directors are granted an option to purchase 1,000 shares of the
Company's common stock on the first business day in June of each year at a price
equal to the closing price of
7
<PAGE>
the Company's common stock as reported by the American Stock Exchange and/or
Chicago Stock Exchange for that date; or if no trade occurred on that date, the
next preceding date for which there is a reported sale.
The option expires five (5) years after the date on which it is granted. The
option also expires upon the outside director's termination of service from the
Board, unless it is due to death, disability or retirement, in which case there
is a period of either six (6) months or one (1) year in which to exercise.
Pursuant to the Plan, last year the nine (9) outside directors were granted an
option of 1,000 shares each at the option price of $28.25.
8
<PAGE>
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 attract and keep 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 the rate of
return on net worth, after taxes, for the forthcoming fiscal year for the
Company as a whole, and further approves 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 1996 Restricted Stock
and Stock Option Plan approved by the shareholders in 1996 -- 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. Stock options were granted by the Committee in 1996.
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. For the three year cycle ending
on December 31, 1996, 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
9
<PAGE>
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 1996, the Committee
reviewed the degree of achievement on cumulative shareholder return established
in the Long Term Incentive Plan for 1994 - 1996, and determined that the
Company's three year compound rate of return exceeded the S&P 500 by 11.4
percentage points. As a result 100% of eligible awards were made to Messrs.
Simpson, Mork and Culliton.
Also for 1996, 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. Raney and Herron, who had a portion of their objective based on
the performance of the Advanced Materials Products Group and Western Region,
respectively, exceeded their objectives and attained an incentive award.
CHANGE IN CONTROL AGREEMENTS
On January 25, 1996, the Board of Directors of A. M. Castle & Co. approved
Change in Control Agreements between the Company and the three senior
executives, Messrs. Michael Simpson, Richard G. Mork and Edward F. Culliton. The
Change in Control Agreements require two events to occur before any payments can
be made. Upon the occurrence of the two events (commonly referred to as a double
trigger), the Agreement provides for a lump sum, based on total compensation
paid to the exectives over the twelve (12) month period prior to the occurrence
of a "Change in Control Event", to be paid upon the executive's termination of
employment. Except for Mr. Mork, the amount paid under the Agreement cannot
exceed 2.99 times the executive's total average compensation over the prior five
years. Mr. Mork's agreement provides that if the lump sum exceeds 2.99 times his
total average compensation over the prior five years, the amount paid will be
increased to cover this amount of any excise tax which may be levied on the
amount paid.
The Change in Control Event set forth in the agreements is either (i) a
change in ownership, direct or indirect, in excess of twenty five percent (25%)
of the outstanding shares of the Company by a group or person who did not have
such an amount on January 25, 1996; (ii) the occurrence of any transaction
relating to Castle required to be described pursuant to the requirements of Item
5(f) of Schedule 14(a) of Regulation 14(a) of the Securities and Exchange Act of
1934; or (iii) any change in composition of the Board of Directors over a two
year period which results in the present directors not constituting the majority
at the period two years thereafter, excluding any new individuals who are
elected under or by recommendation of the then present majority of the Board.
In addition to a Change in Control Event, the executive's right to payment
arises, if within twenty four (24) months of the Change in Control Event (1) the
duties or the responsibilities of the executive are substantially changed or
reduced; or the executive is transferred or relocated; or that the compensation
rate of the executive is reduced; and (2) the executive terminates his/her
employment, or the executive is discharged for whatever reason other than for
cause, death or disability.
THE HUMAN RESOURCES COMMITTEE
Daniel T. Carroll, Chairman
Patrick J. Herbert, III
John P. Keller
John W. Puth
Richard A. Virzi
The tables which follow and the accompanying narrative and footnotes reflect
the decisions covered by the above discussion.
10
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table shows, for the fiscal years ending December 31, 1994,
1995 and 1996 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>
Richard G. Mork (1) 1996 325,000 178,807 16,216 104,065 19,195 81,934 32,474
President & CEO 1995 310,000 183,741 14,988 87,356 68,644 20,600
1994 260,000 175,000 15,808 77,284 60,716 18,125
Michael Simpson 1996 248,000 139,706 18,631 68,357 3,000 53,829 27,503
Chairman of the Board 1995 260,000 168,887 23,315 65,812 51,687 19,010
1994 250,000 172,667 21,998 63,159 49,641 18,283
Edward F. Culliton 1996 178,000 84,324 8,269 40,637 8,410 32,024 18,624
Vice President & CFO 1995 173,000 96,570 6,680 48,094 21,626 18,384
1994 166,000 98,240 6,574 46,148 20,715 11,658
Alan D. Raney 1996 144,000 68,400 4,957 7,650 15,404
Vice President -- Advanced 1995 138,000 77,237 4,516 14,697
Materials Group 1994 132,000 71,456 5,162 8,812 10,740
M. Bruce Herron (3) 1996 142,000 67,320 6,639 7,550 15,125
Vice President -- 1995 135,000 74,924 7,215 14,779
Western Region 1994 128,000 75,840 5,717 8,812 9,901
</TABLE>
- ------------------------
(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 1996, Mr. Mork paid the
outstanding balance on the loan and the Company released the security
mortgage.
(2) Consists of Company contribution to A. M. Castle & Co. Employees Profit
Sharing Plan (a defined Contribution Plan) and a Top Hat Supplemental Plan.
(3) In 1992, the Company made a secured interest free loan of $50,000 to Mr.
Herron 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. Herron's net earnings under
the Company's Management Incentive Plan. In 1996, Mr. Herron paid $10,547
under the loan provisions. The outstanding balance of the loan is
$28,579.96.
11
<PAGE>
STOCK OPTIONS
The following table sets forth information with respect to the named
executives concerning the grants of stock options or restricted stock grants
made under the Company's 1996 Restricted Stock and Stock Option Plan 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 $19.25 per share.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-
UNEXERCISED THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
--------------- ---------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------------- ----------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C>
Richard G. Mork................................ 0 0 0/19,195 0/9,597
Michael Simpson................................ 0 0 0/3,000 0/1,500
Edward F. Culliton............................. 0 0 0/8,410 0/4,205
Alan D. Raney.................................. 3,525 53,022 0/7,650 0/3,825
M. Bruce Herron................................ 3,525 57,869 4,406/7,550 31,650/3,775
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
- ---------------------------------------------------------------------------- AT ASSUMED ALTERNATIVE TO
PERCENT OF ANNUAL RATES OF (F) AND (G):
NUMBER OF TOTAL STOCK PRICE GRANT DATE
SECURITIES OPTIONS/SARS APPRECIATION FOR VALUE
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM ---------------
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------- GRANT DATE
GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($) PRESENT VALUE $
NAME (A) (B) (C) (D) (E) (F) (G) (H)
- -------------------- ------------ ------------ ----------- ---------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard G. Mork..... 19,195 10.7% 18.75 7/25/01 99,238
Michael Simpson..... 3,000 1.7% 18.75 7/25/01 15,510
Edward F.
Culliton........... 8,410 4.7% 18.75 7/25/01 43,480
Alan D. Raney....... 7,650 4.3% 18.75 7/25/01 39,550
M. Bruce Herron..... 7,550 4.2% 18.75 7/25/01 39,033
</TABLE>
- ------------------------
(h) The Grant Date Present Value was determined by using the Black-Scholes
pricing model.
12
<PAGE>
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>
Richard G. Mork....................................... 5,406 2 years -- -- --
Michael Simpson....................................... 3,551 2 years -- -- --
Edward F. Culliton.................................... 2,111 2 years -- -- --
</TABLE>
- ------------------------
(d), (e) & (f) See description of Long Term Incentive Awards in Compensation
Committee's Report.
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>
$145,000.......................... 24,167 36,250 48,333 60,417 72,500 84,583 96,667
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
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
300,000.......................... 50,000 75,000 100,000 125,000 150,000 175,000 200,000
325,000.......................... 54,167 81,250 108,334 135,417 162,500 189,583 216,667
400,000.......................... 66,667 100,000 133,333 166,667 200,000 233,333 266,667
450,000.......................... 75,000 112,500 150,000 187,500 225,000 262,500 300,000
</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 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. Mork, Simpson,
Culliton, Raney and Herron under the Plan are 40, 28, 32, 11 and 26 years,
respectively.
13
<PAGE>
COMPANY PERFORMANCE
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
The SEC requires that the Company include in this proxy statement a
line-graph presentation comparing the Company's cumulative, five-year
shareholder total returns to those of the S&P 500 Stock Index and either a
nationally recognized industry standard or a peer group of 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:
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<S> <C> <C> <C>
Among A.M. Castle & Co., S&P 500 and Peer Group
A.M. Castle & Co. S&P 500 Peer Group
1991 100 100 100
1992 111.90 107.70 125.70
1993 169.90 118.50 166.70
1994 209.80 120.00 194.30
1995 433.40 165.10 244.70
1996 381.80 203.10 302.20
Assumes $100 invested on January 1, 1991 in A.M. Castle & Co.
common stock, S&P Index and the Peer Group S&P 500 Index and the Peer Group
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<S> <C> <C> <C> <C>
Among A.M. Castle & Co., S&P 500 and Peer Group
1991
1992
1993
1994
1995
1996
Assumes $100 invested on January 1, 1991 in A.M. Castle & Co.
common stock, S&P Index and the Peer Group
</TABLE>
PEER GROUP COMPANIES:
Binks Manufacturing Steel Technologies, Inc.
Central Steel & Wire Company Varlen Corporation
Lindberg Corporation Weirton Steel Corporation
SPS Technologies Inc. Wynn's International, Inc.
14
<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, 1997, and the management will present to
the Annual Meeting a proposal that such appointment be ratified.
During 1996, 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 19, 1997.
JERRY M. AUFOX
SECRETARY
March 10, 1997
15
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
A.M. CASTLE & CO.
P ANNUAL MEETING OF STOCKHOLDERS ON APRIL 24, 1997
The undersigned hereby constitutes and appoints Michael Simpson and
R John P. Keller and each of them, his true and lawful agents and
proxies with full power of substitution in each, to represent the
undersigned at the Annual Meeting of Stockholders of A.M. Castle &
O Co. to be held at the office of the Company, 3400 North Wolf Road,
Franklin Park, Illinois on Thursday April 24, 1997, and at any
adjournments thereof, on all matters coming before said meeting.
X
Election of Directors, Nominees:
Y
Daniel T. Carroll, Edward F. Culliton, William K. Hall, Robert S.
Hamada, Patrick J. Herbert, III, John P. Keller, John W. McCarter,
Jr., Richard G. Mork, John W. Puth, Michael Simpson, and
Richard A. Virzi.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY
BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS. THE PROXY COMMITTEE CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE SIDE
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF DIRECTORS,
AND FOR PROPOSAL 2.
- -------------------------------------- /X/ PLEASE MARK YOUR
SIGNATURE VOTES AS IN THIS
EXAMPLE
Date ---------------
<TABLE>
<S> <C> <C>
FOR WITHHELD
1. Election of Directors. / / / /
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
2. Approval of Arthur Andersen & Co.
As Independent Accountants for
the year 1997. / / / / / /
Change of
Address / /
</TABLE>
