<PAGE> 1
SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Information Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
[X] Definitive Information Statement
</TABLE>
AMERISTEEL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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> 2
[AMERISTEEL LOGO]
AMERISTEEL CORPORATION
5100 W. LEMON STREET, SUITE 312
TAMPA, FLORIDA 33609
INFORMATION STATEMENT
Written Consent of Stockholders
In Lieu of an
Annual Meeting of Stockholders
To the Stockholders of July 17, 1997
AmeriSteel Corporation:
This Information Statement is furnished pursuant to Regulation 14C of
the Securities Exchange Act of 1934, as amended, to provide information
regarding certain action being taken by written consent by the holders of a
majority of the outstanding shares of common stock (the "Common Stock") of
AmeriSteel Corporation ("AmeriSteel" or the "Company"). Certain stockholders of
the Company, owning approximately 99.3% of the outstanding Common Stock, intend
to act by written consent in lieu of an Annual Meeting of Stockholders to elect
eight directors, representing all of the members of the Board of Directors of
the Company. The written consent is to be submitted to the Company and become
effective on August 15, 1997.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND TO
THE COMPANY A PROXY.
At the close of business on June 30, 1997, there were 1,075,174 shares
of Common Stock outstanding, each of which is entitled to one vote.
The approximate date on which this Information Statement is to be
mailed to stockholders is July 17, 1997.
1
<PAGE> 3
SECURITY OWNERSHIP
The following table sets forth, as of June 30, 1997, the number of
shares of the Company's Common Stock beneficially owned by (i) each person known
to the Company as having beneficial ownership of more than 5% of the Company's
Common Stock together with such person's address if other than the Company's
address, (ii) each of its directors and nominees to become a director, (iii)
each named executive officer (as defined herein under "Executive Compensation"
and pursuant to Securities and Exchange Commission rules) and (iv) all directors
and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial Owner of Beneficial Percent
or Number in Group Ownership(1) of Class
---------------------------------------------- ----------------- --------
<S> <C> <C>
FLS Holdings Inc. ............................ 9,000,000 89.3%
Phillip E. Casey ............................. 1,006,892(2) 10.0%
J. Donald Haney .............................. 4,176 *
Tom J. Landa ................................. 12,160 *
James F. Oliver .............................. 1,672 *
Shuzo Hikita ................................. 0 -
Koichi Takashima ............................. 0 -
Akihiko Takashima ............................ 0 -
Hideichiro Takashima ......................... 0 -
Ryutaro Yoshioka ............................. 0 -
Thomas G. Creed(3) ........................... 0 -
Jams C. Hogue(3) ............................. 0 -
All Directors and Executive Officers
as a Group (17 persons) ...................... 1,031,956 10.2%
</TABLE>
*Less than one percent
(1) Beneficial ownership of shares, as determined in accordance
with applicable Securities and Exchange Commission rules,
includes shares as to which a person has or shares voting
power and/or investment power. Except as otherwise indicated,
all shares are held of record with sole voting and investment
power.
(2) Includes 67,200 shares of Common Stock, or .7% of outstanding
shares, gifted by Mr. Casey pursuant to Transfer and Proxy
Agreements between Mr. Casey and certain donees. The gifted
shares are subject to certain restrictions set forth in the
agreements. Under the agreements, Mr. Casey is appointed as
attorney-in-fact with full power to vote the shares in
accordance with the decision of the holders of a majority of
the shares of Common Stock held by the donee stockholders and
Mr. Casey. As a result, Mr. Casey has the right to vote all
67,200 shares.
(3) Messrs. Creed and Hogue retired from the Company in November
1996 and May 1997, respectively.
2
<PAGE> 4
ELECTION OF DIRECTORS
Directors are elected for one year terms and until their successors are
duly elected and qualified. The Company's By-Laws provide that directors shall
be elected by a plurality of the votes cast. As of July 16, 1997 there are eight
members on the Company's Board of Directors.
Stockholders owning approximately 99% of the outstanding shares of
Common Stock (the "Majority Stockholders") intend by written consent in lieu of
an Annual Meeting of Stockholders of the Company to elect the following eight
nominees to act as directors of the Company.
Koichi Takashima
Akihiko Takashima
Phillip E. Casey
Tom J. Landa
J. Donald Haney
Shuzo Hikita
Hideichiro Takashima
Ryutaro Yoshioka
The proposed nominees for election as directors are willing to be
reelected as directors. If as a result of circumstances not now known or
foreseen, a nominee shall be unavailable or unwilling to serve as a director,
the Majority Stockholders may elect such other person as they deem advisable.
The following table sets forth certain information regarding the
nominees for directors:
<TABLE>
<CAPTION>
NAME AGE YEARS AS A DIRECTOR
---- --- -------------------
<S> <C> <C>
Koichi Takashima ........... 74 4
Akihiko Takashima .......... 60 4
Phillip E. Casey ........... 54 3
Tom J. Landa ............... 45 *
J. Donald Haney ............ 61 9
Shuzo Hikita ............... 54 *
Hideichiro Takashima ....... 39 2
Ryutaro Yoshioka ........... 58 2
</TABLE>
* Mr. Landa was elected as a director in March 1997 to fill the vacancy created
by the retirement of Thomas G. Creed in November 1996. Mr. Hikita was elected as
a director in September 1996 to fill the vacancy created by the resignation of
Shoji Nakamura
3
<PAGE> 5
KOICHI TAKASHIMA has been Chairman of Kyoei Steel, Ltd. ("Kyoei Steel")
for more than 5 years.
AKIHIKO TAKASHIMA has been Director of Kyoei Steel for more than 5
years.
PHILLIP E. CASEY has been Chairman of the Board, Chief Executive
Officer and a director since June 1994. Prior to joining the Company, Mr. Casey
was an officer of Birmingham Steel Corporation for more than 5 years.
TOM J. LANDA has been Chief Financial Officer, Vice President and
Secretary of the Company since April 1995. Mr. Landa was elected a director of
AmeriSteel in March 1997. Mr. Landa was also appointed to the Executive
Committee in March 1997. Before joining the Company, Mr. Landa spent over 19
years in various financial management positions with Exxon Corporation and its
affiliates worldwide.
J. DONALD HANEY has been Group Vice President, Fabricated Steel Group
since 1979 and a director of the Company since 1988.
SHUZO HIKITA has been Vice President of Engineering since September
1996 and a director of the Company since September 1996. Prior to September
1996, Mr. Hikita held several management positions with Kyoei Steel including
Division Manager of Kyoei Steel's Hirakata mill from 1994 to 1996. From 1992 to
1993, Mr. Hikita was a Vice President with Auburn Steel.
HIDEICHIRO TAKASHIMA has been an executive of Kyoei Steel for more than
5 years.
RYUTARO YOSHIOKA has been an executive of Kyoei Steel since July 1,
1994, and before this, an executive of Bank of Tokyo for more than 5 years.
Koichi Takashima and Akihiko Takashima are brothers. Hideichiro
Takashima is the son of Koichi Takashima. None of the other directors are
related to one another.
4
<PAGE> 6
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
The Board of Directors held two meetings during fiscal 1997. All
incumbent directors except Messrs. Koichi Takashima, Akihiko Takashima, and
Hideichiro Takashima attended at least 75% of all meetings of the Board. All
incumbent directors attended at least 75% of all meetings of the Committees of
which they were members.
The Board of Directors has a standing Executive Committee, Executive
Compensation Committee, and Audit Committee.
The members of the Executive Committee are Messrs. Casey and Landa and
included Mr. Fujimura until his retirement on June 25, 1997. The Executive
Committee held two meetings during fiscal 1997. The Executive Committee is
endowed, during the intervals between meetings of the directors and to the
extent permitted by the Florida Business Corporation Act, with all the powers of
the directors in the management and control of the business.
The Executive Compensation Committee members are Mr. Koichi Takashima,
Mr. Akihiko Takashima and Mr. Ryutaro Yoshioka and included Mr. Takeshi Fujimura
until his retirement on June 25, 1997. No meetings of the Executive Compensation
Committee were held during fiscal 1997. The Compensation Committee's principal
responsibility is to provide recommendations to the Board regarding compensation
for executive officers of the Company.
The Audit Committee members are Mr. Koichi Takashima and Mr. Akihiko
Takashima and included Mr. Takeshi Fujimura until his retirement on June 25,
1997. No meetings of the Audit Committee were held during fiscal 1997. This
committee provides the opportunity for direct communication with the independent
certified public accountants and the Board. The Audit Committee communicates
with the certified public accountants periodically to review their effectiveness
during the annual audit program and to discuss the Company's internal control
policies and procedures.
The Board of Directors does not have a Nominating Committee because the
Board as a whole functions in this capacity.
COMPENSATION OF DIRECTORS
No director receives separate compensation for services rendered as a
director. Expenses incurred by directors who are employees of the Company to
attend meetings of the Board of Directors or committees thereof are covered by
the Company. The Company does not reimburse expenses incurred by non-employee
directors to attend board meetings.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and beneficial owners of
more than 10% of the Company's Common Stock to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Based
solely upon its review of such forms, the Company believes all such reports were
submitted on a timely basis during the fiscal year ended March 31, 1997.
5
<PAGE> 7
EXECUTIVE COMPENSATION COMMITTEE REPORT
This report is submitted by the Executive Compensation Committee with
respect to the compensation policies applicable to the Company's executive
officers for fiscal 1997. The Executive Compensation Committee is represented by
non-employee directors Mr. Koichi Takashima, Mr. Akihiko Takashima, and Mr.
Ryutaro Yoshioka and included Mr. Takeshi Fujimura until has retirement on June
25, 1997.
GENERAL POLICIES
The Company's executive compensation system is intended to attract,
retain, and motivate high quality executive officers who can enhance stockholder
value, and to support a performance-oriented environment that rewards
achievement of the Company's planned financial goals. The Committee believes
that linking executive compensation to corporate performance, through an
emphasis on performance bonuses, results in better alignment of compensation
with corporate goals and stockholder interests. The Committee also believes that
through stock ownership and stock options it has created a program that promotes
stockholder value creation in the long term. In evaluating the performance of
executive officers, the Committee's approach is to consult with the Chief
Executive Officer, except when evaluating his performance, in which case the
Committee's approach is to meet and deliberate independently without the Chief
Executive Officer being present.
The Company compensates its executive officers through three principal
types of compensation; annual base salary, annual incentive bonuses, and
long-term incentive award through stock options and restricted stock. The
Committee's policies regarding the types of compensation are discussed below.
BASE SALARY
The annual base salary of each of AmeriSteel's executive officers is
based upon the scope of his or her responsibility and accountability within the
Company, as well as performance and experience criteria. In setting the level of
base salary for executive officers, other than the Chief Executive Officer, the
Committee's approach is to review the Chief Executive Officer's recommendations
together with other information from independent compensation consultants. The
Chief Executive Officer's salary is based primarily upon the terms of his five
year employment agreement dated June 1, 1994.
ANNUAL INCENTIVE COMPENSATION
Each year the Executive Compensation Committee recommends to the Board
of Directors cash bonuses primarily for a majority of the executive officers of
the Company. The awards are determined in accordance with AmeriSteel's Strategic
Value Added Executive Short-Term Incentive Plan (the "SVA Plan"), the purpose of
which is to award executives who substantially contribute in reaching specific
annual performance goals.
The SVA Plan is administered by the Executive Compensation Committee,
none of whom may participate in the awards. The Executive Compensation Committee
may appoint an officer of the Company to assist in the administration of the SVA
Plan and it may grant authority to such person to execute documents on its
behalf.
6
<PAGE> 8
The SVA Plan is designed to award for the attainment of a minimum
return on average capital employed for the year as determined at the beginning
of the fiscal year. Upon achievement, payments are made within two months of the
end of the fiscal year provided, however, that all covenants governing the
Company's indebtedness for borrowed money are met prior to and after giving
effect to the payments. An award may also be paid in shares of the Company's
Common Stock if so determined by the Chief Executive Officer and approved by the
Board of Directors at any time prior to the payment of the award or in any
combination of cash and shares.
The Company has also implemented a performance based plan to award
virtually all other individuals who do not participate in the SVA Plan. The
Partners in Performance Plan "PIP" ties a portion of an employee's pay to
established minimum performance requirements relative to the responsibilities of
their position. Generally, employees at the steel minimills have performance
criteria relating to tons of steel melted and/or tons of steel rolled, employees
associated with the fabricating operation have performance criteria relating to
manufacturing costs, employees at the rail products plants have performance
criteria relating to tons of finished steel product produced, employees
associated with the mills sales have performance criteria relating to tons
shipped, and general and administrative employees have performance criteria
relating to a combination of the above criteria. PIP awards are paid in cash in
the month following month of attainment except production employees at the steel
minimills and rail products operations, whose awards are paid the week following
the week of attainment.
LONG TERM INCENTIVE COMPENSATION
The Executive Compensation Committee believes that providing key
employees, including executive officers, with the opportunity to acquire stock
ownership over time is the most desirable way to align their interest with those
of the Company's stockholders. Stock options, awarded under the Company's 1996
Equity Ownership Plan (the "EOP"), provide an incentive that focuses the
attention of executive officers and other employees on managing the Company from
the perspective of an owner with an equity interest in the business. In
addition, stock options are a key part of the Company's program for motivating
and rewarding managers over the long term.
The Executive Compensation Committee, upon recommendation by the Chief
Executive Officer, determines and makes final decisions regarding stock options,
restricted stock and other awards under the EOP. Such factors as performance and
responsibilities of individual managers and the management team as a whole in
addition to general industry practices play an integral role in the
determination of the number of options awarded to a particular senior executive
or employee. Accordingly, the Company has granted stock options to a significant
number of employees in various positions to afford them an opportunity to
participate in the Company's future growth, particularly in the creation of
value for all stockholders. In the fiscal year ended March 31, 1997, the Company
granted stock options covering 79,350 shares to various employees, of which
options covering 33,000 shares were granted to executive officers. In May 1997,
the Company granted an additional 63,550 stock options to various employees of
which 21,800 options were granted to executive officers. The options vest in
one-third increments each year beginning approximately two years after the grant
date.
7
<PAGE> 9
In September 1995, the Board of Directors approved, upon recommendation
by the Executive Compensation Committee, a one time Stock Purchase/Option Plan
identified as the Shares in Success Plan (the "SIS Plan"). The SIS Plan was made
available to essentially all employees of the Company. Employees who purchased
stock were awarded stock options equal to six times the number of shares
purchased. A total of 37,689 shares were sold under the SIS Plan at a purchase
price of $10.63 per share, with 32,448 of these shares remaining outstanding as
of March 31, 1997. The options were granted at fair value at the date of the
grant, as determined by an independent appraisal as of the end of the previous
fiscal year-end. A total of 226,134 options were granted under the SIS Plan. No
options remain available for future grant under this plan. The issued options
become one-third vested two years from the grant date, another one-third vested
three years from the grant date and the remaining balance vested four years from
the grant date. Options may be exercised for up to 10 years from the grant date.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR FISCAL 1997
Mr. Casey's salary is set annually by the Executive Compensation
Committee within the approved salary range and in accordance with the terms and
conditions of his employment agreement. Mr. Casey's salary for fiscal 1997 was
$255,000 which was unchanged from fiscal 1996. In fiscal 1997, Mr. Casey was
awarded a bonus of $65,637 under the SVA Plan due to the attainment of certain
performance targets. Mr. Casey did not participate in the stock options awards
made under the EOP during the fiscal year due to his ownership position in the
Company.
CONCLUSION
The Executive Compensation Committee believes that current total
compensation arrangements are reasonable and competitive. The Executive
Compensation Committee believes fiscal 1997 compensation for executive officers
is consistent with the current compensation philosophy and reflects corporate
performance. The Executive Compensation Committee will continue to monitor and
administer compensation programs for executive officers of the Company.
EXECUTIVE COMPENSATION COMMITTEE
Koichi Takashima - Committee Chairman
Akihiko Takashima
Ryutaro Yoshioka
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of the end fiscal 1997, the members of the Company's Executive
Compensation Committee were Messrs. Koichi Takashima, Akihiko Takashima, Ryutaro
Yoshioka and Takeshi Fujimura. Mr. Fujimura was Chairman of the Executive
Committee until June 25, 1997 and remains as a special advisor to the Chairman
of AmeriSteel. None of the other members has at any time been an officer or
employee of the Company.
Mr. Fujimura was Advisor to the President of Kyoei Steel, until June
25, 1997, while the other members of the Committee continue to be executive
officers and/or directors of Kyoei Steel. Two other members of the Company's
Board of Directors are also executive officers and/or directors of Kyoei Steel.
8
<PAGE> 10
EXECUTIVE COMPENSATION
The tables and descriptive information set forth below are being
furnished with respect to those persons who were the Company's Chief Executive
Officer and its four most highly compensated executive officers, other than the
Chief Executive Officer, whose salary and bonus exceeded $100,000 for the most
recent fiscal year and one other individual for whom disclosure would have been
required except that he was not an executive officer at the end of the most
recent fiscal year (together, the "named executive officers"). Tables have been
omitted where no compensation was awarded to, earned by or paid to any of the
named executives required to be reported in any fiscal year covered by that
table.
SUMMARY COMPENSATION TABLE
The following table provides information concerning the annual
compensation of each of the named executive officers of the Company for services
rendered to the Company in each of the Company's last three fiscal years.
<TABLE>
<CAPTION>
LONG TERM COMPENSAION
ANNUAL COMPENSATION AWARDS
--------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
SALARY BONUS AWARD(S) OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $ $(1) # $(2)
- --------------------------- ---- ------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Phillip E. Casey 1997 255,000 65,637 -- -- 3,278
Chairman of the Board 1996 255,000 80,453 -- -- 4,617
and Chief Executive Officer(3) 1995 249,167 2,692,170 4,500,000 250,000 --
J. Donald Haney 1997 210,954 53,893 -- 3,500 3,032
Vice President Fabricating 1996 196,974 64,445 -- 1,368 2,620
Reinforcing Products 1995 216,594 140,995 -- -- 4,137
Tom J. Landa 1997 170,217 43,886 -- -- 3,647
Vice President 1996 160,389 153,019 150,000 12,960 --
and Chief Financial Officer(4)
James C. Hogue(5) 1997 166,662 42,570 -- 3,000 2,921
Vice President Human Resources 1996 155,712 50,944 -- 1,080 2,735
1995 180,936 105,872 -- -- 3,422
James F. Oliver 1997 121,978 83,009 -- 3,000 2,332
Vice President 1996 104,734 35,957 -- 738 2,096
Knoxville Steel Mill Division 1995 119,856 -- -- -- 1,936
Thomas G. Creed(5) 1997 156,408 39,935 -- -- 593,569
President 1996 256,308 82,671 -- 2,500 2,481
and Chief Operating Officer 1995 282,204 221,779 -- -- 4,748
</TABLE>
(1) The shares of restricted stock shown are subject to a substantial risk
of forfeiture which for Mr. Casey lapses at the rate of 20% a year
beginning as of June 1, 1995 and for Mr. Landa lapses at a rate of 33%
beginning as of April 1, 1997. At the end of fiscal 1997, the aggregate
restricted stock holdings and value of such holdings were for Mr. Casey
450,000 shares and $6,075,000, respectively, and for Mr. Landa 12,000
shares and $162,000, respectively. Dividends, if declared and paid on
the Company's common stock generally, are payable on the shares at the
same rate as paid to all stockholders.
9
<PAGE> 11
(2) These amounts consist of Company matching contributions made pursuant
to the Company's Savings Plan, except for Mr. Creed which amount
includes a one-time payment of $591,600 from the Supplemental
Retirement Plan in connection with his retirement in November 1996.
(3) For 1995, Mr. Casey's salary covers ten months of employment beginning
June 1, 1994, whereas his bonus includes a one-time signing bonus of
$500,000 and a $1,946,000 tax bonus. See "Employment Agreements" for
more information.
(4) Includes a $100,000 signing bonus pursuant to Mr. Landa's employment
offer in April 1995.
(5) Messrs. Creed and Hogue retired from their officer positions with the
Company in November 1996 and May 1997, respectively.
OPTIONS GRANTS TABLE
The following table shows information concerning stock options granted
during fiscal 1997 for the "named executive officers."
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ------------------ ----------- ------------ -------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Phillip E. Casey -- -- -- -- -- --
J. Donald Haney 3,500 4.41% 12.50 5/31/06 27,514 69,726
Tom J. Landa -- -- -- -- -- --
James C. Hogue(1) 3,000 3.78% 12.50 5/31/06 23,584 59,765
James F. Oliver 3,000 3.78% 12.50 5/31/06 23,584 59,765
Thomas G. Creed(1) 2,500 3.15% 12.50 5/31/06 19,653 49,804
</TABLE>
The options were granted under the Company's Equity Ownership Plan and
vest over four years at an exercise price of $12.50 per share.
(1) Messrs. Creed and Hogue forfeited their options upon retirement in
November 1996 and May 1997, respectively.
10
<PAGE> 12
OPTION EXERCISES AND YEAR-END VALUE TABLE
No stock options were exercised by any of the Company's executive
officers during fiscal 1997. The following table shows information concerning
stock option values as of the end of fiscal 1997 for each "named executive
officer."
<TABLE>
<CAPTION>
VALUE OF OPTIONS
NUMBER OF OPTIONS EXERCISABLE/UNEXERCISABLE
NAME EXERCISABLE/UNEXERCISABLE $(1)
- ---------------- ------------------------- -------------------------
<S> <C> <C>
Phillip E. Casey 0 0
Tom J. Landa 0/12,960 0/12,960
J. Donald Haney 0/ 4,868 0/ 4,868
James C. Hogue 0/ 4,080 0/ 4,080
James F. Oliver 0/ 3,738 0/ 3,738
Thomas G. Creed 0 0
</TABLE>
(1) This represents the amount by which the latest appraisal exceeds the
exercise price of the options held by the named executive officer. The
latest independent appraisal of the Company's common stock, made as of
March 31, 1997, sets forth a fair market value per share of $13.50.
(2) Messrs. Creed and Hogue forfeited their options upon retirement in
November 1996 and May 1997, respectively.
EMPLOYMENT AGREEMENTS
Effective June 1, 1994, the Company entered into an employment
agreement with Phillip E. Casey to serve as the Company's Chairman of the Board
of Directors and Chief Executive Officer. The Agreement includes a one time
signing bonus of $500,000, annual base salary of $300,000, equity interest of
7.5% of the outstanding common stock of the Company ($4.5 million to vest
ratably over five years), a tax bonus in the amount of $1,946,000 paid to Mr.
Casey with respect to his receipt of the 7.5% equity interest, and other
benefits commensurate with his position. In addition, Mr. Casey was granted and
exercised an option to purchase an additional 2.5% of the outstanding common
stock of the Company for $1.5 million. The agreement provides for certain
termination benefits and places restrictions on the disposition of the Company's
stock.
11
<PAGE> 13
PENSION BENEFIT
The table below sets forth the estimated annual benefits, payable as a
single life annuity beginning at retirement at age 65, at various remuneration
levels and for representative years of service at normal retirement date, under
the Company's tax qualified noncontributory defined benefit pension plan (the
"Retirement Plan"). Also, set forth below this section is information about the
estimated annual benefits (also reported as a single life annuity beginning at
retirement at age 65) payable under the Company's Supplemental Retirement Plan.
ESTIMATED ANNUAL RETIREMENT BENEFIT
<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF SERVICE
COMPENSATION 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 27,070 $ 33,837 $ 40,604 $ 47,372 $ 52,372
$ 150,000 42,070 52,587 63,104 73,622 81,122
$ 200,000 57,070 71,337 85,604 99,872 109,872
</TABLE>
Under the Retirement Plan, the compensation taken into account
generally includes all salary, bonuses and other taxable compensation, subject
to a $150,000 per year limitation. The final average compensation for the named
executive officers for purposes of the Retirement Plan for 1997 is $150,000. The
years of credited service for the named executive officers for the Retirement
Plan are three years for Phillip E. Casey, 39 years for J. Donald Haney, two
years for Tom J. Landa, seven years for James F. Oliver, and 23 years for Thomas
G. Creed. The benefits under the Retirement Plan are not subject to any
deduction for Social Security or other offset amounts.
SUPPLEMENTAL RETIREMENT PLAN
The Company maintains a nonqualified, unfunded Supplemental Retirement
Plan (the "SRP"), which provides certain officers defined pension benefits in
addition to those provided under the Company's other plans. The SRP provides an
annual retirement benefit equal to the greater of (i) 50% of final average
compensation without regard to the $150,000 limit, and (ii) 2.4% of final
average compensation multiplied by years of service (up to 25), plus 1% of final
average compensation multiplied by years of service in excess of 25 (up to 10),
less (in either case) amounts to which the participant is entitled under other
retirement plans of the Company and prior employers and under Social Security.
Upon retirement at November 1, 1996 Thomas Creed received a one-time payment of
$591,600 for supplemental retirement benefit. As of March 31, 1997 the Company
has accrued approximately $138,500 in supplemental retirement benefits for the
then two remaining active employees (James C. Hogue and J. Donald Haney) covered
by the SRP. No other named executive officer is covered by the SRP.
In connection with the acquisition of FLS Holdings Inc. by Kyoei Steel,
the officers covered by this Plan have all waived their rights to an immediate
lump sum payment, provided, that if such officers are terminated without Cause
(as defined in the severance agreements entered into with such officers), resign
for Good Reason (as defined in the severance agreements) or die, retire or
become disabled, then such officers will be entitled to receive the amounts they
would have received had such officers not waived the above described rights.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AmeriSteel has entered into a Tax Sharing Agreement with FLS Holdings
Inc., the Company's parent who owns 89% of the outstanding Common Stock. The Tax
Sharing Agreement provides for the Company to fund federal and state and local
income tax liabilities arising from consolidated filings. For fiscal 1997, FLS
Holdings Inc. incurred no income tax liability on an unconsolidated basis.
The Company has entered into a Technical Assistance Agreement with
Japan based Kyoei Steel. Kyoei Steel owns 100% of FLS Holdings Inc. This
agreement requires AmeriSteel to pay fair market value rates for engineering
consulting services provided by Kyoei Steel. There were no consulting services
provided by Kyoei Steel during fiscal 1997.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
The firm of Arthur Andersen LLP has been the Company's independent
certified public accountants since fiscal 1995. Arthur Andersen LLP has been
recommended by the Audit Committee and approved by the Board of Directors as the
Company's independent certified public accountants for the year ending March 31,
1998. Selection of the Company's independent certified public accountants is not
required by the Company's By-Laws or otherwise.
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