SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [#]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[#] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to subsection
240.14a-11(c) or subsection 240.14a-12
BIRMINGHAM STEEL CORPORATION
(Name of Registrant as Specified in Its Charter)
BIRMINGHAM STEEL CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[#] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-
6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies:
2) Aggregate number of securities to which
transaction applies:
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11: footnote #1
4) Proposed maximum aggregate value of
transaction:
[ ] 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:
-----------------------------------------------
------------------------------------
footnote 1: Set forth the amount on which the filing
fee is calculated and state how it was
determined.
BIRMINGHAM STEEL CORPORATION
September 15, 1995
Dear Stockholder:
You are invited to attend the Annual Meeting of
Stockholders of your Company, which will be held on
Tuesday, October 17, 1995 at 10:00 A.M., local time, at
The Harbert Center, 2019 Fourth Avenue North,
Birmingham, Alabama.
The formal notice of the meeting and the proxy
statement appear on the following pages and describe the
matters to be acted upon. Time will be provided during
the meeting for discussion and you will have an
opportunity to ask questions about your Company.
Whether or not you plan to attend the meeting in
person, it is important that your shares be represented
and voted. After reading the enclosed notice of the
meeting and proxy statement, please sign, date and
return the enclosed proxy at your earliest convenience.
Return of the signed and dated proxy card will not
prevent you from voting in person at the meeting should
you later decide to do so.
Sincerely,
James A. Todd, Jr.
Chairman of the Board and
Chief Executive Officer
BIRMINGHAM STEEL CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 17, 1995
The Annual Meeting of Stockholders of Birmingham
Steel Corporation (the "Company") will be held at The
Harbert Center, 2019 Fourth Avenue North, Birmingham,
Alabama on Tuesday, October 17, 1995, at 10:00 A.M.,
local time, for the following purposes:
(1) To elect eleven directors each to serve until
the next Annual Meeting of Stockholders and
until his successor has been elected and
qualified;
(2) To approve the 1995 Stock Accumulation Plan;
(3) To approve and ratify the selection of Ernst
& Young LLP as the independent auditors for
the Company and its subsidiaries for the
fiscal year ending June 30, 1996; and
(4) To transact such other business as may
properly be brought before the meeting or any
adjournment or postponement thereof.
Only stockholders of record at the close of
business on August 31, 1995 are entitled to notice of
and to vote at the meeting or any adjournments thereof.
Please sign and date the enclosed proxy and return
it promptly in the enclosed reply envelope. If you are
able to attend the meeting, you may, if you wish, revoke
the proxy and vote personally on all matters brought
before the meeting.
By Order of the Board of Directors,
Catherine W. Pecher
Secretary
Birmingham, Alabama
September 15, 1995
BIRMINGHAM STEEL CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished in connection
with the solicitation of proxies by the Board of
Directors of Birmingham Steel Corporation, a Delaware
corporation (the "Company"), to be voted at the Annual
Meeting of Stockholders to be held at the time and place
and for the purposes set forth in the accompanying
Notice of Annual Meeting.
All proxies in the enclosed form that are properly
executed and received by the Company prior to or at the
Annual Meeting and not revoked, will be voted at the
Annual Meeting or any adjournments thereof in accordance
with the instructions thereon, or, if no instructions
are made, will be voted FOR approval of proposals 1, 2
and 3 set forth in the Notice of Annual Meeting. Any
proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before it is voted.
Proxies may be revoked by (i) filing with the Secretary
of the Company, at or before the taking of the vote at
the Annual Meeting, a written notice of revocation
bearing a later date than the proxy, (ii) duly executing
a subsequent proxy relating to the same shares and
delivering it to the Secretary of the Company before the
Annual Meeting, or (iii) attending the Annual Meeting
and voting in person (although attendance at the Annual
Meeting will not in and of itself constitute a
revocation of a proxy). Any written notice revoking a
proxy should be sent to Birmingham Steel Corporation,
1000 Urban Center Drive, Suite 300, Birmingham, Alabama
35242, Attention: Catherine W. Pecher, Secretary, or
hand delivered to the Secretary at or before the taking
of the vote at the Annual Meeting. Abstentions and
broker non-votes will not be counted as votes either in
favor of or against the matter with respect to which the
abstention or broker non-vote relates; however, with
respect to any proposal other than the election of
directors, abstentions and broker non-votes would have
the effect of a vote against the proposal.
The mailing address of the principal executive
offices of the Company is 1000 Urban Center Drive,
Suite 300, Birmingham, Alabama 35242. This Proxy
Statement and the accompanying Notice of Annual Meeting
and Proxy Card are being mailed to stockholders on or
about September 15, 1995.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The record date for determination of stockholders
entitled to receive notice of and to vote at the Annual
Meeting is August 31, 1995. At the close of business on
August 15, 1995, 28,506,941 shares of common stock, par
value $.01 per share, of the Company (the "Common
Stock") were outstanding and entitled to vote at the
Annual Meeting. Each share of Common Stock is entitled
to one vote with respect to each matter to be voted on
at the Annual Meeting.
The following table sets forth certain information
regarding the beneficial ownership of the Common Stock,
as of August 15, 1995, by (i) persons known to the
Company to be the beneficial owners of more than 5% of
the Company's Common Stock, (ii) each of the Company's
directors and nominees for director, (iii) each
executive officer included in the Summary Compensation
Table, and (iv) all directors and executive officers of
the Company as a group. Unless otherwise noted in the
footnotes to the table, the persons named in the table
have sole voting and investment power with respect to
all outstanding shares of Common Stock shown as
beneficially owned by them.
<TABLE>
<CAPTION>
Name of
Beneficial
Owner or Number of
Number of Shares
Persons Beneficially Percent
in Group Owned of Class
----------------- ------------- --------
<S> <C> <C> <C>
James A. Todd, Jr. 458,159 (1) 1.6%
Robert G. Wilson 43,998 (2) *
Thomas N. Tyrrell 42,947 (3) *
Paul H. Ekberg 25,236 (4) *
C. Stephen Clegg 14,055 (5) *
George A. Stinson 11,650 *
Reginald H. Jones 10,372 *
E. Mandell de Windt 7,702 *
E. Bradley Jones 7,500 *
Jack R. Wheeler 6,734 (6) *
Harry Holiday, Jr. 6,000 *
T. Evans Wyckoff 4,000 *
William J. Cabaniss, Jr. 3,015 *
Directors and executive
officers as a group
(15 persons) 655,551 (7) 2.3%
____________________
* Less than 1%.
<FN>
<F1>
(1) Includes 16,576 shares held in the Company's 401(k)
Plan, 7,500 shares of Restricted Stock awarded
under the Management Incentive Plan, 1,021 shares
of Restricted Stock issued under the 1995 Stock
Accumulation Plan, and 45,824 shares owned jointly
with Mr. Todd's spouse. Also includes 28,200
shares held in trust for Mr. Todd's children, with
respect to which Mr. Todd is a co-trustee and
shares voting and investment powers, and 74,549
shares owned by Mr. Todd's spouse. No longer
includes 77,903 shares held in trust for Mr. Todd's
children and grandchildren with respect to which
Mr. Todd's son and daughter are trustees.
<F2>
(2) Includes 24,000 shares subject to incentive stock
options, 1,998 shares held in the Company's 401(k)
Plan, and 2,250 shares of Restricted Stock awarded
under the Management Incentive Plan.
<F3>
(3) Includes 9,000 shares of Restricted Stock awarded
under the Management Incentive Plan, 177 shares of
Restricted Stock issued under the 1995 Stock
Accumulation Plan, and an aggregate of 656 shares
owned by two of Mr. Tyrrell's children.
<F4>
(4) Includes 2,736 shares held in the Company's 401(k)
Plan.
<F5>
(5) Includes 9,550 shares held in the Frakes-Clegg
Family 1984 Trust under the trusteeship of
Robert W. Neiman. Mr. Clegg and the trustee may be
deemed to share voting and investment powers with
respect to these shares.
<F6>
(6) Includes 3,000 shares of Restricted Stock awarded
under the Management Incentive Plan and 209 shares
of Restricted Stock issued under the 1995 Stock
Accumulation Plan.
<F7>
(7) Includes an aggregate of 24,000 shares subject to
stock options held by certain officers of the
Company, an aggregate of 21,310 shares held in the
Company's 401(k) Plan, an aggregate of 21,750
shares of Restricted Stock awarded under the
Management Incentive Plan, and an aggregate of
1,590 shares of Restricted Stock issued under the
1995 Stock Accumulation Plan.
</FN>
</TABLE>
Each of the named individuals in the table above
intends to vote in favor of proposals 1, 2 and 3 set
forth in the Notice of Annual Meeting, and such
individuals beneficially own approximately 2.3% of the
Company's Common Stock.
The Company is not aware of any arrangement,
including any pledge of securities of the Company, which
at a subsequent date could result in a change of control
of the Company.
ELECTION OF DIRECTORS
Eleven directors are to be elected at the Annual
Meeting, each to hold office until the next Annual
Meeting and until his successor has been duly elected
and qualified. Proxies received from stockholders,
unless directed otherwise, will be voted FOR the
election of the following nominees: James A. Todd, Jr.,
E. Mandell de Windt, C. Stephen Clegg, George A.
Stinson, Thomas N. Tyrrell, E. Bradley Jones, Harry
Holiday, Jr., Reginald H. Jones, Paul H. Ekberg, William
J. Cabaniss, Jr. and T. Evans Wyckoff. If any nominee
is unable to stand for election, the persons named in
the proxy will vote the same for a substitute nominee.
All of the nominees are currently directors of the
Company. The Company is not aware that any nominee is
or will be unable to stand for reelection. Directors
shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at the
meeting and entitled to vote on the election of
directors.
In August 1993, the Board of Directors approved a
mandatory retirement policy for its members, pursuant to
which any person serving as a director of the Company
who attains age 75 shall retire from the Board of
Directors upon the expiration of his or her term of
office at the next succeeding annual meeting of
stockholders; provided, however, that each incumbent
director of the Company serving at the date of adoption
of the new policy will not be subject to mandatory
retirement, and may continue to serve as a director
notwithstanding the attainment of age 75.
Set forth below is the name, age, position with the
Company, present principal occupation or employment and
five-year employment history of each of the nominees for
director of the Company.
Name and Year First
Became Director Business Experience Age
------------------- -------------------- ---
James A. Todd, Jr. - 1985 67
Chairman of the Board and Chief Executive Officer of the
Company since July 1991; President and Chief Executive
Officer of the Company from August 1984 to July 1991;
director of Cyprus Amax Minerals Company.
E. Mandell de Windt - 1985 74
Chairman of the Executive Committee of the Board of
Directors of the Company since July 1991; Chairman of
the Board of the Company from January 1985 to July 1991;
Retired; Chairman of the Board and Chief Executive
Officer of Eaton Corporation, a diversified manufac-
turing concern, from 1969 to April 1986.
C. Stephen Clegg - 1985 45
President and Chief Executive Officer of Clegg
Industries, Inc., a company that arranges business
acquisitions and renders management services to the
acquired businesses, since September 1988; Managing
Director of AEA Investors Inc., a private investment
company, for more than five years prior to September
1988; Chairman of the Board and Chief Executive Officer
of Globe Building Materials, Inc. and Midwest Spring
Manufacturing Company; director of Ravens Metals, Inc.
George A. Stinson - 1985 80
Retired Attorney and of counsel to law firm of Thorp,
Reed & Armstrong, Washington, D.C., from 1981 to 1985;
Chairman of National Steel Corporation from 1965 to
1981; director of Midwest Spring Manufacturing Company.
E. Bradley Jones - 1988 67
Retired; Chairman of the Board and Chief Executive
Officer of LTV Steel Company from June 1984 to December
1984; Chairman and Chief Executive Officer of Republic
Steel Corporation (merged with The LTV Corporation in
June 1984) from July 1982 to June 1984; director of TRW
Inc., Cleveland-Cliffs, Inc., RPM, Inc. and Consolidated
Rail Corporation; Trustee, Fidelity Funds and First
Union Real Estate Equity and Mortgage Investments.
Harry Holiday, Jr. - 1991 72
Retired; Chairman of the Board and Chief Executive
Officer of ARMCO, Inc. from April 1982 to January 1986;
director of ASARCO, Inc.
Reginald H. Jones - 1991 78
Retired; Chairman of the Board and Chief Executive
Officer of General Electric Company from December 1972
to April 1981; director of ASA Limited and CasTech
Aluminum Group, Inc.
Paul H. Ekberg - 1992 58
Vice Chairman of the Board since July 1994; President of
the Company from July 1991 to July 1994; President and
Chief Executive Officer of Shane Steel Processing and
IMT (members of the Sudbury Inc. group) from 1987 to
1991; President and Chief Executive Officer of
Production Experts from 1986 to 1987.
William J. Cabaniss, Jr. - 1993 57
President of Precision Grinding, Inc., a metal machining
company serving metal machining industries in the
Southeast, since 1971; director of Protective Life
Corporation.
T. Evans Wyckoff - 1993 70
Formerly Chairman of the Board of Aero-Go, Inc., a
company which manufactures air cushion devices, from
1969 to 1993; President of Wyco Corporation, a private
investment company, since 1983; and President of Arvee
Orchards, Inc. since 1991.
Thomas N. Tyrrell - 1994 50
Vice Chairman of the Board since July 1994; Chief
Executive Officer of American Steel & Wire Corporation,
a company which manufactures high quality rod and wire
and was acquired in November 1993 by the Company, since
1986; President and Chief Executive Officer of American
Steel & Wire Corporation from 1986 to July 1994.
The Board of Directors held ten meetings, including
two actions by unanimous written consent, during the
fiscal year ended June 30, 1995. During fiscal 1995
each incumbent director attended at least 85% of the
aggregate number of meetings of the Board and of
committees of the Board on which he served.
The Company has Audit, Executive, Nominating,
Environmental Affairs, Finance and Compensation and
Stock Option Committees of the Board of Directors.
Messrs. Clegg, Stinson, Cabaniss, Holiday and
Wyckoff are members of the Audit Committee. The
principal functions of the Audit Committee are to make
recommendations to the Board as to the engagement of
independent auditors, to review the scope of the audit
and audit fees, to discuss the results of the audit with
the independent auditors and determine what action, if
any, is required with respect to the Company's internal
controls, and to make a general review of developments
and financial reporting and accounting. The Audit
Committee held four meetings during fiscal 1995.
Messrs. de Windt, Reginald Jones, Todd and Clegg
are members of the Executive Committee. The Executive
Committee exercises all the powers of the Board of
Directors during the intervals between meetings of the
Board of Directors, with certain limitations set forth
in the Company's By-Laws. The Executive Committee held
three meetings during fiscal 1995.
Messrs. de Windt, Clegg, Bradley Jones and Stinson
are members of the Nominating Committee. The Nominating
Committee makes recommendations to the Board of
Directors respecting nominations for director prior to
each annual meeting of stockholders. The Nominating
Committee held no meetings during fiscal 1995.
Messrs. Holiday, Cabaniss and Wyckoff are members
of the Environmental Affairs Committee. The
Environmental Affairs Committee monitors environmental
issues impacting the Company's operations and reviews
and evaluates environmental compliance at the Company's
facilities. The Environmental Affairs Committee held
two meetings during fiscal 1995.
Messrs. Reginald Jones, Todd and Bradley Jones are
members of the Finance Committee. The Finance Committee
reviews and makes recommendations with respect to the
Company's financial policies, including cash flow,
borrowing and dividend policy and the financial terms of
acquisitions and dispositions. Acting with the
Executive Committee, it reviews and makes
recommendations on significant capital investment
proposals. The Finance Committee held one meeting
during fiscal 1995.
Messrs. Bradley Jones, Reginald Jones, de Windt and
Stinson are members of the Compensation and Stock Option
Committee. The Compensation and Stock Option Committee
reviews and approves employment agreements, annual
salaries, bonuses, profit participation and other
compensation of employees of the Company and its
subsidiaries. This Committee also reviews the executive
officers' and employees' performances and administers
and makes awards under the Company's Stock Option Plan,
the Management Incentive Plan and the Stock Accumulation
Plan. The Compensation and Stock Option Committee held
six meetings during fiscal 1995.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE ELECTION OF THE NOMINEES NAMED IN THIS
PROXY STATEMENT.
Compliance with Section 16(a) of the Securities Exchange
Act of 1934
Section 16(a) of the Securities Exchange Act of
1934 requires the Company's directors, certain officers
and persons who own more than 10% of the outstanding
Common Stock of the Company, to file with the Securities
and Exchange Commission reports of changes in ownership
of the Common Stock of the Company held by such persons.
Officers, directors and greater than 10% stockholders
are also required to furnish the Company with copies of
all forms they file under this regulation. To the
Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and
representations that no other reports were required,
during fiscal 1995 all Section 16(a) filing requirements
applicable to its officers and directors were complied
with, except as follows: T. Evans Wyckoff filed a Form
5 to report one transaction which should have been
reported on Form 4, and John M. Casey, Executive Vice
President - Finance, filed a report on Form 3 late.
EXECUTIVE COMPENSATION
The following table provides certain summary
information for the fiscal years ended June 30, 1995,
1994 and 1993 concerning compensation paid or accrued by
the Company to or on behalf of the Company's Chief
Executive Officer and each of the four other most highly
compensated executive officers of the Company who were
serving as executive officers at the end of the last
fiscal year (hereinafter referred to as the "Named
Executive Officers"). "Long-Term Compensation" includes
Restricted Stock awarded under the 1990 Management
Incentive Plan ("MIP") and Restricted Stock issued under
the 1995 Stock Accumulation Plan ("SAP"). See footnotes
(2), (3) and (4) to the Summary Compensation Table.
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
Awards
<CAPTION>
Other All
Name Annual Restric- Other
and Year Salary Bonus Compen- ted Options/ Compen-
Principal sation Stock SARs sation
Position ($) ($)(1) ($) ($)(2) (#) ($)(5)
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
James A. Todd, Jr. 1995 410,342 330,015 0 312,750 (3) 0 34,164
Chairman of the 1994 421,746 375,000 0 0 0 27,838
Board and Chief 1993 421,873 250,000 0 0 0 26,326
Executive Officer
Thomas N. Tyrrell 1995 249,965 189,012 19,750 (6) 87,323 (3) 0 8,860
Vice Chairman of 1994 149,916 (7) 100,000 662 382,380 (4) 0 6,029
the Board and
Chief Administra-
tive Officer
Paul H. Ekberg 1995 247,869 226,802 0 33,598 (3) 0 12,658
Vice Chairman of 1994 227,526 150,000 0 0 0 8,438
the Board and 1993 227,526 100,000 33,155 (8) 0 0 8,715
Chief Operating
Officer
Robert G. Wilson 1995 137,736 90,006 0 13,325 (3) 0 10,203
Vice President, 1994 132,553 45,000 0 0 0 5,761
Marketing Rebar 1993 130,839 30,000 0 0 0 5,836
and Merchant
products
Jack R. Wheeler 1995 121,233 55,004 0 77,297 (3) 0 9,927
Vice President, 1994 117,575 45,000 0 0 0 4,908
Engineering/ 1993 76,176 (9) 15,000 0 153,690 (4) 0 225
Construction
<FN>
___________________
<F1>
(1) Represents cash incentive compensation accrued
for the fiscal year (but paid in the
subsequent fiscal year). For fiscal 1995, the
Named Executive Officers received shares of
Restricted Stock in lieu of a portion of their
cash bonus, which is reflected in the
"Restricted Stock" column. See footnote (3)
below.
<F2>
(2) As of June 30, 1995, the number and value of
all Restricted Stock holdings of the Named
Executive Officers, with respect to which the
restrictions have not lapsed, were as follows:
8,521 shares ($156,573) by Mr. Todd; 9,177
shares ($168,627) by Mr. Tyrrell; 2,250 shares
($41,344) by Mr. Wilson; and 3,209 shares
($58,965) by Mr. Wheeler. Dividends are paid
on shares of Restricted Stock.
<F3>
(3) The amounts shown for fiscal 1995 represent
Restricted Stock issued to the applicable
officer under the SAP in lieu of cash
compensation to which he would otherwise be
entitled. Each of the Named Executive
Officers is required to take 10% of his bonus
in shares of Restricted Stock under the terms
of the SAP, and may elect to take up to 20% of
his base compensation and 50% of his cash
bonus in shares of Restricted Stock. Shares
of Restricted Stock under the SAP are issued
at a 25% discount to the market, but the
amounts shown represent the full market value
of the shares issued. The shares are
restricted from transfer for a period of three
years from the date of issuance. The
following shares of Restricted Stock were
issued under the SAP for fiscal 1995 to the
Named Executive Officers: Mr. Todd - 15,417
shares; Mr. Tyrrell - 4,299 shares; Mr. Ekberg
- 1,649 shares; Mr. Wilson - 654 shares; and
Mr. Wheeler - 3,808 shares. The amount of
cash compensation from both salary and bonus
foregone by the Named Executive Officers by
participating in the plan was as follows: Mr.
Todd - $234,567; Mr. Tyrrell - $65,516; Mr.
Ekberg - $25,198; Mr. Wilson - $9,994; and Mr.
Wheeler - $57,998.
<F4>
(4) Restricted Stock awards under the MIP are made
in the discretion of the Compensation
Committee of the Board of Directors, and
recipients pay only a nominal consideration
(par value) for the issuance of the Restricted
Stock. Mr. Tyrrell's 1994 award (12,000
shares) was made on March 21, 1994 at a per
share price of $31.875. Mr. Wheeler's 1993
award (6,000 shares) was made on March 30,
1993 at a per share price of $25.625. Mr.
Tyrrell's and Mr. Wheeler's Restricted Stock
awards vest in equal increments of one-fourth
over four years.
<F5>
(5) The compensation reported represents Company
contributions to the 401(k) Plan and premiums
for split dollar and other life insurance.
The following information is provided with
respect to the specific allocation of
compensation shown in this column for the
Named Executive Officers for the fiscal year
ended June 30, 1995:
</FN>
</TABLE>
<TABLE>
<CAPTION>
Split Dollar Term and Whole
Name 401(k) Plan Life Insurance Life Insurance
---- ----------- -------------- --------------
<S> <C> <C> <C>
James A. Todd, Jr. $10,072 $8,017 $16,075
Thomas N. Tyrrell 8,561 0 299
Paul H. Ekberg 10,698 0 1,960
Robert G. Wilson 9,210 0 993
Jack R. Wheeler 9,025 0 902
<FN>
<F6>
(6) Includes $18,750 paid for a country club
initiation fee and $1,000 for tax
preparation services.
<F7>
(7) Mr. Tyrrell joined the Company in November
1993.
<F8>
(8) Includes $32,500 paid for a country club
initiation fee and $655 for tax
preparation services.
<F9>
(9) Mr. Wheeler joined the Company in November
1992.
</FN>
</TABLE>
Stock Option Plan
The following table provides certain information
concerning each exercise of stock options under the
Company's 1986 Incentive Stock Option Plan during the
fiscal year ended June 30, 1995, by each of the Named
Executive Officers and the fiscal year-end value of
unexercised options held by such persons under the
Company's 1986 Stock Option Plan:
<TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<CAPTION>
Number of Value of
Unexercised Unexercised
Shares Ac- Options at in the Money
quired on Value Fiscal Options at Fiscal
Name Exercise (#) Realized ($) Year-End (#) Year-End ($) (1)
---- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C>
James A. Todd, Jr. 46,100 250,050 0 0
Thomas N. Tyrrell -- -- 0 0
Paul H. Ekberg -- -- 0 0
Robert G. Wilson 6,000 76,002 24,000 98,628
Jack R. Wheeler -- -- 0 0
____________________
<FN>
<F1>
(1) All of the stock options were granted under the
1986 Stock Option Plan and are presently
exercisable. The fair market value of the Common
Stock at June 30, 1995 was $18.375 per share. The
actual value, if any, an executive may realize will
depend upon the amount by which the market price of
the Company's Common Stock exceeds the exercise
price when the options are exercised.
</FN>
</TABLE>
No stock options have been granted to the Named
Executive Officers under the 1986 Stock Option Plan
since November 1988. In August 1992, the Company made
a grant of stock options to all non-union employees of
the Company, excluding all employees (including officers
of the Company) who are eligible to receive incentive
awards under the Company's annual incentive plan. See
"REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION."
Management Security Plan
In July 1986, the Company adopted a Management
Security Plan (the "Security Plan") to provide certain
benefits to a select group of management or highly
compensated employees who contribute materially to the
business of the Company. The Security Plan is
administered as an unfunded defined benefit pension
plan. The Compensation and Stock Option Committee of
the Board of Directors (the "Committee") oversees the
Security Plan.
Each participant enters into a Security Plan
Agreement with the Company, pursuant to which the
participant is eligible for the payment of either a
death benefit, if the participant dies prior to normal
retirement, or a retirement benefit, if the participant
remains as an employee until his or her normal
retirement date. The amount of the death benefit is
computed with respect to an amount specified by the
participant in his or her Agreement, which may not
exceed 100% of the participant's annual compensation
("Covered Salary"). The amount of the retirement
benefit is also specified by the participant in his or
her Agreement with the Company. The death benefit is
payable in an amount equal to 100% of the participant's
Covered Salary for 12 months, and 50% of the Covered
Salary thereafter. The amount of the death benefit is
payable monthly until the participant would have reached
age 65 or for 20 years, whichever is later. The
retirement benefit is payable monthly over a period of
240 months. The degree to which each eligible employee
participates in the Security Plan is elective with the
individual participant and is conditioned upon such
participant's foregoing cash compensation which would
otherwise be available to him or her. Although the
Company is not obligated to do so, the Company has
purchased key man life insurance on the lives of the
participants to fund its obligations under the Security
Plan.
Effective June 1, 1988, James A. Todd, Jr. agreed
with the Company to an alternative benefit arrangement
in the form of split dollar ownership of the life
insurance policy held on his life. Upon death either
before or after retirement, Mr. Todd's designated
beneficiary will receive his respective share of life
insurance proceeds in lieu of the monthly death benefit
payments described above. If death occurs after
retirement, the retirement payments will cease upon
death. At June 30, 1995, Mr. Todd's ownership of the
net death benefit was $1,735,088.
The Committee has approved the establishment of a
trust (the "MSP Trust") to hold the assets set aside to
pay future benefits granted to participants in the
Security Plan. In the event of a change in control of
the Company or such other event as the Committee may
determine, the MSP Trust will be endowed with paid up
policies for each participant which will be distributed
to such participants.
The Company's expense under the Management Security
Plan with respect to all participants as a group
(including 32 persons) for the fiscal year ended June
30, 1995 was $896,652. The Company's expense with
respect to the Named Executive Officers for the fiscal
year ended June 30, 1995 was as follows: Mr. Todd -
$200,445; Mr. Tyrrell - $25,498; Mr. Ekberg - $90,009;
Mr. Wilson - $42,212; and Mr. Wheeler - $68,942.
The following table indicates, with respect to each
Named Executive Officer who participates in the Security
Plan, the current aggregate amount of the death benefit
and the amount of the monthly retirement benefit under
the Security Plan:
<TABLE>
<CAPTION>
Aggregate Monthly
Death Retirement
Name of Individual Benefit Benefit
------------------ --------- ----------
<S> <C> <C>
James A. Todd, Jr. $1,735,088 $17,818
Thomas N. Tyrrell 1,575,000 12,500
Paul H. Ekberg 1,575,000 12,500
Robert G. Wilson 1,158,149 6,239
Jack R. Wheeler 1,155,002 9,167
</TABLE>
Director Compensation
For fiscal 1995 and pursuant to the Company's
Directors' Compensation Plan, the Company awarded each
non-employee director 1,500 shares of Company Common
Stock as his annual retainer fee and paid each non-
employee director $1,000 for each meeting of the Board
of Directors or committee thereof ($1,500 to the
Chairman of a committee) attended by such director, plus
reasonable travel expenses. Directors who are also
employees of the Company are not separately compensated
for their services as a director.
Notwithstanding anything to the contrary set forth
in any of the Company's previous filings under the
Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate
future filings, including this Proxy Statement, in whole
or in part, the following Report of Compensation
Committee on Executive Compensation and the Stockholder
Return Performance Graph shall not be incorporated by
reference into any such filings.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
Introduction
The Compensation and Stock Option Committee (the
"Committee") of the Board of Directors is comprised of
four non-employee directors, none of whom are eligible
to participate in any of the compensation plans
administered by the Committee. The Committee generally
is responsible for the compensation and benefit plans
for all employees and is directly accountable for
evaluating and approving compensation and benefit plans,
and payments and awards under those plans, for the
Company's senior executives, including the Chief
Executive Officer and the other Named Executive
Officers. The Committee represents the stockholders'
interests by ensuring an appropriate link exists between
the Company's strategic goals, business performance,
stockholder returns, and the executive compensation
plans.
Compensation Philosophy
The Company's compensation philosophy is to provide
wages and salaries which in general are less than
amounts paid by competitors with the opportunity to earn
above average compensation through performance-based
incentives. The Committee believes that incentive
compensation provides the best means of motivating and
rewarding performance while providing necessary controls
on cost. This philosophy is reflected in the Company's
use of incentive compensation at virtually every level
of the organization, not just in the executive ranks.
In the case of production and supervisory employees,
weekly incentives may be earned for exceeding base
production levels. Executives may earn incentives based
on Company profitability. In fiscal 1995, production
and supervisory incentives averaged 26.1% of total
compensation, and executive incentives averaged 40.5%.
These percentages vary from year to year based on
performance. The percentage of total compensation
represented by production and supervisory incentives in
fiscal 1995 decreased from the percentage of total
compensation in fiscal 1994 due to the addition of
American Steel & Wire Corporation ("ASW") employees in
the incentive compensation plan. ASW employees' base
pay is higher than the base pay of other Company
employees participating in the incentive program.
Compensation Policy
The Company's executive compensation program is
designed to achieve the following objectives:
1. To attract, retain, motivate, and reward
executives who have the skills and experience
necessary to conceive and implement a
successful business strategy.
2. To recognize the individual contributions of
the executives to stockholder value, as
reflected in the profitability of the Company.
3. To align the interests of the executives with
those of stockholders by linking a significant
portion of executive compensation to the value
of the Company's Common Stock through the award
of stock incentives.
To accomplish these objectives, the Company has
established an executive compensation program consisting
of base salary, an annual cash incentive based on
Company profitability, and long-term compensation plans
which include stock options, stock appreciation rights,
restricted stock, and deferred compensation. The
Company's policies with respect to each element of the
executive compensation program are discussed below.
Base Salaries
To provide competitive base salaries while
recognizing individual performance, the Company, with
the approval of the Committee, establishes and maintains
base salary ranges for salaried personnel. In keeping
with the Company's philosophy, the midpoints of the
ranges are designed to be below market average salaries
for executives with similar responsibilities in
businesses similar to the Company in size, scope and
industry. The competitiveness of the salary ranges is
reviewed annually with the assistance of an independent
consultant and through participation in salary surveys.
The surveys used include nationally publicized data from
a number of sources, including ECS Top Management
Report, Ernst & Young LLP Executive Compensation Report,
TPF&C Cash Data Bank and The Conference Board
Publication. The survey group is comprised of a broad
base of manufacturers in many different industries,
including the steel industry. Within this framework,
executive salaries are determined based on individual
performance, level of responsibility and experience.
The salary of the Chief Executive Officer is evaluated
solely by the Committee. Salaries for the other Named
Executive Officers are recommended by the Chief
Executive Officer and reviewed and approved by the
Committee.
The salaries of the Named Executive Officers are
listed in the Summary Compensation Table. Only one of
the Named Executive Officers received an increase in
base salary in fiscal 1995.
Discretionary Cash Bonus Plan
The Company's Discretionary Cash Bonus Plan, which
was established in fiscal 1986, has insured that a
portion of the total compensation of the executive
officers is at risk with respect to the profitability of
the Company.
Under the plan, a bonus pool is created which is
equal to 3.5% of pretax earnings. The plan authorizes
adjustment of the earnings calculation to exclude
unusual, non-recurring, or extraordinary events. Once
the bonus pool is established, individual bonuses are
determined based on individual performances. The
Committee determines the bonus to be awarded to the
Chief Executive Officer. Awards for all other key
management, including the other Executive Officers, are
recommended by the Chief Executive Officer and reviewed
and approved by the Committee.
The purpose of the cash bonus plan is to directly
link a significant portion of executive compensation to
Company profitability. Under the plan, executives and
other key employees can earn annual cash incentives
based upon Company profitability. The plan is intended
to motivate executives to increase profitability and to
reward them with respect to the Company's success. In
keeping with the Company's compensation philosophy and
the incentive plans in which the Company's other
employees participate, the cash bonus plan provides
executives the opportunity to earn significant bonuses,
contingent upon profitable results.
The allocations of bonus amounts among executive
officers, while based on individual performance, are
determined on a subjective basis. The Committee does
not consider on a formal basis particular performance
measures, but rather evaluates the overall performance
of the individual officer giving due consideration to
the Company's performance for the fiscal year.
Bonus awards for fiscal 1995 were paid in August
1995, and represent compensation earned for the fiscal
year ended June 30, 1995. In approving the bonus
awards, the Committee considered the Company's
performance to be favorable relative to its peers in the
industry.
Long-Term Incentive Plans
The purpose of the long-term incentive plans is to
promote the Company's continued success by providing
financial incentives to executives and other key
employees to increase the value of the Company, as
reflected in the price of its stock. By providing the
opportunity to acquire a significant proprietary
interest in the Company, the plans link the interests of
the executives with those of the stockholders.
Under the 1990 Management Incentive Plan, which was
approved by the Board of Directors in July 1990 and by
the stockholders in October 1990, the Compensation
Committee is authorized to make awards of stock options,
stock appreciation rights, restricted stock, and other
stock related incentives. The Committee has the sole
authority to select the officers and other key employees
to whom awards may be made under the plan. Since the
value of stock options and other stock awards is
determined by the price of the Company's Common Stock,
the Committee believes these awards benefit stockholders
by linking a significant portion of executive
compensation to the performance of the Company's stock.
In addition, these awards enable the Company to attract
and retain key employees and provide a competitive
compensation opportunity.
During fiscal 1995, two Named Executive Officers
exercised stock options. This information, along with
the pro forma year-end value of outstanding options and
other awards to the Named Executive Officers, is
reported in the Summary Compensation Table and in the
table under the heading "Stock Option Plans."
The Board of Directors recently adopted the 1995
Stock Accumulation Plan, which provides for the issuance
of Restricted Stock in lieu of the payment of various
components of cash compensation to officers and other
key employees selected to participate in the plan. The
Stock Accumulation Plan is being submitted to
stockholders at the 1995 Annual Meeting for approval.
Under the plan, those employees who are under the age of
62 and who participate in the discretionary cash bonus
plan currently must take 10% of their annual cash bonus
in Restricted Stock. In addition, employees who
participate in the cash bonus plan may elect to receive
Restricted Stock in lieu of cash of up to a maximum of
50% of their annual cash bonus and up to 20% of their
base compensation. James A. Todd, Jr., Chairman of the
Board and Chief Executive Officer, who was not required
to participate in the plan, elected to take 40% of his
cash bonus and 15% of his base compensation in
Restricted Stock pursuant to the plan. Eligible
employees who are not participants in the discretionary
cash bonus plan may elect to receive Restricted Stock in
lieu of cash of up to 10% of their incentive
compensation under an incentive compensation plan of the
Company and up to 10% of their base compensation. The
extent of participation in the Stock Accumulation Plan
by the Named Executive Officers is reported in the
Summary Compensation Table.
Chief Executive Officer Compensation
In determining the compensation of the Chief
Executive Officer, the Committee is guided by the
Company's compensation philosophy, Company performance
and competitive practices. The Chief Executive
Officer's base salary was not adjusted in fiscal 1995,
and no long-term incentives were awarded under the
Management Incentive Plan in fiscal 1995. In keeping
with the discretionary cash bonus plan, the Chief
Executive Officer earned a bonus based on adjusted
pretax earnings reported by the Company.
Summary
The Company's executive compensation program
encourages executives to increase profitability and
stockholder value. The emphasis on incentive
compensation for executives is consistent with the pay-
for-performance policy applied throughout the Company.
The Committee believes this approach provides
competitive compensation and is in the best interests of
the stockholders.
The Committee has considered the anticipated tax
treatment to the Company and to the executive officers
of various payments and benefits, and, in particular,
the limitations on deductibility of compensation under
Section 162(m) of the Internal Revenue Code. The
Committee will consider various alternatives to
preserving the deductibility of compensation payments
and benefits to the extent reasonably practicable and to
the extent consistent with its other compensation
objectives; however, the Committee may not in all
circumstances limit executive compensation to that which
is deductible under Section 162(m) of the Internal
Revenue Code.
SUBMITTED BY THE COMPENSATION AND STOCK OPTION COMMITTEE
OF THE BOARD OF DIRECTORS:
E. Bradley Jones, Chairman Reginald H. Jones
George A. Stinson E. Mandell de Windt
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the
yearly percentage change in the cumulative total
stockholder return on the Company's Common Stock against
the cumulative total return of the Standard & Poor's 500
Stock Index and the Standard & Poor's Steel Industry
Group Index for the period of five years commencing on
July 1, 1990 and ending on June 30, 1995. The graph
assumes that the value of the investment in the
Company's Common Stock and each index was $100 on July
1, 1990, and that all dividends were reinvested.
(Graph filed under Form SE)
PROPOSAL TO APPROVE 1995 STOCK ACCUMULATION PLAN
General Information
The Birmingham Steel Corporation 1995 Stock
Accumulation Plan (the "Plan") was adopted by the Board
of Directors of the Company on August 21, 1995, and
provides for the issuance of Restricted Stock in the
manner contemplated by the Plan. In March 1995, the
Board of Directors adopted a similar Stock Accumulation
Plan which was a part of the 1990 Management Incentive
Plan, pursuant to which Restricted Stock has been issued
for the fiscal year ended June 30, 1995. However, the
Board of Directors determined that it was preferable to
establish a Stock Accumulation Plan separate and apart
from the Management Incentive Plan; therefore, the
original Stock Accumulation Plan has been restated as a
separate plan and is being submitted to stockholders for
approval. This Plan was adopted to put at risk a
portion of key management's compensation which would be
paid in Restricted Stock instead of cash. The Plan also
permits an employee to substitute Restricted Stock for
an additional portion of his/her cash compensation.
Through the use of Restricted Stock, the Plan provides
incentives which assist the Company in retaining key
management. The Plan will be administered in compliance
with Rule 16b-3 pursuant to the Securities Exchange Act
of 1934, as amended, relating to employee benefit plan
transactions by persons subject to Section 16 of the
Securities Exchange Act.
The purpose of the Plan is to enable the Company
and its majority-owned subsidiaries (the "Subsidiaries")
and certain affiliates of the Company ("Affiliates") to
attract, retain and motivate officers and other key
employees, to compensate them for their contributions to
the growth and profits of the Company, and to encourage
ownership of the Common Stock on the part of such
personnel. A summary of the features of the Plan is set
forth below and is qualified in its entirety by
reference to the Plan, a copy of which is attached as
Exhibit A. All issues regarding awards under the Plan
shall be governed by the terms of the Plan.
The Plan is not an "employee pension benefit plan"
as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and
is not qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR APPROVAL OF THE PLAN. Approval of the Plan
requires the affirmative vote of a majority of the
oustanding shares of the Company's Common Stock entitled
to vote at the Annual Meeting.
Eligible Employees
The Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer, Chief Administrative
Officer, and each Executive Vice President of the
Company is eligible to participate in the Plan. In
addition, those officers and other key employees of the
Company or its Subsidiaries or Affiliates who are, in
the judgment of the Committee, responsible for or
contribute to the management, growth and/or
profitability of the Company or its Subsidiaries or
Affiliates may be designated by the Committee from time
to time as being eligible to participate in the Plan
("Eligible Employees"). Participation in the Plan by
any Eligible Employee may be either mandatory or
elective as provided in the Plan. Approximately 55
employees are currently eligible to participate in the
Plan.
Administration
The Compensation and Stock Option Committee of the
Board of Directors (the "Committee") administers the
Plan. The Committee presently consists of four
"disinterested persons" (as defined in Rule 16b-3 as
promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934) designated by
the Company's Board of Directors. Members of the
Committee are selected by, and serve at the discretion
of, the Company's Board of Directors.
The Committee has the authority to (a) select those
employees who are Eligible Employees, (b) determine
whether and to what extent Restricted Stock is to be
issued to participants pursuant to mandatory or elective
participation in the Plan, (c) determine the number of
shares of Restricted Stock or portion of compensation
subject to mandatory or elective participation in the
Plan, and (d) determine the terms and conditions, not
inconsistent with the terms of the Plan, of the issuance
of any Restricted Stock. In connection with the
administration of the Plan, the Committee has determined
that certain aspects of the Plan will be operationally
administered by an administrative committee comprised of
the Vice President of Human Resources of the Company and
such other persons as may be designated from time to
time by the Committee.
Levels of Participation
The mandatory and elective levels of participation
in the Plan by Eligible Employees shall be determined
from time to time by the Committee, and are subject to
change at any time by the Committee in its discretion
within the limits permitted by the Plan.
Mandatory Participation. All Eligible employees
who are participants in the Company's discretionary cash
bonus plan ("Cash Bonus Plan") and who are under the age
of 62 at the time cash bonuses for the applicable year
are paid under the Cash Bonus Plan, will be required to
participate in the Plan. The Committee has determined
that each such Eligible Employee will receive shares of
Restricted Stock under the Plan in lieu of the payment
in cash of 10% (which percentage may be changed by the
Committee) of such Eligible Employee's discretionary
cash bonus for the year under the Cash Bonus Plan.
Optional Participation. Elections of optional
participation levels in the Plan will be made on such
form and in such manner as the Committee shall from time
to time designate.
(i) Eligible Employees Who are Participants
in Cash Bonus Plan. Eligible Employees who are
participants in the Cash Bonus Plan may, but are not
required to, elect to receive shares of Restricted
Stock under the Plan in lieu of a cash payment by
the Company of (1) up to 50% (in increments of 5%)
of such Eligible Employee's discretionary cash bonus
for such year under the Cash Bonus Plan (less the
percentage applicable to such bonus under the
mandatory provision of the Plan), and/or (2) up to
20% (in increments of 5%) of such Eligible
Employee's base compensation otherwise payable by
the Company or a Subsidiary or Affiliate with
respect to the six month period during which an
election to participate in the Plan on an optional
basis is in effect (the "Effective Period").
(ii) Eligible Employees Who Are Not
Participants in Cash Bonus Plan. Eligible Employees
who are not participants in the Cash Bonus Plan may,
but are not required to, elect to receive shares of
Restricted Stock under the Plan in lieu of a cash
payment by the Company of (1) up to 10% (in
increments of 5%) of such Eligible Employee's
incentive compensation otherwise payable with
respect to the Effective Period under an incentive
compensation plan of the Company, and/or (2) up to
10% (in increments of 5%) of such Eligible
Employee's base compensation otherwise payable by
the Company or a Subsidiary or Affiliate with
respect to the Effective Period.
Method of Election. Eligible Employees who are
required to participate in the Plan shall automatically
become participants upon designation by the Committee
and without further action by the Eligible Employees.
Eligible Employees may elect to participate or to change
the level of participation in the Plan by completing the
form provided by the Company for such purpose and filing
it with the Plan Administrator or such other person as
may be designated by the Company on the form. An
election by a participant to receive Restricted Stock in
lieu of a portion of such participant's discretionary
cash bonus must be filed not later than January 1 of the
fiscal year of the Company with respect to which the
applicable cash bonus is to be paid under the Cash Bonus
Plan and shall apply with respect to the balance of the
fiscal year. Except as described below, an election to
participate in the Plan pursuant to the other provisions
of the Plan shall apply with respect to the six month
period next commencing on January 1 or July 1, whichever
first occurs following the filing of the election. For
example, to be effective for the period January through
June, the election must be filed after June 30 and on or
before December 31 of the preceding calendar year.
New participants in the Plan and participants whose
status with respect to participation in the Cash Bonus
Plan changes during an Effective Period (resulting in a
change in eligibility for elective participation) may
file elections within 30 days after first becoming an
Eligible Employee or the effective date of the change in
status, as the case may be, and such election shall
generally be effective with respect to the balance of
the Effective Period remaining after the filing of the
election. Participants may indicate in their election
forms that the election is to continue in effect with
respect to subsequent fiscal years or six month periods,
as the case may be, unless participation levels are
changed by the timely filing of a new election or a
notice of withdrawal by the participant. However, once
the period to which an election is applicable has
commenced, a participant generally may not withdraw from
participation in the Plan or change the level of
participation in the Plan. In addition, with respect to
those Eligible Employees who are required to file
reports under Section 16 of the Securities Exchange Act
of 1934, any election (and any subsequent new election)
made under the Plan by such Eligible Employee will apply
with respect to the six month period commencing on the
January 1 or July 1 which first occurs at least six
months after the filing of the election.
Purchase Price and Payment for Restricted Stock
The price of the Restricted Stock for purposes of
determining the number of shares to be issued under the
Plan will be discounted at 25% from Fair Market Value
or, at the discretion of the Committee, such other
percentage as may be necessary to reflect adequately the
impact of the restricted nature and potential forfeiture
of the Restricted Stock. For purposes of the Plan,
"Fair Market Value" of the Common Stock as of any date
specified under the Plan shall be the closing price on
the Composite Tape of the New York Stock Exchange on the
date specified.
With respect to Eligible Employees who are
participants in the Cash Bonus Plan, shares of
Restricted Stock to be received by a participant under
the mandatory or elective provisions of the Plan shall
be issued to or credited to the account of the
participant not later than the fifth business day after
the last day of the month in which the cash bonus is
paid under the Cash Bonus Plan. With respect to all
Eligible Employees, the shares of Restricted Stock to be
received by a participant, pursuant to the elective
provisions of the Plan applicable to base or incentive
compensation, shall be issued to or credited to the
account of the participant on a monthly basis not later
than the fifth business day after the last day of each
month during the Effective Period.
The number of shares of Restricted Stock issued to
a participant on any payment date shall be determined by
dividing the participant's applicable "Participation
Amount" or "Bonus Participation Amount" (as defined in
the Plan) by the price of the Restricted Stock as
determined under the Plan. No fractional shares of
Restricted Stock will be issued, and any fractional
share interest shall be either carried forward and added
to the participant's Participation Amount applicable to
the next payment date or, in the case of the
discretionary cash bonus, paid in cash to the
participant (net of any applicable tax withholding).
Terms and Conditions of Restricted Stock
Shares Available under Plan. The Plan provides for
the payment to participants of Restricted Stock in lieu
of a portion of their cash compensation. The Company
has reserved 500,000 shares of Common Stock of the
Company for issuance under the Plan. The total number
of shares of Common Stock available for issuance under
the Plan may be adjusted upward or downward as the
Committee in its sole discretion may determine, in the
event of any stock dividend, recapitalization, stock
split or other capital adjustment or transaction
materially affecting the Common Stock. If Restricted
Stock issued under the Plan is forfeited, canceled,
terminated or expires prior to the end of the period
during which Restricted Stock is subject to
restrictions, such shares will be available for future
issuances.
In lieu of the actual issuance of a certificate for
shares of Restricted Stock, a book entry may be made in
the records of the Company to evidence the ownership of
such shares of Restricted Stock in the name of the
applicable participant. If a stock certificate is
issued to a participant, it shall bear an appropriate
legend referring to the terms, conditions and
restrictions applicable to such shares of Restricted
Stock. Any such stock certificate issued in the name of
a participant shall be held in the custody of the
Company until the restrictions thereon have lapsed.
Restricted Period. Generally, the Restricted Stock
shall be subject to a "Restricted Period" equal to three
years commencing on the date of the issuance of, or
credit to the account of a participant of, shares of
Restricted Stock. During the Restricted Period the
participant will not be permitted to sell, transfer,
pledge or assign the shares of Restricted Stock. The
Committee in its sole discretion may alter the term of
the Restricted Period or provide for an alternative
Restricted Period, but the Committee may not extend a
Restricted Period for previously issued shares without
the participant's consent. The Committee may provide
for the lapse of any such restrictions or provide for
alternative restrictions, and in the event of retirement
or special hardship circumstances of a participant whose
employment is involuntarily terminated other than for
cause, waive in whole or in part any or all of the
remaining restrictions on the shares of Restricted
Stock. In the event of special hardship circumstances
occurring while the participant is still employed, the
Committee may allow the participant to surrender all or
a portion of the Restricted Stock to the Company and to
receive in cash, without interest, an amount equal to
the applicable value of the stock originally used in
determining the number of shares to be issued to the
participant.
Voting and Dividends. The participant shall have
the right to vote his or her shares of Restricted Stock
during the Restricted Period and shall have the right to
receive regular cash dividends on such shares. Shares
received as a result of a stock dividend or stock split
shall be treated as additional shares of Restricted
Stock subject to the same restrictions and limitations
as the shares of Restricted Stock with respect to which
the shares reflecting the dividend or split were
received. The Committee shall in its sole discretion
determine a participant's rights with respect to any
other extraordinary dividends on the shares of
Restricted Stock.
Certificates without a legend shall be delivered to
the participant promptly after the applicable Restricted
Period shall expire without forfeiture. It shall be a
condition to the obligation of the Company to issue
stock upon the lapse of restrictions on Restricted Stock
that the participant or any beneficiary pay to the
Company such amount as may be requested by the Company
for the purpose of satisfying any liabilities to
withhold federal, state or local income or other taxes.
Forfeiture Prior to Expiration of Restricted
Period. Upon termination of a participant's employment
with the Company or any Subsidiary or Affiliate during
the Restricted Period, all shares still subject to
restrictions shall be forfeited by the participant and
the participant shall be entitled to receive only the
following in respect of such forfeited Restricted Stock:
(i) In the event such termination was for
"cause," the participant shall receive nothing with
respect to any Restricted Stock forfeited, not even
any amount deemed to have been paid for such
forfeited Restricted Stock by the participant.
"Cause" under the Plan means a felony conviction of
a participant or the failure of a participant to
contest prosecution for a felony, or a
participant's willful misconduct or dishonesty, any
of which is harmful to the business or reputation
of the Company or any Subsidiary or Affiliate.
(ii) In the event such termination was
voluntary on the part of the participant and the
participant within six months following such
termination is employed by, or agrees to be
employed by, any business, in whatever form
conducted, whose business, in the sole
determination of the Committee, is competitive with
the business of the Company or any Subsidiary or
Affiliate of the Company, the participant shall
receive nothing with respect to any Restricted
Stock forfeited, not even any amount deemed to have
been paid for such forfeited Restricted Stock by
the participant.
(iii) In the event such termination was due
to death or total and permanent disability of the
participant, the rights of the participant to the
shares of Restricted Stock shall immediately vest
and such shares shall no longer be subject to
forfeiture.
(iv) In the event such termination was other
than as described in paragraphs (i), (ii) or (iii)
above, the participant shall be entitled to receive
in cash only the lesser of (a) the amount by which
the participant's right to receive cash
compensation was reduced in connection with the
receipt of such Restricted Stock, without interest,
or (b) the Fair Market Value of the Restricted
Stock on the date of forfeiture.
In the event a participant is entitled to
receive cash or shares of Common Stock under the
provisions of paragraphs (iii) or (iv) above, such
cash or shares shall be paid or delivered to the
participant or, if the participant is disabled, to
the participant's guardian or personal
representative, or if the participant is deceased,
to such beneficiary as the participant may have
designated on such form for such election as the
Committee may provide, or if no such designation
has been made, to the executor or administrator of
the participant's estate.
Change of Control. In the event of (i) a "Change
of Control" (as defined under the Plan), unless
otherwise determined by the Committee or the Board of
Directors in writing after the receipt of Restricted
Stock by a participant, but prior to the occurrence of
such Change of Control, or (ii) if and to the extent so
determined by the Committee or the Board of Directors in
writing after receipt of Restricted Stock by a
participant, in the event of a "Potential Change of
Control" (as defined under the Plan), the restrictions
applicable to Restricted Stock issued pursuant to the
Plan shall lapse and such shares shall be deemed fully
vested. The value of the Restricted Stock shall, to the
extent determined by the Committee, be cashed out on the
basis of the "Change of Control Price" (as defined under
the Plan) as of the date the Change of Control occurs or
the Potential Change of Control is deemed to have
occurred, or such other date as the Committee may
determine prior to the Change of Control or Potential
Change of Control.
Amendments to or Discontinuance of the Plan
The Board of Directors, without the approval of the
Company's stockholders or Plan participants, may at any
time terminate, amend or modify the Plan, provided that
no such action may, without a participant's consent,
adversely affect the participant's rights respecting
Restricted Stock previously issued, and no amendment may
become effective, without approval of the Company's
stockholders, which would increase the maximum number of
shares of Common Stock which may be issued as Restricted
Stock under the Plan (except in connection with certain
capital adjustments described above).
Restricted Stock Issuances for the Fiscal Year Ended
June 30, 1995
The following table indicates the dollar value and
number of shares of Restricted Stock issued or issuable
under the Plan to the persons indicated for the fiscal
year ended June 30, 1995:
<TABLE>
<CAPTION>
Dollar Value of Cash
Restricted Stock Number Compensation
Name and Position at Date of Grant ($) of Shares Foregone ($)
----------------- -------------------- --------- ------------
<S> <C> <C> <C>
James A. Todd, Jr. 312,750 15,417 234,567
Thomas N. Tyrrell 87,323 4,299 65,516
Paul H. Ekberg 33,598 1,649 25,198
Robert G. Wilson 13,325 654 9,994
Jack R. Wheeler 77,297 3,808 57,998
All Current Executive
Officers as a Group 559,670 27,580 419,834
All Participants,
Including All Current
Officers Who Are Not
Executive Officers,
as a Group 223,939 14,334 217,144
All Participants as
a Group 783,609 41,914 636,992
</TABLE>
Certain Federal Income Tax Consequences
The following is a brief summary of the principal
federal income tax consequences of transactions under
the Plan, based on current federal income tax laws.
This summary is not intended to be exhaustive and does
not describe state, local or foreign tax consequences.
Participants in the Plan are strongly urged to consult
their own tax advisors regarding the federal, state,
local or other tax consequences of awards, elections and
vesting of Restricted Stock and other transactions under
the Plan.
A participant generally must include in ordinary
income the amount by which the fair market value of the
Restricted Stock, as of the time such Restricted Stock
ceases to be subject to a substantial risk of forfeiture
("Forfeiture Period") within the meaning of Section 83
of the Code, exceeds the amount, if any, actually paid
by the participant for such Restricted Stock. The
Forfeiture Period generally will be the same as the
Restricted Period described above. Income and payroll
taxes are required to be withheld by the Company on the
amount includable in ordinary income by the participant
attributable to the Restricted Stock. Any participant
may elect, pursuant to Section 83(b) of the Code, to
take into income in the year the Restricted Stock is
transferred (generally the year of the award or
purchase) by the Company to such person an amount equal
to the fair market value of the Restricted Stock on the
date of such transfer (as if the Restricted Stock were
unrestricted and could be sold immediately). If the
stock subject to the Section 83(b) election is
subsequently forfeited, no deduction or tax refund is
allowed for the amount included as income as a result of
the Section 83(b) election. Such an election must be
made within 30 days of the date of such transfer.
A participant's tax basis in shares of Restricted
Stock will be equal to the amount of ordinary income
recognized by such participant with respect to such
shares of Restricted Stock. Upon the sale of shares
after the expiration of the Forfeiture Period, a
participant generally will recognize gain or loss, which
will be capital gain or loss if the Restricted Stock has
been held as a capital asset; such capital gain or loss
will be treated as long term if the shares have been
held by the participant for more than one year. The
holding period for capital gains treatment will begin
when the Forfeiture Period expires, unless the
participant has made a Section 83(b) election, in which
event the holding period will commence on the date of
transfer of the Restricted Stock by the Company to such
participant. The Company generally will be entitled to
an income tax deduction in the amount of a participant's
ordinary income at the time such income is recognized as
described above.
APPROVAL AND RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of the Company has, subject
to approval and ratification by the stockholders,
selected Ernst & Young LLP as independent auditors for
the Company for the fiscal year ending June 30, 1996.
The Company has been informed that neither Ernst & Young
LLP nor any of its partners has any direct or indirect
financial interest in the Company or any of its
subsidiaries, or has had any connection with the Company
or any of its subsidiaries in the capacity of promoter,
underwriter, voting trustee, director, officer or
employee.
A representative of Ernst & Young LLP is expected
to be present at the Annual Meeting. Such
representative will have the opportunity to make a
statement if he desires to do so and will be available
to respond to appropriate questions.
The affirmative vote of a majority of shares
present in person or represented by proxy at the Annual
Meeting and entitled to vote on the matter shall be
required to approve the selection of Ernst & Young LLP
as independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR THE APPROVAL AND RATIFICATION OF
THE SELECTION OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Any proposal by stockholders of the Company
intended to be presented at the Company's next Annual
Meeting of Stockholders must be received in proper form
by the Company at its principal office for inclusion in
the Company's Proxy Statement and form of proxy relating
to such Annual Meeting, no later than May 18, 1996.
GENERAL
The Board of Directors of the Company is not aware
of any matters other than the aforementioned matters
that will be presented for consideration at the Annual
Meeting. If other matters properly come before the
Annual Meeting, it is the intention of the persons named
in the enclosed proxy to vote thereon in accordance with
their best judgment.
The cost of preparing, printing and mailing this
Proxy Statement and of the solicitation of proxies by
the Company will be borne by the Company. Solicitation
will be made by mail and, in addition, may be made by
directors, officers and employees of the Company
personally, or by telephone or telegram. The Company
will request brokers, custodians, nominees and other
like parties to forward copies of proxy materials to
beneficial owners of stock and will reimburse such
parties for their reasonable and customary charges or
expenses in this connection.
The Company will provide to any stockholder of
record, without charge, upon written request to its
Corporate Secretary, a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended June 30,
1995.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
THEREFORE, STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE
MEETING IN PERSON ARE URGED TO EXECUTE AND RETURN THE
ENCLOSED PROXY IN THE REPLY ENVELOPE PROVIDED.
By Order of the Board of Directors,
Catherine W. Pecher
Secretary
September 15, 1995
EXHIBIT A
THE BIRMINGHAM STEEL CORPORATION
STOCK ACCUMULATION PLAN
Section 1. Purpose of the Plan.
The name of this plan is THE BIRMINGHAM STEEL
CORPORATION STOCK ACCUMULATION PLAN (the "Plan"). The
purpose of the Plan is to enable BIRMINGHAM STEEL
CORPORATION (the "Company") and its Subsidiaries and
Affiliates to attract, retain and motivate officers and
other key employees, to compensate them for their
contributions to the growth and profits of the Company
and to encourage ownership of stock in the Company on
the part of such personnel. The Plan provides
incentives to participating officers and other key
employees which are linked directly to increases in
stockholder value and will, therefore, inure to the
benefit of all stockholders of the Company.
Section 2. Definitions.
For the purposes of the Plan, the following terms
shall be defined as set forth below:
(a) Affiliate" means any corporation (other than
a Subsidiary), partnership, joint venture or any other
entity in which the Company owns, directly or
indirectly, at least a 10 percent beneficial ownership
interest.
(b) Board" means the Board of Directors of the
Company.
(c) "Bonus Participation Amount" means, with
respect to any Participant for any fiscal year of the
Company, the aggregate amount by which the right of such
Participant to receive payment in cash with respect to
any cash bonus under the Cash Bonus Plan otherwise
payable to such Participant with respect to such fiscal
year has been reduced pursuant to participation in the
Plan as provided in Section 4 hereof. The Bonus
Participation Amount shall be computed by multiplying
(i) the sum of the Specified Percentage and the
participation percentage, if any, elected by such
Participant pursuant to Section 4(a)(ii)(A)(I) by (ii)
the gross amount of the cash bonus which would have been
payable to that Participant with respect to that fiscal
year under the Cash Bonus Plan if the Participant were
not required to, and had not elected to, participate in
the Plan.
(d) "Cash Bonus Plan" shall have the meaning
ascribed thereto in Section 4(a) hereof.
(e) "Cause" means a felony conviction of a
Participant or the failure of a Participant to contest
prosecution for a felony, or a Participant's willful
misconduct or dishonesty, any of which is harmful to the
business or reputation of the Company or any Subsidiary
or Affiliate.
(f) "Change of Control" means the happening of any
of the following:
i) when any "person", as such term used in
Section 13(d) and 14(d) of the Exchange Act (other
than the Company or a Subsidiary or any Company
employee benefit plan (including its trustee)), is
or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or
indirectly of securities of the Company
representing 20 percent or more of the combined
voting power of the Company's then outstanding
securities;
ii) when, during any period of two
consecutive years during the existence of the Plan,
individuals who, at the beginning of such period,
constituted the Board cease, for any reason other
than death, to constitute at least a majority
thereof, unless each director who was not a
director at the beginning of such period was
elected by, or on the recommendation of, at least
two-thirds of the individuals who were directors at
the beginning of such period; or
iii) the occurrence of a transaction
requiring stockholder approval for the acquisition of
the Company by an entity other than the Company or a
Subsidiary through purchase of assets, or by merger,
or otherwise.
(g) "Change of Control Price" means, as of any
date of computation, the highest price per share paid in
any transaction reported on the New York Stock Exchange
Composite Tape, or paid or offered in any transaction
related to a potential or actual Change of Control of
the Company, in each case, at any time during the sixty
day period preceding such computation date as determined
by the Committee.
(h) "Code" means the Internal Revenue Code of
1986, as amended, or any successor statute thereto.
(i) "Commission" means the Securities and Exchange
Commission.
(j) "Committee" means the Compensation and Stock
Option Committee of the Board, or any other committee of
the Board consisting exclusively of Disinterested
Persons hereafter appointed for the purpose of, or
charged by the Board with the responsibility for,
administering the Plan.
(k) "Computation Value" means the Fair Market
Value of the Stock as of the day on which the applicable
cash bonus is declared under the Cash Bonus Plan, in the
case of Restricted Stock to be received pursuant to
Section 4(a)(i) or Section 4(a)(ii)(A)(I), and the last
trading day of the applicable month, in the case of
Restricted Stock to be received pursuant to the other
provisions of Section 4(a)(ii), in each case, discounted
by such factor (the "Discount Factor") as is determined
by the Committee from time to time to be appropriate to
reflect both the impact on valuation of the restrictions
applicable to the Restricted Stock under Section 6 and
the risk of forfeiture of the Restricted Stock by a
Participant under Section 6(d). Until such time as
determined otherwise by the Committee, the Discount
Factor shall be 25 percent.
(l) "Disability" means total and permanent
disability as determined under the Company's long-term
disability program as from time to time in effect.
(m) "Disinterested Person" shall have the meaning
set forth in Rule 16b-3(d)(3) as promulgated by the
Commission under the Exchange Act, or any successor
definition adopted by the Commission.
(n) "Early Retirement" means retirement from
active employment with the Company, any Subsidiary and
any Affiliate pursuant to the early retirement
provisions of any applicable Company pension plan.
(o) "Effective Period" means the six-month period
(or such shorter period as is provided in Section 5)
during which an election by an Eligible Employee to
participate in the Plan pursuant to Section 4(a)(ii)
hereof is in effect (without regard to any re-election
which may occur or the continuation of such election
which may occur as provided under Section 5 hereof);
provided that if any Participant ceases to be an
Eligible Employee during any period in which such an
election would otherwise be in effect, the Effective
Period with respect to such election shall end as of the
date such Participant ceases to be an Eligible Employee.
(p) "Eligible Employee" shall have the meaning
ascribed thereto in Section 3 hereof.
(q) "Exchange Act" means the Securities Exchange
Act of 1934, as amended, and any successor thereto.
(r) "Fair Market Value" means, as of any given
date, the closing price of the Stock on such date (or,
if no transactions were reported on such date, on the
next preceding date on which transactions were so
reported) on the New York Stock Exchange Composite Tape
or, if the Stock is not on such date listed on the New
York Stock Exchange, in the principal market in which
such stock is traded on such date.
(s) "1990 Plan" means the Birmingham Steel
Corporation 1990 Management Incentive Plan.
(t) "Normal Retirement" means retirement from
active employment with the Company, any Subsidiary and
any Affiliate on or after the normal retirement date
specified in any applicable Company pension plan.
(u) "Participant" shall have the meaning ascribed
thereto in Section 3 hereof.
(v) "Participation Amount" means, with respect to
any Participant for any month during the Effective
Period, the aggregate amount by which the right of such
Participant to receive payment in cash with respect to
any incentive compensation and any base compensation
otherwise payable to such Participant with respect to
such month has been reduced pursuant to participation in
the Plan as provided in Section 4 hereof. The
Participation Amount shall be computed by (i)
multiplying (A) the applicable participation percentage
elected by such Participant with respect to incentive
compensation or base compensation, as the case may be,
under Section 4(a) hereof by (B) the gross amount of
that type of compensation which would have been payable
to that Participant with respect to that month if the
Participant had not elected to participate in the Plan,
(ii) totalling the amounts determined under clause (i),
and (iii) adding to the total determined under clause
(ii) the amount, if any, carried forward from the
immediately preceding month under Section 4(c)(ii).
(w) "Potential Change of Control" means the
happening of any of the following:
i) the entering into an agreement by the
Company, the consummation of which would result in
a Change of Control of the Company; or
ii) the acquisition of beneficial ownership,
directly or indirectly, by any entity, person or
group (other than the Company or a Subsidiary or
any Company employee benefit plan (including its
trustee)) of securities of the Company representing
5 percent or more of the combined voting power of
the Company's outstanding securities and the
adoption by the Board of Directors of a resolution
to the effect that a Potential Change of Control of
the Company has occurred for purposes of this Plan.
(x) "Restricted Period" means the three-year period
(or such other period as is determined by the Committee
in accordance with the terms hereof, in each case,
together with any extensions thereof approved as
provided herein) commencing on the date of the issuance
of the applicable shares of Restricted Stock to or for
the account of a Participant hereunder, whether or not
such shares are evidenced by a book entry or a
certificate and whether or not any such certificate is
held in the custody of the Company.
(y) "Restricted Stock" means Stock received by a
Participant hereunder that is subject to the
restrictions set forth in Section 6 hereof.
(z) "Retirement" means Normal Retirement or Early
Retirement.
(aa) "Specified Percentage" shall have the meaning
ascribed thereto in Section 4(a) hereof.
(bb) "Stock" means the Common Stock of the
Company.
(cc) "Subsidiary" means any corporation (other
than the Company) in an unbroken chain of corporations
beginning with the Company if each of the corporations
(other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
corporations in the chain.
Section 3. Eligibility for Participation.
(a) The chief executive officer, chief operating
officer, chief administrative officer, chief financial
officer and each executive vice president of the Company
shall be eligible to participate in the Plan. In
addition, those officers and other key employees of the
Company or its Subsidiaries or Affiliates who are, in
the judgment of the Committee, responsible for or
contribute to the management, growth and/or
profitability of the Company or its Subsidiaries or
Affiliates may be designated by the Committee from time
to time as being eligible to participate in the Plan
(such officers and key employees who are so designated
by the Committee, together with those officers
specifically identified in the preceding sentence, are
referred to herein as "Eligible Employees").
Participation in the Plan by any Eligible Employee may
be either mandatory or elective as provided in Section
4 below. Those Eligible Employees who are required to
participate in the Plan or who elect to participate in
the Plan, in each case, in accordance with the
applicable provisions hereof, are referred to herein as
"Participants."
Section 4. Levels of Participation.
(a) The prescribed and permitted levels of
participation in the Plan by Eligible Employees shall be
determined from time to time by the Committee; provided
that the Committee shall not require any mandatory
participation in the Plan with respect to the base
compensation of any Eligible Employee.
i) Unless otherwise determined by the
Committee, all Eligible Employees who are
participants in the Company's discretionary cash
bonus plan (the "Cash Bonus Plan") and who will be
under the age of 62 at the time cash bonuses for
the applicable year are to be paid under the Cash
Bonus Plan will be required to participate in the
Plan as and to the extent set forth in this Section
4(a)(i). Each such Eligible Employee will receive
shares of Restricted Stock under the Plan in lieu
of the Company's payment in cash of a specified
percentage (the "Specified Percentage") of such
Eligible Employee's discretionary cash bonus for
that year under the Cash Bonus Plan. The amount of
the Specified Percentage shall be determined by the
Committee from time to time in its sole discretion,
and any such determination (including the initial
designation of the Specified Percentage set forth
in the next sentence) shall continue in effect
until such time as the Committee determines that
the Specified Percentage shall thereafter be a
different amount. The Specified Percentage with
respect to the first award of cash bonuses under
the Cash Bonus Plan following the adoption of the
Plan shall be 10 percent.
ii) Each Eligible Employee may, but is not
required to, elect to receive shares of Restricted
Stock under the Plan in lieu of the right to
receive a portion of his/her compensation in cash
as and to the extent provided below in this Section
4(a)(ii).
(A) Eligible Employees who are
participants in the Cash Bonus Plan may elect
to receive shares of Restricted Stock under t
the Plan in lieu of the right to receive
payment in cash by the Company (or a
Subsidiary or Affiliate, as applicable) of:
(I) up to 50 percent (in increments
of 5 percent) of such Eligible Employee's
discretionary cash bonus for such year
under the Cash Bonus Plan (less the
Specified Percentage if applicable to
such bonus under Section 4(a)(i) above);
and/or
(II) up to 20 percent (in
increments of 5 percent) of such Eligible
Employee's base compensation otherwise
payable by the Company (or a Subsidiary
or Affiliate, as applicable) with respect
to the Effective Period; and
(B) Eligible Employees who are not
participants in the Cash Bonus Plan may elect
to receive shares of Restricted Stock under
the Plan in lieu of the right to receive
payment in cash by the Company (or a
Subsidiary or Affiliate, as applicable) of:
(I) up to 10 percent (in increments
of 5 percent) of such Eligible Employee's
incentive compensation otherwise payable
with respect to the Effective Period
under an incentive compensation plan of
the Company (or a Subsidiary or
Affiliate, as applicable) other than the
1990 Plan; and/or
(II) up to 10 percent (in
increments of 5 percent) of such Eligible
Employee's base compensation otherwise
payable by the Company (or a Subsidiary
or Affiliate, as applicable) with respect
to the Effective Period.
iii) Any reduction in the right of an
Eligible Employee to receive payment of base
compensation or incentive compensation in cash
resulting from such Eligible Employee's elective
participation in the Plan under Section
4(a)(ii)(A)(II) or Section 4(a)(ii)(B) hereof shall
be applied pro rata to each payment of the
applicable type of compensation made to such
Eligible Employee with respect to the Effective
Period.
(b) Subject to the provisions of Section 6 hereof,
i) the shares of Restricted Stock to be
received by a Participant pursuant to Section 4(a)(i)
and Section 4(a)(ii)(A)(I) shall be issued to or
credited to the account of such Participant by the
Company not later than the fifth business day after the
last day of the month in which the applicable cash bonus
of such Participant is paid under the Cash Bonus Plan,
the number of shares to be so issued or credited to be
determined under Section 4(c)(i) below, and
ii) the shares of Restricted Stock to be
received by a Participant pursuant to the other
provisions of Section 4(a)(ii) shall be issued to or
credited to the account of such Participant on a monthly
basis not later than the fifth business day after the
last day of each month during the Effective Period, the
number of shares to be so issued or credited with
respect to each month to be determined under Section
4(c)(ii) below.
(c) i) The number of shares of Restricted stock to
be issued to a Participant under Section 4(a)(i) and
Section 4(a)(ii)(A)(I) shall be determined by dividing
(A) such Participant's Bonus Participation Amount by (B)
the applicable Computation Value of the Stock; provided
that no fractional shares of Restricted Stock shall be
issued, and the amount computed by multiplying any
fractional share interest otherwise resulting from such
determination by the applicable Computation Value shall
be paid over to the Participant (net of any applicable
tax withholding).
ii) The number of shares of Restricted Stock
to be issued to a Participant under Section
4(a)(ii)(A)(II) or Section 4(a)(ii)(B) with respect to
any month during the Effective Period shall be
determined by dividing (x) such Participant's
Participation Amount applicable to such month by (y) the
applicable Computation Value of the Stock; provided that
no fractional shares of Restricted Stock shall be
issued, and the amount computed by multiplying any
fractional share interest otherwise resulting from such
determination by the applicable Computation Value shall
be carried forward and added to such Participant's
Participation Amount applicable to the next succeeding
month or, at the option of the Committee, shall be paid
over to the Participant (net of any applicable tax
withholding).
Section 5. Method of Election.
(a) An Eligible Employee who is required to
participate in the Plan pursuant to Section 4(a)(i)
hereof shall automatically be a Participant upon
designation by the Committee and without further action
by such Eligible Employee (except as otherwise provided
below in this Section 5). Such a Participant may elect
to increase his/her participation in the Plan, and an
Eligible Employee who is not required to participate in
the Plan may elect to become a Participant and to
participate in the Plan, (in each case as and to the
extent provided in Section 4(a)(ii) hereof) by
completing the form provided by the Company for such
purpose and filing it with the Plan Administrator (or
such other person as may be designated by the Company on
such form) prior to the applicable date set forth below.
Except as otherwise provided below, an election to
participate in the Plan pursuant to Section
4(a)(ii)(A)(I) hereof must be filed as provided above
not later than January 1 of the fiscal year of the
Company with respect to which the applicable cash bonus,
if any, is to be paid under the Cash Bonus Plan and, if
timely filed, shall apply with respect to the balance of
such fiscal year. Except as otherwise provided below,
an election to participate in the Plan pursuant to the
remaining provisions of Section 4(a)(ii) hereof shall
apply with respect to the six-month period next
commencing on January 1 or July 1, whichever first
occurs following the filing of such election (i.e., to
be effective for the period January through June, the
election must be filed after June 30 and on or before
December 31 of the preceding calendar year, and to be
effective for the period July through December the
election must be filed after December 31 of the
preceding calendar year and on or before June 30 of the
current year). Elections with respect to any applicable
period during which the Plan is initially adopted may be
filed as provided above within 30 days after the
adoption of the Plan and, if timely filed, shall be
effective with respect to the balance of such period
remaining after the filing of such election.
(b) Employees first becoming Eligible Employees
during an applicable period and Eligible Employees whose
status with respect to participation in the Cash Bonus
Plan changes during an applicable period (resulting in
a change in eligibility for elective participation in
the Plan under Section 4(a)(ii)) may file elections
within 30 days after (i) first becoming Eligible
Employees or (ii) the effective date of such change of
status, as the case may be, and, if timely filed, such
elections shall be effective with respect to the balance
of such period remaining after the filing of such
election (or, if shorter, the balance of the period
remaining after the termination of any previously filed
election as provided below). Participants may indicate
in their election forms that the election is to continue
in effect with respect to subsequent fiscal years or
six-month periods, as applicable, unless participation
levels are changed by the timely filing of a new
election or such Participant files with the Plan
Administrator (or the person with whom an election form
would be properly filed) a notice of withdrawal from
elective participation in the Plan. Notwithstanding the
immediately preceding sentence, except as provided in
the next sentence, a Participant may not withdraw from
participation in the Plan or change the level of
participation in the Plan with respect to a fiscal year
or six-month period, as the case may be, after June 30
of such fiscal year (in the case of a fiscal year) or
once such six-month period has commenced (in the case of
a six-month period), and no purported cancellation,
revocation or modification of the election by the
Participant shall be effective for such purpose. In the
case of an Eligible Employee whose eligibility for
participation under Section 4(a)(ii) changes as a result
of a change of status under the Cash Bonus Plan during
an applicable period, any election previously filed by
such Eligible Employee with respect to such period shall
terminate and be of no further effect, and the Effective
Period with respect to such election shall end, in each
case, as of the end of the month in which such change of
status occurs.
(c) Notwithstanding the provisions of Section 5(a)
and 5(b) above, solely with respect to those Eligible
Employees who are required to file reports under Section
16 of the Exchange Act, any election (and any subsequent
new election) made under Section 4(a)(ii) hereof by such
Eligible Employee shall apply with respect to the six
month period commencing on the January 1 or July 1 which
first occurs at least six months after the filing of
such election.
Section 6. Restricted Stock.
(a) The maximum number of shares of Stock which
may be issued under the Plan shall be not more than
500,000 shares of Stock, subject to adjustment as
provided in Section 8 hereof, and such shares may be
either previously issued shares reacquired by the
Company or authorized but previously unissued shares.
In the event shares of Restricted Stock are forfeited
prior to the end of the period during which the
restrictions on the Restricted Stock expire, the
forfeited shares of Restricted Stock will become
available for future issuance under the Plan.
(b) Each Participant who receives shares of
Restricted Stock hereunder may, but need not, be issued
a stock certificate in respect of such shares of
Restricted Stock. Each certificate, if any, issued to
a Participant shall be registered in the name of such
Participant and, during the applicable Restricted
Period, shall bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to
such shares of Restricted Stock, substantially in the
following form:
"The transferability of the certificate and
the shares of stock represented hereby are
subject to the terms and conditions (including
forfeiture) of the Birmingham Steel
Corporation Stock Accumulation Plan. A copy
of such Plan is on file in the offices of
Birmingham Steel Corporation, 1000 Urban
Center Drive, Suite 300, Birmingham, Alabama
35242."
The Committee shall require that any stock
certificate issued in the name of a Participant
evidencing shares of Restricted Stock be held in the
custody of the Company until the restrictions thereon
shall have lapsed, and that, as a condition of the
issuance of a certificate for Restricted Stock, the
Participant shall have delivered to the Company a stock
power, endorsed in blank, relating to the shares covered
by such certificate.
In lieu of the issuance of a certificate for any
shares of Restricted Stock during the applicable
Restricted Period, a "book entry" (i.e., a computerized
or manual entry) may be made in the records of the
Company to evidence the ownership of such shares of
Restricted Stock in the name of the applicable
Participant. Such Company records shall, absent
manifest error, be binding on the Participants.
(c) The shares of Restricted Stock received by a
Participant under the Plan shall be subject to the
following restrictions and conditions:
i) Subject to the provisions of the Plan,
during the Restricted Period applicable to shares
of Restricted Stock received hereunder, the
Participant shall not be permitted to sell,
transfer, pledge or assign such shares of
Restricted Stock. The Committee may, in its sole
discretion, (A) initially provide for an
alternative Restricted Period or alter the three-
year Restricted Period for previously issued shares
of Restricted Stock (provided that the Committee
may not extend the Restricted Period for previously
issued shares of Restricted Stock without the
Participant's written consent), (B) during any
extension of such Restricted Period, provide for
alternative restrictions (provided that nothing
contained in this clause shall grant the Committee
any additional powers under the Plan with respect
to shares of Restricted Stock issued or to be
issued to persons who are subject to Section 16 of
the Exchange Act), (C) provide for the lapse of any
such restrictions in installments, and (D) in the
event of Retirement or of special hardship
circumstances of a Participant whose employment is
involuntarily terminated (other than for Cause),
including as the result of death or Disability of
such Participant, waive in whole or in part any or
all remaining restrictions with respect to shares
of Restricted Stock.
ii) In the event of special hardship
circumstances (determined in the sole discretion of the
Committee) occurring while the Participant is still
employed, the Participant may be allowed to surrender
all or a portion of the Participant's Restricted Stock,
such portion to be determined in the sole discretion of
the Committee, as to which restrictions still remain in
effect and to receive in cash, without interest, for
each such share surrendered an amount equal to the
applicable Computation Value of the Stock originally
used in determining the number of such shares of
Restricted Stock to be issued to such Participant.
iii) The Committee may, in its sole
discretion, waive or shorten the period during
which the Restricted Stock is subject to forfeiture
as provided in paragraph (d) of this Section 6
below during any Restricted Period.
iv) The Participant shall have the right to
vote or direct the vote of his or her shares of
Restricted Stock during the Restricted Period and
shall have the right to receive any regular cash
dividends on such shares of Restricted Stock.
Shares of Common Stock received as a result of a
stock dividend or stock split with respect to
Restricted Stock shall, during the balance of the
Restricted Period applicable to such shares of
Restricted Stock, be treated as additional shares
of Restricted Stock subject to the same
restrictions and limitations as the shares of
Restricted Stock with respect to which such shares
reflecting a stock dividend or stock split were
received. The Committee shall in its sole
discretion determine the Participant's rights with
respect to any other extraordinary dividends on the
shares of Restricted Stock.
v) Certificates for shares of Restricted
Stock shall be delivered to the Participant
promptly after, and only after, the applicable
Restricted Period shall expire (or such earlier
time as the restrictions may lapse in accordance
with paragraph (c)(i) of this Section 6) without
forfeiture. If certificates evidencing such shares
of Restricted Stock were previously issued bearing
the legend set forth in Section 6(b) hereof, such
certificates shall be cancelled and new
certificates not bearing such legend shall be
issued for delivery to the Participant.
(d) Subject to the provisions of clauses (c)(i),
(c)(ii) and (c)(iii) of this Section 6, the following
provisions shall apply to a Participant's shares of
Restricted Stock prior to the end of the Restricted
Period (including extensions):
i) Upon termination of a Participant's
employment with the Company or any Subsidiary or
Affiliate for Cause during the Restricted Period,
such Participant shall forfeit all Restricted
Stock, and shall be entitled to receive nothing in
lieu thereof, not even the amount by which the
Participant's right to receive compensation in cash
was reduced in connection with the receipt of such
forfeited Restricted Stock.
ii) In the event a Participant voluntarily
terminates employment with the Company or any
Subsidiary or Affiliate and such Participant within
six months following such termination is employed
by, or agrees to be employed by, any business in
whatever form conducted, whose business, in the
sole determination of the Committee, is competitive
with the business of the Company or any Subsidiary
or Affiliate of the Company, such Participant shall
forfeit all Restricted Stock, and shall be entitled
to receive nothing in lieu thereof, not even the
amount by which the Participant's right to receive
compensation in cash was reduced in connection with
the receipt of such forfeited Restricted Stock.
iii) In the event of the termination of the
Participant's employment with the Company or any
Subsidiary or Affiliate other than as described in
clauses (d)(i), (d)(ii) and (d)(iv) of this Section
6, the Participant shall forfeit all Restricted
Stock and shall be entitled to receive in lieu
thereof in cash only the lesser of either (A) the
amount by which the Participant's right to receive
compensation in cash was reduced in connection with
the receipt of such forfeited Restricted Stock,
without interest or (B) the Fair Market Value of
the forfeited Restricted Stock on the date of
forfeiture.
iv) In the event of the termination of the
Participant's employment with the Company or any
Subsidiary or Affiliate as the result of the death
or Disability of such Participant, the rights of
such Participant in and to the shares of Restricted
Stock held by or for the account of such
Participant shall immediately vest and such shares
of Restricted Stock shall no longer be subject to
the forfeiture hereunder.
For purposes of this paragraph (d) a Participant's
employment with the Company or any Subsidiary or
Affiliate shall be deemed not to have been terminated if
contemporaneously with such termination such Participant
is employed by another Subsidiary or Affiliate or by the
Company.
(e) In the event of (A) a Change of Control,
unless otherwise determined by the Committee or the
Board in writing after the receipt by a Participant of
Restricted Stock hereunder, but prior to the occurrence
of such Change of Control, or (B) a Potential Change of
Control, if and to the extent so determined by the
Committee or the Board in writing after the receipt by
a Participant of Restricted Stock hereunder:
i) the restrictions applicable to Restricted
Stock issued pursuant to the Plan shall lapse and
such shares shall be deemed fully vested and no
longer subject to forfeiture; and
ii) the value of all outstanding Restricted
Stock shall, to the extent determined by the
Committee, be cashed out on the basis of the Change
of Control Price as of the date the Change of
Control occurs or the Potential Change of Control
is deemed to have occurred, or such other date as
the Committee may determine prior to the Change of
Control or Potential Change of Control.
Section 7. Administration.
The Plan shall be administered by the Committee
which shall have the power and authority to issue
Restricted Stock to Participants pursuant to the terms
of the Plan.
In particular, the Committee shall have the
authority:
i) to select those employees of the Company
and its Subsidiaries and Affiliates who are
Eligible Employees;
ii) to determine whether and to what extent
Restricted Stock is to be issued to Participants
hereunder pursuant to mandatory or elective
participation in the Plan;
iii) to determine the number of shares of
Restricted Stock or portion of compensation subject
to mandatory or elective participation hereunder;
and
iv) to determine the terms and conditions,
not inconsistent with the terms of the Plan, of the
issuance of any Restricted Stock hereunder.
The Committee shall have the authority to adopt,
alter and repeal such administrative rules, guidelines
and practices governing the Plan, not inconsistent with
the Plan, as it shall, from time to time, deem
advisable; to interpret the terms and provisions of the
Plan; and to otherwise supervise the administration of
the Plan. All decisions made by the Committee pursuant
to the provisions of the Plan shall be final and binding
on all persons, including the Company and the
Participants. The Committee may act by a majority vote
at a regular or special meeting of the Committee or by
decision reduced to writing and signed by a majority of
the members of the Committee without holding a formal
meeting. Vacancies in the membership of the Committee
shall be filled by the Board of Directors.
The Committee may request that the management of
the Company appoint a "Plan Administrator" to carry out
the administrative and ministerial functions necessary
to implement the determinations, decisions and actions
of the Committee with respect to the Plan.
Section 8. Adjustments Upon a Change in Common Stock.
In the event of any change in the outstanding Stock
of the Company by reason of any stock split, stock
dividend, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares or
other similar event and such change equitably requires
an adjustment in the number or kind of shares that may
be issued under the Plan pursuant to Section 6(b), such
adjustment shall be made by the Board and shall be
conclusive and binding for all purposes of the Plan.
Section 9. Amendment and Termination.
The Plan may be amended or terminated at any time
and from time to time by the Board, but no amendment
which increases the aggregate number of shares of Stock
which may be issued pursuant to the Plan (except as
provided in Section 8 hereof) shall be effective unless
and until the same is approved by the stockholders of
the Company. Neither an amendment to the Plan nor the
termination of the Plan shall adversely affect any right
of any Participant with respect to any Restricted Stock
theretofore received hereunder without such
Participant's written consent.
Section 10. Designation of Beneficiary.
A Participant may file a written designation of a
beneficiary who is to receive any shares of Restricted
Stock and/or cash to the Participant's credit under the
Plan in the event of such Participant's death prior to
delivery to him of such shares of Restricted Stock
and/or cash. Such designation of beneficiary may be
changed by the Participant at any time by written
notice. Upon the death of a Participant and upon
receipt by the Company of proof of the identity and
existence at the Participant's death of a beneficiary
validly designated by him under the Plan, the Company
shall deliver such shares of Restricted Stock and/or
cash to such beneficiary. In the event of the death of
a Participant and in the absence of a beneficiary
validly designated under the Plan who is living at the
time of such Participant's death, the Company shall
deliver such shares of Restricted Stock and/or cash to
the executor or administrator of the estate of the
Participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company) the
Company shall deliver such shares of Restricted Stock
and/or cash to the applicable court having jurisdiction
over the administration of such estate. No designated
beneficiary shall, prior to the death of the Participant
by whom he has been designated, acquire any interest in
the shares of Restricted Stock or cash credited to the
Participant under the Plan.
Section 11. General Provisions.
(a) The Committee may require each Eligible
Employee electing to participate in the Plan to
represent to and agree with the Company in writing that
such person is acquiring the shares of Stock subject to
the terms of the Plan and without a view to distribution
thereof.
All certificates for shares of Stock delivered
under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other
requirements of the Commission, any stock exchange upon
which the Stock is then listed, and any applicable
Federal or state securities law, and the Committee may
cause a legend or legends to be put on any such
certificates to make appropriate reference to such
restrictions.
(b) Nothing contained in the Plan shall prevent
the Board from adopting other or additional compensation
arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be
either generally applicable or applicable only in
specific cases. Neither the adoption of the Plan by the
Company nor the participation in the Plan by any
employee shall confer upon any employee of the Company
or any Subsidiary or Affiliate any right to continued
employment with the Company or a Subsidiary or
Affiliate, as the case may be, or interfere in any way
with the right of the Company or a Subsidiary or
Affiliate to terminate the employment of any of its
employees at any time.
(c) No member of the Board or the Committee, nor
any officer or employee of the Company acting on behalf
of the Board or the Committee, shall be personally
liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan,
and all members of the Board or the Committee and each
and any officer or employee of the Company or any
Subsidiary or Affiliate acting on their behalf shall, to
the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action,
determination or interpretation.
(d) A Participant's rights and interest under the
Plan may not be assigned or transferred in whole or in
part either directly or by operation of law or otherwise
(except in the event of a Participant's death)
including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in
any other manner.
(e) The Company and its Subsidiaries and
Affiliates shall have the right to deduct from any
payment made under the Plan any federal, state or local
income or other taxes required by law to be withheld
with respect to such payment. It shall be a condition
to the obligation of the Company to issue Stock upon the
lapse of restrictions on Restricted Stock that the
Participant (or any beneficiary) pay to the Company,
upon its demand, such amount as may be requested by the
Company for the purpose of satisfying any liability to
withhold federal, state or local income or other taxes.
If the amount requested is not paid, the Company may
refuse to issue shares.
(f) All notices or other communications by a
Participant to the Company under or in connection with
the Plan shall be deemed to have been duly given when
received by the Treasurer of the Company or when
received in the form specified by the Company at the
location, or by the person, designated by the Company
for the receipt thereof.
Section 12. Effective Date of Plan.
The Plan shall be effective as of April 1, 1995,
and was adopted by the Board on August 21, 1995.
BIRMINGHAM STEEL CORPORATION
This Proxy is solicited on behalf of the Board of
Directors for use at the 1995 Annual Meeting of
Stockholders to be held on October 17, 1995.
The undersigned hereby appoints James A. Todd, Jr.
and Thomas N. Tyrrell, and each of them, attorneys and
proxies with full power of substitution, to vote in the
name of and as proxy for the undersigned at the Annual
Meeting of Stockholders of Birmingham Steel Corporation
to be held on Tuesday, October 17, 1995 at 10:00 a.m.
local time at The Harbert Center, 2019 Fourth Avenue
North, Birmingham, Alabama, and at any adjournment
thereof, according to the number of votes that the
undersigned would be entitled to cast if personally
present.
(1) To elect the following nominees as directors to
serve until the next Annual Meeting of Stockholders and
until their successors are elected and qualified:
James A. Todd, Jr., E. Mandell de Windt, C.
Stephen Clegg, George A. Stinson, Thomas N.
Tyrrell, E. Bradley Jones, Harry Holiday, Jr.,
Reginald H. Jones, Paul H. Ekberg, William J.
Cabaniss, Jr., T. Evans Wyckoff
[ ] FOR all nominees listed above [ ] WITHHOLD
(except as indicated to the AUTHORITY
contrary below) to vote for
all nominees
(2) To approve the 1995 Stock Accumulation Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) To approve and ratify the selection of Ernst &
Young LLP as the independent auditors for the Company
and its subsidiaries for the fiscal year ending June 30,
1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) To consider and take action upon such other matters
as may properly come before the meeting or adjournments
or postponements thereof.
PROPERLY EXECUTED PROXIES WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO SUCH
DIRECTIONS ARE GIVEN, SUCH PROXIES WILL BE VOTED FOR ALL
NOMINEES REFERRED TO IN PARAGRAPH (1) AND FOR THE
PROPOSITIONS REFERRED TO IN PARAGRAPHS (2) AND (3).
The undersigned revokes any prior proxies to vote the
shares covered by this proxy.
Signature
Signature
Date:, 1995
(This Proxy should be marked, dated and signed by the
stockholder(s) exactly as his or her name appears
hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so
indicate. If shares are held by joint tenants or as
community property, both should sign.)
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY
PROMPTLY. This Proxy, when properly executed, will be
voted in accordance with the directions given by the
undersigned stockholder. If no direction is made, it
will be voted FOR Proposals 1, 2 and 3 as the proxies
deem advisable on such other matters as may come before
the meeting.
