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.
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement.
AMERISTEEL CORPORATION
-------------------------------------------------------------------------------
(Name of Registrant as specified in its Charter)
None.
-------------------------------------------------------------------------------
(Name of person(s) Filing Information Statement, if Other Than the Registrant)
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>
[LOGO OMITTED]
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 28, 2000
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 to be taken by written consent by the holders of a
majority of the outstanding shares of Class A common stock (the "Class A Common
Stock") of AmeriSteel Corporation ("AmeriSteel" or the "Company"). Certain
stockholders of the Company, owning approximately 94.8% of the outstanding Class
A Common Stock, intend to act by written consent in lieu of an Annual Meeting of
Stockholders for the following purposes:
(1) to elect ten directors, representing all of the members of the
Board of Directors of the Company; and
It is anticipated that the written consent is to be submitted to the
Company and become effective on or about August 19, 2000.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND TO
THE COMPANY A PROXY.
1
<PAGE>
At the close of business on June 30, 2000, there were 10,382,184 shares
of Class A Common Stock outstanding, each of which is entitled to one vote.
There are no shares of Class B Common Stock outstanding, each of which is
entitled to two votes.
The approximate date on which this Information Statement is to be
mailed to stockholders is July 28, 2000.
SECURITY OWNERSHIP
The following table sets forth, as of June 30, 2000, the number of
shares of the Company's Class A Common Stock beneficially owned by (i) each
person known to the Company as having beneficial ownership of more than 5% of
the Company's Class A 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>
NAME OF BENEFICIAL OWNER AMOUNT AND NATURE OF
OR NUMBER IN GROUP BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS
--------------------------------------- ------------------------ ----------------
<S> <C> <C>
FLS Holdings, Inc. (2) ................ 9,000,000 86.7%
Phillip E. Casey (3) .................. 844,192 8.1%
Tom J. Landa .......................... 14,851 *
J. Donald Haney ....................... 3,953 *
Jorge Gerdau Johannpeter .............. 0 --
Frederico C. Gerdau Johannpeter ....... 0 --
Klaus Gerdau Johannpeter .............. 0 --
Andre Bier Johannpeter ................ 0 --
Germano Gerdau Johannpeter ............ 0 --
Carlos J. Petry ....................... 0 --
Hideichiro Takashima .................. 300 --
Dennie Andrew ......................... 1,667 *
James S. Rogers, II ................... 2,652 *
All Directors and Executive Officers as
a Group (14 persons) .................. 874,390 8.4%
</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. For
purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares as of a given date
which such person has the right to acquire within 60 days after
such date.
2
<PAGE>
(2) All shares shown are directly owned by FLS Holdings, Inc., of
which Gerdau USA, Inc. ("Gerdau USA"), a Delaware corporation
owns 88% of the outstanding common stock and Kyoei Steel Ltd.
owns the remaining 12%. Gerdau USA is a wholly owned subsidiary
of Gerdau S.A. FLS Holdings, Inc. and Gerdau USA's address is c/o
Osvaldo B. Schirmer, Gerdau S.A. Av. Farrapos 1811 Porto Alegre,
Rio Grande Do Sul - Brazil CEP 90220-005 .
(3) Mr. Casey's address is 5100 W. Lemon Street, Suite 312, Tampa,
Florida 33609.
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 the date of this Information
Statement there are ten members on the Company's Board of Directors.
Stockholders owning approximately 94.8% of the outstanding shares of
Class A Common Stock (the "Majority Stockholders") intend by written consent in
lieu of an Annual Meeting of Stockholders of the Company to elect the following
ten nominees to act as directors of the Company.
Phillip E. Casey
Tom J. Landa
J. Donald Haney
Jorge Gerdau Johannpeter
Frederico C. Gerdau Johannpeter
Klaus Gerdau Johannpeter
Andre Bier Johannpeter
Germano Gerdau Johannpeter
Carlos J. Petry
Hideichiro Takashima
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.
In September 1999, Kyoei Steel, Ltd. ("Kyoei"), a company organized
under the laws of Japan, sold approximately 88% of the issued and outstanding
common stock of FLS Holdings, Inc. ("FLS"), a Delaware corporation, to Gerdau
USA (the "Stock Purchase Transaction"). Under the terms of the Stock Purchase
Agreement, Gerdau USA, Kyoei and FLS also entered into a Shareholders Agreement.
The Shareholders Agreement provides that Gerdau USA, as long as Kyoei
3
<PAGE>
maintains at least a 2.5% ownership interest in FLS, will elect one person
designated by Kyoei to the Board of Directors of FLS and AmeriSteel. Kyoei,
under the terms of the Stock Purchase Agreement, designated Hideichiro Takashima
as the person to be nominated and elected to the Board of Directors of
AmeriSteel.
The following table sets forth certain information regarding the
nominees for directors:
NAME AGE YEARS AS A DIRECTOR
---- --- -------------------
Phillip E. Casey ........................ 57 6
Tom J. Landa ............................ 48 3
J. Donald Haney ......................... 64 12
Jorge Gerdau Johannpeter ................ 63 *
Frederico C. Gerdau Johannpeter.......... 57 *
Klaus Gerdau Johannpeter................. 65 *
Andre Bier Johannpeter................... 37 *
Germano H. Gerdau Johannpeter.............68 *
Carlos J. Petry...........................59 *
Hideichiro Takashima......................42 5
* Each of the directors was appointed to the Board of Directors in
September 1999 to fill vacancies.
PHILLIP E. CASEY has been Chief Executive Officer and a director since
June 1994 and President since September 1999. Mr. Casey was Chairman of the
Board of AmeriSteel from June 1994 until September 1999.
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
the Company 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 Reinforcing
Steel Group since 1979. Mr. Haney joined the Company in 1958 and is principally
responsible for the Company's reinforcing steel fabricating group.
JORGE GERDAU JOHANNPETER. Mr. Jorge Gerdau Johannpeter has been working
for the Gerdau Companies since 1954. Mr. Jorge Johannpeter and his brothers,
Germano, Klaus and Frederico, started as apprentices. Mr. Jorge Johannpeter
became an Executive Officer in 1973 and was appointed President in 1983. He
received a degree in Law from the Federal University of Rio Grande do Sul.
4
<PAGE>
FREDERICO C. GERDAU JOHANNPETER. Mr. Frederico Johannpeter has worked
for the Gerdau Companies with his father and brothers since 1961. Mr. Frederico
Johannpeter became an Executive Officer in 1973 and was appointed Vice-President
of the Gerdau Companies in 1983. He received a degree in Business Administration
from the Federal University of Rio Grande do Sul.
KLAUS GERDAU JOHANNPETER Mr. Klaus Johannpeter has worked for the
Gerdau Companies with his father and brothers since 1954. Mr. Klaus Johannpeter
became an Executive Officer in 1973 and was appointed Vice-President of the
Gerdau Companies in 1983. He received a degree in Civil, Electrical and
Mechanical Engineering from the Federal University of Rio Grande do Sul.
ANDRE BIER JOHANNPETER. Mr. Andrew Bier Johannpeter has been working
for the Gerdau companies since 1980. He started as an apprentice and became an
Executive Officer in 1989. In 1998 Mr. Johannpeter was appointed Director of
Information Systems and in 1999 he became Director of Managerial Processes. He
holds a degree in Business Management from the Catholic Pontiff University of
Rio Grande do Sul.
GERMANO GERDAU JOHANNPETER. Mr. Germano Johannpeter has been working
with his father and brothers since 1951. Mr. Germano Johannpeter became an
Executive Officer in 1973 and was appointed Vice-President of the Gerdau
Companies in 1983. He received a degree in Business Administration from the
Getulio Vargas Foundation.
CARLOS J. PETRY. Mr. Petry has worked for the Gerdau Companies since
1965. In 1975, he was appointed to the Board of Directors. Mr. Petry received a
degree in Philosophy from the Federal University of Rio Grande do Sul.
HIDEICHIRO TAKASHIMA has been a director of the Company since 1995.
Since June 1995, Mr. Takashima has been President and Chief Operating Officer of
Kyoei. From June 1992 until June 1995, Mr. Takashima held other senior
management positions with Kyoei.
Messrs. Jorge, Frederico, Klaus and Germano Johannpeter are brothers.
Andre Johannpeter is the son of Jorge Johannpeter. None of the other directors
are related to one another.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
The Board of Directors held two meetings during fiscal 2000. All
incumbent directors except for J. Donald Haney, Germano Gerdau Johannpeter and
Hideichiro Takashima attended at least 75% of all meetings of the Board during
the period of time they held office.
The Board of Directors has a standing Executive Compensation Committee
and Audit Committee.
The Executive Compensation Committee members are Carlos J. Petry, Andre
Beir Johannpeter and Philip E. Casey each of whom were elected to the committee
in September 1999. Prior to September 1999, the Executive Compensation Committee
members were Mr. Koichi
5
<PAGE>
Takashima, Mr. Hideichiro Takashima and Mr. Ryutaro Yoshioka. No meetings of the
Executive Compensation Committee were held during fiscal 2000, although the
committee did act by written consent. 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 Carlos J. Petery and Andre Bier
Johannpeter each of whom were elected to the committee in September 1999. Prior
to September 1999 the Audit Committee members were Mr. Hideichiro Takashima and
Mr. Ryutaro Yoshioka. No meetings of the Audit Committee were held during fiscal
2000. 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
Under Section 16 of the Securities Exchange Act of 1934, as amended,
certain officers, directors and stockholders of the Company are required to file
reports of stock ownership and changes therein with the Securities and Exchange
Commission. Based solely upon the Company's review of such forms, all such forms
were filed timely, except that one Form 4 was filed late for Mr. Casey reporting
gifts of stock to family members, and one Form 4 was filed late for each of
Messrs. Haney, Andrew, Muhlhan, McCullohs, Landa, and Rogers reporting the
grant, vesting, and exercise of certain stock appreciation rights that vested
and were exercised upon a change in control of the Company. In addition, one
Form 4 was filed late for each of Mr. Haney and Mr. Andrew reporting option
exercises and stock sales.
6
<PAGE>
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 2000. The Executive Compensation Committee members are
Carlos J. Petry, Andre Beir Johannpeter and Philip E. Casey each of whom were
elected to the committee in September 1999. Prior to September 1999, the
Executive Compensation Committee members are Mr. Koichi Takashima, Mr.
Hideichiro Takashima and Mr. Ryutaro Yoshioka.
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 awards 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.
ANNUAL INCENTIVE COMPENSATION
Each year the Executive Compensation Committee recommends to the Board
of Directors cash bonuses payable to 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.
7
<PAGE>
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 generally 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 or its equivalent over time is the most desirable way to align their
interest with those of the Company's stockholders. Stock options or stock
appreciation rights ("SARs"), 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 and
SARs 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, 2000, the Company
granted stock options covering 56,850 shares to various employees, none of which
were granted to executive officers. In addition, the Company granted 169,284,
SARS, of which 1,031 were granted to executive officers. The options vest in
one-third increments each year beginning approximately two years after the grant
date and the SARs vest in one-quarter increments each year beginning one year
after the date of grant.
8
<PAGE>
In July 1999, the Board of Directors approved, upon recommendation by
the Executive Compensation Committee, the Stock Purchase/SAR Plan. The plan was
made available to essentially all employees of the Company. Employees who
purchased stock under the plan received Stock Appreciation Rights equal to four
times the number of shares purchased under the plan. In fiscal 2000, a total of
42,321 shares were sold under the Stock Purchase/SAR Plan at a purchase price of
$15.30 per share, with 33,776 of these shares remaining outstanding as of March
31, 2000. A total of 169,284 SARs were granted under the plan.
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 1,047 of these shares remaining outstanding as
of March 31, 2000. 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.
In fiscal 2000, the Board of Directors approved a long-term incentive
plan available to executive management (the "Stakeholder Plan") to ensure the
Company's senior management's interest is congruent with the Company's
shareholders. Awards are based on the Company's return on capital employed.
Earned awards are vested and paid out over a period of four years.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR FISCAL 2000
Mr. Casey's salary is set annually by the Executive Compensation
Committee within the approved salary range. Mr. Casey's salary for fiscal 2000
was $255,000, which was unchanged from fiscal 1999. In fiscal 2000, Mr. Casey
was awarded a bonus of $255,000 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 2000 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
Carlos Joao Petry - Committee Chairman
Andre Bier Johannpeter
Phillip E. Casey
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return of the
Company's Common Stock with the cumulative total return of the companies in the
Standard & Poor's 500 Index and S&P 500 Iron and Steel Index. Cumulative total
return for each of the periods shown in the Performance Graph is measured
assuming an initial investment of $100 on July 29, 1996, the date the Company's
Common Stock was registered under Section 12 of the Securities Exchange Act of
1934, and the reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
JULY 31 1996 MARCH 31 1997 MARCH 31 1998 MARCH 31 1999 MARCH 31 2000
------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
AmeriSteel $100.00 $108.00 $164.80 $153.60 $233.60
S&P 500 Index $100.00 $147.84 $218.80 $259.19 $359.69
S&P 500 -Iron & Steel $100.00 $117.94 $141.52 $101.91 $ 95.85
</TABLE>
10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of the end of fiscal 2000, the members of the Company's Executive
Compensation Committee were Carlos Joao Petry, Andre Bier Johannpeter and Philip
E. Casey. Mr. Casey is the President of AmeriSteel.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company previously entered into technical assistance arrangements
with Kyoei, which, until September 1999, was the majority stockholder of FLS
Holdings, Inc. Under these arrangements the Company reimbursed Kyoei for the
personnel costs of its consulting engineers and certain travel and other
expenses. Payments made by the Company under this arrangement in fiscal 2000
were less than $500,000.
11
<PAGE>
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 $100,000 for the most
recent fiscal year (the "Named Executive Officers"). Tables have been omitted
where no compensation was awarded to, earned by or paid to any of the named
executives required to be reported in any fiscal year covered by that table.
SUMMARY COMPENSATION TABLE
The following table provides information concerning the annual
compensation of each of the Named Executive Officers of the Company for services
rendered to the Company in each of the Company's last three fiscal years.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------
SECURITIES
RESTRICTED UNDERLYING
STOCK OPTIONS/ ALL OTHER
AWARDS SARS LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS ($)(1) (#)(1) PAYOUTS(2) SATION (3)
--------------------------- ----- -------- ------- ---------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Phillip E. Casey ............ 2000 $255,000 $255,000 -- -- -- $ 4,287
Chairman of the Board 1999 255,000 $229,398 -- -- -- 3,057
and Chief Executive Officer 1998 255,000 $255,000 -- -- -- 4,750
J. Donald Haney ............. 2000 $219,120 $201,963 -- -- $800,000 $885,287
Group Vice President 1999 219,120 197,120 -- 50,000 -- 3,041
Fabricated Reinforcing Steel 1998 216,684 219,120 33,750 2,700 -- 4,334
Tom J. Landa ................ 2000 $190,362 $176,745 -- -- $800,000 $ 5,271
Vice President and 1999 184,380 167,477 -- 50,000 -- 3,024
Chief Financial Officer 1998 176,886 179,016 33,750 2,500 -- 3,537
Dennie Andrew ............... 2000 $198,090 $184,355 -- -- $800,000 $ 5,461
Vice President, Steel 1999 190,464 173,004 -- 50,000 -- 8,661
Mill Operations 1998 165,960 166,956 33,750 2,500 -- 47,212
James S. Rogers, II ......... 2000 $150,780 $140,157 -- -- $800,000 $ 4,158
Vice President, Human 1999 145,518 132,176 -- 50,000 -- 2,991
Resources 1998 129,514 129,514 33,750 2,000 -- 2,590
</TABLE>
(1) All references are to Class A Common Stock. The shares of restricted stock
shown are subject to a substantial risk of forfeiture which for Messrs.
Haney, Landa, Andrew and Rogers lapses at a rate of 33 % per year beginning
as of October 1, 1999. At the end of fiscal 2000, the aggregate restricted
stock holdings and value of such holdings for each of Mr. Haney, Mr. Landa,
Mr. Andrew and for Mr. Rogers were 1,667 and $46,676, respectively.
Dividends, if declared and paid on the Common Stock generally, are payable
on such restricted shares at the same rate as paid to all stockholders.
(2) These amounts represent payments made in connection with the immediate
vesting of SARs resulting from the change in control of the Company that
was triggered upon the purchase of a majority interest in FLS Holdings by
Gerdau, U.S.A. in September 1999.
(3) These amounts consist of Company matching contributions made pursuant to
the Company's Savings Plan and for Mr. Haney includes $881,639 which was a
distribution from the Company's Supplemental Retirement Plan.
12
<PAGE>
SAR GRANTS TABLE
The following table shows information concerning SARs granted during
fiscal 2000 for the Named Executive Officers. No options were granted to the
Named Executive Officers in fiscal 2000.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
INDIVIDUAL GRANTS PRICE APPRECIATION
------------------------------ ---------------------
% OF TOTAL
SARS
NUMBER OF GRANTED TO
SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SH) DATE 5%($) 10%($)
------------------- --------- ------------ ---------- ---------- ----- -------
<S> <C> <C> <C> <C> <C> <C>
Philip E. Casey ... -- -- -- -- -- --
J. Donald Haney ... 876 .52 18.00 9/29/2009 9,916 25,130
Tom J. Landa ...... 764 .45 18.00 9/29/2009 8,648 21,917
Dennie Andrew (1) . 800 .47 18.00 9/29/2009 9,056 22,949
James S. Rogers, II 608 .36 18.00 9/29/2009 6,883 17,442
</TABLE>
(1) SARs granted to Mr. Andrew were forfeited in March 2000 due to the sale of
the underlying shares.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table shows information concerning stock option and SAR
exercises and values as of the end of fiscal 2000.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT FISCAL AT FISCAL YEAR-END($)
SHARES VALUE YEAR-END(#)
ACQUIRED ON REALIZED
NAME EXERCISE(#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
---- ------------ --------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Phillip E. Casey .. -- -- 0/0 0/0
J. Donald Haney ... 54,601 893,421 0/3,843 0/52,948
Tom J. Landa ...... 50,000 800,000 13,793/2,431 212,958/31,812
Dennie Andrew ..... 52,833 857,244 0/2,667 0/39,671
James S. Rogers, II 50,000 800,000 666/1,942 9,657/25,423
</TABLE>
(1) This represents the excess of the fair market value of the Company's Common
Stock as of the date of exercise above the exercise price of the
options/SARs.
(2) This represents the excess of the fair market value per share of the
Company's Common Stock of $28.00 per share as of March 31, 2000, the date
of the latest appraisal of the Company's stock, above the exercise price of
the options/SARs.
13
<PAGE>
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.
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------------
FINAL AVERAGE COMPENSATION 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
-------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000.................. $ 26,694 $ 33,368 $ 40,041 $ 46,715 $ 51,715
150,000.................. 41,694 52,118 62,541 72,965 80,465
200,000.................. 56,694 70,868 85,041 99,215 109,215
</TABLE>
Under the Retirement Plan, the compensation taken into account
generally includes all salary, bonuses and other taxable compensation, subject
to an annual compensation limit, which currently is $160,000. As of March 31,
2000, the final average compensation and years of credited service for the Named
Executive Officers for purposes of the Retirement Plan were as follows: $159,023
and five years for Phillip E. Casey; $198,896 for benefits earned through
September 30, 1994 and $153,336 for benefits earned subsequently and 40 years
for J. Donald Haney; $153,750 and four years for Tom J. Landa; $155,645 and
three years for Dennie Andrew; and $156,116 and 18 years for James S. Rogers,
II. 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 an officer 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 $160,000 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. Due to the
change of control, a payment in the amount of $881,639 was made to Mr. Haney. As
of March 31, 2000 the Company has accrued approximately $63,000 in supplemental
retirement benefits for the then one remaining active employee (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, the
officers covered by the SRP have all waived certain rights, provided that if
such officers are terminated without cause (as defined in the mutually effective
severance agreements entered into with such officers), resign for good reason
(as defined in the mutually effective 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 such rights.
EMPLOYMENT AGREEMENTS
Effective June 1, 1994, the Company entered into a five-year employment
agreement with Phillip E. Casey to serve as the Company's Chairman of the Board
of Directors and Chief Executive Officer. The Agreement terminated June 1, 1999.
However, certain provisions of the Agreement remain in effect for up to an
additional three years. Specifically, the Company has a right to purchase from
Mr. Casey the Company's
14
<PAGE>
Class A Common Stock acquired by Mr. Casey pursuant to the Agreement. In
addition, the Agreement provides that the sale by the Company of any shares that
are senior or preferred to the Class A Common Stock held by Mr. Casey requires
Mr. Casey's consent. Mr. Casey also has certain rights to participate with the
Company in a secondary public offering of the Company's common stock and a right
of first refusal with respect to 10% of any new stock to be issued by the
Company, except under certain circumstances including certain public offerings,
stock splits or stock dividends.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
The firm of Arthur Andersen LLP has been the Company's independent
certified public accountants since fiscal 1995. The Company anticipates
retaining Arthur Andersen LLP as the Company's independent certified public
accountants for the year ending December 31, 2000. Stockholder approval of the
selection of the Company's independent certified public accountants is not
required by the Company's By-Laws or otherwise.
15
