<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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
Friedman Industries, Incorporated
- --------------------------------------------------------------------------------
(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):
/X/ $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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
FRIEDMAN INDUSTRIES, INCORPORATED
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------------
To the Shareholders of Friedman Industries, Incorporated:
The Annual Meeting of Shareholders of Friedman Industries, Incorporated
(the "Company") will be held at the offices of Fulbright & Jaworski L.L.P., 1301
McKinney, 51st Floor, Houston, Texas, on August 30, 1996, at 11:00 a.m. (local
time), for the following purposes:
(1) To elect a board of seven directors for the ensuing year.
(2) To consider approval of the Friedman Industries, Incorporated 1996
Employee Stock Option Plan.
(3) To transact such other business as may properly come before the
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on July 19, 1996, as
the record date for the determination of shareholders entitled to receive this
notice and to vote at the meeting.
All shareholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
BEN HARPER
Secretary
August 1, 1996
Houston, Texas
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND MAIL IT IN THE ENCLOSED ENVELOPE TO ASSURE
REPRESENTATION OF YOUR SHARES. IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN
PERSON OR BY YOUR PROXY.
<PAGE> 3
FRIEDMAN INDUSTRIES, INCORPORATED
-------------------------------
PROXY STATEMENT
-------------------------------
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 30, 1996
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Friedman Industries, Incorporated (the
"Company"), 4001 Homestead Road, Houston, Texas 77028 (telephone number
713-672-9433) to be used at the Annual Meeting of Shareholders to be held on
Friday, August 30, 1996 (the "Annual Meeting"), at the offices of Fulbright &
Jaworski L.L.P., 1301 McKinney, 51st Floor, Houston, Texas, for the purposes set
forth in the foregoing notice of the meeting. Properly executed proxies received
in time for the meeting will be voted as directed therein, unless revoked in the
manner provided hereinafter. As to any matter for which no choice has been
specified in a proxy, the shares represented thereby will be voted by the
persons named in the proxy (i) for the election as director of the nominees
listed herein; (ii) for the proposal to approve and ratify the adoption of the
Friedman Industries, Incorporated 1996 Employee Stock Option Plan (the "Stock
Option Plan"); and (iii) in the discretion of such persons, in connection with
any other business that may properly come before the meeting. If the enclosed
form of proxy is executed and returned, it may nevertheless be revoked by the
shareholder at any time before it is exercised pursuant to either the
shareholder's execution and return of a subsequent proxy or the shareholder's
voting in person at the Annual Meeting.
At the close of business on July 19, 1996, there were 6,125,512 shares of
Common Stock, $1 par value, of the Company ("Common Stock") outstanding. Holders
of record of the Common Stock on such date will be entitled to one vote per
share on all matters to come before the Annual Meeting.
The holders of a majority of the total shares of Common Stock issued and
outstanding on the record date, whether present in person or represented by
proxy, will constitute a quorum for the transaction of business at the Annual
Meeting. Any unvoted position in a brokerage account will be considered as not
voted and will not be counted toward fulfillment of quorum requirements. The
shares held by each shareholder who signs and returns the enclosed form of proxy
will be counted for purposes of determining the presence of a quorum at the
Annual Meeting.
The enclosed form of proxy provides a means for shareholders to vote for
all of the nominees listed therein, to withhold authority to vote for one or
more of such nominees or to withhold authority to vote for all of such nominees.
The withholding of authority by a shareholder will have no effect on the results
of the election of those directors for whom authority to vote is withheld
because the Company's bylaws provide that directors are elected by a plurality
of the votes cast.
Approval of the Stock Option Plan requires the affirmative vote of the
holders of a majority of the shares of Common Stock entitled to vote on the
proposal and present in person or represented by proxy at the Annual Meeting.
Shares that are represented at the Annual Meeting but abstain from voting will
be counted as shares entitled to vote on the proposal and will have the same
effect as a vote against the proposal.
The Company's Annual Report to Shareholders for the year ended March 31,
1996, including financial statements, is enclosed with this proxy statement. The
Annual Report to Shareholders does not constitute a part of the proxy soliciting
materials. This proxy statement is being mailed on or about August 1, 1996, to
shareholders of record as of July 19, 1996.
1
<PAGE> 4
ELECTION OF DIRECTORS
(PROPOSAL 1)
The persons who are elected directors will hold office until the next
Annual Meeting of Shareholders and until their successors are elected and shall
qualify. The Board of Directors currently consists of seven members.
It is intended that the persons named in the enclosed proxy will vote for
the election of the seven nominees named below. The management of the Company
does not contemplate that any of such nominees will become unavailable to serve
as a director. However, should any nominee of management be unable to serve as a
director or become unavailable for any reason, proxies which do not withhold
authority to vote for that nominee may be voted for another nominee to be
selected by management.
The following table sets forth the names of the nominees for election to
the Board of Directors, the principal occupation or employment of each of the
nominees, the period during which each nominee has served as a director of the
Company and the age of each nominee:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
BUSINESS EXPERIENCE FOR MORE DIRECTOR
NOMINEE THAN THE LAST FIVE YEARS SINCE AGE
---- ---
<S> <C> <C> <C>
Jack Friedman............... Chairman of the Board and Chief Executive 1965 75
Officer of the Company
Harold Friedman............. Vice Chairman of the Board 1965 66
Charles W. Hall............. Partner, Fulbright & Jaworski L.L.P., 1974 66
Attorneys,
Houston, Texas
Alan M. Rauch............... President, Ener-Tex International Inc. 1980 61
(oilfield equipment sales), Houston, Texas
Hershel M. Rich............. Private investor and business consultant, 1979 71
Houston, Texas
Henry Spira................. Retired, former Vice President of the Company 1965 91
Kirk K. Weaver.............. Chairman of the Board and Chief Executive 1981 51
Officer, LTI Technologies, Inc. (technical
services), Houston, Texas; also, since
1992, President, HB Larkin Corporation
(manufacturer of oilfield equipment),
Houston, Texas
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the Securities Exchange Act of 1934 (the "Exchange Act"), the
Company's directors, executive officers and 10% shareholders must report to the
Securities and Exchange Commission certain transactions involving Common Stock.
Based solely on a review of the copies of the reports required pursuant to
Section 16(a) of the Exchange Act that have been furnished to the Company and
written representations that no other reports were required, the Company
believes that these filing requirements have been satisfied for the fiscal year
ended March 31, 1996.
DIRECTOR FEES
With the exception of Harold and Jack Friedman, directors are paid $500 per
quarter and receive annually 400 shares of the Company's Common Stock. Harold
and Jack Friedman receive no director fees. In addition, audit committee members
receive $500 for each committee meeting attended.
BOARD OF DIRECTORS AFFILIATIONS AND CONTROL PERSONS
Messrs. Harold Friedman and Jack Friedman are brothers and the nephews of
Mr. Spira. Mr. Hall is a partner with Fulbright & Jaworski L.L.P., legal counsel
for the Company.
2
<PAGE> 5
Based on the amount of Common Stock owned by Messrs. Harold and Jack
Friedman, they may be deemed to be control persons of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
During fiscal 1996, the Board met three times. Messrs. H. Friedman, J.
Friedman, Spira, Rauch, Rich and Weaver attended all of the meetings. Mr. Hall
attended one of the meetings.
The Board of Directors has an audit committee which consists of Messrs.
Hall, Rauch and Weaver. The audit committee discusses with the independent
accountants and management the scope of the audit examinations, reviews with the
independent accountants the audit budget, receives and reviews the Audit Report
submitted by the independent accountants, reviews with the independent
accountants internal accounting and control procedures and recommends
independent accountants for appointment as auditors. The audit committee met one
time in fiscal 1996, and Messrs. Rauch and Weaver attended the meeting.
The Board of Directors has a compensation committee composed of Messrs.
Hall, Rauch and Weaver. The compensation committee considers and recommends for
approval by the Board of Directors adjustments to the compensation of the
executive officers of the Company and the implementation of any compensation
program. The compensation committee met one time in fiscal 1996 with Messrs.
Rauch and Weaver attending the meeting.
The Board does not have a nominating committee. Board of Directors nominees
are proposed by management.
EXECUTIVE COMPENSATION
REMUNERATION OF OFFICERS
The following table sets forth the aggregate amount of remuneration paid by
the Company for the three fiscal years ended March 31, 1996, 1995, and 1994 to
each of the Company's five most highly compensated executive officers, including
the Chief Executive Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------
(a) (b) (c) (d) (i)
---------- ----- -------- -------- -------
ALL
OTHER
COMPEN-
NAME AND SALARY BONUS(1) SATION
PRINCIPAL POSITION YEAR ($) ($) ($)
- ---------------------------------------------------- ----- ------- -------- -------
<S> <C> <C> <C> <C>
Jack Friedman, 1996 110,000 68,586 2,320(2)
Chairman of the Board and Chief Executive Officer 1995 110,000 57,624 4,413(2)
1994 110,000 37,394 4,814(2)
Harold Friedman, 1996 106,700 68,586 16,585(2)
Vice Chairman of the Board 1995 106,700 57,624 16,519(2)
1994 106,700 37,394 16,503(2)
William E. Crow 1996 71,500 82,897 2,320(3)
President and Chief Operating Officer 1995 61,000 57,624 2,254(3)
1994 61,000 37,394 2,238(3)
Ben Harper 1996 67,125 75,741 2,320(3)
Senior Vice President -- Finance and 1995 61,000 57,624 2,254(3)
Secretary/Treasurer 1994 61,000 37,394 2,238(3)
Thomas Thompson 1996 67,125 75,741 2,320(3)
Senior Vice President -- Sales and Marketing 1995 61,000 57,624 2,254(3)
1994 61,000 37,394 2,238(3)
</TABLE>
3
<PAGE> 6
- ------------
(1) Includes performance and Christmas bonuses both of which are paid at the
direction of the Board of Directors.
(2) Includes life insurance premiums paid by the Company of $2,159 and $2,576
in 1995 and 1994, respectively, on the life of Jack Friedman and $14,265 in
each of 1996, 1995 and 1994 on the life of Harold Friedman. Under the terms
of the policies, in the event of their death, the Company will receive the
cash surrender value of the policies and the remaining proceeds will be
paid to the beneficiaries designated by Jack or Harold Friedman. Also
includes payments of $2,320, $2,254 and $2,238 in 1996, 1995 and 1994,
respectively, for the benefit of each of Jack Friedman and Harold Friedman
to the Company's profit sharing plan.
(3) Reflects payments made to the Company's profit sharing plan for the benefit
of each officer listed.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
WITH RESPECT TO COMPENSATION OF EXECUTIVE OFFICERS
Historically, the profits of the Company have been a principal factor in
determining the compensation of the Company's executive officers. The Committee
believes that the Company's net profit constitutes a significant measure of the
performance of the Company and should have a significant effect on executive
officer compensation. Accordingly, each of the Company's executive officers,
including the Chief Executive Officer, receives a base salary that the Committee
believes is modest in comparison to salaries received by persons holding similar
offices with other publicly held companies, plus a quarterly cash bonus based on
a percentage of the Company's quarterly net income. During the fiscal year ended
March 31, 1996, the base salary and bonus percentage for each of the named
executive officers, with the exception of the Chief Executive Officer and Vice
Chairman, were increased to reflect the additional responsibilities assumed by
him upon his promotion to President or Senior Vice President, as the case may
be, of the Company.
Because the Chief Executive Officer and Vice Chairman already have a
significant equity interest in the Company, the Committee believes that their
interests are already aligned with those of the Company's shareholders and,
therefore, compensation in the form of cash, as compared to a combination of
cash and equity securities, is appropriate. The Board believes that compensation
in the form of equity securities is more appropriate for the other executive
officers and key employees of the Company. Accordingly, the Company maintains a
stock option plan in which its other executive officers and other key employees
participate. No options were granted under such plan during the fiscal year
ended March 31, 1996.
July 29, 1996
Charles W. Hall
Alan M. Rauch
Kirk K. Weaver
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of Charles W. Hall, Alan M. Rauch
and Kirk K. Weaver, all of whom are outside directors. During the fiscal year
ended March 31, 1996, no executive officer of the Company served as (i) a member
of the compensation committee of another entity, one of whose executive officers
served as a director of the Company or (ii) a director of another entity, one of
whose executive officers served as a member of the Compensation Committee.
OTHER TRANSACTIONS
Operating under the name Site Guard, Howard Henderson, the son of Ted
Henderson, a Vice President of the Company, provided tubular processing and
other related services to the Company's Texas Tubular operation during the year
ended March 31, 1996. The Company paid Site Guard an aggregate of approximately
$473,000 for such services. The Company believes that such services were
provided on terms at least as favorable to the Company as could have been
obtained from unaffiliated parties.
4
<PAGE> 7
PERFORMANCE GRAPH
The following graph compares the percentage change in the Company's
cumulative total shareholder return on the Common Stock with the total
cumulative return on the American Stock Exchange Market Value Index ("MVI") and
the American Stock Exchange Capital Goods Index ("CGI") for each fiscal year
indicated. The graph is based on the assumption that $100 is invested in the
Common Stock of the Company, the MVI and the CGI on the last day of fiscal 1991
and that all dividends are reinvested. The Company is traded principally on the
American Stock Exchange which classifies the Company in its "Capital Goods"
group. Accordingly, the Company considers the CGI to be an appropriate peer
group.
COMPARISON OF 5 YEAR CUMULATIVE RETURN
<TABLE>
<CAPTION>
American ]American
Stock Stock
Friedman Exchange Exchange
Measurement Period Industries, Market Value Capital Goods
(Fiscal Year Covered) Incorporated Index Index
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 130.50 109.98 110.64
1993 121.88 117.88 108.94
1994 187.71 123.36 129.03
1995 203.00 129.29 129.39
1996 195.20 159.07 189.21
</TABLE>
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Commission or subject to
Regulations 14A and 14C under the Securities Exchange Act of 1934 or to the
liabilities of Section 18 under such Act.
PROPOSAL TO ADOPT THE 1996 EMPLOYEE STOCK OPTION PLAN
(PROPOSAL 2)
On July 29, 1996, the Board of Directors adopted, subject to shareholder
approval, the Stock Option Plan, pursuant to which options to acquire up to
250,000 shares of Common Stock may be granted to employees of the Company. The
purpose of the Stock Option Plan is to promote the interests of the Company and
its shareholders by linking employee interests to those of the Company's
shareholders and to attract and retain persons of outstanding competence to
serve as employees of the Company. The Stock Option Plan is subject to the
approval by the Company's shareholders at the Annual Meeting. The following
summary of the Stock Option Plan is necessarily incomplete and is, therefore,
qualified in its entirety by reference to the Stock Option Plan itself.
5
<PAGE> 8
The individuals eligible to participate in the Stock Option Plan are such
key employees, including officers and employee directors, of the Company as the
Stock Option Committee of the Board of Directors, which administers the Stock
Option Plan, may determine from time to time; provided, however, Jack Friedman
and Harold Friedman are not eligible to participate in the Stock Option Plan.
The Stock Option Committee may grant either incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or non-statutory stock options. The maximum number of shares subject to
options that may be awarded under the Stock Option Plan to any employee during
any consecutive three-year period is 75,000 shares. The purchase price of shares
subject to an option granted under the Stock Option Plan is determined by the
Stock Option Committee at the time of grant, but may not be less than the fair
market value of the shares of Common Stock on the date of grant. Notwithstanding
any other provisions of the Stock Option Plan to the contrary, the aggregate
fair market value (determined as of the date the option is granted) of the stock
with respect to which incentive stock options are exercisable for the first time
by the optionee in any calendar year (under the Stock Option Plan and any other
incentive stock option plan of the Company) may not exceed $100,000. Options
granted under the Stock Option Plan must be exercised within ten years from the
date of grant, and, unless otherwise provided by the Stock Option Committee, may
be exercised at any time or from time to time during such period, provided that
no option may be exercised within six months of the date of grant. In the case
of any eligible employee who owns or is deemed to own stock possessing more than
10% of the total combined voting power of all classes of stock of the Company or
its parent or subsidiaries, the option price of any incentive stock option
granted under the Stock Option Plan may not be less than 110% of the fair market
value of the Common Stock on the date of grant, and the exercise period may not
exceed five years from the date of grant.
Options granted under the Stock Option Plan are not transferable by the
optionee other than by will or under the laws of descent and distribution. Such
options terminate on the earlier of the date of the expiration on the option or
the date the optionee terminates employment with the Company for any reason
other than the death, disability or retirement of the optionee. In the event of
retirement of an optionee, the option terminates on the earlier of the date of
expiration of the option or three months following the date of retirement,
during which period the optionee may exercise the option in respect of the
number of shares that were vested on the date of retirement. In the event of the
death or disability of an optionee, the option terminates on the earlier of the
date of expiration of the option or one year following the date of death or
severance of employment because of disability. The optionee or, in the case of
death, the executors or administrators of the optionee or other person to whom
his option may be transferred by will or by the laws of descent and
distribution, may exercise the option in respect of the number of shares that
were vested on the date of severance because of disability or death. No options
have been granted under the Stock Option Plan.
No optionee will recognize income upon the grant of an option under the
Stock Option Plan. Upon the exercise of any portion of a non-statutory stock
option, the optionee will recognize taxable ordinary income equal to the excess
of the fair market value of the shares so acquired as of the date of exercise
over the option price paid for such shares. The Company ordinarily will be
entitled to a deduction for compensation expense in an amount equal to the
amount of such ordinary income, subject to certain limitations that apply if the
optionee's aggregate compensation is greater than $1 million, and there is a
withholding requirement on the date of exercise. Although compensation income in
excess of $1 million may not, under certain circumstances, be deductible by the
Company, the Company does not anticipate that any optionee's compensation will
exceed the $1 million limit on deductions. Upon disposition of the shares
acquired upon the exercise of the option, the optionee will generally recognize
a long-term or short-term capital gain or loss (depending on how long the shares
were held) equal to the excess of the amount realized by him upon such
disposition over the fair market value of the shares on the date he or she
exercised the option.
In the case of incentive stock options, and except to the extent the excess
of the fair market value of the acquired shares as of the date of exercise over
the exercise price may constitute income for purpose of the optionee's
alternative minimum tax computation, if the optionee does not dispose of shares
acquired pursuant to the exercise of such option within two years from the date
the option was granted or within one year after the shares were transferred to
him, no income would be recognized by the optionee by reason of his exercise of
the option. The difference between the option price and the amount realized upon
a subsequent disposition of
6
<PAGE> 9
shares would be treated as long-term capital gain or loss. In such event, the
Company would not be entitled to any deduction in connection with the grant or
exercise of the option or the disposition of the shares so acquired. If,
however, an optionee disposes of shares acquired pursuant to his exercise on an
incentive stock option before the end of the two-year or one-year holding period
noted above, the optionee would be treated as having received, at the time of
disposition, compensation taxable as ordinary income. In such event, the Company
ordinarily will be entitled to a deduction for compensation paid at the same
time in the same amount as compensation is treated as being received by the
optionee, subject to certain limitations that apply if the optionee's aggregate
compensation is greater than $1 million. The amount treated as compensation is
the excess of the fair market value of the shares at the time of exercise (or,
in the case of a sale in which a loss, if sustained, would be recognized, the
amount realized on the sale, if less) over the option price; any amount realized
in excess of the fair market value of the shares at the time of exercise would
be treated as long-term or short-term capital gain, depending on how long the
shares were held.
On July 26, 1996, the closing sale price of a share of Common Stock on the
American Stock Exchange, Inc. was $4.50.
The Board of Directors has approved the Stock Option Plan. However, the
Stock Option Plan will not be implemented unless the holders of a majority of
the shares of Common Stock, present in person or represented by proxy and
entitled to vote at the Annual Meeting, vote "for" the approval of the Stock
Option Plan. The enclosed form of proxy provides a means for a shareholder to
vote for the approval of the Stock Option Plan, to vote against such approval or
to abstain from voting on the proposal. Each properly executed proxy received in
time for the meeting will be voted as specified therein. If a shareholder
executes and returns a proxy but does not specify otherwise, the shares
represented by such shareholder's proxy will be voted "for" the approval of the
Stock Option Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information concerning the
beneficial ownership of Common Stock by each director, nominee for director,
named executive officer and officers and directors as a group and persons who
owned of record more than 5% of the Common Stock as of June 30, 1996:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENTAGE
BENEFICIAL OF SHARES
NAME OWNERSHIP(A) OUTSTANDING
---- ------------ -----------
<S> <C> <C>
Jack Friedman.............................................. 1,035,261 16.9%
P.O. Box 21147
Houston, Texas 77226
Harold Friedman............................................ 1,146,093 18.7%
P.O. Box 21147
Houston, Texas 77226
Dimensional Fund Advisors Inc.............................. 355,282(b) 5.8%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Henry Spira................................................ 240,518 3.9%
Charles W. Hall............................................ 2,583 *
Alan M. Rauch.............................................. 24,956 *
Hershel M. Rich............................................ 43,284(c) *
Kirk K. Weaver............................................. 2,948 *
William E. Crow............................................ 32,625(d) *
Ben Harper................................................. 34,764(d) *
Thomas Thompson............................................ 20,502(d)(c) *
Officers and directors as a group
(12 persons)............................................. 2,621,198(c)(e) 42.3%
</TABLE>
7
<PAGE> 10
- ------------
* Less than 1%.
(a) Based upon information obtained from the officers, directors, director
nominees and beneficial owners. Includes all shares beneficially owned
according to the definition of "beneficial ownership" in the rules
promulgated under to the Securities Exchange Act of 1934. Except as
otherwise indicated, the indicated person has sole voting and investment
power with respect to the shares. To the Company's knowledge, the only
other record owner of Common Stock having more than 5% of the voting power
of such class of security is Cede & Co. The Company is informed that Cede &
Co. is a nominee name for The Depository Trust Company, a stock clearing
corporation. The shares of Common Stock held by Cede & Co. are believed to
be held for the accounts of various brokerage firms, banks and other
institutions, none of which, to the Company's knowledge, owns beneficially
more than 5% of the Common Stock except as described above.
(b) Based upon information contained in a Schedule 13G dated February 7, 1996,
and otherwise received from the listed owner, Dimensional Fund Advisors
Inc. ("Dimensional"). Dimensional, a registered investment advisor, is
deemed to have beneficial ownership of 355,282 shares of the Company's
Common Stock as of December 31, 1995, all of which shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
(c) Does not include 20,237 shares and 3,655 shares beneficially owned and voted
by the spouses of Mr. Rich and of Mr. Thompson, respectively, as to which
shares beneficial ownership is disclaimed.
(d) Includes 13,401 shares that are subject to acquisition within 60 days.
(e) Includes 67,005 shares that are subject to acquisition within 60 days.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Ernst & Young LLP served as the Company's independent accountants for the
1996 fiscal year and has been recommended by the audit committee to so serve for
the current year. Representatives of Ernst & Young LLP are expected to be
present at the Annual Meeting, shall have the opportunity to make a statement if
they so desire and will be available to respond to appropriate questions.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be included in the Company's proxy
statement and form of proxy for the 1997 Annual Meeting of Shareholders must be
received at the Company's principal offices at 4001 Homestead Road, Houston,
Texas 77028 on or before April 2, 1997.
GENERAL
Management knows of no other matter to be presented at the meeting. If any
other matter should be presented upon which a vote may properly be taken, it is
intended that shares represented by the proxies in the accompanying form will be
voted with respect thereto in accordance with the best judgment of the person or
persons voting such shares.
8
<PAGE> 11
The cost of solicitation of proxies in the accompanying form will be paid
by the Company. In addition to solicitation by use of the mails, certain
directors, officers and regular employees of the Company may solicit the return
of proxies by telephone, telegram or personal interviews.
By Order of the Board of Directors,
BEN HARPER
Secretary
August 1, 1996
9
<PAGE> 12
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
FRIEDMAN INDUSTRIES, INCORPORATED
PROXY -- ANNUAL MEETING OF SHAREHOLDERS -- AUGUST 30, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Friedman Industries, Incorporated (the "Company") hereby appoints Jack
P Friedman and Harold Friedman, and each of them, proxies of the undersigned, with full power of substitution,
R to vote at the Annual Meeting of Shareholders of the Company to be held at the offices of Fulbright &
O Jaworski L.L.P., 1301 McKinney, 51st Floor, Houston, Texas, on August 30, 1996, at 11:00 a.m. (local time),
X and at any adjournment thereof, the number of votes which the undersigned would be entitled to cast if
Y personally present.
(1) Election of directors
PLEASE / / FOR all nominees listed below / / WITHHOLD AUTHORITY
SIGN (except as marked to the contrary below) to vote for all nominees listed below
ON (INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE NOMINEE'S
REVERSE NAME IN THE LIST BELOW.)
SIDE J. Friedman, H. Friedman, H. Spira, K. Weaver, A. Rauch, H. Rich and C. Hall
AND (2) Proposal to approve the adoption of the Friedman Industries, Incorporated 1996 Employee Stock Option
RETURN Plan
IN THE / / FOR / / AGAINST / / ABSTAIN
ENCLOSED (3) In their discretion the proxies are authorized to vote on such other matters as may properly come before
ENVELOPE the meeting or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
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(CONTINUED FROM OTHER SIDE)
For additional disclosure, please see the Notice of Annual Meeting
of Shareholders and the Proxy Statement each dated August 1, 1996
relating to such meeting, receipt of which is hereby acknowledged.
UNLESS OTHERWISE DIRECTED BY THE SHAREHOLDER, THIS PROXY WILL BE
VOTED FOR THE DIRECTOR NOMINEES LISTED ON THE REVERSE SIDE AND FOR
APPROVAL OF THE FRIEDMAN INDUSTRIES, INCORPORATED 1996 EMPLOYEE STOCK
OPTION PLAN. ANY PROXY OR PROXIES HERETOFORE GIVEN BY THE UNDERSIGNED
ARE HEREBY REVOKED.
If your address below is incorrect, please make necessary changes
on this proxy.
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Signature of Shareholder(s)
Please sign your name here
exactly as it appears
hereon. Joint owners should
each sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give your
full title as it appears
hereon.
Dated , 1996
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