BIRMINGHAM STEEL
CORPORATION
September 11, 1998
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of your
Company, which will be held on Tuesday, October 13, 1998, at 10:00 A.M., local
time, at The Wynfrey Hotel, 1000 Riverchase Galleria, 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,
Robert A. Garvey
--------------------
Robert A. Garvey
Chairman of the Board and
Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 13, 1998
The Annual Meeting of Stockholders of Birmingham Steel Corporation (the
"Company") will be held at The Wynfrey Hotel, 1000 Riverchase Galleria,
Birmingham, Alabama, on Tuesday, October 13, 1998, at 10:00 A.M., local time,
for the following purposes:
(1) To elect nine directors, each to serve until the next Annual
Meeting of Stockholders and until his successor has been
elected and qualified;
(2) 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, 1999; and
(3) To transact such other business as may, in accordance with the
Company's bylaws, be properly brought before the meeting or
any adjournment or postponement thereof.
Only stockholders of record at the close of business on August 21, 1998
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
-------------------------
Catherine W. Pecher
Vice President and Secretary
Birmingham, Alabama
September 11, 1998
<PAGE>
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 and 2 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 subsequently dated 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. A stockholder may
abstain or withhold his or her vote (collectively, "abstentions") with respect
to each item submitted for stockholder approval. In addition, brokers and other
nominees may not be entitled to vote shares held in "street name" on certain
non-routine items absent customer instructions (known as a "broker nonvote").
Shares represented by proxies indicating abstentions and broker nonvotes, if
any, will be counted as present for purposes of determining the existence of a
quorum. Because the election of directors is determined by the votes cast at the
meeting, abstentions and broker nonvotes, if any, will not affect such election.
However, since other matters that come before the Meeting may require the
affirmative vote of a majority of all shares outstanding, and not just those
represented at the meeting, abstentions and broker nonvotes, if any, will have
the effect of a vote against those proposals.
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 11, 1998.
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 21, 1998 (the "Record
Date"). At the close of business on the Record Date, 29,536,303 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 the Record Date, 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.
<PAGE>
Name of
Beneficial Owner or Number of Shares
Number of Persons Beneficially Percent
in Group Owned of Class
- ---------------------------- ------------------- ----------
The Prudential Insurance 2,996,105(1) 10.1%
Company of America
Merrill Lynch & Co., Inc., 2,658,100(2) 9.0%
et al.
Brinson Partners, Inc., et al. 2,345,065(3) 7.9%
Robert A. Garvey 142,208(4) *
William R. Lucas, Jr. 51,908(5) *
Jack R. Wheeler 43,409(6) *
Frederick J. Rocchio, Jr. 42,074(7) *
C. Stephen Clegg 20,055(8)(9) *
Joseph Alvarado 19,862(10) *
E. Mandell de Windt 13,702(9) *
E. Bradley Jones 13,500(9) *
Harry Holiday, Jr. 12,000(9) *
T. Evans Wyckoff 10,424(9) *
William J. Cabaniss, Jr. 9,345(9) *
Alfred C. DeCrane, Jr. 2,000 *
Richard de J. Osborne 1,000 *
Directors and executive
officers of a
group (13 persons) 389,487(11) 1.3%
* Less than 1%
(footnotes appear on following page)
<PAGE>
(1) This information was taken from a Schedule 13G/A filed by The
Prudential Insurance Company of America on February 9, 1998 reflecting
information as of December 31, 1997. The amount shown includes sole
voting power with respect to 3,750 shares, shared voting power with
respect to 2,992,355 shares, sole dispositive power with respect to
3,750 shares, and shared dispositive power with respect to 2,992,355
shares.
(2) This information was taken from a Schedule 13G/A filed by Merrill Lynch
& Co., Inc. and certain related affiliates including Merrill Lynch
Asset Management L.P., Merrill Lynch Capital Fund, Inc., Merrill Lynch
Group, Inc. and Princeton Services, Inc. on February 4, 1998 reflecting
information as of December 31, 1997. The amount shown represents shared
voting and dispositive powers by the reporting persons.
(3) This information was taken from a Schedule 13G/A filed by Brinson
Partners, Inc. and certain related parties, including Brinson Trust
Company, Brinson Holdings, Inc., SBC Holding (USA), Inc. and Swiss Bank
Corporation, on February 10, 1998 reflecting information as of December
31, 1997. The amount shown represents shared voting and dispositive
powers by the reporting persons.
(4) Includes 25,158 shares of Restricted Stock issued under the 1995 Stock
Accumulation Plan, 24,000 shares of Restricted Stock awarded under the
1990 Management Incentive Plan, 2,645 shares held in the Company's
401(k) Plan, and 33,334 shares subject to stock options.
(5) Includes 2,000 shares of Restricted Stock awarded under the 1990
Management Incentive Plan, 2,402 shares held in the Company's 401(k)
Plan, and 3,950 shares of Restricted Stock issued under the 1995 Stock
Accumulation Plan. Also includes 500 shares owned by Mr. Lucas' spouse
and 36,000 shares subject to stock options.
(6) Includes 30,000 shares subject to stock options and 6,080 shares issued
under the 1995 Stock Accumulation Plan.
(7) Includes 3,000 shares of Restricted Stock awarded under the 1990
Management Incentive Plan, 2,710 shares under the 1995 Stock
Accumulation Plan, and 36,000 shares subject to stock options.
(8) Includes 9,555 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.
(9) Includes 1,500 shares subject to stock options granted under the 1996
Director Stock Option Plan.
(10) Includes 6,000 shares of Restricted Stock awarded under the 1990
Management Incentive Plan, 1,412 shares of Restricted Stock issued
under the 1995 Stock Accumulation Plan, 1,488 shares held in the
Company's 401(k) plan, and 10,000 shares subject to stock options.
(11) Includes an aggregate of (i) 145,334 shares subject to stock options
held by certain officers of the Company, (ii) an aggregate of 6,535
shares held in the Company's 401(k) Plan, (iii) an aggregate of 35,000
shares of Restricted Stock awarded under the 1990 Management Incentive
Plan, (iv) an aggregate of 39,310 shares of Restricted Stock issued
under the 1995 Stock Accumulation Plan, and (v) an aggregate of 9,000
shares subject to options granted under the Company's 1996 Director
Stock Option Plan.
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.
<PAGE>
AGENDA ITEM ONE
ELECTION OF DIRECTORS
Nine 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: Robert A.
Garvey, E. Mandell de Windt, C. Stephen Clegg, E. Bradley Jones, Harry Holiday,
Jr., William J. Cabaniss, Jr., T. Evans Wyckoff, Richard de J. Osborne and
Alfred C. DeCrane, Jr. If any nominee is unable to stand for election, the
persons named in the proxy may 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 re-election. 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
- --------------------- ------------------------------------------------------
Robert A. Garvey Chairman of the Board and Chief Executive Officer of
1996 the Company since January 5, 1996; President of North
(Age 60) Star Steel Co. from 1984 to 1996.
E. Mandell de Windt Chairman of the Executive Committee of the Board of
1985 Directors of the Company since July 1991; Chairman of
(Age 77) 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
manufacturing concern, from 1969 to April 1986.
C. Stephen Clegg Chairman of the Board and Chief Executive Officer of
1985 Diamond Home Services, Inc., a contractor of installed
(Age 48) home improvement products,and Midwest Spring
Manufacturing Company, a manufacturer of specialty
springs, wireforms and metal stamping products;
director of Ravens Metals, Inc.
E. Bradley Jones Retired; Chairman of the Board and Chief Executive
1988 Officer of LTV Steel Company from June 1984 to December
(Age 70) 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., RPM,Inc.and Consolidated Rail Corporation;
Trustee of Fidelity Funds and The Cleveland Clinic
Foundation.
Harry Holiday, Jr. Retired; Chairman of the Board from 1982 to 1986 and
1991 Chief Executive Officer from 1979 to 1985 of ARMCO,
(Age 75) Inc., a producer of specialty flat-rolled stainless,
electrical and galvanized steel.
William J. Cabaniss, Jr. President of Precision Grinding,Inc.,a metal machining
1993 company serving metal machining industries in the
(Age 60) Southeast, since 1971; director of Protective Life
Corporation.
T. Evans Wyckoff Retired; Chairman of the Board of Aero-Go, Inc., a
1993 manufacturer of air cushion devices,from 1969 to 1993;
(Age 73) President of Wyco Corporation, a private investment
company, since 1983; President of Arvee Orchards, Inc.
since 1991.
Richard de J. Osborne Chairman of the Board and Chief Executive Officer of
1998 ASARCO Incorporated, a leading producer of nonferrous
(Age 64) metals; Chairman of the Board of Southern Peru Copper
Corporation; director of Schering-Plough Corporation,
The BFGoodrich Company, The Tinker Foundation and
NACCO Industries, Inc.
Alfred C.DeCrane, Jr. Retired; Chairman of the Board and Chief Executive
1998 Officer of Texaco, Inc., an explorer, producer and
(Age 67) marketer of oil and natural gas, from January 1987 to
July 1996; director of CIGNA Corporation, Inc.,
Bestfoods,Corn Products International, Inc. and Harris
Corporation.
The Board of Directors held fourteen meetings, including one action by
unanimous written consent, during the fiscal year ended June 30, 1998. During
fiscal 1998, 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 &
Safety, Finance, and Compensation and Stock Option Committees of the Board of
Directors.
The members of the Audit Committee are Messrs. Clegg, Cabaniss, Holiday
and Wyckoff, along with George A. Stinson, a current director who is not a
nominee for election. 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 1998.
The members of the Executive Committee are Messrs. de Windt, Garvey and
Clegg, along with Reginald H. Jones, a current director who is not a nominee for
election. 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 Bylaws. The Executive Committee
held three meetings during fiscal 1998.
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 two meetings during
fiscal 1998.
Messrs. Holiday, Cabaniss and Wyckoff are members of the Environmental
Affairs & Safety Committee. The Environmental Affairs & Safety Committee
monitors environmental and safety issues impacting the Company's operations and
reviews and evaluates environmental compliance, safety performances, and
processes at the Company's facilities. The Environmental Affairs & Safety
Committee held two meetings during fiscal 1998.
Messrs. Reginald Jones, Garvey, Cabaniss 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 four meetings during fiscal 1998.
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 all stock-based and other
benefit plans (unless otherwise specified in plan documents) affecting officers'
direct and indirect remuneration. The Compensation and Stock Option Committee
held four meetings during fiscal 1998.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES NAMED IN THIS PROXY STATEMENT.
Section 16(a) Beneficial Ownership Reporting Compliance
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. Such 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 1998 all
Section 16(a) filing requirements applicable to its officers and directors were
satisfied, except that Mr. Rocchio, Executive Vice President-Development and
Technology, filed a Form 4 late relating to a single transaction of 3000 shares.
EXECUTIVE COMPENSATION
The following table provides certain summary information for the fiscal
years ended June 30, 1998, 1997 and 1996 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 ("1990 MIP") and Restricted Stock issued under the 1995 Stock
Accumulation Plan ("SAP"). See footnotes (2), (7) and (8) to the Summary
Compensation Table.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Annual Compensation Compensation Awards
-------------------------------------------- ----------------------- -----------
Other Annual Restricted Options/ All Other
Name and Salary Bonus Compensation Stock SARs Compensation
Principal Position Year ($) ($)(1) ($) ($)(2) (#) ($)(3)
- ------------------- ---- ---------- ------- ------------ ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert A. Garvey(4) 1998 367,968(5) -0- -0- 122,665(8) 50,000 88,431
Chairman of 1997 371,506 240,005 143,005(6) 197,928(8) -0- 6,422
the Board 1996 170,347 270,011 123,928(6) 951,916(7)(8) 100,000 4,274
and Chief
Executive
Officer
Joseph Alvarado (9) 1998 275,538(5) 67,507(5) -0- 9,991(8) -0- 44,909
Executive Vice 1997 71,077 46,811 -0- 135,839(7)(8) 50,000 1,348
President-
Commercial
William R. 1998 214,856 27,004 -0- 4,007(8) 12,000 42,019
Lucas, Jr. 1997 170,654 99,011 -0- 39,924(8) 60,000 6,151
Executive 1996 166,270 -0- -0- 177,171(7)(8) -0- 3,139
Vice President -
Administration
and General
Counsel
Frederick J. 1998 188,654(5) 21,603(5) -0- 3,196(8) 12,000 40,111
Rocchio, Jr.(10) 1997 161,896 77,005 -0- 43,993(8) 60,000 5,941
Executive 1996 114,462 -0- -0- 102,690(7) -0- 3,525
Vice President -
Development
and Technology
Jack R. Wheeler 1998 164,133(5) 16,202(5) -0- 2,409(8) 5,000 33,093
Vice President - 1997 146,346 48,603 -0- 17,185(8) 50,000 4,649
Plant 1996 134,903 -0- -0- 20,128(8) -0- 5,916
Operations
- --------------------------
<FN>
(1) Represents cash incentive compensation accrued for the fiscal year (but
paid in the subsequent fiscal year). Does not include amounts foregone
in fiscal years 1998, 1997 and 1996 in connection with the receipt of
shares of Restricted Stock under the SAP, which is reflected in the
"Restricted Stock" column in the table above. See footnote (8) below.
(2) The value of the Restricted Stock awards shown in the table above
reflects the number of shares awarded during the year indicated
multiplied by the closing market price of the Company's unrestricted
common stock on the date of the award (net of any consideration paid by
the Named Executive Officer). The number and dollar value of all
Restricted Stock holdings of the Named Executive Officers with respect
to which the restrictions have not lapsed as of the Record Date,
calculated using the closing market price of the Company's unrestricted
common stock on June 30, 1998, were as follows: 49,158 shares
($608,330) by Mr. Garvey; 7,412 shares ($91,724) by Mr. Alvarado; 5,950
shares ($73,631) by Mr. Lucas; 5,710 shares ($70,661) by Mr. Rocchio;
and 6,080 shares ($75,240) by Mr. Wheeler. Dividends are paid on shares
of Restricted Stock.
(3) The compensation reported represents Company contributions to the
401(k) Plan, premiums for life insurance and contributions to the
Birmingham Steel Corporation Executive Retirement and Compensation
Deferral Plan (the "ERP/CDP"). 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, 1998:
<PAGE>
Term and Whole
Name 401(k) Plan Life Insurance ERP/CDP
- ------------- ------------- -------------- ------------
Robert A. Garvey $5,393 $7,042 $75,996
Joseph Alvarado 7,585 4,570 32,754
William R. Lucas, Jr. 5,459 4,074 32,486
Frederick J. Rocchio, Jr. 5,438 4,723 29,950
Jack R. Wheeler 5,366 5,914 21,813
(4) Mr. Garvey joined the Company in January 1996.
(5) Includes amounts deferred by Named Executive Officers pursuant to
the ERP/CDP.
(6) Consists solely of amounts paid to reimburse Mr. Garvey for loss on
forfeiture of stock award from his previous employer during 1997 and
lost profit sharing benefits from his former employer during 1996.
(7) Includes the value of Restricted Stock award(s) granted under the 1990
MIP on the date of such grant(s). Restricted Stock awards under the
1990 MIP are made in the discretion of the Compensation and Stock
Option Committee of the Board of Directors, and recipients pay only a
nominal consideration (par value) for the issuance of the Restricted
Stock. Mr. Garvey's 1996 award (50,000 shares) was made on January 5,
1996, at a per share price of $17.125; 10,000 shares vested immediately
and 40,000 shares vest over a five year period with 8,000 shares
vesting on each anniversary. Mr. Alvarado's award (8,000 shares) was
made on April 14, 1997, at a per share price of $16.125, and vests in
equal increments of one-fourth over four years. Mr. Lucas' 1996 award
(8,000 shares) was made on August 4, 1995, at a per share price of
$19.75, and vests in equal increments of one-fourth over four years;
Mr. Rocchio's 1996 award (6,000 shares) was made on October 16, 1995,
at a per share price of $17.125, and vests in equal increments of
one-fourth over four years.
(8) Includes the value of Restricted Stock issued under the SAP in lieu of
cash compensation to which the Named Executive Officer would otherwise
be entitled on the date of such issuance. 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 include 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 amount of cash
compensation from both salary and bonus foregone by the Named Executive
Officers by participating in the plan was as follows: Mr. Garvey: 1998
- $91,992, 1997 - $148,554 and 1996 - $72,126; Mr. Alvarado: 1998 -
$7,493 and 1997-$5,189; Mr. Lucas: 1998 - $2,996, 1997 - $30,026 and
1996 - $14,442; Mr. Rocchio: 1998 - $2,397, 1997 - $32,995 and 1996 -
$0; and Mr. Wheeler: 1998 - $1,798, 1997 - $12,923, and 1996 - $15,096.
Such amounts are not included in the "Salary" or "Bonus" columns in the
table above.
(9) Mr. Alvarado joined the Company in March 1997.
(10) Mr. Rocchio joined the Company in October 1995.
</FN>
</TABLE>
<PAGE>
Stock Option Plan
The following table provides certain information concerning individual
grants of stock options under the Company's 1986 Stock Option Plan, the 1990 MIP
and the 1997 Management Incentive Plan (the "1997 MIP") made during the fiscal
year ended June 30, 1998, to each of the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term
------------------------------------------------ ------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base Expira-
Options/SARs Employees In Price tion
Name Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
- --------- ------------- ------------ ------- ------- -------- ---------
Robert A. 50,000 23% 18.625 9/02/07 585,658 1,484,173
Garvey
William
R. Lucas,
Jr. 12,000 6% 18.625 9/02/07 140,558 356,201
Frederick
J.Rocchio,
Jr. 12,000 6% 18.625 9/02/07 140,558 356,201
Jack R.
Wheeler 5,000 2% 18.625 9/02/07 58,566 148,417
- ----------
(1) These options vest equally over a five year period beginning with the
first anniversary from the grant date and every anniversary thereafter.
The following table provides certain information concerning each
exercise of stock options during the fiscal year ended June 30, 1998 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, the
1990 MIP, and the 1997 MIP.
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of
Securities Value of
Underlying Unexercised in-
Unexercised the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
Shares
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized($) Unexercisable Unexercisable (1)
- ------------- ----------- ----------- -------------- -----------------
Robert A. Garvey -0- -0- 33,334/116,666 -0-/-0-
Joseph Alvarado -0- -0- 10,000/40,000 -0-/-0-
William R.
Lucas, Jr. -0- -0- 24,000/48,000 -0-/-0-
Frederick J.
Rocchio, Jr. -0- -0- 24,000/48,000 -0-/-0-
Jack R. Wheeler -0- -0- 20,000/35,000 -0-/-0-
- ----------
(1) The stock options were granted under the 1986 Stock Option Plan, the
1990 MIP, and the 1997 MIP. The fair market value of the Common Stock
at June 30, 1998 was $12.375 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.
Management Security Plan
The Company established the Birmingham Steel Corporation Management
Security Plan (the "MSP") effective June 1, 1986. The Compensation and Stock
Option Committee has the right to amend the MSP, provided that any amendment
does not deprive any participant or beneficiary of any benefit which had accrued
prior to the effective date of the amendment. Effective July 1, 1997, the
Company amended and restated the MSP to constitute the ERP/CDP. The MSP provided
certain officers and key employees with fixed benefits payable in equal monthly
installments upon retirement or death. The present value of each participant's
MSP benefit was credited to his or her account in the ERP/CDP, a non-qualified
deferred compensation plan. The MSP opening balance fully vests after the
participant completes five years of service and at least one year as a
participant in the ERP/CDP. The Compensation and Stock Option Committee credited
additional amounts to certain participants in such amounts necessary to fund
fully the present value of such participant's projected benefit in the MSP in
exchange for such participant's agreement to convert the MSP, a defined benefit
plan, to the ERP/CDP. With respect to Messrs. Garvey and Wheeler, these special
opening balance credits were $751,506 and $372,676, respectively. Such balances,
as well as earnings thereon, vest in proportion to a participant's years as a
participant divided by the lesser of five or the complete years of potential
service in the ERP/CDP if the participant retires at the age of sixty-five.
Executive Retirement and Compensation Deferral Plan
The ERP/CDP is a non-qualified deferred compensation plan pursuant to
which the Named Executive Officers may defer compensation in amounts between 2%
to 20% of bi-weekly base pay and 5% to 50% of bonus pay, which amounts are
deemed to be credited to their accounts under the Plan. The retirement
components for the ERP participants consist of ongoing Company contributions
equal to 10% of eligible compensation, which contributions are deemed to be
credited at the end of each quarter and are fully vested. Benefits under the
ERP/CDP are unfunded and are payable from the Company's general assets. The
amounts deferred by participants and amounts credited by the Company, as well as
amounts credited under the predecessor MSP, including any special opening
balances authorized by the Compensation and Stock Option Committee, are deemed
to be invested based upon the investment directions suggested by the
participants, subject to the Administrative Committee's approval of such. CDP
accounts are deemed to be credited with bonus interest of 4% for those employed
at the end of each plan year, which interest becomes 100% vested after five
years from the date credited, except full vesting occurs in the event of a
change of control or the participant's death, disability, attainment of the
normal retirement age of sixty-five, or attainment of age sixty and completion
of fifteen years of service. Upon normal retirement, benefits are paid based
upon the method of distribution previously selected by the participant. A lump
sum of the vested balance is paid upon other termination of employment. Upon
death, all account balances plus twice the participant's annual base pay rate
are paid to the participant's designated beneficiary.
Executive Severance Plan
The Company's Board of Directors has adopted the Birmingham Steel
Corporation Executive Severance Plan (the "Severance Plan"). Participation in
the Severance Plan is limited to a select number of key members of management of
the Company as designated by the Board of Directors, including the executive
officers named in the Summary Compensation Table, and is designed to reassure
participants in the event of a Change in Control (as defined below) of the
Company, so that they can continue to focus their time and energy on
business-related concerns rather than personal concerns. A Change in Control is
defined as (i) the acquisition by any person, entity, or group of 15% or more of
the combined voting power of the Company's outstanding securities; (ii) a change
in the majority of the Board of Directors within a period of two consecutive
years or less unless the new Directors were elected or nominated by at least
two-thirds of the continuing Directors; or (iii) the consummation of a
transaction requiring stockholder approval for the acquisition of the Company by
an entity other than the Company or a subsidiary through the purchase of assets,
by merger, or otherwise. A participant is entitled to benefits under the
Severance Plan if, within two years after a Change in Control, the participant's
employment is terminated by the Company Without Substantial Cause or is
voluntarily terminated by the participant for good reason ("Good Reason").
Termination "Without Substantial Cause" means a termination that is neither for
Substantial Cause nor disability. "Substantial Cause" for purposes of the
Severance Plan shall mean: (i) a participant's felony conviction; (ii) the
participant's failure to contest prosecution for a felony; or (iii) a
participant's willful misconduct or dishonesty. "Good Reason" is defined as: (i)
the assignment to the participant of duties that are materially inconsistent
with the participant's position or a change in the participant's title or office
without his or her consent; (ii) a reduction in the participant's salary or the
Company's failure to increase the participant's salary by a specified percentage
and by a specified date; (iii) a change in the participant's principal work
location to a location more than 25 miles from his or her current principal work
location; (iv) the Company's failure to maintain any benefit or compensation
plan (collectively, "Plans") in which the participant was participating, a
reduction of the participant's benefits under the Plans, or the failure to
provide the participant with any fringe benefits or the same number of vacation
days to which he or she was entitled prior to a Change in Control; (v) the
Company's failure to pay the participant any compensation within seven days of
its due date; (vi) the Company's failure to require any successor to the Company
to assume the obligations pursuant to the Severance Plan; or (vii) any purported
termination of the participant's employment by the Company in a manner
inconsistent with the Severance Plan.
The benefits provided under the Severance Plan following a Change in
Control include a lump sum payment upon covered terminations equal to 200% of a
participant's annual compensation ("Annual Compensation") for the year
immediately preceding his or her termination. Annual Compensation for purposes
of the Severance Plan means the total of all compensation, including wages,
salary, bonuses, and any other benefit of monetary value, whether in the form of
cash or otherwise, paid as consideration for the Participant's service to the
Company, except for amounts paid by the Company in connection with a
Participant's coverage under certain employee welfare benefit arrangements.
Benefits under the Severance Plan also include the maintenance by the Company of
all life insurance, accidental death and dismemberment insurance, and medical,
dental and prescription drug plans in which the participant was entitled to
participate for up to one year after a participant's termination following a
Change in Control. The Severance Plan also requires the Company to provide
participants with a lump-sum payment equal to any accrued but unpaid salary,
bonuses, and other benefits.
The Severance Plan is unfunded but contains provisions which allow for
the creation of a trust to help ensure the payment of benefits under the
Severance Plan.
Director Compensation
For fiscal 1998 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.
Director Stock Option Plan
The Company's Board of Directors has adopted and the stockholders have
approved the Birmingham Steel Corporation Director Stock Option Plan (the
"Director Plan"). The purpose of the Director Plan is to provide stock-based
compensation to eligible directors of the Company in order to encourage the
highest level of director performance and to promote long-term stockholder
value. The Director Plan will provide such directors with a proprietary interest
in the Company's success and progress through annual grants of options to
purchase shares of the Company's common stock.
Participation in the Director Plan is limited to company directors who
are not employees of the Company or any of its subsidiaries. There are currently
eight directors eligible to participate in the Director Plan. An aggregate of
100,000 shares of the Company's $.01 par value common stock is reserved for
issuance under the Director Plan. Shares of common stock issuable under the
Director Plan may be authorized and unissued shares or shares held in treasury.
The Director Plan will be administered by the Company and the Compensation and
Stock Option Committee of the Board of Directors of the Company.
Under the Director Plan, on the date of each annual meeting of the
Company's stockholders, each non-employee director will be granted, without the
necessity of action by the Compensation and Stock Option Committee, a
non-qualified stock option to purchase 1,500 shares of the Company's common
stock at a purchase price equal to the fair market value per share of the common
stock on such grant date.
Each option granted under the Director Plan is exercisable for a period
of ten (10) years beginning on the date of its grant. Except in the event of the
death or disability of the director or in the event of a Change of Control or a
Potential Change of Control (as defined in the Director Plan), an option may not
be exercised during the first year after grant. In the event of termination of
service of a director by reason of disability or death, any options held by such
director under the Director Plan shall be immediately exercisable and may be
exercised until the earlier of the expiration of the stated term of the option
or the first anniversary of the death or disability of such director, as the
case may be. In the event of termination of service of a director by reason of
retirement, any options held by such director may thereafter be exercised (to
the extent then exercisable) until the earlier of the expiration of the stated
term of the option or the third anniversary of the effective date of the
director's retirement. If a director who has retired dies while any option is
still outstanding, the option may be exercised by the former director's legal
representative until the earlier of the expiration of the stated term of the
option or the first anniversary of the death of the former director.
Employment Agreements
On January 5, 1996, the Company entered into an Employment Agreement with
Robert A. Garvey, Chairman of the Board and Chief Executive Officer of the
Company. See "REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION."
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. 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 competitive wages
and salaries 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 1998, production and
supervisory incentives averaged 28% of total compensation, and executive
incentives averaged 7%. These percentages vary from year to year based on
performance.
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 the
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. 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, Towers
Perrin 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.
Discretionary Cash Bonus Plan
The Company's Discretionary Cash Bonus Plan, which was established in
fiscal 1986, has ensured 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 if the Company achieves a minimum return
on capital as determined by the Committee ("the threshold return"). If the
threshold return is achieved, the amount of the bonus pool is 2.5% of pre-tax
earnings. The pool may be higher than 2.5% of pre-tax earnings if return on
capital exceeds the threshold return. The amount of the bonus pool is determined
according to a formula which corresponds with the Company's actual return on
capital for the fiscal year. The plan authorizes adjustment of the pre-tax
earnings used in this calculation to exclude the effects of interest expense and
a portion of pre-operating and startup losses associated with the commencement
of new operations.
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 using the performance goals established
by the Committee under the Chief Executive Officer Incentive Compensation Plan
(discussed below). 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 link directly 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 1998 will be paid by September 15, 1998, and
represent compensation earned for the fiscal year ended June 30, 1998.
Long Term Incentive Plans
The purpose of the Company's long-term incentive plans discussed below
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 align the interests
of the executives with those of the stockholders.
Under the 1986 Stock Option Plan, the 1990 MIP and the 1997 MIP, each
of which were approved by the Board of Directors and the stockholders of the
Company, the 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 these plans. 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.
The 1997 MIP was submitted to and approved by the Company's
stockholders at the 1997 annual meeting. The 1997 MIP is intended to be a
continuation of the Company's incentive compensation program currently provided
by the Company's 1986 Stock Option Plan and the 1990 MIP. The primary purposes
for the 1997 MIP were to provide sufficient shares for the grant of future
awards to officers and key employees of the Company and to comply with certain
of the provisions of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), in order that certain compensation attributable to awards
under the Company's management incentive program will qualify as
performance-based compensation and therefore not be subject to the limitation on
the deductibility of compensation set forth in Section 162(m) of the Code.
In fiscal 1998, options were granted under the 1990 MIP and the 1997
MIP to four of the Named Executive Officers. During fiscal 1998, no Named
Executive Officers exercised stock options.
The SAP, which was approved by the Board of Directors in August 1995
and by the Company's stockholders in October 1995, provides for the issuance of
Restricted Stock in lieu of the payment of cash compensation to officers and
other key employees selected to participate in the plan. Under this plan, those
employees who are under the age of 62 and who participate currently in the
discretionary cash bonus plan must accept Restricted Stock in lieu of 10% of
their annual cash bonus. 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. 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 SAP 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. Robert A. Garvey, the Company's Chairman
of the Board and Chief Executive Officer, is employed under the terms of an
Employment Agreement providing for a base salary of $450,000 and certain other
benefits. The term of the Agreement is five years, expiring January 5, 2001. In
the event of termination without cause, Mr. Garvey would be entitled to (i)
exercise all outstanding options which are exercisable or would become
exercisable within one year after termination of employment, (ii) continue
participation in the Company's pension and welfare benefit plans until the first
anniversary of termination of employment, and (iii) receive payment in cash of
$2,250,000 less the amount of base salary paid prior to termination. In the
event of termination of employment in connection with a change in control of the
Company as defined under the Agreement, Mr. Garvey would be entitled to the same
benefits and payments as described for a termination without cause or the
benefits he would be entitled to receive under the Severance Plan, whichever is
greater. In the event of termination due to death or disability, Mr. Garvey
would be entitled to the one-year acceleration of vesting described above with
respect to stock options and continued participation in the Company's pension
and welfare benefit plans for a period of one year.
The Chief Executive Officer Incentive Compensation Plan
The Board of Directors has adopted and the stockholders have approved
the Birmingham Steel Corporation Chief Executive Officer Incentive Compensation
Plan (the "CEO Plan"). The purpose of the CEO Plan is to provide supplementary
annual cash compensation to the Company's Chief Executive Officer in order to
motivate and retain the Company's Chief Executive Officer and to assist the
Company in reaching its financial and strategic objectives. The CEO Plan is
intended to be qualified under Section 162(m) of the Code, and the regulations
promulgated thereunder, and the CEO Plan was submitted to and approved by the
stockholders in order to qualify CEO Plan compensation for exclusion from
"applicable employee remuneration" as defined in Section 162(m).
<PAGE>
Section 162(m) of the Code provides generally that no deduction will be
allowed to a publicly held corporation for "applicable employee remuneration"
with respect to a "covered employee" (which includes the chief executive officer
of the corporation) to the extent that the amount of such remuneration for the
taxable year with respect to such employee exceeds $1 million. The term
"applicable employee remuneration" does not include remuneration payable solely
on account of the attainment of one or more performance goals, but only if (i)
the performance goals are determined by a compensation committee of the board of
directors of the taxpayer corporation which is comprised solely of two or more
outside directors, (ii) the material terms under which the remuneration is to be
paid, including the performance goals, are disclosed to stockholders and
approved by a majority vote of the stockholders in a separate shareholder vote
before the payment of such remuneration, and (iii) before any payment of such
remuneration, the compensation committee certifies that the performance goals
and any other material terms were in fact satisfied. Compensation paid pursuant
to the CEO Plan is intended to be qualified for the foregoing exemptive
treatment.
Pursuant to the CEO Plan, no later than 75 days after the end of the
Company's fiscal year for which an award is granted (the "Plan Year"), the Chief
Executive Officer is entitled to receive a cash bonus award ("Award") based upon
the accomplishment of specific performance goals established by the committee
appointed by the Board of Directors (which shall be the Compensation and Stock
Option Committee) (the "Committee") to administer the Plan. Not later than 90
days after the beginning of each Plan Year, the Committee shall establish (i)
the performance goals for the Plan Year, (ii) the maximum cash value of the
Award to be paid to the participant with respect to the Plan Year if all
performance goals and other terms for such Plan Year are satisfied (the "Target
Award"), and (iii) the method for computing the actual cash amount earned for a
Plan Year by the participant if and to the extent that such goals are satisfied.
The Target Award to be paid to the participant in a Plan Year may not, however,
exceed 200% of the participant's total cash compensation for the given Plan
Year. The committee shall establish the objective performance goals based on the
following criteria: pre-tax earnings, stock price, return on average capital,
and safety. Based on the level of achievement of the pre-established performance
goals, the cash amount earned for a Plan Year by the participant shall be
determined by the Committee for the Plan Year. No compensation was paid under
the CEO Plan for the fiscal year ended June 30, 1998.
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.
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
<PAGE>
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 ("S&P") 500 Stock Index and
the S&P Steel Industry Group Index for the period of five years commencing on
July 1, 1993 and ending on June 30, 1998. The graph assumes that the value of
the investment in the Company's Common Stock and each index was $100 on July 1,
1993, and that all dividends were reinvested.
<PAGE>
AGENDA ITEM TWO
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, 1999. 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 1999 ANNUAL MEETING
Any proposal by stockholders of the Company intended to be presented at
the Company's next Annual Meeting of Stockholders pursuant to Rule 14a-8
promulgated under the Exchange Act, 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 14, 1999.
If a proponent fails to notify the Company by August 14, 1999, but not earlier
than July 15, 1999 (pursuant to the Company's bylaws), of a non-Rule 14a-8
shareholder proposal which it intends to submit at the Company's 1999 Annual
Meeting of Stockholders, the proxy solicited by the Board of Directors with
respect to such meeting may grant discretionary authority to the proxies named
therein to vote with respect to such matters.
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, 1998.
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
-------------------
Catherine W. Pecher
Vice President and Secretary
September 11, 1998
<PAGE>
BIRMINGHAM STEEL CORPORATION
This Proxy is solicited on behalf of the Board of Directors for use at
the 1998 Annual Meeting of Stockholders to be held on October 13, 1998. The
undersigned hereby appoints Robert A. Garvey and Catherine W. Pecher, 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 13, 1998, at
10:00 a.m. local time at The Wynfrey Hotel, 1000 Riverchase Galleria,
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:
Robert A. Garvey; E. Mandell de Windt; C. Stephen Clegg; E. Bradley Jones; Harry
Holiday, Jr.; William J. Cabaniss, Jr.; T. Evans Wyckoff; Richard de J. Osborne;
and Alfred C. DeCrane, Jr.
( ) FOR all nominees listed above (except as indicated to the contrary below)
- ------------------------------------------------------------------------------
( ) WITHHOLD AUTHORITY
(2) 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, 1999.
( ) FOR ( ) AGAINST ( ) ABSTAIN
(3) 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 PROPOSITION REFERRED TO IN
PARAGRAPH (2).
The undersigned revokes any prior proxies to vote the shares covered by this
Proxy.
- -----------------------------
Signature
- -----------------------------
Signature
Date: , 1998
---------------------
(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 stockholder. If no
direction is made, it will be voted FOR Proposals 1 and 2 and as the proxies
deem advisable on such other matters as may come before the meeting.
