SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X| Filed by a Party other than the Registrant
Check the appropriate box:
|X| Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
| | Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Pursuant toss. 240.14a-11(c) orss. 240.14a-12
Atchison Casting Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): (4) Proposed
maximum aggregate value of transaction: (5) Total fee paid:
| | Fee paid previously with preliminary materials.
| | Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[LOGO]
ATCHISON CASTING CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held November 17, 2000
Notice is hereby given that the Annual Meeting of Stockholders of Atchison
Casting Corporation (the "Company") will be held at the offices of the Company,
400 South Fourth Street, Atchison, Kansas, on the 17th day of November, 2000, at
11 a.m. (Central Time) for the following purposes:
1. To elect two Class I Directors to serve for a term of three years.
2. To ratify the adoption of a Shareholder Rights Plan and the Rights
Agreement dated as of March 28, 2000 between the Company and American Stock
Transfer & Trust Company.
3. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on September 25,
2000 as the record date for the determination of stockholders entitled to
receive notice of and to vote at the meeting. If you own stock in Atchison
Casting Corporation as of that date, you are cordially invited to attend the
meeting.
Your vote is important. Whether or not you plan to attend the meeting,
please sign and date the enclosed proxy and promptly return it in the envelope
provided. No postage is necessary if mailed in the United States. If you attend
the meeting, we will be glad to return your proxy so that you may vote in
person.
PLEASE RETURN YOUR PROXY - THANKS!
By Order of the Board of Directors,
HUGH H. AIKEN
Chairman of the Board and
Chief Executive Officer
Atchison, Kansas
October 13, 2000
P.S. - I look forward to seeing you at the meeting. We will give you a tour of
the foundry when it is over. If you would like transportation from and to the
Kansas City airport, please contact me or Jeff Brentano at (913) 367-2121 with
your flight information, and we will have you picked up from and returned to the
airport. It is approximately a 40 minute ride.
<PAGE>
ATCHISON CASTING CORPORATION
400 South Fourth Street
Atchison, Kansas 66002-0188
(913) 367-2121
PROXY STATEMENT
for
Annual Meeting of Stockholders
to be held November 17, 2000
GENERAL INFORMATION
This proxy statement is being furnished to you on or about October 13,
2000, in connection with the solicitation of proxies by the Board of Directors
of Atchison Casting Corporation, a Kansas corporation (the "Company"), for use
at the Annual Meeting of Stockholders to be held at the Company's offices, 400
South Fourth Street, Atchison, Kansas, at 11:00 a.m. (Central Time) on Friday,
November 17, 2000. Atchison will use the proxies it receives to: (i) elect two
Class I directors, (ii) to ratify the adoption of a Shareholder Rights Plan and
Rights Agreement and (iii) to transact other business properly coming before the
Annual Meeting. In order to provide every stockholder with an opportunity to
vote on all matters scheduled to come before the Annual Meeting and to be able
to transact business at the meeting, proxies are being solicited by the
Company's Board of Directors. Upon execution and return of the enclosed proxy,
the shares represented by it will be voted by the persons designated therein as
proxies, in accordance with the stockholder's directions. You may vote on a
matter by marking the appropriate box on the proxy or, if no box is marked for a
specific matter, the shares will be voted as recommended by the Board of
Directors on that matter.
You may revoke the enclosed proxy at any time before it is voted by (i)
notifying the Secretary of the Company in writing before the Annual Meeting,
(ii) exercising a proxy of a later date and delivering such later proxy to the
Secretary of the Company prior to the Annual Meeting or (iii) attending the
Annual Meeting and voting in person. Unless the proxy is revoked or is received
in a form that renders it invalid, the shares represented by it will be voted in
accordance with the instructions contained therein.
The Company will bear the cost of solicitation of proxies, which will be
principally conducted by the use of the mails; however, certain officers and
employees of the Company may also solicit by telephone, telegram or personal
interview. Such expense may also include ordinary charges and expenses of
brokerage firms and others, for forwarding soliciting material to beneficial
owners.
On September 25, 2000, the record date for determining stockholders
entitled to vote at the Annual Meeting, the Company had outstanding and entitled
to vote 7,673,272 shares of common stock, par value $.01 per share (the "Common
Stock"). Each outstanding share of Common Stock entitles the record holder to
one vote.
-1-
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, elected for terms of
three years and until their successors are elected and qualified. At the meeting
two Class I directors are to be elected. The proxies named in the accompanying
proxy intend to vote for the election of Hugh H. Aiken and David D. Colburn. In
the event Mr. Aiken or Mr. Colburn should become unavailable for election, which
is not anticipated, the proxies will be voted for such substitute nominee as may
be nominated by the Board of Directors. The two nominees for election as Class I
directors who receive the greatest number of votes cast for election of the
directors at the meeting, a quorum being present, shall be elected directors of
the Company. Abstentions, broker nonvotes and instructions on the accompanying
proxy card to withhold authority to vote for a nominee will result in the
nominee receiving fewer votes.
Information Concerning Nominees
The following table sets forth information with respect to the nominees to
the Board of Directors.
Class I - Term Expiring 2000
Principal Occupation and
Name Age Five-Year Employment History
---- --- --------------------------------------------
Hugh H. Aiken 56 Chairman of the Board, President, Chief Executive
Officer and Director since June 1991.
David D. Colburn 42 Director since January 2000. Since 1989, Mr.
Colburn has been a private investor and the manager
of various investment partnerships. Mr. Colburn
currently serves as director of Ayr, Inc. and Hajoca
Corporation. Mr. Colburn is a member of the Audit
Committee of the Board of Directors.
Information Concerning Directors Continuing in Office
The following table sets forth information with respect to the directors
who are continuing in office for the respective periods and until their
successors are elected and qualified.
Class II - Term Expiring 2001
Principal Occupation and
Name Age Five-Year Employment History
---- --- ---------------------------------------------
David L. Belluck 38 Director since June 1991. Since 1989, Mr.
Belluck has been a Vice President of Riverside Partners,
Inc., an investment firm located in Boston,
Massachusetts. Mr. Belluck is a member of the
Compensation Committee and the Audit Committee of the
Company's Board of Directors.
-2-
<PAGE>
Class III - Term Expiring 2002
Principal Occupation and
Name Age Five-Year Employment History
---- --- ----------------------------
Stuart Z. Uram 66 Director since August 1997. Since January 1997, Dr.
Uram has been a Senior Consultant to Carpenter
Technology Inc., of Reading, Pennsylvania. Dr. Uram
served as the President of Certech, Inc., from 1970
to 1997, a producer of ceramic cores for the
investment casting industry as well as injection
molded ceramics for a variety of industries. Dr.
Uram founded Certech, Inc. in 1970 and sold the
company to Carpenter Technology Inc. in 1995. Dr.
Uram holds a Doctor of Science, Master of Science and
Bachelor of Science degree from Massachusetts
Institute of Technology in Metallurgy. Dr. Uram is a
member of the Compensation Committee of the Company's
Board of Directors.
Ray H. Witt 72 Director since August 1993. Mr. Witt served as
Chairman of the Board and majority owner of CMI
International, Inc., from 1957 to 1999, which
operated eight foundries in North America. Mr. Witt
founded CMI International in 1957 and sold the
company to Hayes Lammerz International, Inc. in
1999. Mr. Witt was President of the American
Foundryman's Society from 1992 to 1993. Mr. Witt
currently serves as a director Hayes Lammerz
International, Inc. Mr. Witt is a member of the Audit
Committee of the Company's Board of Directors.
Committees of the Board of Directors
The standing committees of the Board of Directors are an Audit Committee
and a Compensation Committee.
The Audit Committee consists of Messrs. Belluck, Colburn and Witt. The
Audit Committee serves as an independent and objective party to monitor the
Company's financial reporting process and internal control system; reviews and
appraises the audit efforts of the Company's independent auditors and internal
auditors; and provides an open avenue of communication among the independent
auditors, financial and senior management, the internal auditors and the Board
of Directors.
The Compensation Committee consists of Mr. Belluck and Dr. Uram. The
Compensation Committee annually reviews and makes recommendations to the
Board of Directors regarding compensation arrangements with the executive
officers of the Company and reviews and approves the procedures for
administering employee benefit plans of all types.
During the 2000 fiscal year, the Board of Directors met 6 times, the Audit
Committee met 1 time and the Compensation Committee met 1 time. All Directors
attended at least 75% of the meetings of the Board of Directors and the
committees on which they served, except for Mr. Belluck who attended 67% of the
Board of Directors meetings and 100% of the Compensation Committee meetings. Mr.
Belluck was not a member of the Audit Committee during the 2000 fiscal year.
-3-
<PAGE>
Compensation of Directors
Non-employee directors receive a fixed fee of $8,000 each year and $4,000
for each quarterly meeting of the Board of Directors attended, all or part of
which may be paid in cash or Common Stock at their election. In addition, the
Company reimburses directors for expenses incurred in connection with attendance
at meetings of the Board of Directors and committees thereof. Upon their initial
election, each non-employee director is granted an option to purchase 10,000
shares of Common Stock at an exercise price per share equal to its fair market
value on the date of grant.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended June 30, 2000, there were no interlocking
relationships between any executive officers of the Company and any entity whose
directors or executive officers serve on the Board's Compensation Committee, nor
did any current or past officers of the Company serve on the Compensation
Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company is
responsible for reviewing and approving policies, practices and procedures
relating to executive compensation and the establishment and administration of
employee benefit plans. The overall goal of the Compensation Committee is to
attract and retain strong management and to base incentive compensation on both
individual performance and the overall Company success. The key elements of the
Company's executive compensation package are base salary, annual bonuses, and
long-term incentives. Each of those elements are discussed below.
The Company's executive officers are compensated with base salary and
annual bonuses, as well as incentive stock options, restricted subsidiary stock
and by the Company's normal fringe benefits.
The base salary of each executive officer, other than the chief executive
officer ("CEO"), is determined by a subjective process of negotiation and
evaluation of performance involving the officer, the CEO and the Compensation
Committee. The base salary of the CEO was originally determined by negotiation
between the CEO and the major stockholders of the Company in February 1991,
resulting in a five-year employment contract between the Company and the CEO. At
the time of the Company's initial public offering of its Common Stock (October
1993), this employment contract was extended by two years, changing its
expiration date from June 1996 to June 1998. The Employment Contract with the
CEO has been further amended to provide for the annual renewal of a three year
term, although either party may terminate the agreement with six month's notice.
The CEO's employment contract allows for annual increases. As of July 1, 2000
Mr. Aiken's base salary was $289,000.
The annual bonus for executive officers for fiscal 2000 was based on the
return on net assets employed or "ROA" on a quarterly and annual basis. The
annual bonus for executive officers for fiscal 1999 and 1998 was based on annual
earnings before interest, taxes and amortization of intangibles, or "EBITA."
Targets are set by the Board of Directors for the fiscal year ROA (fiscal 2000)
and EBITA (fiscal 1999 and 1998) of each executive's subsidiary or
-4-
<PAGE>
operating group. In the case of the CEO and the chief financial officer, the
targets were based on consolidated earnings for the entire Company. The amount
of bonus which was to be earned if ROA (fiscal 2000) or EBITA (fiscal 1999 and
1998) reached 100% of target was also set by the Board (or by contract in the
case of the CEO), and was 100% of base salary for the CEO and 25% to 40% of base
salary for other corporate officers. For fiscal 2000, the bonus was calculated
based on quarterly and annual targets. For fiscal 1999 and 1998, the bonus was
calculated based on annual targets. If all of the targets are reached, the
officer receives 100% of his bonus. For any percentage of actual ROA (fiscal
2000) or EBITA (fiscal 1999 and 1998) above the target, the amount of the
calculated bonus at 100% of the target is increased by the same percentage. A
minimum level of ROA (fiscal 2000) or EBITA (fiscal 1999 and 1998) is also set,
below which no bonus is paid. At ROA (fiscal 2000) or EBITA (fiscal 1999 and
1998) above the minimum threshold the bonus is pro-rated based on the relation
of actual ROA (fiscal 2000) or EBITA (fiscal 1999 and 1998) to the target and
the minimum threshold. During fiscal 2000, bonuses to executive officers ranged
from 0% to 47% of the amount of their bonus set by the Board.
The Compensation Committee may raise or lower a bonus at its discretion,
based on an individual's overall performance.
Incentive stock options are granted by the Company to eligible employees
under the Company's 1993 Incentive Stock Plan. The number of options granted is
determined by the Compensation Committee after considering subjective criteria
such as the employee's performance, the employee's value to the Company and the
use of options at other companies.
Restricted stock of subsidiaries of the Company for up to 10% of the
capital stock of some subsidiaries is made available to key managers of such
subsidiaries, and vests in equal annual installments over five years from the
date of awarding such stock. To participate in this plan, a manager must
purchase stock in the subsidiary.
This report has been issued over the names of each member of the
Compensation Committee, David L. Belluck and Stuart Z. Uram.
David L. Belluck
Stuart Z. Uram
-5-
<PAGE>
EXECUTIVE COMPENSATION
The table below sets forth information concerning the annual and long-term
compensation paid to the Chief Executive Officer and the four other most highly
paid executive officers whose compensation exceeded $100,000 during the last
fiscal year.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation Compensation
Awards
------
Securities
Underlying
Name and Options/ All Other
Principal Position Year Salary($) Bonus($) SARs(#) Compensation($)
------------------ ---- --------- -------- ------- ---------------
<S> <C> <C> <C> <C> <C>
Hugh H. Aiken. . . . . . . . 2000 $ 271,088 $ 32,288 20,000 $ 7,688 (1)
Chairman of the 1999 $ 246,000 None 20,000 $ 5,327
Board, President and 1998 $ 212,629 $ 174,500 20,000 $ 6,833
Chief Executive
Officer
Thomas K. Armstrong (2). 2000 $ 180,000 None 15,000 $ 8,438 (1)
Chief Operating Officer - 1999 $ 50,540 None 35,000 None
North America
David Fletcher. . . . . . . 2000 $ 175,168 (3) $ 17,407 None $ 56,097 (4)
Vice President 1999 $ 173,338 None 3,000 $ 43,475
1998 $ 180,495 $ 279,321 None $ 17,722
John R. Kujawa . . . . . . 2000 $ 150,000 $ 28,336 4,000 $ 7,688 (1)
Vice President 1999 $ 150,000 $ 42,018 6,000 $ 7,100
1998 $ 135,420 $ 33,126 None $ 7,675
James Stott. . . . . . . . 2000 $ 135,408 None None $ 6,094 (1)
Vice President 1999 $ 121,658 None None $ 1,641
1998 $ 132,804 None None $250,000
<FN>
(1) Consists solely of Company contributions to the Company's 401(k) savings
plan for the benefit of the executive.
(2) Mr. Armstrong became Chief Operating Officer - North America of the Company
in March, 1999.
(3) Mr. Fletcher's compensation has been converted from British pounds to U.S.
dollars at the exchange rate available at the close of business on June 30,
2000.
(4) Consists of benefits of an auto, private medical insurance and pension
costs for the benefit of the executive.
</FN>
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Potential Realizable Value
At Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
----------------- ---------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Expiration
Name Granted(#)(1) Fiscal Year Price ($/Sh) Date 5%($) 10%($)
---- ------------- ----------- ------------ ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Hugh H. Aiken. . . . . . . . 20,000 30.1% $ 10.375 6/30/09 $ 130,496 $ 330,702
Thomas K. Armstrong . . . . 15,000 22.6% $ 10.375 6/30/09 $ 97,872 $ 248,026
David Fletcher. . . . . . . None
John R. Kujawa . .. . . . . 4,000 6.0% $ 8.875 9/13/09 $ 22,326 $ 56,578
James Stott . . . . . . . . None
<FN>
(1) All options are rights to buy Common Stock of the Company. The options
granted are subject to a three-year vesting schedule commencing one
year from the date of the grant, with one-third of the grant vesting on
each of the three anniversaries from the grant date.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last
Fiscal Year and FY-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End(#) FY-End($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
<S> <C> <C>
Hugh H. Aiken. . . . . . . . . . . . . 80,000/40,000 $0/0
Thomas K. Armstrong. . . . . . . . . . 11,667/38,333 $0/0
David Fletcher . . . . . . . . . . . . 1,000/2,000 $0/0
John R. Kujawa . . . . . . . . . . . . 11,333/8,667 $0/0
James Stott . . . . . . . . . . . . . 15,000/0 $0/0
</TABLE>
-7-
<PAGE>
Employment Contracts
The Company has entered into an employment agreement with Mr. Aiken that
has a rolling three year term. As of June 30, 2000, the minimum annual
compensation payable to Mr. Aiken pursuant to this agreement was $289,000. At
the discretion of the Board of Directors, the minimum annual compensation may be
increased during the term of this agreement. This agreement provides for a
severance payment in the amount of one year of base salary in the event of his
death or disability and up to three years of base salary in the event he is
terminated other than for cause, disability or death. This agreement also
prohibits Mr. Aiken from competing with the Company for a period of two years
following the termination of his employment with the Company. Mr. Aiken's
employment contract has been extended until June 30, 2003, subject to
termination on 6 months' notice.
As part of the Share Exchange Agreement between the Company, Atchison
Casting UK Ltd. ("ACUK"), David Fletcher and other minority shareholders of
Sheffield, on April 6, 1998 ACUK assumed Sheffield's obligations under an
employment agreement with Mr. Fletcher originally executed October 31, 1988.
This agreement can be terminated: (i) upon 12 months notice by Sheffield or upon
6 months notice by Mr. Fletcher; or (ii) immediately upon a "serious" or
material breach of the employment agreement. The agreement provides for minimum
annual compensation payable to Mr. Fletcher of 110,000 pounds, which may be
increased at the discretion of the board of directors of Sheffield.
Pension Benefits
The Company maintains a qualified defined benefit pension plan, the
Salaried Employees Retirement Plan of Atchison Casting Corporation (the
"Retirement Plan"), of which Mr. Aiken and Mr. Kujawa are participants. The
estimated annual benefits payable under the Retirement Plan payable upon
retirement at various years of credited service and at different levels of
remuneration are as follows:
Remuneration Years of Credited Service at Retirement
------------ ---------------------------------------
15 20 25 30 35
-- -- -- -- --
$ 50,000 $16,654 $17,248 $17,842 $18,435 $19,029
75,000 26,654 27,873 29,092 30,310 31,529
100,000 36,654 38,498 40,342 42,185 44,029
125,000 46,654 49,123 51,592 54,060 56,529
150,000 56,654 59,748 62,842 65,935 69,029
170,000(1) 64,654 68,248 71,842 75,435 79,029
(1) Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, and
the Omnibus Budget Reconciliation Act of 1993 limit the amount of
compensation that can be considered in computing benefits under a
qualified defined benefit pension plan. For 2000, the maximum amount of
compensation allowed for use in calculating an individual's pension
benefits is $170,000. This limit may be raised in the future by annual
cost-of-living adjustments determined by the U.S. Secretary of the
Treasury.
-8-
<PAGE>
The remuneration covered by the Retirement Plan is the average of the
highest five consecutive years during all years of service prior to eligibility
to receive benefits under the Retirement Plan of total cash remuneration,
including salary and bonus (both as reported in the Summary Compensation Table)
paid or accrued and payable in the year following accrual. As of the end of
fiscal 2000, Mr. Aiken and Mr. Kujawa each had eleven years of service credited
under the Retirement Plan. Benefits shown are computed as life-only annuities
beginning at age 65 and are not reduced for Social Security benefits.
Sheffield maintains a qualified benefit pension plan for Mr. Fletcher (the
"Sheffield Pension Plan"). If Mr. Fletcher remains employed with Sheffield until
age 65, Mr. Fletcher will receive an annual pension benefit equal to two-thirds
of his base salary over the preceding twelve months. If Mr. Fletcher leaves
service or retires before age 65, the annual pension benefits payable will be
reduced proportionately based on the ratio that his years of service with
Sheffield from March 31, 1986 bears to 25. Had Mr. Fletcher reached age 65 this
year, his annual pension benefit would have been $116,778.
-9-
<PAGE>
PERFORMANCE OF THE COMPANY'S COMMON STOCK
The graph set forth below compares the percentage change in
cumulative stockholder return of the Company's Common Stock, from June 30, 1995
to June 30, 2000 (the Company's fiscal year end), against the cumulative return
of the Index for the New York Stock Exchange (U.S. Companies only) (the "NYSE
Index") and an index prepared by the Center for Research in Security Prices at
the University of Chicago Graduate School of Business consisting of stocks of
U.S. companies traded on the New York Stock Exchange that transact business in
primary metals industries (S.I.C. 3300-3399) (the "NYSE Metals Industry Index")
covering the same period.
[Graphic omitted]
<TABLE>
<CAPTION>
----------------------------------------------- ------------- ------------ ------------ ------------ ------------
06/30/1995 06/30/1996 06/30/1997 06/30/1998 06/30/1999 06/30/2000
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Atchison Casting Corporation 100.0 109.6 115.7 124.3 72.2 40.0
NYSE Index 100.0 126.0 165.0 211.6 242.7 242.9
NYSE Metals Industry Index 100.0 105.7 141.4 137.9 155.7 131.4
---------------------------------- ------------ ------------- ------------ ------------ ------------ ------------
</TABLE>
Upon written request, we will provide any stockholder, without charge, a
list of the component issues in either of the indexes. The graph is based on
$100 invested on June 30, 1995, in the Company's Common Stock and each of the
indexes, each assuming dividend reinvestment. The historical stock price
performance shown on this graph is not necessarily indicative of future
performance.
-10-
<PAGE>
CERTAIN TRANSACTIONS
On February 18, 2000, the Company entered into a Management Agreement with
Dunton Foundries, LLC ("Dunton") for the management of Atchison Indiana, L.L.C.
("AI"), which owns the RMG Foundry in Mishawaka, Indiana. The Management
Agreement may be terminated by Dunton after 18 months in certain circumstances.
Under the terms of the Management Agreement, the Company provides certain
management services to AI. David D. Colburn, a director of the Company, is the
Manager of AI. Also, Mr. Colburn owns approximately 10% of the capital stock of
Dunton, which owns 100% of AI. Under the Management Agreement, the Company will
receive a base management fee of $70,000 annually as well as a variable fee
based upon the financial performance of AI. The maximum amount of the variable
performance fee is $100,000 per year.
Contemporaneously with the Management Agreement, the Company entered into
an Option Agreement with Dunton, in which Dunton granted the Company an option
to purchase one-half of the equity interests of AI. The Company may exercise the
option at any time prior to March 6, 2003. If the Company exercises the option,
the Company must pay to Dunton one-half of Dunton's net capital investment in AI
(which includes any loans made by Dunton to AI) plus 15% annual interest on the
average monthly balance of Dunton's net capital investment in AI.
ACUK has granted Mr. Fletcher options to purchase 660,000 shares of Class
"C" Ordinary Shares of ACUK at one pence per share. One-fifth of the options
vest on each anniversary date of the Agreement contingent upon Mr. Fletcher
remaining as an employee of ACUK upon each such anniversary. The options are
exercisable for a 10-year period, except upon the termination of Mr. Fletcher's
employment, in which case options exercisable pursuant to the option scheme must
be exercised within six weeks of termination. In addition to the five-year
vesting schedule described above, the options vest upon firm negotiations or a
firm proposal of a public offering of the shares of Sheffield or ACUK, and
become exercisable upon the completion of such public offering. The options also
vest upon any sale of control (as defined) of ACUK.
Mr. Fletcher was granted several rights related to the ACUK stock received
under the Agreement. First, Mr. Fletcher was granted the right to exchange all
of his Class "B" Ordinary Shares and Class "C" Ordinary Shares (whether actually
owned or vested) of ACUK for Common Stock of the Company. This right can be
exercised any time during the period starting five years and ending ten years
from the date of the Agreement and allows Mr. Fletcher to receive Common Stock
of the Company equal to 85% of the net asset value of the ACUK Class "B"
Ordinary Shares and Class "C" Ordinary Shares exchanged. Second, Mr. Fletcher
was granted the right to put all of his Class "B" Ordinary Shares and Class "C"
Ordinary Shares at their net asset value to ACUK within six weeks of his
termination of employment. Third, the Company must purchase the ACUK Class "B"
Ordinary Shares and Class "C" Ordinary Shares held by Mr. Fletcher at their net
asset value or procure an offer for an equivalent exchange in the event an offer
is received for the purchase of all of the shares of the Company.
For a discussion of certain other transactions, see "Election of Directors
-- Compensation Committee Interlocks and Insider Participation," "Compensation
Committee Report on Executive Compensation" and "Executive Compensation --
Employment Contracts."
-11-
<PAGE>
PROPOSAL TWO
RATIFICATION OF SHAREHOLDER RIGHTS PLAN
At the Annual Meeting, stockholders of the Company are being asked to
ratify the Company's Shareholder Rights Plan (the "Rights Plan") the terms and
conditions of which are set forth in the Rights Agreement dated as of March 28,
2000 (the "Rights Agreement") between the Company and American Stock Transfer &
Trust Company (the "Rights Agent").
RATIFICATION BY STOCKHOLDERS
By resolutions passed on March 21, 2000, the Board of Directors of the
Company adopted the Rights Plan and the Rights Plan became effective, subject to
ratification of the stockholders, on March 28, 2000.
Under the provisions of the Rights Agreement, the Rights (as defined below)
and the Rights Agreement will terminate and be void and of no further force and
effect if the Rights Agreement is not ratified by the stockholders of the
Company. In order for the Rights Plan and Rights Agreement to be ratified, no
more than fifty percent (50%) of the holders of the Common Stock of the Company
outstanding and entitled to vote at the meeting may cast votes against
ratification. Abstentions will be counted as "shares present" for purposes of
determining whether a quorum exists and will not be counted as a vote "for" or
"against" this proposal. Broker nonvotes will not be counted as "shares present"
and will not effect the outcome of the vote on this proposal.
The text of the resolution to ratify the Rights Agreement is set forth
below:
"RESOLVED, that the Rights Agreement, dated as of March 28, 2000
between Atchison Casting Corporation and American Stock Transfer & Trust
Company, as Rights Agent, as may be amended pursuant to its terms, be and
the same hereby is ratified, confirmed and approved."
RECOMMENDATION OF THE BOARD OF DIRECTORS
In adopting the Rights Plan, the Board of Directors considered the
appropriateness of establishing a shareholder rights plan and concluded, for the
reasons discussed below, that it was in the best interests of the Company to
adopt the Rights Plan. ACCORDINGLY, THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE RIGHTS
AGREEMENT.
PURPOSES AND BACKGROUND OF THE RIGHTS PLAN
The Company's Board of Directors adopted the Rights Plan and the Rights
Agreement to protect the Company's stockholders against abusive takeover
tactics, to ensure that each stockholder would be treated fairly in the event of
an unsolicited offer to acquire the Company and to obtain fair value for the
Company in the event of a sale.
The primary objective of the Board of Directors in adopting the Rights
Agreement was, and continues to be, the preservation and maximization of the
Company's value for all stockholders. The Rights Agreement is intended in part
to discourage creeping acquisitions of control whereby
-12-
<PAGE>
an acquirer may accumulate a controlling block of stock in the open market
without paying a control premium, attempt to unfairly pressure stockholders,
potentially squeeze them out of their investment without any real choice and
deprive them of the full value of their stock. Small stockholders are
particularly vulnerable to creeping acquisitions and partial or two-tiered
tender offers. The Board of Directors believes that the Rights Agreement is a
significant deterrent against such activities. The Rights Agreement is also
designed to assist the Company in obtaining the best price and other terms if a
transaction should occur.
The Board of Directors believes that there is substantial empirical
evidence that the Rights Agreement will position the Board of Directors to
achieve the best results for all stockholders in the event there is a bid for
the Company. In fact, a 1997 study of 319 merger and acquisition transactions
completed between 1992 and 1996, by Georgeson & Company, Inc., found the
following:
* premiums paid to acquire companies with stockholder rights agreements
averaged eight percentage points higher than premiums paid for
companies without such plans;
* the presence of stockholder rights agreements contributed an estimated
additional $13 billion in stockholder value in the merger and
acquisition transactions studied, and stockholders of acquired
companies without stockholder rights agreements sacrificed an estimated
$14.5 billion in potential premiums;
* the presence of a stockholder rights agreement did not increase the
likelihood of the withdrawal of a friendly bid nor the defeat of a
hostile bid; and
* stockholder rights agreements did not reduce the likelihood of a
company becoming a takeover target (in fact, companies with stockholder
rights agreements had a slightly higher takeover rate than companies
without plans).
The Rights Agreement is not designed or intended to prevent an
unsolicited, non-abusive offer to acquire the Company at a fair price. The
Company believes that potential acquirers will be encouraged by the Rights
Agreement to negotiate directly with the Board of Directors, which the Company
believes is in the best position to negotiate on behalf of all stockholders. The
Rights Agreement does not affect any potential takeover proposal that the Board
of Directors may determine, in the exercise of its fiduciary duties, adequately
reflects the value of the Company and is in the best interests of the Company's
stockholders. NEITHER AT THE TIME OF ADOPTION OF THE RIGHTS PLAN NOR AT THE DATE
OF THIS PROXY STATEMENT WAS THE BOARD OF DIRECTORS AWARE OF ANY SPECIFIC
TAKEOVER BID FOR THE COMMON STOCK THAT HAS BEEN MADE OR IS CONTEMPLATED.
It was not the intention of the Board of Directors in adopting the Rights
Plan to secure the continuance in office of the existing members of the Board of
Directors or to avoid an acquisition of control of the Company in a transaction
that is fair and in the best interests of the Company's stockholders. The rights
of stockholders under existing law to seek a change in the management of the
Company or to influence or promote action of management in a particular manner
will not be affected by the Rights Plan.
The actions of the Board of Directors are subject to fiduciary duties that
are imposed by law on all directors. These fiduciary duties assure that the
Board of Directors will act in the best
-13-
<PAGE>
interests of the Company and all its stockholders. The Board of Directors
believes that the adoption of the Rights Agreement was an appropriate exercise
of its fiduciary duty.
Rights agreements have been adopted by a large number of public companies.
Many companies with rights agreements have received unsolicited offers and have
redeemed their rights after their directors were satisfied that the offer, as
negotiated by the company's board of director, adequately reflected the value of
the company and was fair and equitable to all stockholders. Similarly, under the
Company's Rights Agreement, the Board of Directors can redeem rights granted in
order to facilitate an acquisition that it determines to be at a fair price and
in the best interests of all stockholders. The Board of Directors believes that
the only proper time to consider redemption of rights and termination of the
Rights Agreement is if and when a specific offer is made to acquire the
Company's Common Stock. Redemption of rights and termination of the Rights
Agreement prior to that time would be premature, would remove any incentive for
a potential acquiror to negotiate with the Board of Directors and would
eliminate a valuable safeguard designed to ensure that all stockholders are
treated fairly.
THE RIGHTS PLAN
The following is a summary description of the terms of the Rights Plan,
which is qualified in its entirety to the full text of the Rights Agreement, a
copy of which has been filed as an Exhibit to the Company's Registration
Statement on Form 8-A dated March 28, 2000. Copies of the Rights Agreement shall
be made available upon request to the Company, Attn: Secretary, 400 South Fourth
St., Atchison, Kansas 66002, (913) 367-2121.
Capitalized terms used below but not defined below have the meanings
ascribed to them in the Rights Agreement.
THE RIGHTS
The Board of Directors of the Company declared a dividend of one Preferred
Stock Purchase Right (a "Right") for each share of Common Stock of the Company
outstanding at the close of business on March 21, 2000 (the "Record Date"), or
issued thereafter and prior to the Distribution Date (as defined in the Rights
Agreement).
Each Right entitles its registered holder to purchase from the Company,
after the Distribution Date (as defined below), 1/1000th of one share of Series
A Participating Cumulative Preferred Stock (the "Preferred Stock") for $30.00
(the "Exercise Price"), subject to adjustment. The Rights will be evidenced by
the Common Stock certificates until the "Distribution Date," which is the close
of business on the earlier of (i) the tenth business day (or such later date as
the Board of Directors of the Company may from time to time fix by resolution
adopted prior to the Distribution Date that would otherwise have occurred) after
the date on which any Person (as defined in the Rights Agreement) commences a
tender or exchange offer which, if consummated, would result in such Person's
becoming an Acquiring Person (as defined below) and (ii) the tenth business day
after the first date of public announcement by the Company that such Person has
become an Acquiring Person (the "Flip-in Date") or such earlier or later date as
the Board of Directors of the Company may from time to time fix by resolution
adopted prior to the Flip-in Date (as defined below) that would otherwise have
occurred; provided that if a tender or exchange offer referred to in clause (i)
is canceled, terminated or otherwise withdrawn prior to the Distribution Date
without the purchase of any shares of stock pursuant thereto, such offer shall
be deemed never to have been made.
-14-
<PAGE>
Until the Distribution Date (or the earlier redemption, expiration or
termination of the Rights), the surrender for transfer of any of the
certificates of the Common Stock outstanding in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. Certificates for the Common Stock
issued after the Record Date, but prior to the earliest of the Distribution
Date, the Redemption Date or the Expiration Time, shall evidence one Right and
shall contain a legend incorporating by reference the terms of the Rights
Agreement (as such may be amended from time to time). With respect to such
certificates not containing the aforementioned legend, until the Distribution
Date (or the earlier redemption, expiration or termination of the rights), the
Right associated with the Common Stock represented by such certificate shall be
evidenced by such certificate alone.
The Rights will not be exercisable until the Business Day (as defined in
the Rights Agreement) following the Distribution Date. The Rights will expire on
the earliest of (i) the Exchange Time (as defined below), (ii) December 31,
2000, in the event that stockholders holding more than 50% of the issued and
outstanding shares of Common Stock vote against ratification of the Rights
Agreement at this meeting, (iii) the close of business on the tenth anniversary
of the Rights Agreement, (iv) the date on which the Rights are redeemed as
described below and (v) upon certain mergers of the Company with another
corporation pursuant to an agreement entered into prior to a Flip-in Date (in
any such case, the "Expiration Time").
The Exercise Price and the number of Rights outstanding, or in certain
circumstances the securities purchasable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution in the event of a
Common Stock dividend on, or a subdivision or a combination into a smaller
number of shares of, Common Stock, or the issuance or distribution of any
securities or assets in respect of, in lieu of or in exchange for Common Stock.
ACQUIRING PERSON
An "Acquiring Person" is any Person who is the Beneficial Owner (as
defined in the Rights Agreement) of 20% or more of the outstanding shares of
Common Stock of the Company then outstanding, but shall not include the Company,
any Subsidiary (as defined in the Rights Agreement ) of the Company, any
employee stock ownership plan or employee benefit plan of the Company or any
Subsidiary of the Company, or any Person holding Common Stock for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph, has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares of Common Stock
so that such Person would no longer be an Acquiring Person, as defined pursuant
to the foregoing provisions of this paragraph, then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of the Rights Agreement.
FLIP-IN EVENT
In the event that prior to the Expiration Time a Flip-in Date occurs, each
Right (other than Rights Beneficially Owned by the Acquiring Person or any
affiliate or associate thereof, which Rights shall become void) shall constitute
the right to purchase from the Company, upon the exercise thereof in accordance
with the terms of the Rights Agreement, that number of shares of Common Stock of
the Company having an aggregate Market Price (as defined in the Rights
Agreement), on the date of the public announcement by the Company of an
Acquiring Person's becoming such (the "Shares Acquisition Date") that gave rise
to the Flip-in Date, equal to twice
-15-
<PAGE>
the Exercise Price for an amount in cash equal to the then current Exercise
Price. In addition, the Board of Directors of the Company may, at its option, at
any time after a Flip-in Date and prior to the time an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding shares of Common Stock,
elect to exchange all (but not less than all) the then outstanding Rights (other
than Rights Beneficially Owned by the Acquiring Person or any affiliate or
associate thereof, which Rights become void) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of the Distribution Date (the "Exchange Ratio"). Immediately upon such
action by the Board of Directors (the "Exchange Time"), the right to exercise
the Rights will terminate and each Right will thereafter represent only the
right to receive a number of shares of Common Stock equal to the Exchange Ratio.
Whenever the Company shall become obligated under the preceding paragraph
to issue shares of Common Stock upon exercise of or in exchange for Rights, the
Company, at its option, may substitute shares of Preferred Stock, at a ratio of
one one-thousandth (1/1000) of a share of Preferred Stock for each share of
Common Stock so issuable.
FLIP-OVER EVENT
A "Flip-over Transaction or Event" is a transaction or series of
transactions in which, directly or indirectly, (i) the Company consolidates or
merges or participates in a share exchange with any other Person, if at the time
of such consummation transaction or at the time the Company enters an agreement
with respect to such transaction, the Acquiring Person controls the Company's
Board of Directors (as "control" is defined in the Rights Agreement) and either
(A) any term of or arrangement concerning the treatment of shares of capital
stock in such transaction relating to the Acquiring Person is not identical to
the terms and arrangements relating to other holders of Common Stock or (B) the
Person with whom the transaction or series of transactions occurs is the
Acquiring Person or an affiliate or associate of the Acquiring Person or (ii)
the Company sells or otherwise transfers (or one or more of its Subsidiaries
shall sell or otherwise transfer) assets (A) aggregating more than 50% of the
assets (measured by either book value or fair market value), or (B) generating
more than 50% of the operating income or cash flow, of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more of its wholly-owned Subsidiaries) or to two or more such Persons
which are Affiliates or Associates or otherwise acting in concert, if, at the
time the Company (or any such Subsidiary) enters into an agreement with respect
to such sale or transfer, the Acquiring Person Controls the Board of Directors
of the Company.
In the event that the Company enters into, consummates or permits to occur
a Flip-over Transaction or Event, the Company shall take such action as shall be
necessary to ensure, and shall not permit to occur such Flip-over Transaction or
Event until it shall have entered into a supplemental agreement with the
Flip-over Entity (as defined in the Rights Agreement), for the benefit of the
holders of the Rights, providing, that upon consummation or occurrence of the
Flip-over Transaction or Event (i) each Right shall thereafter constitute the
right to purchase from the Flip-over Entity, upon exercise thereof in accordance
with the terms of the Rights Agreement, that number of shares of Flip-over Stock
(as defined in the Rights Agreement) of the Flip-over Entity having an aggregate
Market Price on the date of consummation or occurrence of the Flip-over
Transaction or Event equal to twice the Exercise Price for an amount in cash
equal to the then current Exercise Price and (ii) the Flip-over Entity shall
thereafter be liable for, and shall assume, all the obligations and duties of
the Company pursuant to the Rights Agreement. For purposes of the foregoing
description, the term "Acquiring Person" shall include any Acquiring Person and
its
-16-
<PAGE>
Affiliates and Associates (both as defined in the Rights Agreement) counted
together as a single person.
REDEMPTION OF RIGHTS
The Board of Directors of the Company may, at its option, at any time
prior to the close of business on the Flip-in Date, redeem all (but not less
than all) the then outstanding Rights at a price of $.01 per Right (the
"Redemption Price"), as provided in the Rights Agreement. Immediately upon the
action of the Board of Directors of the Company electing to redeem the Rights,
without any further action and without any notice, the right to exercise the
Rights will terminate and each Right will thereafter represent only the right to
receive the Redemption Price in cash for each Right so held.
The holders of Rights will, solely by reason of their ownership of Rights,
have no rights as stockholders of the Company, including, without limitation,
the right to vote or to receive dividends.
-17-
<PAGE>
CERTAIN BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK
The following table sets forth information as of September 8, 2000,
concerning the shares of Common Stock beneficially owned by (i) each person
known by the Company to be the beneficial owner of 5% or more of the Company's
outstanding Common Stock, (ii) each of the directors of the Company, (iii) each
of the executive officers of the Company named in the Summary Compensation Table
and (iv) all directors and executive officers of the Company as a group. Unless
otherwise indicated, the named beneficial owner has sole voting and investment
power over the shares listed.
<TABLE>
<CAPTION>
Number of Shares Percentage of Common
Name of Individual or Group Beneficially Owned Stock Owned
--------------------------- ------------------ -----------
<S> <C> <C>
Edmundson International, Inc. (1)............................ 925,157 12.0%
227 West Monroe Street, Suite 3000
Chicago, IL 60606
Wanger Asset Management, Ltd. (2)........................... 811,400 10.6%
227 West Monroe Street, Suite 3000
Chicago, IL 60606
Dimensional Fund Advisors, Inc. (3)......................... 706,200 9.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Ingalls & Snyder LLC (4).................................... 692,058 9.0%
61 Broadway
New York, NY 10006
Wellington Management Company, LLP (5)...................... 440,000 5.7%
75 State Street
Boston, MA 02019
Hugh H. Aiken (6)........................................... 452,016 5.8%
David L. Belluck (7)........................................ 30,292 *
Ray H. Witt (8)............................................. 70,442 *
Stuart Z. Uram (9).......................................... 22,973 *
David D. Colburn (10)....................................... 751,557 9.8%
Thomas Armstrong (11)....................................... 23,621 *
David Fletcher (12)......................................... 1,000 *
John R. Kujawa (13)......................................... 36,981 *
James Stott (14)............................................ 15,000 *
All directors and executive ................................ 1,445,075 18.3%
officers as a group (11 persons) (15)
-------------------
* Less than 1% of Common Stock outstanding.
</TABLE>
[FN]
(1) Based on a Schedule 13D Amendment No. 1 dated September 29, 2000, (a)
Edmundson International Inc., Consolidated Electrical Distributors, Inc.,
Portshire Corp., Lincolnshire Associates, Ltd. and David D. Colburn,
President of Portshire Corp., share voting and dispositive power over
40,000 of shares or approximately .5% of the outstanding shares of Common
Stock, (b) Employees' Retirement Plan of Consolidated Electrical
Distributors, Inc. and David D. Colburn, a member of the investment
committee of the Employees' Retirement Plan of Consolidated Electrical
Distributors, Inc., share voting and dispositive power over 506,512 shares
or approximately 6.8% of the outstanding shares of Common Stock, (c)
Employees' Retirement Plan of Hajoca Corporation has sole voting and
dispositive power over 169,600 shares or approximately 2.3% of the
outstanding shares of Common Stock, (d) Dunton Foundries, LLC, of which
David D. Colburn is the sole manager, has sole voting and dispositive power
over 189,500 shares or approximately 2.5% of the outstanding shares of
Common Stock, (e) David D. Colburn has sole voting and dispositive power
over 15,545 shares or .2% of the outstanding shares of Common Stock, as
more thoroughly described in footnote (10) below, (f) Keith
-18-
<PAGE>
W. Colburn Retirement Plan has sole voting and dispositive power over 2,000
shares of Common Stock, and (g) Keith W. Colburn Trust has sole voting and
dispositive power over 2,000 shares of Common Stock. The reporting persons,
although disclaiming membership in a group, have nonetheless authorized
Edmundson International, Inc. to file this Amendment No. 1 to Schedule 13D
as a group on behalf of each of them.
(2) Based on a Schedule 13G Amendment No. 5 dated February 11, 2000, Wanger
Asset Management, L.P. ("WAM") is an investment adviser, which shares
voting and dispositive powers with Wanger Asset Management Ltd., its
general partner. WAM also shares voting and dispositive powers with certain
of its clients, including Acorn Investment Trust, an investment company
that shares voting and dispositive powers over 499,000 shares or
approximately 6.5% of the outstanding shares of Common Stock.
(3) Based on a Schedule 13G dated February 3, 2000, Dimensional Fund Advisors,
Inc. ("DFA") is an investment advisor to certain investment companies and
in such role possesses sole voting and dispositive powers over the shares;
however, DFA disclaims beneficial ownership of such shares which are owned
by certain of its advisory clients.
(4) Based on a Schedule 13G Amendment No. 6 dated February 4, 2000, Ingalls &
Snyder LLC is a broker-dealer which shares voting and dispositive powers
over 671,257 of such shares with certain of its clients who do not
beneficially own 5% or more of the outstanding shares of Common Stock.
(5) Based on a Schedule 13G Amendment No. 2 dated February 11, 2000, Wellington
Management Company LLP ("WMC") is an investment adviser, which shares
voting and dispositive powers with certain of its clients who do not
beneficially own 5% of more of the outstanding shares of Common Stock.
(6) Includes 100,000 shares subject to exercisable options, 500 shares owned by
each of Mr. Aiken's three children, and 26,579 shares pursuant to the
Company's 401(k) Plan.
(7) Includes 10,000 shares subject to exercisable options, which Mr.
Belluck received pursuant to the Atchison Casting Non-Employee Director
Option Plan.
(8) Includes 35,583 shares owned by CMI Management Services, Inc. Mr. Witt is
Chairman of the Board of CMI Management Services, Inc., which received
175,583 shares of Common Stock of the Company in connection with the
Company's acquisition of the operating assets of CMI-Quaker Alloy, Inc.
Includes 10,000 shares subject to an exercisable option received by Mr.
Witt in June 1996.
(9) Includes 10,000 shares subject to exercisable options, which Mr. Uram
received pursuant to the Atchison Casting Non-Employee Director Option
Plan.
(10) Includes 10,000 shares subject to exercisable options, which Mr.
Colburn received pursuant to the Atchison Casting Non-Employee Director
Option Plan, 506,512 shares owned by Employees' Retirement Plan of
Consolidated Electrical Distributors, Inc., of which Mr. Colburn is a
member of the investment committee, 189,500 shares owned by Dunton
Foundries, LLC, of which Mr. Colburn is the sole manager, and 40,000
shares owned by Lincolnshire Associates, Ltd., whose general partner is
Portshire Corp., of which Mr. Colburn is President.
(11) Includes 16,667 shares subject to exercisable options and 160 shares
pursuant to the Company's 401(k) Plan.
(12) Includes 1,000 shares subject to exercisable options.
(13) Includes 11,333 shares subject to exercisable options.
(14) Includes 15,000 shares subject to exercisable options.
(15) Includes 213,334 shares subject to exercisable options, 28,455 shares
pursuant to the Company's 401(k) Plan, and 506,512 shares owned by
Employees' Retirement Plan of Consolidated Electrical Distributors, Inc.,
189,500 shares owned by Dunton Foundries, LLC, and 40,000 shares owned by
Lincolnshire Associates, Ltd., as more thoroughly described in footnote
(10) above.
</FN>
-19-
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, all Section 16(a) filing requirements
applicable to its directors, executive officers and ten percent holders were
satisfied during the fiscal year ended June 30, 2000, with the exception of one
late report on Form 5 by Thomas Armstrong.
Relationship With Independent Accountants
The Board of Directors, on the recommendation of the Audit Committee, has
selected the firm of Deloitte & Touche LLP as independent auditors to examine
the financial statements of the Company and its subsidiaries for the fiscal year
2001. Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions.
Other Business
As of the date of this proxy statement, management knows of no other
matters to be presented at the Annual Meeting. However, if any other matters
shall properly come before the meeting, it is the intention of the persons named
in the enclosed proxy to vote in accordance with their best judgment.
PROPOSALS OF SECURITY HOLDERS
The Company currently plans to hold the 2001 Annual Meeting in Atchison,
Kansas, on or around November 16, 2001. Pursuant to the Company's By-Laws,
stockholders desiring to bring business before the annual meeting must provide
written notice of each matter to the Company's Secretary not less than 60 days
nor more than 120 days prior to the date of the annual meeting. Such notice must
contain certain information specified in the Company's By-Laws. If a stockholder
desires his or her proposal to be considered for inclusion in the proxy
statement for the 2001 annual meeting, it must be received by the Company's
Secretary no later than June 15, 2001 and must comply with the process described
in Rule 14a-8 of the Securities Exchange Act of 1934, as amended.
ATCHISON CASTING CORPORATION
HUGH H. AIKEN
Chairman of the Board and
Chief Executive Officer
Dated: October 13, 2000
Atchison, Kansas
-20-
<PAGE>
--------------------------------------------------------------------------------
PROXY PROXY
ATCHISON CASTING CORPORATION
400 South Fourth Street
Atchison, Kansas 66002
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Hugh H. Aiken and Kevin T. McDermed, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of Common Stock of Atchison Casting Corporation the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on November
17, 2000, or any adjournment or postponement thereof. This proxy revokes all
prior proxies given by the undersigned.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED PREPAID ENVELOPE.
(Continued and to be signed on the reverse side)
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
ATCHISON CASTING CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. |X|
1. PROPOSAL ONE: ELECTION OF DIRECTORS --
FOR WITHHOLD
Nominee: Hugh H. Aiken |_| |_|
Nominee: David Colburn |_| |_|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES.
2. PROPOSAL TWO: PROPOSAL TO RATIFY THE SHAREHOLDER RIGHTS PLAN
FOR AGAINST ABSTAIN
|_| |_| |_|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL TWO.
3. In their discretion, the Proxies are This proxy, when properly executed,
authorized to vote upon such other will be voted in the manner directed
business as may properly come before herein by the undersigned the meeting
and all matters incident stockholder. If no direction is made, to the
conduct of the meeting. this proxy will be voted FOR each of the nominees
for Director listed in
Proposal One and FOR Proposal Two.
Dated: , 2000
Signature(s)
----------------------------------
-----------------------------------
Please sign exactly as name appears
at left. When shares are held by
joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by an authorized
person.
--------------------------------------------------------------------------------
