<PAGE>
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by Registrant (x)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
(x) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
Roanoke Electric Steel Corporation
(Name of Registrant as Specified in its Charter)
Thomas J. Crawford, Corporate Secretary
(Name of Persons(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(x) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(1)(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: _
4) Proposed maximum aggregate value of transaction:
_________________________________________________________
_ Set forth the amount on which the filing fee is
calculated and state how it was determined.
( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid: _________________________________
2) Form, Schedule or Registration Statement No.:
_________________________________________________________
3) Filing Party: ___________________________________________
4) Date Filed: ___________________
<PAGE>
ROANOKE ELECTRIC STEEL CORPORATION
P.O. BOX 13948
ROANOKE, VIRGINIA 24038-3948
December 12, 1994
DEAR SHAREHOLDER:
The Annual Meeting of Shareholders of Roanoke Electric
Steel Corporation will be held at 10:00 a.m. on Monday,
January 16, 1995, in the Auditorium of the Appalachian Power
Company Building, 40 Franklin Road, S.W., Roanoke, Virginia.
Enclosed you will find the formal Notice, proxy and Proxy
Statement detailing the matters which will be acted upon.
WE URGE YOU TO SIGN AND DATE THE PROXY, AND RETURN IT AS
SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE. SHOULD
YOU DECIDE TO ATTEND THE MEETING AND VOTE IN PERSON, YOU MAY
WITHDRAW YOUR PROXY.
We appreciate your continued interest and investment in
Roanoke Electric Steel Corporation.
Sincerely,
[Donald G. Smith sig]
DONALD G. SMITH
CHAIRMAN AND CEO
<PAGE>
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF ROANOKE ELECTRIC STEEL CORPORATION:
NOTICE is hereby given that the 1995 Annual Meeting of Shareholders of
Roanoke Electric Steel Corporation (the "Company") will be held in the
Auditorium of the Appalachian Power Company Building, 40 Franklin Road, S.W.,
Roanoke, Virginia, on Monday, January 16, 1995, at 10:00 a.m., local time, for
the following purposes:
1. To elect ten directors to hold office until the next Annual Meeting of
Shareholders and until their respective successors have been duly
elected and qualify; and
2. To transact such other business as may properly come before the Meeting,
or any adjournments thereof.
Only shareholders of record at the close of business on November 28, 1994,
are entitled to notice of and to vote at the Annual Meeting, or any adjournments
thereof.
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE
COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY CARD IN THE RETURN
ENVELOPE PROVIDED. YOUR PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS EXERCISE,
AND IF YOU ARE PRESENT AT THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON IF YOU SO DESIRE.
By Order of the Board of Directors
[SIG]
THOMAS J. CRAWFORD
ASSISTANT VICE PRESIDENT
AND SECRETARY
December 12, 1994
<PAGE>
ROANOKE ELECTRIC STEEL CORPORATION
P.O. BOX 13948
ROANOKE, VIRGINIA 24038-3948
PROXY STATEMENT
1995 ANNUAL MEETING OF SHAREHOLDERS
The solicitation of the enclosed 1995 proxy is made by and on behalf of the
Board of Directors (the "Board") of Roanoke Electric Steel Corporation (the
"Company") to be used at the 1995 Annual Meeting of Shareholders to be held on
Monday, January 16, 1995, at 10:00 a.m., local time, in the Auditorium of the
Appalachian Power Company Building, 40 Franklin Road, S.W., Roanoke, Virginia,
and at any adjournments thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. The approximate mailing date of the
Proxy Statement and the accompanying proxy is December 12, 1994.
The cost of the solicitation of proxies will be borne by the Company.
Solicitations will be made only by the use of the mails, except that, if
necessary, officers, directors and regular employees of the Company, or its
affiliates, may make solicitations of proxies by telephone, telegram or personal
calls. No additional compensation will be paid by the Company to such officers,
directors and regular employees for such solicitation assistance. It is
contemplated that brokerage houses and nominees will be requested to forward the
proxy solicitation material to the beneficial owners of the stock held of record
by such persons, and the Company will reimburse them for reasonable charges and
expenses in this connection.
All properly executed proxies delivered pursuant to this solicitation will
be voted at the Annual Meeting in accordance with any instructions thereon. Any
person signing and mailing the enclosed proxy may, nevertheless, revoke the
proxy at any time prior to the actual voting thereof by attending the Annual
Meeting and voting in person, by submitting a signed proxy bearing a later date
or by written notice of revocation of the proxy sent to the Corporate Secretary
of the Company, P.O. Box 13948, Roanoke, Virginia 24038-3948.
The Annual Report to Shareholders, including the financial statements for
the year ended October 31, 1994, reported upon by Deloitte & Touche LLP, is
being mailed concurrently with this Proxy Statement, but should not be
considered proxy solicitation material.
As of November 28, 1994, the Company had outstanding 5,348,909 shares of
common stock, each of which is entitled to one vote at the Annual Meeting. Only
shareholders of record at the close of business on November 28, 1994, will be
entitled to vote at the Annual Meeting or any adjournments thereof.
A majority of votes entitled to be cast on matters to be considered at the
Annual Meeting constitutes a quorum. If a share is represented for any purpose
at the Annual Meeting, it is deemed to be present for purposes of establishing a
quorum. Abstentions and shares held of record by a broker or its nominee
("Broker Shares") which are voted on any matter are included in determining the
number of votes present or represented at the Annual Meeting. Conversely, Broker
Shares that are not voted on any matter will not be included in determining
whether a quorum is present. If a quorum is established, directors will be
elected by a plurality of the votes cast by shares entitled to vote at the
Annual Meeting. Votes that are withheld and Broker Shares that are not voted in
the election of directors will not be included in determining the number of
votes cast.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of October 31, 1994, information with
respect to the known beneficial owners of more than five percent of the
outstanding common stock of the Company. Unless otherwise noted in the footnotes
to the table, the named beneficial owners have sole voting and investment power
with respect to all shares of common stock shown as beneficially owned by them.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT
OF BENEFICIAL BENEFICIALLY OF
OWNER OWNED CLASS
<S> <C> <C>
FMR Corp. 380,800 1 7.1%
82 Devonshire Street
Boston, MA 02109
Estate of John W. Hancock, Jr. 326,158 2 6.1%
c/o Plunkett, Logan & Oehlschlaeger
300 Shenandoah Building
305 First Street
Roanoke, VA 24011
Hollins College Corporation 290,919 5.4%
7916 Williamson Rd.
Roanoke, VA 24020
</TABLE>
1 FMR Corp. has no voting power and sole dispositive power with respect to these
shares.
2 The executors of the Estate, Messrs. T.L. Plunkett and Charles I. Lunsford,
II, have sole voting and sole dispositive power with respect to these shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of November 18, 1994, certain information
regarding the beneficial ownership of the common stock of the Company by each
director nominee and named executive officer and by all director nominees and
executive officers as a group. Unless otherwise noted in the footnotes to the
table, the named persons 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 AND NUMBER OF SHARES OF COMMON STOCK PERCENT
PERSONS IN GROUP BENEFICIALLY OWNED OF CLASS
<S> <C> <C>
Frank A. Boxley 67,868 1 1.3%
T. A. Carter 1,000 2 *
George B. Cartledge, Jr. 11,686 3 *
Thomas J. Crawford 3,964 4 *
Donald R. Higgins 5,892 5 *
Charles I. Lunsford, II 334,525 6 6.3%
John E. Morris 5,647 7 *
William L. Neal 17,712 8 *
Thomas L. Robertson 15,100 *
Donald G. Smith 20,978 9 *
Paul E. Torgersen 10,000 *
Gordon C. Willis 44,227 10 *
John D. Wilson 461 *
All director nominees and
executive officers as
a group (13 persons) 539,060 11 10.1%
</TABLE>
2
<PAGE>
* Less than one percent.
1 Includes 38,181 shares held in the name of Mr. Boxley's spouse.
2 Includes 1,000 shares held in the name of Mr. Carter's spouse.
3 Includes 562 shares held in the name of Mr. Cartledge's spouse and 1,124
shares held in custodian accounts for the benefit of Mr. Cartledge's children.
4 Includes 2,500 shares which Mr. Crawford has the right to acquire through the
exercise of stock options.
5 Includes 600 shares held in the name of Mr. Higgins' spouse, 2,242 shares held
in custodian accounts for the benefit of Mr. Higgins' children and 1,500
shares which Mr. Higgins has the right to acquire through the exercise of
stock options.
6 Includes 702 shares held in custodian accounts for the benefit of Mr.
Lunsford's children and 326,158 shares held by Mr. Lunsford as an executor
under the Will of John W. Hancock, Jr., deceased.
7 Includes 3,500 shares which Mr. Morris has the right to acquire through the
exercise of stock options.
8 Includes 4,500 shares which Mr. Neal has the right to acquire through the
exercise of stock options.
9 Includes 4,500 shares which Mr. Smith has the right to acquire through the
exercise of stock options.
10 Includes 3,407 shares held in the name of Mr. Willis' spouse, 900 shares held
by NationsBank of Virginia, N.A. for the benefit of Mr. Willis and 28,292
shares owned by Rockydale Quarries Corporation of which Mr. Willis is
Chairman of the Board.
11 Includes 16,500 shares which executive officers have the right to acquire
through the exercise of stock options.
3
<PAGE>
ELECTION OF DIRECTORS
PROPOSAL NO. 1
Ten directors of the Company are to be elected at the Annual Meeting to
serve until the next Annual Meeting of Shareholders and until their successors
are elected and qualify. The persons named as proxies in the accompanying form
of proxy, unless otherwise directed, intend to vote the shares represented by
the proxy for the election of the ten nominees named below. All nominees are
members of the present Board of the Company and the Boards of each of its
subsidiaries and were elected to the present terms of office by the
shareholders. The Board is informed that all of the nominees are willing to
serve as directors, but if any of them should become unavailable to serve, the
persons named as proxies may vote for such substitute nominee or nominees as may
be designated by the Board.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The following information, including the principal occupation during the
past five years, is given with respect to the nominees for election to the Board
at the 1995 Annual Meeting of Shareholders.
<TABLE>
<CAPTION>
SERVED AS
NAME AND AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
<S> <C> <C>
Frank A. Boxley President, Southwest Construction, Inc. 1993
Age 61
T.A. Carter Architect 1991
Age 66
George B. Cartledge, Jr. President, Grand Piano & Furniture Co., Inc. 1991
Age 53
Charles I. Lunsford, II Chairman, Chas. Lunsford Sons & Assoc., A Division of 1978
Age 54 Rollins Hudig Hall of Virginia, Inc. (general insurance);
President and General Manager, Center in the Square from
January, 1990 to January, 1993.
William L. Neal President, John W. Hancock, Jr., Inc. (wholly-owned 1989
Age 67 subsidiary of the Company)
Thomas L. Robertson President and Chief Executive Officer, Carilion Health 1992
Age 51 System; Director, Roanoke Gas Company
Donald G. Smith Chairman of the Board, President, Treasurer and Chief 1984
Age 59 Executive Officer of the Company; Director, American
Electric Power Company, Inc.
Paul E. Torgersen President, Virginia Polytechnic Institute and State 1986
Age 63 University ("VPI & SU") since January, 1994; President,
Virginia Tech Corporate Research Center, Inc. from
January, 1990 to January, 1994; prior thereto, Dean of the
College of Engineering, VPI & SU
Gordon C. Willis Chairman of the Board, Rockydale Quarries Corporation 1966
Age 74
John D. Wilson President, Washington and Lee University 1987
Age 63
</TABLE>
4
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
MEETINGS OF THE BOARD
The Board of Directors held twelve meetings during fiscal 1994. All
directors with the exception of Mr. Carter, attended 75% or more of the total
number of meetings of the Board and the committees of the Board on which they
served. Mr. Carter did attend 75% of the meetings of the Board.
DIRECTOR COMPENSATION
Each director of the Company receives a $6,000 annual retainer plus $500
for each Board meeting attended. In addition, non-employee directors receive a
fee of $400 for each committee meeting attended. Directors not residing in
Roanoke, Virginia, are reimbursed for actual travel expenses to attend Board and
committee meetings.
DIRECTORS' RETIREMENT PLAN
The Board adopted, effective as of January 24, 1989, an unfunded directors'
retirement plan, whereby eligible directors of the Company will receive a
monthly benefit following retirement from the Board. A director is eligible
after five years of service as a director and will be paid an amount equal to
the retainer fee being paid to then current members of the Board for a period
corresponding in duration with the participant's years of service as a director
of the Company, or such longer or shorter period as the Board may determine. In
all cases, payment of benefits will cease upon the death of the participant.
COMMITTEES OF THE BOARD
The Board of Directors of the Company has standing Executive, Audit, Profit
Sharing Plan and Compensation and Stock Option Committees. The respective
membership on and functions of such committees are set forth below. The Board
has no standing Nominating Committee.
The Executive Committee of the Board is composed of directors Smith
(Chairman), Robertson, Torgersen and Willis. This Committee is authorized to
act, between meetings of the Board, in the place and stead of the Board, except
with respect to matters reserved for the Board by Virginia law or by resolution
of the Board. The Executive Committee met twelve times in fiscal 1994.
The Audit Committee of the Board is composed of directors Willis
(Chairman), Carter, Robertson and Torgersen. The functions of the Audit
Committee include reviewing the accounting principles and procedures employed by
the Company, reviewing annual and interim reports of the Company and the
independent public accountants of the Company, reviewing significant financial
information, reviewing the Company's system of internal controls, reviewing all
related party transactions and recommending the selection of the independent
public accountants. The Audit Committee met three times in fiscal 1994.
The Profit Sharing Plan Committee of the Board is composed of directors
Lunsford (Chairman) and Smith. The Committee meets quarterly to administer the
Employees' Profit Sharing Plan of the Company, including making amendments
thereto and issuing rulings or interpretations thereunder. The Profit Sharing
Plan Committee met five times in fiscal 1994.
The Compensation and Stock Option Committee of the Board is composed of
directors Cartledge (Chairman), Boxley, Lunsford and Wilson. The Committee meets
as necessary to oversee the Company's compensation and benefit practices,
recommend to the full Board the compensation arrangements for the Company's
senior officers, administer the Company's executive compensation plans and
administer and consider awards under the Company's Employees' Stock Option Plan.
The Compensation and Stock Option Committee met twice in fiscal 1994.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table provides certain summary information for the fiscal
years ended October 31, 1994, 1993 and 1992 concerning the compensation of the
Company's Chief Executive Officer, 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, and one former executive officer
who was not serving in such capacity at the end of the last fiscal year
(hereinafter referred to as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG
TERM
COMPENSATION
AWARDS
SECURITIES
UNDERLYING
OPTIONS/ ALL OTHER
NAME AND ANNUAL COMPENSATION 1 SARS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) 2 (#) ($) 3
<S> <C> <C> <C> <C> <C>
Donald G. Smith 1994 155,750 321,094 0 32,151
Chairman, President, 1993 137,000 152,622 0 18,607
Treasurer and CEO 1992 137,000 98,207 2,500 11,255
Donald R. Higgins 1994 87,250 113,722 0 26,067
Vice President-Sales 1993 82,500 50,874 0 10,340
1992 75,000 32,736 2,000 5,215
John E. Morris 1994 86,250 113,722 0 26,145
Vice President-Finance 1993 81,500 50,874 0 10,506
and Assistant Treasurer 1992 74,000 32,736 2,000 5,430
John W. Hancock, Jr. 4 1994 55,927 128,825 0 0
Chairman of the Executive 1993 147,684 406,991 0 0
Committee of the Board 1992 148,114 261,886 0 0
William L. Neal 1994 110,213 34,643 0 24,857
President, John W. Hancock, Jr., 1993 102,963 13,448 0 14,563
Inc. 1992 102,963 10,947 2,500 11,223
Thomas J. Crawford 1994 72,250 66,897 0 17,950
Assistant Vice President and 1993 66,250 25,437 0 7,028
Corporate Secretary 1992 55,000 16,368 1,500 3,413
</TABLE>
1 None of the Named Executive Officers received perquisites or other personal
benefits in excess of the lesser of $50,000 or 10% of the total of his salary
and bonus reported in the above table.
2 Represents incentive compensation paid according to the incentive compensation
program, as described in the Compensation and Stock Option Committee Report on
Executive Compensation.
6
<PAGE>
3 Includes for 1994 (i) vested contributions from the Profit Sharing Plan of the
Company and its subsidiaries, and (ii) employer paid insurance premiums,
respectively, for the Named Executive Officers as follows: Mr. Smith, $29,383
and $2,768; Mr. Higgins, $25,003 and $1,064; Mr. Morris, $24,807 and $1,339;
Mr. Hancock, $0 and $0; Mr. Neal, $17,382 and $5,961; and Mr. Crawford,
$17,274 and $675. Includes employer contributions to Hancock Joist Employees'
Retirement Savings Plan for 1994 for Mr. Neal of $1,514.
4 Mr. Hancock passed away on March 3, 1994.
OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth information regarding stock options
exercised by each of the Named Executive Officers during the fiscal year ended
October 31, 1994 and the value of unexercised options held by such persons on
October 31, 1994. No stock options were granted in fiscal 1994 to any of the
Named Executive Officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS/SARS AT
ACQUIRED ON FY-END (#) FY-END ($)
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Donald G. Smith 2,000 7,300 4,500/0 36,750/0
Donald R. Higgins 3,500 17,405 1,500/0 8,175/0
John E. Morris 1,500 3,975 3,500/0 28,855/0
John W. Hancock, Jr. 0 0 0/0 0/0
William L. Neal 2,000 5,800 4,500/0 36,750/0
Thomas J. Crawford 1,000 2,650 2,500/0 20,960/0
</TABLE>
7
<PAGE>
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
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 is generally charged with overseeing the Company's
compensation and benefit practices, making determinations regarding the award of
stock options to the Company's executive officers and other employees under the
Company's Employees' Stock Option Plan (the "Option Plan") and providing
recommendations to the full Board on the salary, incentives and other
compensation of the Company's senior officers.
COMPENSATION PROGRAM. The Company's executive compensation program is
designed to attract and retain qualified executives, to support a longstanding
internal culture of loyalty and dedication to the interests of the Company and
to reward its executives for short and long-term operating results and
individual contributions which enhance the value of shareholders' investment in
the Company. Compensation of the executive officers, including the Chief
Executive Officer, has been structured and administered so that a substantial
component of total compensation is dependent upon, and directly related to, the
Company's earnings, growth and profitability. Salaries are set at levels which
in general are less than amounts paid by competitors, with the incentive
compensation program (described below) providing an opportunity for executives
to earn competitive levels of total cash compensation. The Company's executive
compensation program encourages executives to increase profitability and
shareholder value.
BASE SALARY. Base salaries for executive officers for 1994 were recommended
by the Committee and approved by the Board of Directors. The amount of base
salary for executive officers other than the Chief Executive Officer is
recommended to the Committee by the Chief Executive Officer, based on his
evaluation of the executive's performance and contribution to the Company's
overall results and current and projected economic conditions. The base salary
recommendation for the Chief Executive Officer is determined separately by the
Committee after reviewing the Chief Executive Officer's performance, the overall
results of the Company and the economic climate. In recommending the base
salaries for both the Chief Executive Officer and the other executive officers,
the Committee also considers the salaries paid to the chief executive officers
and executive officers of other companies, as well as inflation and cost of
living factors. The salaries of the Named Executive Officers are listed in the
Summary Compensation Table. The Named Executive Officers, with the exception of
Mr. Hancock, received an increase in base salary in February, 1994.
INCENTIVE COMPENSATION PROGRAM. The Company's incentive compensation
program, which was established in 1958, has insured that a portion of the total
compensation of the executive officers is at risk with respect to the
profitability of the Company. The purpose of the incentive program is to
directly link a significant portion of executive compensation to Company
profitability, which will motivate executives to increase profitability and will
reward executives with respect to the Company's success. 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 Company
and its shareholders. Under the program, a percentage of the consolidated
monthly gross profits, before profit sharing and taxes, of the Company or of
John W. Hancock, Jr., Inc., may be distributed to Company officers. At October
31, 1994, the incentive percentages being paid to Messrs. Smith, Higgins, Morris
and Crawford totaled 3.375% of the consolidated monthly gross profits, before
profit sharing and taxes, of the Company, and the incentive percentage being
paid to Mr. Neal was 2.7% of the consolidated monthly gross profits, before
profit sharing and taxes, of John W. Hancock, Jr., Inc. The percentage of
incentive compensation to be received by each executive officer, if any, is
approved annually by the Board, upon recommendation of the Committee, using the
8
<PAGE>
same procedures and criteria that are applied in determining base salary. The
Committee determines the percentage to be awarded to the Chief Executive
Officer. The percentages for the other executive officers are recommended by the
Chief Executive Officer and are reviewed and approved by the Committee.
Incentives earned by the Named Executive Officers are listed in the Summary
Compensation Table. The Named Executive Officers, with the exception of Messrs.
Hancock and Neal, received an increase in incentive compensation percentage in
February, 1994.
STOCK OPTIONS. Stock options awarded under the Option Plan are used as
incentives for individual and Company performance and to foster stock ownership
by Company executives and other employees. The Compensation and Stock Option
Committee has sole responsibility for determining all awards of stock options
under the Option Plan, including awards to the Company's executive officers, and
for establishing the terms and exercise periods (not to exceed five years) of
such options, the requisite conditions for exercise and the amounts of the
awards. Under the Option Plan, the option price is 85% of the closing per share
sales price of the Company's common stock on the date of grant. In awarding
options to executive officers, the Compensation and Stock Option Committee
considers the factors set forth above, as well as the individual's current
shareholdings in the Company. The Compensation and Stock Option Committee
currently has no specific policy with respect to the frequency, timing, number,
or size of option grants to executive officers or other employees of the
Company. No options were granted under the Option Plan in fiscal 1994.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. In determining the
compensation of the Chief Executive Officer, the Committee is guided by the
policies and programs described above, Company performance and competitive
practices. The primary factor underlying this arrangement is the Company's
emphasis on tying a substantial portion of executives' total compensation to the
Company's performance. The amount of total cash compensation of the Chief
Executive Officer fluctuates depending on the profitability of the Company. As
mentioned previously, the base salary and incentive compensation percentage for
the Chief Executive Officer were adjusted in February, 1994, with such
adjustments being the first since fiscal 1986.
SUBMITTED BY THE COMPENSATION AND STOCK OPTION COMMITTEE:
George B. Cartledge, Jr., Chairman
Frank A. Boxley
Charles I. Lunsford, II
John D. Wilson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Stock Option Committee consists of Messrs. Cartledge,
Lunsford, Wilson and Boxley. Mr. Lunsford is Chairman of Chas. Lunsford Sons &
Associates, a division of Rollins Hudig Hall of Virginia, Inc., a firm which
acts as agent and broker for numerous insurance companies and associations. The
Company and its subsidiaries paid premiums totalling $1,640,168 to the firm
during fiscal 1994. The transactions were effected on terms as favorable to the
Company and its subsidiaries as could have been obtained from other sources of
similar insurance coverage.
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Company's common stock with the cumulative total
returns on the Standard & Poor's 500 Composite Stock Index (the "S&P 500") and
the Standard & Poor's Steel Group Index (the "S&P Steel") for the five year
period commencing on October 31, 1989 and ending on October 31, 1994. These
comparisons assume the investment of $100 in the Company's common stock and each
of the indices on October 31, 1989 and the reinvestment of dividends.
GRAPH AS DEFINED BY FOLLOWING DATA POINTS:
Cumulative Total Return
10/89 10/90 10/91 10/92 10/93 10/94
Roanoke Elec Stl
Corp 100 70 57 78 108 139
S&P 500 100 93 124 136 156 162
S&P Steel 100 78 101 114 173 194
10
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants are selected annually by the
Board upon recommendation of the Audit Committee. The public accounting firm of
Deloitte & Touche LLP has been retained by the Company as the independent public
accountants for fiscal year 1995. It is expected that a representative of that
firm will be present at the shareholders' meeting and will have the opportunity
to make a statement and respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's 1996
Annual Meeting of Shareholders must be received by the Company, addressed to the
attention of the Corporate Secretary, at its principal executive offices, 102
Westside Boulevard, N.W., Roanoke, Virginia 24017, no later than August 14,
1995, in order to be considered for inclusion in the Proxy Statement relating to
that meeting.
MISCELLANEOUS
All properly executed proxies received by the Company will be voted at the
Annual Meeting in accordance with the specifications contained thereon.
The Board knows of no other matter which may properly come before the
Annual Meeting for action. However, if any other matter does properly come
before the Annual Meeting, the persons named in the enclosed proxy intend to
vote in accordance with their judgment upon such matter.
By Order of the Board of Directors
[Thomas J. Crawford]
THOMAS J. CRAWFORD
ASSISTANT VICE PRESIDENT
AND SECRETARY
11
PROXY ROANOKE ELECTRIC STEEL CORPORATION
Proxy for Annual Meeting of Shareholders
January 16, 1995
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Donald G. Smith, John E. Morris and
Thomas J. Crawford, or any of them who shall act, proxies for and with all
the powers of the undersigned, each with powers of substitution, to vote all
shares of the common stock of Roanoke Electric Steel Corporation registered
in the name of the undersigned at the Annual Meeting of Shareholders of said
Corporation to be held in the Auditorium of the Appalachian Power Company
Building, 40 Franklin Road, S.W., Roanoke, Virginia, on January 16, 1995, at
10:00 a.m., local time, and at all adjournments thereof, on all matters set
forth in the Notice and accompanying Proxy Statement for said meeting, a copy
of which has been received by the undersigned, as follows:
1. ELECTION OF DIRECTORS: ( ) FOR all nominees listed ( ) WITHHOLD AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees listed
below
Frank A. Boxley, T.A. Carter, George B. Cartledge, Jr.,
Charles I. Lunsford, II, William L. Neal, Thomas L. Robertson,
Donald G. Smith, Paul E. Torgersen, Gordon C. Willis, John D. Wilson.
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
_______________________________________________________________________________
2. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING AND ANY ADJOURNMENTS THEREOF.
PLEASE DATE AND SIGN ON REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE
VOTED "FOR" THE ELECTION OF DIRECTORS.
The undersigned hereby acknowledges receipt of
the Notice of Meeting and Proxy Statement dated
December 12, 1994.
Dated: ______________________________, 19___
____________________________________________
____________________________________________
Signature(s) of Shareholder(s)
IMPORTANT: Please mark this Proxy, date, sign exactly as your name(s)
appear(s), and return in the enclosed postage paid envelope. If shares are
held jointly, signature should include both names. Trustees and others signing
in a representative capacity should so indicate. This Proxy is revocable at any
time prior to the exercise hereof.
