UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-2389
ROANOKE ELECTRIC STEEL CORPORATION
(Exact name of Registrant as specified in its charter)
Virginia 54-0585263
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
102 Westside Blvd., N.W., Roanoke, Virginia 24017
(Address of principal executive offices) (Zip Code)
(540) 342-1831
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of January 31, 1999, reflecting a three-for-two
stock split, effective March 25, 1998.
11,075,888 Shares outstanding
ROANOKE ELECTRIC STEEL CORPORATION
FORM 10-Q
CONTENTS
Page
1. Part I - Financial Information 3 - 13
Item 1. Financial Statements
a. Consolidated Balance Sheets 3
b. Consolidated Statements of Earnings 4
c. Consolidated Statements of Cash Flows 5
d. Notes to Consolidated Financial Statements 6 - 8
e. Independent Accountants' Report 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 12
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 13
2. Part II - Other Information 14
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
3. Signatures 15
4. Exhibit Index pursuant to Regulation S-K 16
5. Exhibits
a. By Laws, as amended 17
b. Steel of West Virginia Material Contracts 18
c. Financial Data Schedule 19
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ROANOKE ELECTRIC STEEL CORPORATION
Consolidated Balance Sheets
ASSETS
(Unaudited)
January 31, October 31,
1999 1998
CURRENT ASSETS
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 17,761,092 $ 16,167,025
Investments 10,419,876 11,727,636
Accounts receivable 50,674,031 42,415,061
Refundable income taxes 300,693 ---
Inventories 69,973,178 31,902,900
Prepaid expenses 2,228,285 1,586,357
Deferred income taxes 3,076,304 1,608,938
Total current assets 154,433,459 105,407,917
PROPERTY, PLANT AND EQUIPMENT
Land 7,975,371 4,264,165
Buildings 40,322,317 19,621,407
Other property and equipment 179,836,635 123,615,952
Assets under construction 6,999,557 4,656,746
Total 235,133,880 152,158,270
Less--accumulated depreciation 71,546,114 68,522,086
Property, plant and equipment, net 163,587,766 83,636,184
GOODWILL 16,096,395 ---
OTHER ASSETS 960,184 166,788
TOTAL ASSETS $ 335,077,804 $ 189,210,889
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 15,026,887 $ 4,250,000
Accounts payable 21,798,174 15,273,850
Dividends payable 1,052,210 1,052,210
Employees' taxes withheld 632,516 358,851
Accrued profit sharing contribution 1,516,562 5,335,822
Accrued wages and expenses 8,958,580 2,959,367
Accrued income taxes --- 1,259,939
Total current liabilities 48,984,929 30,490,039
LONG-TERM DEBT
Notes payable 150,218,249 28,541,667
Less--current portion 15,026,887 4,250,000
Total long-term debt 135,191,362 24,291,667
POSTRETIREMENT LIABILITIES 1,580,827 1,293,788
DEFERRED INCOME TAXES 27,064,894 13,687,507
STOCKHOLDERS' EQUITY
Common stock--no par value--authorized 20,000,000 shares,
issued 12,349,002 shares 2,858,128 2,858,128
Retained earnings 120,215,532 117,407,628
Total 123,073,660 120,265,756
Less--treasury stock, 1,273,114 shares -- at cost 817,868 817,868
Total stockholders' equity 122,255,792 119,447,888
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 335,077,804 $ 189,210,889
The accompanying notes to consolidated financial statements are an
integral part of this statement.
</TABLE>
<TABLE>
<CAPTION>
ROANOKE ELECTRIC STEEL CORPORATION
Consolidated Statements of Earnings
(Unaudited)
Three Months Ended
January 31,
1999 1998
<S> <C> <C> <C> <C>
SALES $ 73,403,567 $ 71,603,735
COST OF SALES 58,435,125 58,695,984
GROSS EARNINGS 14,968,442 12,907,751
OTHER OPERATING EXPENSES
Administrative 5,939,850 4,324,764
Interest, net 1,212,943 284,135
Profit sharing 1,413,514 1,221,961
Total 8,566,307 5,830,860
EARNINGS BEFORE INCOME TAXES 6,402,135 7,076,891
INCOME TAX EXPENSE 2,542,021 2,825,899
NET EARNINGS $ 3,860,114 $ 4,250,992
Weighted average number of common shares outstanding : *
Basic 11,075,888 11,211,154
Diluted 11,118,312 11,316,913
Net earnings per share of common stock:
Basic $ 0.35 $ 0.38
Diluted $ 0.35 $ 0.38
Cash dividends per share of common stock $ 0.095 $ 0.087
* Adjusted for three-for-two stock split effective March 25, 1998.
The accompanying notes to consolidated financial statements are an
integral part of this statement.
</TABLE>
<TABLE>
<CAPTION>
ROANOKE ELECTRIC STEEL CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
January 31,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net earnings $ 3,860,114 $ 4,250,992
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Postretirement liabilities 80,112 75,745
Depreciation and amortization 3,164,793 2,293,429
(Gain) loss on sale of investments and property, plant and equipment 2,622 (13,399)
Deferred income taxes (66,000) 50,000
Changes in assets and liabilities which provided
(used) cash, exclusive of changes shown separately (3,030,465) 1,157,177
Net cash provided by operating activities 4,011,176 7,813,944
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment (3,274,214) (1,507,987)
Proceeds from sale of property, plant and equipment 178,814 ---
(Purchase) sale of investments 1,304,264 (251,779)
Acquisition of Steel of West Virginia, Inc. (67,920,897) ---
Other 13,472 ---
Net cash used in investing activities (69,698,561) (1,759,766)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends (1,052,210) (971,821)
Increase in dividends payable --- 182
Proceeds from exercise of common stock options --- 14,932
Payment of long-term debt (81,158,771) (1,062,500)
Proceeds from long-term debt 150,000,000 ---
Loan costs (507,567) ---
Net cash provided by (used in) financing activities 67,281,452 (2,019,207)
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,594,067 4,034,971
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 16,167,025 8,844,537
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 17,761,092 $ 12,879,508
CHANGES IN ASSETS AND LIABILITIES WHICH PROVIDED
(USED) CASH, EXCLUSIVE OF CHANGES SHOWN SEPARATELY
(Increase) decrease in accounts receivable $ 6,772,169 $ 767,858
(Increase) decrease in refundable income taxes 2,479,898 ---
(Increase) decrease in inventories (2,980,765) 1,064,532
(Increase) decrease in prepaid expenses (260,691) (30,870)
Increase (decrease) in accounts payable (2,563,587) 2,434,088
Increase (decrease) in employees' taxes withheld (203,424) 119,137
Increase (decrease) in accrued profit sharing contribution (4,062,690) (3,688,482)
Increase (decrease) in accrued wages and expenses (951,436) (1,224,222)
Increase (decrease) in accrued income taxes (1,259,939) 1,715,136
Total $ (3,030,465) $ 1,157,177
The accompanying notes to consolidated financial statements are an integral part of this statement.
</TABLE>
ROANOKE ELECTRIC STEEL CORPORATION
Notes to Consolidated Financial Statements
January 31, 1999
Note 1. In the opinion of the Registrant, the accompanying unaudited
consolidated financial statements contain all adjustments necessary
to present fairly the financial position as of January 31, 1999
and the results of operations and cash flows for the three months
ended January 31, 1999 and 1998.
Note 2. Inventories include the following major classifications:
(Unaudited)
January 31, October 31,
1999 1998
Scrap steel $ 5,378,170 $ 4,876,856
Melt supplies 3,906,853 2,408,961
Billets 12,719,230 3,499,907
Mill supplies 5,306,190 3,176,619
Work-in-process 6,184,470 ---
Finished steel 36,478,265 17,940,557
Total inventories $ 69,973,178 $ 31,902,900
Note 3. In February 1997, the Financial Accounting Standards Board issued
SFAS No. 128, "Earnings per Share", which changes the method of
calculating earnings per share. SFAS No. 128 requires the
presentation of "basic" earnings per share and "diluted" earnings per
share on the face of the income statement. Basic earnings per share
is computed by dividing the net income available to common
shareholders by the weighted average shares of outstanding common
stock. The calculation of diluted earnings per share is similar to
basic earnings per share except that the denominator includes dilutive
common stock equivalents such as stock options and warrants. The
statement is effective for financial statements for periods ending
after December 15, 1997. Basic earnings per share and diluted
earnings per share calculated in accordance with SFAS No. 128 are
presented in the consolidated statements of earnings.
Note 4. The Registrant declared a three-for-two common stock split payable
March 25, 1998, to shareholders of record March 6, 1998. All
references to the number of common shares (basic and diluted) and per
common share amounts (basic and diluted) have been restated to
retroactively reflect the stock split.
Note 5. In June 1997, the Financial Accounting Standards Board issued SFAS
No. 130, "Comprehensive Income", and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information". SFAS No. 130
establishes standards for reporting and display of comprehensive
income and its components in a full set of general-purpose financial
statements. The Company adopted SFAS No. 130 during the current
quarter, but comprehensive income, and its required disclosure, is
the same as that shown in the consolidated statements of earnings.
SFAS No. 131 establishes disclosure standards regarding information
about operating segments in interim and annual financial statements.
The Company will be required to adopt SFAS No. 131 at the close of
fiscal year 1999 and, based on current circumstances, does not
believe the effect of adoption will be significant.
Note 6. On December 16, 1998, the Registrant acquired all of the
outstanding common shares of Steel of West Virginia, Inc. ("SWVA"), a
Huntington, West Virginia steel manufacturer, upon completion of its
cash tender offer. The consideration given was approximately $117.1
million, including the assumption of approximately $52.3 million of
indebtedness, which translates into $10.75 net per SWVA share, for
approximately 6,028,000 shares on a fully-diluted basis. Upon
merger, SWVA became a wholly-owned subsidiary of Roanoke Electric
Steel Corporation, and each share of SWVA common stock not purchased
in the offer (approximately 3.6% of SWVA's outstanding shares) will
be converted, subject to appraisal rights, into the right to receive
$10.75 in cash, without interest. Funding for the acquisition was
provided by a syndicate of four banks, including First Union National
Bank, Agent. SWVA operates a mini-mill in Huntington, West Virginia,
and steel fabrication facilities in Huntington and Memphis,
Tennessee, while custom designing and manufacturing special steel
products principally for use in the construction of truck trailers,
industrial lift trucks, off-highway construction equipment (such as
bulldozers and graders), manufactured housing, guard rail posts and
mining equipment. For its year ended December 31, 1997, SWVA
reported net sales, net income and total stockholder's equity of
$112,776,000, $5,259,000 and $54,302,000, respectively. The
acquisition has been accounted for as a purchase. Accordingly, the
acquired assets and liabilities are included in the accompanying
January 31, 1999 consolidated balance sheet at values based on a
preliminary purchase price allocation. The purchase price allocation
will be finalized by October 31, 1999 based upon appraisals and other
evaluations currently in process. The preliminary purchase price
allocation is summarized below:
(Unaudited)
December 16,
1998
Accounts and other receivables $ 17,811,730
Inventories 35,089,513
Prepaid expenses and other current assets 1,848,603
Property, plant and equipment 79,913,809
Goodwill 16,197,632
Other assets 304,356
Accounts and other payables (9,596,233)
Accrued expenses and other current liabilities (7,194,079)
Long-term debt (52,804,120)
Other liabilities (13,650,314)
$ 50,109,167
Unaudited pro forma consolidated results of operations for the three
month periods ended January 31, 1999 and 1998, assuming the SWVA
acquisition had occurred at the beginning of each period, are as
follows:
(Unaudited)
Three Months Ended
January 31,
1999 1998
Sales $ 85,562,678 $ 101,209,912
Net earnings $ 2,639,322 $ 5,863,934
Net earnings per share of common stock:
Basic $ 0.24 $ 0.52
Diluted $ 0.24 $ 0.52
The pro forma consolidated results of operations include adjustments
to give effect to amortization of goodwill, interest expense on
acquisition debt and certain other adjustments, together with related
income tax effects. The unaudited pro forma information is not
necessarily indicative of the results of operations that would have
occurred had the purchase been made at the beginning of the periods
presented or the future results of the combined operations.
Note 7. Supplemental cash flow information:
(Unaudited)
Three Months Ended
January 31,
1999 1998
Cash paid during the period for:
Interest $ 1,045,230 $ 561,005
Income taxes $ 1,388,062 $ 1,060,764
Detail of acquisition:
Fair value of assets acquired $ 151,165,643
Liabilities assumed (83,244,746)
Net cash paid for acquisition $ 67,920,897
INDEPENDENT ACCOUNTANTS' REPORT
DELOITTE & TOUCHE LLP
Suite 1401 Telephone: (336) 721-2300
500 West Fifth Street Facsimile: (336) 721-2301
Winston-Salem, North Carolina 27120
Board of Directors
Roanoke Electric Steel Corporation:
We have reviewed the accompanying consolidated balance sheet of Roanoke
Electric Steel Corporation and subsidiaries as of January 31, 1999, and the
related consolidated statements of earnings and cash flows for the
three-month periods ended January 31, 1999 and 1998. These financial
statements are the responsibility of the Corporation's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Roanoke Electric Steel
Corporation and subsidiaries as of October 31, 1998, and the related
consolidated statements of earnings, stockholders' equity, and cash flows
for the year then ended (not presented herein); and in our report dated
November 18, 1998, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of October 31, 1998 is fairly
stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
Deloitte & Touche LLP
March 2, 1999
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's earnings during the periods
included in the accompanying consolidated statements of earnings.
A summary of the period to period changes in the principal items included in
the consolidated statements of earnings is shown below:
Comparison of Increases (Decreases)
Three Months Ended
January 31,
1999 and 1998
Amount Percent
Sales 1,799,832 2.5
Cost of Sales (260,859) (0.4)
Administrative Expenses 1,615,086 37.3
Interest Expense 928,808 326.9
Profit Sharing Expense 191,553 15.7
Earnings before Income Taxes (674,756) (9.5)
Income Tax Expense (283,878) (10.0)
Net Earnings (390,878) (9.2)
On December 16, 1998, the Registrant acquired 100% of the capital stock of
Steel of West Virginia, Inc. ("SWVA"), a steel manufacturer; and results for
the three months ended January 31, 1999 reflect the operations of SWVA from
the date of acquisition. The 1998 financial statements have not been
restated to include SWVA because the acquisition was treated as a purchase
for accounting purposes. Sales for the periods compared increased primarily
due to the inclusion of SWVA's revenues in 1999 consolidated sales, together
with improved selling prices for fabricated products. Sales, however, were
negatively affected by significant declines in selling prices for both
merchant bar products and billets, together with a substantial drop in
billet shipments and moderate declines in bar and fabricated product
shipments. Bar product selling prices declined due to increased competition
from both foreign and domestic producers, prompting industry-wide list price
reductions. The increased competition and excess inventories at steel
service centers caused the reduction in tons shipped of bar products. A
dramatic change in market conditions for billets brought diminished demand
and a 42% decline in tons shipped. Billet selling prices declined with
sharp reductions in scrap prices which normally trigger changes in billet
pricing. Shipments of fabricated products decreased due to construction
delays caused by severe winter weather, while fabricated product selling
prices improved mainly as a result of less competitive conditions within the
commercial construction industry, as business conditions continued strong
and backlogs remained high. The effects of the decreased tons shipped for
all product classes, along with the drop in the cost of scrap steel, our
main raw material, were nearly offset by the impact of SWVA costs, resulting
in cost of sales being flat for the period compared. Gross profit as a
percentage of sales increased from 18.0% to 20.4% due mainly to the impact
of the significantly reduced billet shipments which carry much lower
margins. In addition, lower scrap costs and higher selling prices for
fabricated products more than offset the lower selling prices for bar
products and the effects of reduced production levels on costs. The
increase in gross profit for the period was primarily attributable to the
inclusion of SWVA's profit margins in 1999 results. Net earnings declined
for the quarter as a result of increased administrative, interest and profit
sharing expenses. Administrative expenses increased mainly as a result of
the inclusion of SWVA's expenses in 1999 results; however, other expenses
such as insurance and executive and other compensation increased as well.
Administrative expenses, as a percentage of sales, rose from 6.0% in 1998 to
8.1% in 1999. Interest expense increased primarily due to substantially
higher average borrowings, related to the SWVA acquisition, and slightly
higher interest rates, in spite of increased capitalized interest and
interest income. Profit sharing expense is based on earnings before income
taxes in accordance with the provisions of various plans. For the quarter,
profit sharing expense increased, in spite of reduced pre-tax income,
because pre-tax income, for the purposes of calculating profit sharing, was
adjusted for the affects of certain SWVA acquisition costs, principally
interest expense. The effective income tax rate was relatively constant for
both periods compared.
Working capital increased $30,530,652 during the period to $105,448,530
resulting both from acquired SWVA working capital and working capital
provided from operations exceeding capital expenditures, dividends and debt
maturities. The current ratio of 3.2 to 1 and the quick ratio of 1.6 to 1
both indicate very strong liquidity and a healthy financial condition. In
addition, cash, cash equivalents and investments total $28,180,968. At
December 15, 1998, the Registrant's outstanding bank debt was $27,583,333.
On December 16, 1998, the Registrant closed on $180,000,000 of secured
credit facilities with a syndicate of four banks. The facilities are
comprised of a $150,000,000 seven year term loan and a $30,000,000 five year
revolver. The term loan was used to purchase all of the outstanding capital
stock of SWVA, and refinance both the existing term debt of the Registrant
and most of SWVA's bank debt assumed through the merger. Due to this new
credit facility, current debt maturities are now $15,000,000 annually, which
will affect working capital and future liquidity. Although, our unused
$30,000,000 revolving credit facility combined with the cash and investments
mentioned above provide the liquidity and capital resources necessary to
fund operations and remain competitive.
At January 31, 1999, there were commitments for the purchase of property,
plant and equipment approximating $4,500,000, most of which is for new
state-of-the-art stacking and bundling equipment, expected to be in
operation by mid-1999 with anticipated improvements in rolling mill
productivity and efficiency. These commitments will also affect future
liquidity and will be financed from internally generated funds and the use
of the revolver mentioned above.
During the quarter, the ratio of debt to equity rose to 1.7 to 1 due to the
new borrowings and other debt associated with the SWVA acquisition. The
percentage of long-term debt to total capitalization increased from 16.9% to
52.5% during the period. Long-term debt increased $110,899,695 to
$135,191,362, which could limit the capital resources available to the
Registrant. Stockholders' equity increased as net earnings of $3,860,114
exceeded dividends of $1,052,210.
From time to time, the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, technological developments, new products, research and
development activities and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. In order to comply with the terms of the safe harbor, the
Company notes that a variety of factors could cause the Company's actual
results and experience to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements.
The risks and uncertainties that may affect the operations, performance,
development and results of the Company's business include economic and
industry conditions, availability and prices of supplies, prices of steel
products, competition, governmental regulations, interest rates, inflation,
labor relations, environmental concerns, the ability of the Company and its
customers and vendors to address, effectively, Year 2000 issues, and others.
Since 1997, the Company has been diligently involved in converting our
computer hardware and software to be Year 2000 compliant. It has been
assigned the highest priority within our information systems area utilizing
all internal personnel available. External resources have been added to
assist in the task and continue ongoing projects. We have identified the
systems in our manufacturing facilities and offices that may be affected and
have completed conversion on nearly all systems through the end of 1998. To
ensure compliance by third-party software vendors, we are requesting in
writing from our vendors confirmation of their Year 2000 compliance. We
have also purchased analytical tools to check not only our computers for
compliance, but also loaded software. The Company has sent compliance
questionnaires to its major suppliers to assess their readiness and our
needs to seek alternate suppliers. We have not totally assessed the risks
of Year 2000 issues, nor have we developed any contingency plans. We plan
to utilize the remainder of 1999 for such matters and have established a
completion goal of June 30, 1999 for testing our conversions. The estimated
costs of Year 2000 issues are approximately $300,000 and are not expected to
have a material effect on results of operations, liquidity or capital
resources.
PART I - ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Quantitative and qualitative information about market risk was addressed in
Form 10-K for fiscal year ended October 31, 1998, as previously filed with
the commission. There has been no material changes to that information
required to be disclosed in this 1st quarter 10-Q filing.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
To the best of Registrant's information and belief no new legal
proceedings were instituted against Registrant or any of its
wholly-owned subsidiaries, including SWVA, during the period
covered by this report and there was no material development in or
termination of the legal proceedings reported earlier by both the
Registrant on Form 10-K for fiscal year ended October 31, 1998 and
by SWVA on Form 10-K for fiscal year ended December 31, 1997 and
Forms 10-Q for the quarters ended March 31, 1998, June 30, 1998 and
September 30, 1998, all previously filed with the Commission.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits.
(3) (b) By Laws, as amended
(10) (a)/(f) SWVA Material Contracts
(27) Financial Data Schedule
b. Reports on Form 8-K.
Reports on Forms 8-K, dated November 10, 1998 and December 16,
1998, filed during the quarter for which this report is filed, were
related to the acquisition of Steel of West Virginia, Inc. on
December 16, 1998. The earlier Form 8-K, under Item 5, announced
the execution of the agreement and plan of merger between the
Registrant and SWVA, and included the related press release as an
exhibit under Item 7. The later Form 8-K, under Item 5, reported
the successful completion of the Registrant's cash tender offer for
all of the outstanding shares of common stock of SWVA, and included
the related press release as an exhibit under Item 7. A subsequent
Form 8-K was filed February 4, 1999, reporting details of the
acquisition under Item 2 and giving related financial statements,
unaudited pro forma financial information and exhibits under Item 7.
Items 2, 3, 4 and 5 are omitted because the information required by these
items is not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROANOKE ELECTRIC STEEL CORPORATION
Registrant
Date March 16, 1999 Dondald G. Smith
Donald G. Smith, Chairman, President,
Treasurer and Chief Executive Officer
(Principal Financial Officer)
Date March 16, 1999 John E. Morris
John E. Morris, Vice President-Finance
and Assistant Treasurer
(Chief Accounting Officer)
EXHIBIT INDEX
Exhibit No. Exhibit Page
(3) (b) By Laws, as amended 17
(10) (a) SWVA Management Bonus Plan 18
Incorporated by
Reference
(10) (b) SWVA Management Retirement Plan 18
Incorporated by
Reference
(10) (c) SWVA Collective Bargaining Agreement 18
Incorporated by
Reference
(10) (d) SWVA Collective Bargaining Unit Bonus Plan 18
Incorporated by
Reference
(10) (e) SWVA Collective Bargaining Unit Retirement Plan 18
Incorporated by
Reference
(10) (f) SWVA Employment Agreement with Timothy R. Duke 18
Incorporated by
Reference
(27) Financial Data Schedule 19
EXHIBIT NO. 3 (b)
BY-LAWS, AS AMENDED
BY-LAWS
OF
ROANOKE ELECTRIC STEEL CORPORATION
ARTICLE I
Offices
The principal office and place of business of the
Corporation shall be in the County of Roanoke, State of Virginia,
and the post office address of the Corporation shall be in the
City of Roanoke, State of Virginia.
ARTICLE II
Stockholders
Section 1 - Annual Meeting - The annual meeting of the
Stockholders of the Corporation shall be held on the third Monday
in January of each year.
Section 2 - Special Meetings - Special meetings of the
Stockholders may be called by the President and shall be called
by the President or Secretary at the request in writing of a
majority of the Board of Directors, or at the request in writing
by Stockholders owning a majority in amount of the entire capital
stock of the Corporation issued and outstanding and entitled to
vote.
Section 3 - Notice and Place of Meetings - The
Secretary shall cause written notice of the time and place of the
holding of each annual or special meeting to be mailed, at least
ten (10) days prior to such meeting, to each Stockholder entitled
to vote, to the post office address of record with the
Corporation. Notice of special meetings of the Stockholders
shall state the purpose or purposes of such meetings. Meetings
shall be held at such place in the City or County of Roanoke as
may be designated in the notice.
Section 4 - Quorum - At any meeting of the
Stockholders, the holders of a majority of the shares of the
capital stock of the Corporation, issued and outstanding and
entitled to vote, present in person or represented by proxy,
shall represent a quorum of the Stockholders for all purposes.
If the holders of the amount of stock necessary to
constitute a quorum shall fail to attend, in person or by proxy,
at the time and place of meeting, the Chairman of the meeting may
adjourn such meeting from time to time without notice, other than
by announcement at the meeting, until holders of the amount of
stock requisite to constitute a quorum shall attend. At any such
adjourned meeting, at which a quorum be present, any business may
be transacted which might have been transacted at the meeting as
originally called.
Section 5 - Organization - The President, and in his
absence, the Vice-President, shall call all of the meetings of
the Stockholders to order and shall act as Chairman of such
meetings. In the absence of the President and Vice-President,
the Board of Directors shall appoint any stockholder to act as
Chairman of such meeting. The Secretary of the Corporation shall
act as Secretary of all meetings of the Stockholders, and in the
absence of the Secretary, the presiding officer may appoint any
person to act in such capacity.
Section 6 - Voting - At each meeting of the
Stockholders, every Stockholder shall be entitled to vote in
person or by proxy appointed by an instrument in writing,
subscribed by such Stockholder, or by his duly authorized
attorney, and delivered to the Secretary at the meeting, and he
shall have one vote for each share of stock entitled to vote and
registered in his name at the time of taking the list of
Stockholders for such meeting. No share of stock shall be voted
at any election which shall have been transferred on the books of
the Corporation within twenty (20) days next preceding such
election. Upon the demand of any Stockholder, the vote upon any
question before the meeting shall be by ballot.
It shall be the duty of the Secretary to prepare, at
least ten (10) days before every meeting, a complete list of the
Stockholders entitled to vote, arranged in alphabetical order and
indicating the number of shares held by each. Such list shall
be open for inspection by any Stockholder at the principal place
of business of the Corporation during business hours for the ten
(10) days preceding the meeting.
Section 7 - Inspectors - At each meeting of the
Stockholders, one (1) or more inspectors of election may be
appointed by the presiding officer. It shall be the duty of the
inspectors of election to count and certify to the Secretary the
results of all votes at such meeting. In the absence of the
appointment of such inspector or inspectors, the Secretary shall
perform such duties.
Section 8 - Order of Business - At meetings of the
Stockholders, the order of business shall be:
(1) Calling of roll.
(2) Proof of due notice of meeting or of waiver of
notice.
(3) Reading and disposal of unapproved minutes.
(4) Reports of officers and committees.
(5) Election of Directors.
(6) Unfinished business.
(7) New business.
(8) Adjournment.
ARTICLE III
Board of Directors
Section 1 - Number and Term of Office - The business
and property of the Corporation shall be managed and controlled
by a Board of not less than five, nor more than nine Directors.
The Directors shall be elected by ballot, by a majority of the
Stockholders present and voting in person or by proxy, at each
annual meeting of the Stockholders, and shall be elected to serve
for a term of one (l) year and until their successors shall be
elected and shall qualify.
Section 2 - Vacancies - In case of any vacancy in the
Board of Directors through death, resignation, disqualification
or other cause, the remaining Directors, by an affirmative vote
of the majority thereof, may elect a successor to hold office for
the unexpired portion of the term.
Section 3 - Annual Meetings - The annual meeting of the
Board of Directors of the Corporation shall be held on the second
Tuesday following the annual meeting of the Stockholders of the
Corporation.
Section 4 - Special Meetings - Special meetings of the
Board of Directors shall be held whenever called by the direction
of its Chairman or the President, or by one-third in number of
the Directors then in office.
Section 5 - Time, Place and Notice of Meetings - The
Secretary shall cause written notice of the time and place of the
holding of each annual or special meeting to be mailed, at least
ten (10) days prior to the date of such meeting, to each Director
to the post office address of record with the Corporation.
Section 6 - Quorum - A majority of the Board of
Directors shall constitute a quorum for the transaction of
business, but if at any meeting of the Board, there be less than
a quorum present, a majority of those present shall adjourn the
meeting from time to time.
Section 7 - Election and Salaries of Officers - The
Directors shall elect the officers of the Corporation and fix
their salaries.
Section 8 - Order of Business - At meetings of the
Board of Directors, the order of business shall be:
(1) Calling of roll.
(2) Proof of due notice of meeting or of waiver of
notice.
(3) Reading and disposal of any unapproved minutes.
(4) Reports of officers and committees.
(5) Election of officers.
(6) Unfinished business.
(7) New business.
(8) Adjournment.
ARTICLE IV
Section 1 - Officers - The officers of the Corporation
shall be a Chairman of the Board of Directors, a President, a
Vice-President, a Secretary and a Treasurer. Any two or more of
such offices, other than those of President and Secretary, may be
held by one person. The Board of Directors may, in its
discretion, elect more than one Vice-President, and an Assistant
Secretary and Assistant Treasurer. The officers shall be elected
at each annual meeting of the Board of Directors and shall be
elected to serve for a term of one (1) year or until removed by a
majority vote of the entire Board of Directors.
Section 2 - Powers and Duties of Officers
(a) The Chairman of the Board of Directors shall
preside at all meetings of the Board of Directors.
(b) President - The President shall be elected from
the Board of Directors and shall preside at all meetings of
the Stockholders, and, in the absence of the Chairman of
the Board of Directors, at all meetings of the Directors.
He shall have power to sign certificates of stock, to sign
and execute all contracts, deeds, leases and other
documents, and to sign checks, drafts, notes and orders for
the payment of money, and to appoint, discharge and fix the
salaries of agents and employees. He shall have general
and active management of the business of the Corporation
and shall perform all of the duties incident to the office
of President.
(c) Vice-President - The Vice-President, or
Vice-Presidents, shall have such powers and perform such
duties as may be delegated to him or them by the Board of
Directors. In the absence or disability of the President,
the senior Vice-President may perform the duties and
exercise the powers of the President.
(d) Treasurer and Assistant Treasurer - The Treasurer
shall have custody of all funds and securities of the
Corporation and shall keep a full and accurate account of
all monies received and paid by him on account of the
Corporation. He shall have power to sign all checks,
drafts, notes and orders for the payment of money and shall
perform all acts incident to the position of Treasurer,
subject to the control of the Board of Directors. The
Assistant Treasurer shall have such powers and duties as
may be delegated to him by the Board of Directors and, in
the absence or disability of the Treasurer, may perform the
duties and exercise the powers of the Treasurer.
(e) Secretary and Assistant Secretary - The Secretary
shall keep the minutes of all meetings of the Board of
Directors and Stockholders, and shall give and serve all
notices. The Secretary shall attest and countersign all
contracts, deeds, leases and other documents where
necessary, and shall have charge and custody of the seal,
and of the stock certificate books, transfer books and
stock ledgers of the Corporation, and shall, in general,
perform all duties usually incident to the office of
Secretary. The Assistant Secretary shall have such powers
and duties as may be delegated to him by the Board of
Directors and, in the absence or disability of the
Secretary, may perform the duties and exercise the powers
of the Secretary.
ARTICLE V
Capital Stock, Dividends and Seal
Section 1 - Certificates of Shares - The certificates
for the shares of the capital stock of the Corporation shall be
in such form as may be approved by the Board of Directors. The
certificates shall be signed by the President and the Secretary
or Treasurer of the Corporation and shall be consecutively
numbered. The name of the person owning the shares represented
by each certificate, with the number of such shares and the date
of issue, shall be entered on the Corporation's books. The
Corporation may treat the holder of record of any share or shares
of stock as the holder-in-fact thereof, and shall not be bound
to recognize any claim to or interest in any such share on the
part of any other person.
Section 2 - Transfer of Shares - Shares of the capital
stock of the Corporation shall be transferable by the holder
thereof in person, or by his duly authorized attorney, upon
surrender and cancellation of certificates for a like number of
shares properly endorsed.
Section 3 - Regulations - The Board of Directors shall
have power and authority to make all such rules and regulations
as they may deem expedient concerning the issue, transfer and
registration of certificates for the shares of stock of the
Corporation.
Section 4 - Dividends - The Board of Directors may
declare dividends from the surplus of the Corporation or from the
net profits from the operation of its business at such times and
in such amounts as the Board, in its sole discretion, may
determine. Before the payment of any dividend or the
distribution of any profits, there may be set aside out of the
surplus or net profits arising out of the operation of the
business of the Corporation, such sum or sums as the Directors
from time to time think proper, either as working capital, a
reserve fund to meet contingencies, for the repair and
maintenance of the property of the Corporation, or for such other
purposes as the Directors shall think conducive to the interests
of the Corporation.
Section 5 - Corporate Seal - The corporate seal shall
have inscribed thereon the name of the Corporation, the year of
its organization, and the words "Corporate Seal" and "Virginia".
Section 6 - Fiscal Year and Financial Statements - The
fiscal year of the Corporation shall begin on the first day of
November and terminate on the 31st day of October in each year.
The Board of Directors shall publish and submit to the
Stockholders, along with the notice of the time and place of the
annual meeting, an operating statement of the Corporation for the
preceding fiscal year and a consolidated balance sheet showing
the assets and liabilities of the Corporation at the end of the
preceding fiscal year.
ARTICLE VI
Amendment of By-Laws
The By-Laws of the Corporation may be amended at any annual
or special meeting of the Corporation by a vote of the holders of
a majority of the shares of the capital stock of the Corporation
issued and outstanding and entitled to vote, present in person or
represented by proxy.
John W. Hancock, Jr.
President
ATTEST:
Elizabeth B. Hancock
Secretary
WAIVER OF NOTICE
We, the undersigned, being all of the members of the
Board of Directors of Roanoke Electric Steel Corporation, hereby
waive notice of the first meeting of the Board of Directors to be
held at the offices of Roanoke Iron and Bridge Works in the City
of Roanoke, Virginia at 4 p.m. o'clock on the 27th day of April,
1955, and consent to the transaction of all business that may
properly come before such meeting.
DATED at Roanoke, Virginia this 27th day of April, 1955.
John W. Hancock, Jr.
O.D. Oakey, Jr.
S. Colston Sneed, Jr.
B.W. Morris
Charles P. Lunsford
A. Blair Antrim
John M. Donalson
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1 - 3(n), Code of Virginia, 1950, as
amended, Roanoke Electric Steel Corporation executes Articles of
Amendment to its By-Laws as follows:
(a) The name of the Corporation is ROANOKE ELECTRIC STEEL
CORPORATION.
(b) The amendment so adopted amends Article VI of the
By-Laws to read as follows:
"The Corporation shall indemnify each director
and officer of the Corporation, his heirs, executors,
administrators and personal representatives, against
any and all liabilities, judgments, fines, penalties
and claims (including amounts paid in settlement)
imposed upon or asserted against him by reason of his
being or having been an officer or director of the
Corporation or of any other corporation in which he
served or serves as a director or officer pursuant to
the written request of the Corporation (whether or not
he continues to be an officer or director at the time
of such imposition or assertion), and against all
expenses (including counsel fees) reasonably incurred
by him in connection therewith, except in respect of
matters as to which he shall have been finally
adjudged to be liable by reason of having been guilty
of negligence or misconduct in the performance of his
duty as such director or officer. In the event of any
other judgment against such officer or director or in
the event of a settlement, the indemnification shall
be made only if the Corporation shall be advised (a)
by the Board of Directors, in case none of the persons
involved shall then be a director of the Corporation,
or (b) by independent counsel appointed by the Board
of Directors, in case any of the persons involved
shall then be a director of the Corporation, that in
its or his opinion, as the case may be, such director
or officer was not guilty of negligence or misconduct
in the performance of his duty, and, in the event of a
settlement, that such settlement was, or, if still to
be made, would be, in the best interests of the
Corporation. If the determination is to be made by
the Board of Directors, it may rely, as to all
questions of law, upon the advice of independent
counsel. The foregoing right of indemnification shall
not be exclusive of other rights to which any director
or officer may be entitled as a matter of law or
otherwise."
(c) The meeting of the Board of Directors at which the
amendment was found to be in the best interests of the
Corporation and directed to be submitted to a vote at a meeting
of stockholders was held on the 18th day of October, 1967.
Notice was given to each stockholder of record entitled to vote
on the 15th day of December, 1967, such notice being given more
than twenty-five and less than fifty days before the date of the
meeting and was given in the manner provided in this Act, and was
accompanied by a copy of the proposed amendment; the date of the
adoption of the amendment by the stockholders was the 15th day of
January, 1968.
(d) The number of shares outstanding and the number of
shares entitled to vote on the amendment was 560,000 shares; all
shares being common stock of no par value, there was no class
entitled to vote thereon as a class.
(e) The number of shares present in person or by proxy
voted for the amendment was 441,265 shares and none against such
amendment.
(f) Such amendment does not effect a change in the amount
of stated capital.
(g) Such amendment does not effect a restatement of the
Articles of Incorporation.
Witness the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary thereof, this 20th day of January, 1968.
ROANOKE ELECTRIC STEEL CORPORATION
BY William M. Meador
President
ATTEST:
Donald G. Smith
Secretary
STATE OF VIRGINIA )
) To-Wit:
COUNTY OF ROANOKE )
I, Paul D. Sturgill, a Notary Public in and for the County
of Roanoke, State of Virginia, do hereby certify that William M.
Meador, and Donald G. Smith, President and Secretary respectively
of Roanoke Electric Steel Corporation, have this day personally
appeared before me and executed the foregoing Articles of
Amendment, and made oath that the matters therein stated are true
and correct.
Given under my hand this 20th day of January, 1968. My
commission expires April 4, 1968.
Paul D. Sturgill
Notary Public
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1 - 24, Code of Virginia, 1950,
as amended, Roanoke Electric Steel Corporation executes Articles
of Amendment to its By-Laws as follows:
(a) The name of the Corporation is ROANOKE ELECTRIC STEEL
CORPORATION.
(b) The amendment so adopted adds a new by-law, which would
be new Article VII, to read as follows:
"The power to alter, amend or repeal the By-laws
or adopt new by-laws shall be vested in the Board of
Directors. But by-laws made by the Board of Directors
may be repealed or changed, and new by-laws made, by
the stockholders and the stockholders may prescribe
that any by-law made by them shall not be altered,
amended or repealed by the Directors."
(c) The meeting of the Board of Directors at which the
amendment was found to be in the best interests of the
Corporation and directed to be submitted to a vote at a meeting
of stockholders was held on the 18th day of October, 1967.
Notice was given to each stockholder of record entitled to vote
on the 15th day of December, 1967, such notice being given more
than twenty-five and less than fifty days before the date of the
meeting and was given in the manner provided in this Act, and was
accompanied by a copy of the proposed amendment; the date of the
adoption of the amendment by the stockholders was the 15th day of
January, 1968.
(d) The number of shares outstanding and the number of
shares entitled to vote on the amendment was 560,000 shares; all
shares being common stock of no par value, there was no class
entitled to vote thereon as a class.
(e) The number of shares present in person or by proxy
voted for the amendment was 441,265 shares and none against such
amendment.
(f) Such amendment does not effect a change in the amount
of stated capital.
(g) Such amendment does not effect a restatement of the
Articles of Incorporation.
Witness the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary thereof, this 20th day of January, 1968.
ROANOKE ELECTRIC STEEL CORPORATION
BY William M. Meador
President
ATTEST:
Donald G. Smith
Secretary
STATE OF VIRGINIA )
) To-Wit:
COUNTY OF ROANOKE )
I, Paul D. Sturgill, a Notary Public in and for the County
of Roanoke, State of Virginia, do hereby certify that William
M.Meador, and Donald G. Smith, President and Secretary
respectively of Roanoke Electric Steel Corporation, have this day
personally appeared before me and executed the foregoing Articles
of Amendment, and made oath that the matters therein stated are
true and correct.
Given under my hand this 20th day of January, 1968. My
commission expires April 4, 1968.
Paul D. Sturgill
Notary Public
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-24 of the Code of Virginia and
Article VII of the By-Laws of Roanoke Electric Steel Corporation,
The Board of Directors of Roanoke Electric Steel Corporation hereby
amends the By-Laws of the Corporation as follows:
(a) Section 2 of Article V is amended by inserting
"(subject to such restrictions as may be placed upon the transfer
of shares under the terms of the following section)" between
"transferable" and "by".
(b) Section 3 of Article V is amended by adding to the
end of such section the following sentence: "The Board of
Directors may place such restrictions upon the transferability of
all or part of the shares of the capital stock of the Corporation
as may be necessary in the opinion of the Board to insure that any
issue of stock by the Corporation will comply with applicable federal
and state securities laws and with the terms of any agreement of
merger or other corporate reorganization duly approved by the Board."
(c) The meeting of the Board of Directors at which the
amendment was found to be in the best interest of the Corporation
was held on the 19th day of August, 1975.
Witness the signature of Roanoke Electric Steel
Corporation, by its President, with the corporate seal affixed
and attested by the Secretary thereof, this 19th day of August,
1975.
ROANOKE ELECTRIC STEEL CORPORATION
By William M. Meador
President
ATTEST:
Donald G. Smith
Secretary
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-24 of the Code of Virginia and
Article VII of the By-Laws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation executes
Articles of Amendment to its By-Laws as follows:
(a) The name of the Corporation is ROANOKE ELECTRIC
STEEL CORPORATION.
(b) The amendment so adopted amends Section 1 of
Article III to read as follows:
"The business and property of the Corporation shall be
managed and controlled by a Board of not less than five, nor more
than ten Directors. The Directors shall be elected by ballot,
by a majority of the Stockholders present and voting in person or
by proxy, at each annual meeting of the Stockholders, and shall
be elected to serve for a term of one (1) year and until their
successors shall be elected and shall qualify."
(c) The meeting of the Board of Directors at which the
amendment was found to be in the best interest of the Corporation
was held on the 16th day of September, 1975.
Witness the signature of Roanoke Electric Steel
Corporation, by its President, with the corporate seal affixed
and attested by the Secretary thereof, this 16th day of
September, 1975.
ROANOKE ELECTRIC STEEL CORPORATION
By William M. Meador
President
ATTEST:
Donald G. Smith
Secretary
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-24 of the Code of Virginia and
Article VII of the By-Laws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation executes
Articles of Amendment to its By-Laws as follows:
(a) The name of the Corporation is ROANOKE ELECTRIC
STEEL CORPORATION.
(b) The amendment so adopted amends Section 1 of
Article III to read as follows:
"The business and property of the Corporation shall be
managed and controlled by a Board of not less than five, nor more
than eleven Directors. The Directors shall be elected by
ballot, by a majority of the Stockholders present and voting in
person or by proxy, at each annual meeting of the Stockholders,
and shall be elected to serve for a term of one (1) year and
until their successors shall be elected and shall qualify."
(c) The meeting of the Board of Directors at which the
amendment was found to be in the best interest of the Corporation
was held on the 17th day of April 1984.
Witness the signature of Roanoke Electric Steel
Corporation, by its President, with the corporate seal affixed
and attested by the Secretary thereof, this 17th day of April
1984.
ROANOKE ELECTRIC STEEL CORPORATION
By William M. Meador
President
ATTEST:
Donald G. Smith
Secretary
ARTICLES OF AMENDMENT TO BYLAWS OF
ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-24 of the Code of Virginia and
Article VII of the Bylaws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation
hereby executes and approves these Articles of Amendment to its
Bylaws as follows:
(a) Article III, "Board of Directors", is hereby amended by
the addition of Section 9 as follows:
Section 9 - Executive Committee and Other
Committees
The Board of Directors of the Corporation,
by resolution adopted by a majority of the
Directors in office, may designate an
Executive Committee and/or such other
committees as from time to time shall be
deemed necessary and appropriate. The
Executive Committee shall be composed of two
or more Directors of the Corporation,
appointed by the Board of Directors, and, to
the extent provided in such resolution,
shall have and exercise all of the
authority of the Board of Directors except
to approve an amendment of the Articles of
Incorporation, a plan of merger or
consolidation, a plan of exchange under
which the Corporation would be acquired, the
sale, lease or exchange, or the mortgage or
pledge of for a consideration other than
money, of all or substantially all of the
property and assets of the Corporation
otherwise than in the ordinary and regular
course of business, the voluntary
dissolution of the Corporation, or
revocation of voluntary dissolution
proceedings. Other committees consisting of
two or more Directors, appointed by the
Board of Directors, may be designated by
resolution adopted by a majority of the
Directors present at a meeting at which a
quorum is present. Upon designation of any
committee, including the Executive
Committee, the Board of Directors shall
appoint a chairman thereof.
(b) A meeting of the Board of Directors at which this
Amendment was found to be in the best interest of the Corporation
was held January 29, 1985. A majority of the Board of Directors
then in office voted in favor of the Amendment.
WITNESS the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary of, this 29th day of January, 1985.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
Attest: Thomas J. Crawford
Secretary
ARTICLES OF AMENDMENT TO BYLAWS OF
ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-714 of the Code of Virginia, 1950,
as amended, and Article VII of the Bylaws of Roanoke Electric
Steel Corporation, the Board of Directors of Roanoke Electric
Steel Corporation hereby executes and approves these Articles of
Amendment to its Bylaws as follows:
(a) Article IV, Section 1 is hereby amended to read as
follows:
Section 1 - Officers - The officers of the
Corporation shall be a Chairman of the Board of
Directors, a President, a Vice President, an
Assistant Vice President, a Secretary and a
Treasurer. The Board of Directors may, in its
discretion, elect more than one Vice President,
more than one Assistant Vice President, and an
Assistant Secretary and Assistant Treasurer. The
same individual may simultaneously hold more than
one office in the Corporation. The officers
shall be elected at each annual meeting of the
Board of Directors for a term of one (1) year or
until removed by a majority vote of the entire
Board of Directors.
(b) Article IV, Section 2 (c) is hereby amended to read as
follows:
(c) Vice President and Assistant Vice President - The
Vice President(s) and Assistant Vice President(s) shall
have the powers and perform such duties as may be delegated
to him or them by the Board of Directors. In the absence
or disability of the President, the senior Vice President
may perform the duties and exercise the powers of the
President.
(c) The meeting of the Board of Directors at which these
Amendments were found to be in the best interest of the
Corporation was held October 18, 1988. The majority of the Board
of Directors then in office voted in favor of the Amendments.
The Amendments were ratified by a majority of the Board of
Directors at its meeting on November 15, 1988.
WITNESS the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested
by the Secretary thereof, this 15th day of November, 1988.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
President
ATTEST:
Thomas J. Crawford
Secretary
ARTICLES OF AMENDMENT TO BYLAWS
OF
ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-714 of the Code of Virginia, 1950,
as amended, and Article VII of the Bylaws of Roanoke Electric
Steel Corporation, the Board of Directors of Roanoke Electric
Steel Corporation hereby executes and approves these Articles of
Amendment to its Bylaws as follows:
(a) Section 1 of Article IV of the Bylaws is hereby
amended in its entirety to read as follows:
"Section 1 - Officers - The officers of the
Corporation shall be a Chairman of the Board
of Directors, a President, a Vice President,
an Assistant Vice President, a Secretary
and a Treasurer and such other officers as
the Board may by resolution appoint. The
same individual may simultaneously hold
more than one office in the Corporation.
The Board of Directors may, in its
discretion, elect more than one Vice
President, more than one Assistant Vice
President, and an Assistant Secretary and
Assistant Treasurer. The officers shall be
elected at each annual meeting of the Board
of Directors and shall be elected to serve
for a term of one (1) year or until removed
by a majority vote of the entire Board of
Directors."
(b) The meeting of the Board of Directors at which
this Amendment was found to be in the best interests
of the Corporation was held on November 16, 1993. The
majority of the members of the Board of Directors
then in office voted in favor of the Amendment.
WITNESS the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary thereof, this 16th day of November, 1993.
ROANOKE ELECTRIC STEEL CORPORATION
By: Donald G. Smith
President
ATTEST:
Thomas J. Crawford
Secretary
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-714 of the Code of Virginia and
Article VII of the By-Laws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation
executes Articles of Amendment to its By-Laws as follows:
(a) The name of the Corporation is Roanoke Electric
Steel Corporation.
(b) The amendment so adopted (the "Amendment") amends
Section 1 of Article II to read as follows:
"Section 1 - Annual Meeting - The annual meeting
of the Stockholders of the Corporation shall be held on the third
Tuesday in February of each year, or on such other date as the
Board of Directors may determine."
(c) The Amendment also amends Section 3 of Article III
to read as follows:
"Section 3 - Annual Meeting - The annual meeting
of the Board of Directors of the Corporation shall be held
immediately following the annual meeting of Stockholders, or at
such other time as the Board of Directors may determine."
(d) The meeting of the Board of Directors at which the
Amendment was found to be in the best interest of the Corporation
was held on the 19th day of September, 1995.
Witness the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary thereof, this 19th day of September, 1995.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
President
ATTEST:
Thomas J. Crawford
Secretary
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-714 of the Code of Virginia and
Article VII of the By-Laws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation
executes Articles of Amendment to its Bylaws as follows:
A. The name of the Corporation is Roanoke Electric
Steel Corporation.
B. The Amendment so adopted (the "Amendment") amends
Section 1 of Article III to read as follows:
"Section 1 - Number and Term of Office. The
number of directors of the Corporation shall be nine. The
directors shall be divided into three classes (A, B and C)
as nearly equal in number as possible. The initial term of office
for members of Class A shall expire at the annual meeting of
stockholders in 1997; the initial term of office for members
of Class B shall expire at the annual meeting of stockholders
in 1998; and the initial term of office for members of Class C
shall expire at the annual meeting of stockholders in 1999.
At each annual meeting of stockholders following such initial
classification and election, directors elected to succeed those
directors whose terms expire after their election and shall
continue to hold office until their respective successors
are elected and qualify."
C. The Amendment also amends Section 2 of Article III to read as
follows:
"Section 2 - Vacancies. Newly-created directorships resulting
from an increase in the number of directors or any vacancies in
the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office, or other
cause shall be filled by the affirmative vote of a majority
of the directors then in office, whether or not a quorum. No
decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
A director may be removed from office only for cause."
D. The meeting of the Board of Directors at which the Amendment
was found to be in the best interest of the Corporation was held on the
15 day of October, 1996.
WITNESS the signature of Roanoke Electric Steel Corporation, by its
President, with the corporate seal affixed and attested by the Secretary
thereof, this 15 day of October, 1996.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
President
Attest:
Thomas J. Crawford
Secretary
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-714 of the Code of Virginia and
Article VII of the By-Laws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation
executes Articles of Amendment to its Bylaws as follows:
A. The name of the Corporation is Roanoke Electric
Steel Corporation.
B. The Amendment so adopted (the "Amendment") amends
Section 1 of Article III to read as follows:
"Section 1 - Number and Term of Office. The
number of directors of the Corporation shall be ten. The
directors shall be divided into three classes (A, B, and C)
as nearly equal in number as possible. The initial term
of office for members of Class A shall expire at the annual
meeting of stockholders in 1997; the initial term of office for
members of Class B shall expire at the annual meeting of
stockholders in 1998; and the initial term of office for members
of Class C shall expire at the annual meeting of stockholders in
1999. At each annual meeting of stockholders following such
initial classification and election, directors elected to succeed
those directors whose terms expire after their election shall
continue to hold office until their respective successors are
elected and qualify."
C. The meeting of the Board of Directors at which the
Amendment was found to be in the best interest of the Corporation was held
on the 15 day of April, 1997.
Witness the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary thereof, this 15 day of April, 1997.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
President
ATTEST:
Thomas J. Crawford
Secretary
ARTICLES OF AMENDMENT
TO BY-LAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-714 of the Code of Virginia and
Article VII of the By-Laws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation
executes Articles of Amendment to its Bylaws as follows:
A. The name of the Corporation is Roanoke Electric
Steel Corporation.
B. The Amendment so adopted (the "Amendment") amends
Section 1 of Article III to read as follows:
"Section 1 - Number and Term of Office. The number of
directors of the Corporation shall be eight. The directors shall
be divided into three classes (A, B, and C) as nearly equal in
number as possible. The initial term of office for members of
Class A shall expire at the annual meeting of stockholders in 1997;
the initial term of office for members of Class B shall expire at
the annual meeting of stockholders in 1998; and the initial
term of office for members of Class C shall expire at the annual
meeting of stockholders in 1999. At each annual meeting of
stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire
after their election shall continue to hold office until their
respective successors are elected and qualify."
C. The meeting of the Board of Directors at which the
Amendment was found to be in the best interest of the Corporation
was held on the 17 day of March, 1998.
Witness the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary thereof, this 17 day of March, 1998.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
President
ATTEST:
Thomas J. Crawford
Secretary
ARTICLES OF AMENDMENT
TO BYLAWS OF
ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-714 of the Code of Virginia and
Article VII of the Bylaws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation
executes Articles of Amendment to its Bylaws as follows:
A. The name of the Corporation is Roanoke Electric Steel
Corporation.
B. The Amendment so adopted (the "Amendment") adds a new
Section 9 to Article II of the Bylaws, which reads as follows:
"Section 9 - Stockholder Proposals or Nominations. No
business shall be transacted at any meeting of
stockholders, except such business as shall be (a)
specified in the notice of meeting given as provided in
Section 3 of this Article II; (b) otherwise brought before
the meeting by or at the direction of the Board; or (c)
otherwise brought before the meeting by a stockholder of
record of the Corporation entitled to vote at the meeting
in compliance with the procedure set forth in this Section
9. For business to be brought before a meeting by a
stockholder pursuant to (c) above, the stockholder must
have given timely notice in writing to the President of the
Corporation. To be timely, a stockholder's notice shall be
delivered to, or mailed and received at, the principal
executive offices of the Corporation not less than sixty
(60) days nor more than ninety (90) days prior to the
meeting; provided, however, in the event that less than
seventy (70) days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received
not later than the close of business on the tenth day
following the day on which such notice of the date of the
meeting or such public disclosure was made. Notice shall
be deemed to have been given more than seventy (70) days in
advance of an annual meeting of stockholders if the annual
meeting is called on the date indicated by Section 1 of
this Article II (as may be amended from time to time)
without regard to when public disclosure thereof is made.
Notice of actions to be brought before a meeting pursuant
to (c) above shall set forth, as to each matter the
stockholder proposes to bring before the meeting: (a) a
brief description of the business desired to be brought
before the meeting and the reasons for bringing such
business before the meeting; (b) if the stockholder intends
to nominate a candidate at the meeting for election to the
Board, (i) the qualifications and experience of the
prospective nominee, including current principal occupation
and employment, principal positions held during the last
five years and a list of all companies for which the
prospective nominee serves as director, (ii) the basis for
nomination, (iii) a description of all arrangements or
undertakings between the recommending party and each
prospective nominee and any other person concerning the
recommendation and (iv) confirmation of the proposed
nominee's willingness to serve; and (c) as to the
stockholder giving the notice, (i) his name and address, as
they appear on the Corporation's books, (ii) the classes
and number of shares of the Corporation which are owned of
record or beneficially by such stockholder, and (iii) any
material interest of such stockholder in such business
other than his interest as a stockholder of the
Corporation. Notwithstanding anything in these Bylaws to
the contrary, no business shall be conducted on a
stockholder proposal or nomination except in accordance
with the provisions set forth in this Section 9. The
requirements of this Section are in addition to any other
requirements established by law and do not impair the
effect of the requirements of Sections 2 and 3 of Article
II of these Bylaws relating to business permitted to be
transacted at special stockholders' meetings. The Chairman
of the meeting shall, if the facts warrant, determine and
declare to the meeting that any business or nomination was
not properly brought before the meeting in accordance with
the provisions prescribed by these Bylaws and, if he should
so determine, he shall so declare to the meeting, and any
such business not so properly brought before the meeting
shall not be transacted."
C. The meeting of the Board of Directors at which the
Amendment was found to be in the best interest of the Corporation
was held on the 15 day of December, 1998.
WITNESS the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary thereof, this 15 day of December, 1998.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
President
Attest:
Thomas J. Crawford
Secretary
ARTICLES OF AMENDMENT
TO BYLAWS
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-714 of the Code of Virginia and
Article VII of the Bylaws of Roanoke Electric Steel Corporation,
the Board of Directors of Roanoke Electric Steel Corporation
executes Articles of Amendment to its Bylaws as follows:
A. The name of the Corporation is Roanoke Electric
Steel Corporation.
B. The Amendment so adopted (the "Amendment") amends
Section 1 of Article III to read as follows:
"Section 1 - Number and Term of Office.
The number of directors of the Corporation shall be
nine. The directors shall be divided into three
classes (A, B and C) as nearly equal in number as
possible. The initial term of office for members of
Class A shall expire at the annual meeting of
stockholders in 1997; the initial term of office for
members of Class B shall expire at the annual
meeting of stockholders in 1998; and the initial
term of office for members of Class C shall expire
at the annual meeting of stockholders in 1999. At
each annual meeting of stockholders following such
initial classification and election, directors
elected to succeed those directors whose terms
expire after their election shall continue to hold
office until their respective successors are elected
and qualify."
C. The meeting of the Board of Directors at which
the Amendment was found to be in the best interest of the
Corporation was held on the 19 day of January, 1999.
Witness the signature of Roanoke Electric Steel Corporation,
by its President, with the corporate seal affixed and attested by
the Secretary thereof, this 19 day of January, 1999.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
President
ATTEST:
Thomas J. Crawford
Secretary
EXHIBIT NO. 10
(a)
SWVA MANAGEMENT BONUS PLAN
Incorporated by reference to the previously filed SWVA Form 10-K
(Exhibit 10.42) for December 31, 1988 on file in the Commission office.
(b)
SWVA MANAGEMENT RETIREMENT PLAN
Incorporated by reference to the previously filed SWVA Form 10-K
(Exhibit 10.49) for December 31, 1989 on file in the Commission office.
(c)
SWVA COLLECTIVE BARGAINING AGREEMENT
Incorporated by reference to the previously filed SWVA Form 8-K, No.
0-016254 (Exhibit 10.25) dated March 26, 1996 on file in the Commission
office.
(d)
SWVA COLLECTIVE BARGAINING UNIT BONUS PLAN
Incorporated by reference to the previously filed SWVA Form S-1, No.
33-16845 (Exhibit 10.46) on file in the Commission office.
(e)
SWVA COLLECTIVE BARGAINING UNIT RETIREMENT PLAN
Incorporated by reference to the previously filed SWVA Form S-1, No.
33-55952 (Exhibit 10.46) on file in the Commission office.
(f)
SWVA EMPLOYMENT AGREEMENT WITH TIMOTHY R. DUKE
Incorporated by reference to the previously filed Form SC 14D-1
(Exhibit (c) (4)) dated December 3, 1998 on file in the Commission office.
EXHIBIT NO. 27
FINANCIAL DATA SCHEDULE
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the
1st Quarter Consolidated Balance Sheets and Statement of Earnings and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> JAN-31-1999
<CASH> 17,761,092
<SECURITIES> 10,419,876
<RECEIVABLES> 50,974,724
<ALLOWANCES> 0
<INVENTORY> 69,973,178
<CURRENT-ASSETS> 154,433,459
<PP&E> 235,133,880
<DEPRECIATION> 71,546,114
<TOTAL-ASSETS> 335,077,804
<CURRENT-LIABILITIES> 48,984,929
<BONDS> 135,191,362
0
0
<COMMON> 2,858,128
<OTHER-SE> 119,397,664
<TOTAL-LIABILITY-AND-EQUITY> 335,077,804
<SALES> 73,403,567
<TOTAL-REVENUES> 73,403,567
<CGS> 58,435,125
<TOTAL-COSTS> 58,435,125
<OTHER-EXPENSES> 7,353,364
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,212,943
<INCOME-PRETAX> 6,402,135
<INCOME-TAX> 2,542,021
<INCOME-CONTINUING> 3,860,114
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,860,114
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.35
</TABLE>
