<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
/X/ Filed by the Registrant
/ / Filed by a Party other than the Registrant
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ____14a-11(c) or ____14a-12
</TABLE>
REPUBLIC ENGINEERED STEELS, INC.
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
_____________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:__________________________________________________________
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<PAGE> 2
REPUBLIC
ENGINEERED
STEELS, INC.
- --------------------------------------------------------------------------------
[LOGO]
NOTICE OF 1996 ANNUAL
MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
<PAGE> 3
[REPUBLIC ENGINEERED STEELS LOGO]
To Our Stockholders:
You are cordially invited to attend the 1996 Annual Meeting of
Stockholders, which will be held on Wednesday, October 23, 1996, at 6:00 P.M.,
local time, at Washington High School, One Paul E. Brown Drive, N.E., Massillon,
Ohio 44646.
At the meeting, we will be reporting to you on your Company's current
operations and outlook, and stockholders will elect six Class II directors and
one Class I director of the Company. The Board of Directors and management hope
that many of you will be able to attend the meeting in person.
The formal Notice of Annual Meeting and the Board of Directors' Proxy
Statement accompany this letter. It is important that your shares be represented
and voted at the meeting, regardless of the size of your holdings. Accordingly,
please mark, sign and date the enclosed proxy and return it promptly in the
enclosed envelope to ensure that your shares will be represented. Stockholders
who attend the Annual Meeting may, of course, withdraw their proxy should they
wish to vote in person.
Sincerely,
/s/ Russell W. Maier
Russell W. Maier
Chairman of the Board,
Chief Executive Officer and President
October 2, 1996
<PAGE> 4
REPUBLIC ENGINEERED STEELS, INC.
410 OBERLIN ROAD, S.W.
MASSILLON, OHIO 44647
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 23, 1996
------------------------
To the Stockholders of
REPUBLIC ENGINEERED STEELS, INC.:
The Annual Meeting of Stockholders of Republic Engineered Steels, Inc., a
Delaware corporation (the "Company"), will be held on Wednesday, October 23,
1996, at 6:00 P.M., local time, at Washington High School, One Paul E. Brown
Drive, N.E., Massillon, Ohio 44646, for the following purposes:
1. To elect six Class II directors to serve until the 1998 Annual Meeting
of Stockholders or until their successors are duly elected and qualified and to
elect one Class I director to serve until the 1997 Annual Meeting of
Stockholders or until his successor is duly elected and qualified.
2. To transact such other business as may properly be brought before the
meeting and any adjournments or postponements thereof.
Holders of record of Common Stock, par value $.01 per share, of the Company
at the close of business on October 1, 1996, will be entitled to notice of and
to vote on all matters presented at the meeting and at any adjournments or
postponements thereof.
By order of the Board of Directors
/s/ James D. Donohoe
James D. Donohoe,
Secretary
October 2, 1996
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU
PLAN TO ATTEND, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE TO ENSURE THAT YOUR SHARES WILL BE
REPRESENTED. STOCKHOLDERS MAY NEVERTHELESS VOTE IN PERSON AT THE ANNUAL MEETING.
<PAGE> 5
REPUBLIC ENGINEERED STEELS, INC.
410 OBERLIN ROAD, S.W.
MASSILLON, OHIO 44647
PROXY STATEMENT
------------------------
Annual Meeting of Stockholders
October 23, 1996
------------------------
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders and form of proxy are being furnished to the holders of common
stock of Republic Engineered Steels, Inc. (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
1996 Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be
held at Washington High School, One Paul E. Brown Drive, N.E., Massillon, Ohio
44646, on Wednesday, October 23, 1996, at 6:00 P.M., local time, and at any
adjournments or postponements thereof. These proxy materials are being mailed on
or about October 3, 1996 to holders of record on October 1, 1996 of the
Company's common stock, par value $.01 per share ("Common Stock").
A proxy may be revoked by a stockholder prior to its exercise in any of
three ways: by written notice to the Secretary of the Company; by submission of
another proxy bearing a later date; or by voting in person at the Annual
Meeting. Revocation by notice to the Secretary of the Company or by submission
of a later proxy will not affect a vote on any matter which is taken prior to
the receipt of the notice or later proxy by the Company. The mere presence at
the Annual Meeting of the stockholder executing the proxy will not revoke the
proxy. If not revoked, the proxy will be voted at the Annual Meeting in
accordance with the instructions indicated on the proxy by the stockholder or,
if no instructions are indicated, will be voted FOR the slate of directors
described herein and, as to any other item of business that may be brought
before the Annual Meeting, in accordance with the judgment of the person or
persons named in the proxy and voting on the matter.
The Company has adopted a policy of encouraging stockholder participation
in corporate governance by ensuring the confidentiality of stockholder votes.
The Company has designated an independent third party, National City Bank,
Cleveland, Ohio, which is the Company's transfer agent, to receive and to
tabulate stockholder proxy votes. The manner in which any stockholder votes on
any particular issue will be kept confidential and will not be disclosed to the
Company or any of its officers or employees except (i) where disclosure is
required by applicable law, (ii) where disclosure of a vote of a stockholder is
expressly requested by such stockholder or (iii) where the Company concludes in
good faith that a bona fide dispute exists as to the authenticity of one or more
proxies, ballots or votes or as to the accuracy of any tabulation of such
proxies, ballots or votes. Aggregate vote totals may be disclosed to the Company
from time to time and publicly announced at the Annual Meeting.
This solicitation is being made on behalf of the Board of Directors of the
Company. All expenses of the Company in connection with this solicitation will
be borne by the Company. In addition to solicitation by mail, proxies may be
solicited by directors, officers and other employees of the Company, by
telephone, in person or otherwise, without additional compensation. The Company
also will request that brokerage firms, nominees, custodians and fiduciaries
forward proxy materials to the beneficial owners of shares held of record by
such persons and will reimburse such persons and the Company's transfer agent
for reasonable out-of-pocket expenses incurred by them in forwarding such
materials.
THE COMPANY
The Company was originally incorporated in Delaware on May 15, 1989, under
the name Bar Acquisition Co. The Company was formed to purchase substantially
all of the assets of the Bar Division of LTV Steel Company Inc. The Company
changed its name to Republic Engineered Steels, Inc. on July 7, 1989. Until the
initial public offering of its Common Stock in April 1995 (the "IPO"), the
Company had been virtually
1
<PAGE> 6
wholly-owned by its employees through an employee stock ownership plan ("ESOP").
As of October 1, 1996, the ESOP held approximately 58% of the outstanding shares
of Common Stock of the Company. The Company is a Delaware corporation and its
principal executive offices are located at 410 Oberlin Road, S.W., Massillon,
Ohio 44647, and its telephone number at that address is (330) 837-6000.
VOTING SECURITIES
GENERAL
On October 1, 1996 there were 19,706,578 shares of Common Stock
outstanding. Each outstanding share of Common Stock entitles the holder thereof
to one vote. Holders of record of Common Stock at the close of business on
October 1, 1996 are entitled to notice of and to vote at the Annual Meeting and
at any adjournments or postponements thereof.
The presence in person or by proxy at the Annual Meeting of the holders of
a majority of all outstanding shares of Common Stock constitutes a quorum.
Assuming the presence of a quorum at the Annual Meeting, directors will be
elected by the affirmative vote of a plurality of the shares present in person
or by proxy at the Annual Meeting and entitled to vote for the election of
directors.
An abstention with respect to the election of directors will be counted as
present for purposes of determining the existence of a quorum. Brokers who do
not receive a stockholder's instructions are entitled to vote on the election of
directors.
Holders of Common Stock may vote their shares of Common Stock by completing
the enclosed Proxy Card and mailing it in the enclosed postage pre-paid envelope
so that it is received by October 22, 1996, or by appearing at the Annual
Meeting in person.
ESOP SHARES
As of October 1, 1996, there were 11,335,162 shares of Common Stock
(approximately 58% of the outstanding shares of Common Stock) held by the ESOP
(the "ESOP Shares"). The committee administering the ESOP (the "ESOP
Administrative Committee") is required under the terms of the ESOP to solicit
instructions of participants in the ESOP on all matters requiring stockholder
approval and to direct the trustee of the ESOP (the "ESOP Trustee") to vote ESOP
shares in accordance with the instructions of the participants.
Pursuant to the terms of the ESOP, this Proxy Statement along with a letter
from the ESOP Administrative Committee is being sent to participants in the ESOP
requesting that ESOP participants instruct the ESOP Administrative Committee to
direct the ESOP Trustee to vote the ESOP Shares allocated to each ESOP
participant's account. ESOP Shares for which no voting instructions are received
(unvoted shares) and ESOP Shares which are held by the ESOP Trustee and not yet
allocated to ESOP participants' accounts (unallocated shares) will be voted in
the same proportion as the votes received from those ESOP participants who
submit instructions.
Notwithstanding such provisions, the ESOP Administrative Committee and the
ESOP Trustee must abide by the fiduciary obligations imposed by federal law.
Accordingly, although participants in the ESOP have the right to instruct the
ESOP Administrative Committee how to vote the shares of Common Stock allocated
to their accounts, the ESOP Administrative Committee and the ESOP Trustee each
has the continuing obligation, even after the receipt of such instructions, to
determine whether to follow such instructions based on its evaluation of the
facts and circumstances or to override the instructions of the ESOP participants
in certain very limited circumstances.
2
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of September 13, 1996 by (a) each person that is
the beneficial owner of more than five percent of the Common Stock, (b) each
director and nominee for director of the Company, (c) the executives named in
the Summary Compensation Table under "Executive Compensation" and (d) all
directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------
NUMBER OF PERCENT
SHARES OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED CLASS
--------------------------------------- ---------- --------
<S> <C> <C>
State Street Bank and Trust Company(2)........................ 11,335,162 58%
200 Newport Avenue
N. Quincy, MA 02191
Russell W. Maier(3)........................................... 5,000 (5)
Stephen S. Higley(3)(7)....................................... 11,335 (5)
James B. Riley(3)(8).......................................... 18,240 (5)
Sam Camens(6)................................................. 900 (5)
Carol A. Cartwright........................................... -0- -0-
Richard F. Celeste............................................ 1,500 (5)
Wayne A. Hardy(4)............................................. 1,989 (5)
Rudolph Kogut(4).............................................. 1,549 (5)
Douglas M. Lawson(4).......................................... 1,661 (5)
Gary E. Lenhart(4)............................................ 3,043
Martin Manley................................................. -0- -0-
Walter C. Meck................................................ 1,000 (5)
John J. Richards(4)........................................... 2,626 (5)
William J. Williams........................................... 1,500 (5)
James T. Anderson(3)(9)....................................... 9,297 (5)
Harold V. Kelly(3)(10)........................................ 8,084 (5)
All directors and executive officers of the Company as a
group(5).................................................... 100,740 (5)
</TABLE>
- ---------------
(1) The address of all persons other than State Street Bank and Trust Company,
is the address of the Company, 410 Oberlin Road, S.W., Massillon, Ohio
44647.
(2) State Street Bank and Trust Company holds such stock as trustee for the
ESOP. The number of shares held by the ESOP Trust represents the number of
shares allocated to participants' accounts under the ESOP and unallocated
shares held by the ESOP Trust.
(3) Does not include shares that may be issued under the Company's stock option
plan (the "1995 Stock Option Plan"). Options granted under the 1995 Stock
Option Plan are generally not exercisable until May 1998 and are therefore
not included in this chart.
(4) Represents the number of shares allocated to such person's account under
the ESOP.
(5) Less than 1%.
(6) Includes 700 shares of Common Stock held by Mr. Camens as custodian for his
grandchildren under the Uniform Gift to Minors Act. Mr. Camens disclaims
beneficial ownership of these shares.
(7) Includes 7,710 shares allocated to Mr. Higley's account under the ESOP.
(8) Includes 8,240 shares allocated to Mr. Riley's account under the ESOP.
(9) Includes 7,622 shares allocated to Mr. Anderson's account under the ESOP.
(10) Includes 6,584 shares allocated to Mr. Kelly's account under the ESOP.
3
<PAGE> 8
I. ELECTION OF DIRECTORS
In accordance with the Amended and Restated Certificate of Incorporation of
the Company (the "Charter") and the By-laws of the Company (the "By-laws"), the
Board of Directors has fixed the number of directors at thirteen directors,
divided into two classes, one of seven directors and the other of six directors.
The term of office of each class is two years. The Charter and By-laws also
provide for the following qualifications for the Company's directors:
<TABLE>
<S> <C>
Group A Directors: Four individuals designated by the United Steelworkers of America
AFL/CIO ("USWA"), one of whom is designated by the International
President of the USWA and three of whom are designated by USWA local
unions.
Group B Director: One individual, the chief executive officer of the Company.
Group C Directors: Eight individuals, five of whom must be independent directors (not
affiliated with the Company or the USWA), selected by a nominating
committee (the "Nominating Committee") comprised of the Group A
Director designated by the International President of the USWA, the
Group B Director and three Group C Directors who are independent
directors.
In the event that the ESOP owns less than 25% of the outstanding shares
of Common Stock (i) the Group A Directors will be reduced to two (both
to be appointed by the International President of the USWA), (ii) the
Nominating Committee will consist solely of Group C independent
directors and (iii) the number of Group C Directors will be increased
to ten (10), of which seven (7) must be independent directors.
</TABLE>
The term of all Class II directors expires at the 1996 Annual Meeting. In
accordance with the provisions of the Charter and the By-laws, the Board of
Directors has nominated James B. Riley, Stephen S. Higley, Sam Camens, Martin J.
Manley, Walter C. Meck and Gary E. Lenhart for election as Class II directors to
hold office until the 1998 Annual Meeting of Stockholders, or until their
respective successors are elected and qualified or until their earlier death,
resignation or removal. In accordance with the provisions of the Charter and
By-laws, the Board of Directors has nominated Rudy Kogut for election as a Class
I director to hold office until the 1997 Annual Meeting of Stockholders, or
until his successor is elected and qualified or until his earlier death,
resignation or removal. Each nominee is currently a director except for Messrs.
Higley and Lenhart. In the event that any person listed as a nominee becomes
unavailable as a candidate for election, it is intended that the shares
represented by your proxy will be voted for a substitute nominee, but the Board
of Directors knows of no reason to anticipate that this will occur.
Assuming the presence of a quorum at the Annual Meeting, the affirmative
vote of a plurality of the shares present in person or by proxy is required for
the election of directors. Shares represented by your proxy will be voted in
accordance with your direction as to the election as directors of the persons
listed below as nominees. In the absence of direction, the shares represented by
your proxy will be voted FOR the election of all such nominees.
Certain information with respect to the nominees and each of the continuing
directors is set forth below, including their director group qualification.
4
<PAGE> 9
NOMINEES FOR CLASS II DIRECTORS WHOSE TERMS EXPIRE
AT THE 1998 ANNUAL MEETING OF STOCKHOLDERS:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE GROUP QUALIFICATION SINCE
- ---- --- ------------------- --------
<S> <C> <C> <C>
James B. Riley 44 Group C Director 1989
Stephen S. Higley 52 Group C Director --
Sam Camens 79 Group A Director (designated by the
International President of the
USWA) 1989
Martin J. Manley 44 Group C Independent Director 1994
Walter C. Meck 45 Group C Independent Director 1989
Gary E. Lenhart 45 Group C Director --
</TABLE>
NOMINEE FOR CLASS I DIRECTOR WHOSE TERM EXPIRES
AT THE 1997 ANNUAL MEETING OF STOCKHOLDERS:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE GROUP QUALIFICATION SINCE
- ---- --- ------------------- --------
<S> <C> <C> <C>
Rudy Kogut............. 58 Group A Director 1996(1)
</TABLE>
(1) On March 19, 1996, Harry E. Schaefer resigned from the Board of Directors.
Mr. Schaefer had been elected for a two-year term at the 1995 Annual
Stockholders meeting as the Group A(ii) Qualified Director. Pursuant to the
By-laws, on August 22, 1996, Mr. Kogut was elected as a director by the
Board of Directors to fill the vacancy created by Mr. Schaefer's resignation
until the next annual election which will take place at the Annual Meeting.
In accordance with the Charter, Mr. Kogut has been designated for nomination
by USWA Local 1200 as the Group A(ii) Qualified Director to fill the
unexpired term of Mr. Schaefer. If elected, Mr. Kogut's term will expire at
the 1997 Annual Meeting of Stockholders.
CONTINUING (CLASS I) DIRECTORS WHOSE TERMS EXPIRE
AT THE 1997 ANNUAL MEETING OF STOCKHOLDERS:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE GROUP QUALIFICATION SINCE
- ---- --- ------------------- --------
<S> <C> <C> <C>
Russell W. Maier....... 59 Group B Director 1989
Carol A. Cartwright.... 55 Group C Independent Director 1991
Richard F. Celeste..... 58 Group C Independent Director 1994
William J. Williams.... 68 Group C Independent Director 1989
Wayne A. Hardy......... 42 Group A Director 1995
Douglas M. Lawson...... 54 Group A Director 1995
</TABLE>
The following are brief summaries of the business experience of the
nominees for election as directors of the Company and of the other directors
whose terms of office as directors will continue after the Annual Meeting,
including, where applicable, information as to the other directorships held by
each of them.
NOMINEES FOR CLASS II DIRECTORS:
JAMES B. RILEY has been Executive Vice President and Chief Financial
Officer of the Company since November 1993. He was formerly Vice President and
Chief Financial Officer of the Company from 1989 to October 1993. Prior to the
formation of the Company he was the Assistant Controller of LTV Steel and the
Controller of the Bar Division of LTV Steel. Mr. Riley has been active in the
steel industry since 1975.
STEPHEN S. HIGLEY has been a corporate Vice President and President of the
Company's Specialty Steels Division since January 1995. Prior to that time he
was Vice President - Commercial of the Company since
5
<PAGE> 10
November 1989. Prior to that time he held the same position at LTV Steel. Mr.
Higley has been active in the steel industry since 1966.
SAM CAMENS is retired. Mr. Camens served as Assistant to the International
President of the USWA from 1981 until his retirement in 1987.
MARTIN J. MANLEY has been the Managing Director, KP Consulting of Kaiser
Permanente (Northern California Region) since October 1995. From July 1994 to
October 1995 he was an independent business consultant. From 1993 to July 1994
he served as the Assistant Secretary of Labor for the American Workplace in the
Clinton Administration. From 1991 to 1993, Mr. Manley was a partner in The
Waterman Group, a business consulting firm. From 1986 to 1991, Mr. Manley was a
Senior Manager for McKinsey & Company, Inc., a business consulting firm.
WALTER C. MECK has been the Chairman and Chief Executive Officer of H.H.
Fessler Knitting Co., Inc. since 1994. From 1990 to 1993, Mr. Meck was Executive
Vice President and Chief Operating Officer of Farrel & Co., an investment and
merchant banking firm. From 1986 to 1990, Mr. Meck was the Executive Vice
President - Finance and Chief Financial Officer of Mack Trucks, Inc., a major
manufacturer of trucks. Mr. Meck is also a director of Orix Credit Alliance
Receivables Corporation.
GARY E. LENHART has been a Plant Manager of the Company's Cold Finished Bar
Division since June, 1993. Currently, Mr. Lenhart is responsible for the
Company's cold finished bar plants in Beaver Falls, PA and Willimantic, CT. He
was formerly General Supervisor of the Company's cold finished bar plant in
Massillon, Ohio since the Company's inception in November, 1989. Mr. Lenhart has
been active in the steel industry since 1969.
NOMINEE FOR CLASS I DIRECTOR:
RUDY KOGUT is a member of USWA Local 1200 and has been employed at the
Company's steelmaking plant on Eighth Street in Canton, Ohio since 1956 .
CLASS I DIRECTORS:
RUSSELL W. MAIER has been Chairman of the Board, President and Chief
Executive Officer of the Company since November 1989. Prior to the formation of
the Company, Mr. Maier served as the President of LTV Steel Flat Rolled and Bar
Company. Mr. Maier has been active in the steel industry since February 1960.
Mr. Maier is also a member of the Board of Directors of United National Bank and
Trust Company and Ohio Edison Company.
CAROL A. CARTWRIGHT has been Chief Executive Officer of Kent State
University since 1991. From 1988 to 1991 she served as chief Academic Officer of
the University of California at Davis. Ms. Cartwright is also a member of the
Board of Directors of Ohio Edison Company, KeyBank National Association and M.A.
Hanna Company.
RICHARD F. CELESTE has been a partner in Celeste and Sabety, Ltd., a public
strategy consulting firm since January 1991. Mr. Celeste was the Governor of the
State of Ohio from 1982-1990. Mr. Celeste is also a member of the Board of
Directors of Navistar International Corporation and Health-South Corporation.
WILLIAM J. WILLIAMS is retired. Mr. Williams had been the Chairman and
Chief Executive Officer of the Huntington National Bank from 1986 until his
retirement in 1994. Mr. Williams is the former President and Chief Operating
Officer of Republic Steel Corporation, a predecessor of LTV Steel. Mr. Williams
is currently a member of the Board of Directors of Centerior Energy Corporation,
UNR Industries, Inc. and Huntington Bankshares, Inc.
WAYNE A. HARDY is a member of USWA Local 1566 and has been employed at the
Company's cold finished bar plant in Massillon, Ohio since 1973.
DOUGLAS M. LAWSON is a member of USWA Local 3069 and has been employed at
the Company's cold finished bar plant on Dunes Highway in Gary, Indiana since
1964. Mr. Lawson previously served as a director of the Company from January
1990 to December 1991.
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<PAGE> 11
There is no family relationship among any of the directors or executive
officers of the Company.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held seven meetings (exclusive of committee
meetings), during the 1996 fiscal year. In addition, the Board of Directors
acted by unanimous written consent on two occasions during the 1996 fiscal year.
The Board of Directors has also established four committees whose functions and
current members are noted below. Each current director attended 75% or more of
the aggregate number of meetings of the Board of Directors and committees on
which he or she served which were held during such period.
Audit Committee: The Audit Committee of the Board of Directors (the "Audit
Committee") presently consists of and has during the 1996 fiscal year consisted
of Dr. Cartwright and Messrs. Meck (Chairman) and Williams. Each of the
foregoing is a director who is not employed by the Company or affiliated with
management. The Audit Committee is responsible for reviewing and helping to
ensure the integrity of the Company's financial statements. Among other matters,
the Audit Committee reviews the Company's internal accounting controls and
financial statements and reviews with the Company's independent accountants the
scope of their audit, their report and their recommendations. The Audit
Committee held four meetings during the 1996 fiscal year.
Compensation Committee: Since October 26, 1995 the Compensation Committee
of the Board of Directors (the "Compensation Committee") has consisted of
Messrs. Camens, Celeste, Lawson, Maier, Manley (Chairman) and Richards. From May
25, 1995 to October 26, 1995 the Compensation Committee consisted of Mr. William
R. Ryan (until his term of office expired on October 26, 1995) and Messrs.
Camens, Celeste, Maier, Manley (Chairman) and Richards. The Compensation
Committee establishes the policies used in determining the compensation of all
executive officers of the Company. The Compensation Committee held five meetings
during the 1996 fiscal year. See "Compensation Committee Interlocks and Insider
Participation."
Nominating Committee: Since June 12, 1995 the Nominating Committee has
consisted of Messrs. Camens, Maier (Chairman), Manley, Meck and Williams.
The Nominating Committee of the Board of Directors, acting by unanimous
vote, designates the nominees for the Group C Directors. The Nominating
Committee must, in accordance with the provisions of the Charter and By-laws,
consist of the Group A Director nominated by the International President of the
USWA, the Group B Director and three Group C Directors who are independent
directors as long as the ESOP (and/or other benefit plan(s)) owns 25% or more of
the issued and outstanding shares of Common Stock.
The Nominating Committee held one meeting during the 1996 fiscal year. The
Nominating Committee also acted by unanimous written consent on July 27, 1995 to
designate Dr. Cartwright and Messrs. Celeste and Williams as nominees for the
Group C directors in Class I standing for election at the 1995 Annual Meeting of
Stockholders.
Option Administrative Committee: Since May 5, 1995 the committee of the
board of Directors that administers the Company's 1995 Stock Option Plan (the
"Option Administrative Committee") has consisted of Dr. Cartwright and Messrs.
Celeste, Manley, Meck and Williams. As required by the 1995 Stock Option Plan
all members of the Option Administrative Committee were Group C independent
directors.
The Option Administrative Committee did not act in the 1996 fiscal year.
COMPENSATION OF DIRECTORS
Each director who is not an officer or employee of the Company receives an
annual fee of $15,000, plus attendance fees of $1,500 for regular and special
meetings, $750 for committee meetings and $500 for telephonic board meetings,
and is reimbursed for his or her out-of-pocket expenses incurred in connection
with serving on the Board of Directors. Officers and other employees of the
Company who serve on the Board of
7
<PAGE> 12
Directors of the Company receive no additional compensation for their services
(other than reimbursement for their related out-of-pocket expenses).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Maier, the President and Chief Executive Officer of the Company and the
Group B Director, serves on the Compensation Committee but does not participate
in deliberations concerning his compensation. Three other members of the
Compensation Committee who served during the 1996 fiscal year are employees of
the Company, namely Mr. Ryan, a Group A Director (designated by Union Local
1033), Mr. Lawson, a Group A Director (designated by Union Local 3069) and Mr.
Richards, a Group C Director. The compensation of Messrs. Lawson, Ryan and
Richards is not determined by the Compensation Committee.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and any persons who own more than ten
percent of the Company's Common Stock to file reports of initial ownership of
the Company's Common Stock and subsequent changes in that ownership with the
Securities and Exchange Commission and to furnish the Company with copies of all
forms they file pursuant to Section 16(a). Based solely upon a review of the
copies of the forms furnished to the Company, or written representations from
certain reporting persons that no Forms 5 were required, the Company believes
that during the 1996 fiscal year all Section 16(a) filing requirements were
complied with, except that one report for one transaction was filed late by
Russell W. Maier.
8
<PAGE> 13
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
The Company's Charter requires that the Compensation Committee include at
least one Group A Qualified Director (a director nominated by either the USWA or
certain USWA locals) and two Group C Qualified Directors (directors who may, but
need not be, independent directors). The Compensation Committee is currently
composed of Sam Camens, Richard F. Celeste, Douglas M. Lawson, Russell W. Maier,
Martin J. Manley and John J. Richards. Mr. Maier is the President and Chief
Executive Officer of the Company (the "CEO") and the Group B Qualified Director.
Mr. Lawson is an employee of the Company and a Group A Qualified Director
designated by Union Local 3069. Mr. Camens is not an employee of the Company and
is a Group A Qualified Director designated by the USWA Union. Mr. Richards is an
employee of the Company and a Group C Qualified Director. Messrs. Celeste and
Manley are independent Group C Qualified Directors. Although Mr. Maier is a
member of the Compensation Committee, he abstains from deliberations regarding
his compensation.
COMPENSATION PHILOSOPHY
The purpose of the Company's executive compensation plan is to enable the
Company to attract and retain quality executive officers. The Company's
compensation philosophy is to reward the individual and team efforts of
executive officers who increase the long term value of the Company in a manner
consistent with ownership by employees and public investors. As a result, the
Company's executive compensation plan seeks to reward increases in the value of
the Company's Common Stock, insure competitiveness with industrial companies of
similar size and complexity and reinforce the Company's commitment to employee
ownership and participation. Specifically, this purpose and philosophy are
implemented through a total compensation program that includes a short-term
direct compensation package and a long-term incentive compensation package. The
short-term direct compensation package for executive officers (except the CEO)
currently consists of a base salary, participation in various employee benefit
plans in which the Company's employees generally participate (including a profit
sharing plan) and a severance benefit program in the event the executive officer
is terminated without cause. The long-term incentive compensation package
consists of participation in the ESOP (except the CEO) and the 1995 Stock Option
Plan.
COMPENSATION OF EXECUTIVE OFFICERS GENERALLY
Previously, the short-term compensation of seven of the Company's eleven
executive officers had been determined pursuant to employment agreements entered
into in 1989 at the inception of the Company when it was virtually wholly owned
by the ESOP (the "1989 Agreements"). Each 1989 Agreement provided for an initial
five-year term that ended in 1994 and, other than Mr. Maier's agreement, annual
extensions thereafter that were automatic unless the Board of Directors elected,
at least 90 days prior to the anniversary date of such agreement, not to extend
such agreement.
Pursuant to each 1989 Agreement, the executive party thereto received a
fixed base salary that was increased for comparable increases in the base salary
of other employees of the Company generally, other than pursuant to a salary
"merit budget" (performance based) program adopted by the Company. Each 1989
Agreement also provided that the Board of Directors would from time to time
evaluate the Company's progress and attainments under the direction of the
executive and annually consider increasing the executive's base salary pursuant
to a salary "merit budget" (performance based) program that may be adopted by
the Company. The Compensation Committee is responsible for making
recommendations to the Board of Directors regarding the nature and criteria of
such programs. In the past, such programs have generally been comparable to
those provided by the Company to other of its employees.
The compensation of the remaining four of the Company's executive officers
was determined by the Board of Directors based upon a recommendation from the
Compensation Committee. In making such recommendation, the Compensation
Committee considered the individual executive's performance, seniority and
longevity in light of the compensation provided to the other executives under
the 1989 Agreements.
9
<PAGE> 14
On October 26, 1995, the Board of Directors, upon the recommendation of the
Compensation Committee, approved an amendment of the Company's Salaried
Employee's Termination Plan (the "Termination Plan Amendment"), the effect of
which was to provide executive officers, other than the CEO, with enhanced
severance benefits in lieu of the 1989 Agreements. Under the Termination Plan
Amendment executive officers with two or more years of service as an executive
officer who are terminated without cause will be provided with continued salary
and benefits for a period of one year from the date employment is terminated.
The final details of the Termination Plan Amendment were completed in May 1996.
On November 2, 1995, in connection with the adoption of the Termination
Plan Amendment, each executive officer who was a party to a 1989 Agreement
agreed to voluntarily terminate his 1989 Agreement. Each of those executive
officers is eligible to receive the severance benefits provided by the
Termination Plan Amendment. After the expiration of the initial five-year term
of the 1989 Agreements, the primary economic benefit for the executive officer
under the 1989 Agreement had been salary continuation in the event of
termination without cause during the remainder of the one year extension period.
Under the Termination Plan Amendment, executive officers with two or more years
of service as an executive officer who are terminated without cause will be
provided continued salary and benefits for a period of one year from the date
employment is terminated. If the terminated executive is re-employed within the
one-year period, the severance payments would be reduced by any salary received
by the new employer. Therefore, in many instances, the Termination Plan
Amendment will extend the duration of the executive officer's post-termination
benefits. The Compensation Committee believed that this enhancement would
provide greater stability at the executive level and make the Company more
competitive with similarly situated industrial companies.
Following the termination of the 1989 Agreements, the Board set the base
salary for executive officers (other than the CEO), based upon the
recommendation of the Compensation Committee, at the same levels such employees
received on the date of termination of the 1989 Agreements. In making such
recommendation, the Compensation Committee considered the individual executive's
performance, seniority and longevity in light of the compensation provided to
the other executives and the overall financial condition of the Company. The
base compensation for each executive officer in the 1996 fiscal year increased
commensurate with the increases in base salary for other salaried employees. The
Company does not currently pay bonuses to any of its executive officers.
The Compensation Committee continually reviews the Company's existing
compensation structure for executives to ensure that the Company is offering
competitive compensation packages that will enable it to attract and retain
quality executives. In this regard, the Compensation Committee has engaged
independent compensation advisors to review the compensation packages of
executive officers.
CEO COMPENSATION
Mr. Maier's employment agreement (the "CEO Agreement"), was entered into in
November 1989 along with the 1989 Agreements, for an initial five-year term that
ended in 1994. The CEO Agreement provides that, commencing in November 1992 and
on each anniversary date of the CEO Agreement thereafter, the term of the CEO
Agreement shall automatically extend one year (so that the remaining term shall
be three years) unless the Board of Directors elects, prior to the anniversary
date of such agreement, not to extend such agreement. The other terms of the CEO
Agreement are similar to the comparable terms of the 1989 Agreements.
The compensation package for Mr. Maier for fiscal year 1996 was established
pursuant to the CEO Agreement. Pursuant to the CEO Agreement, Mr. Maier's
compensation in fiscal year 1996 included an increase in base salary
commensurate with the increase in base salary received by other salaried
employees. The CEO Agreement may be terminated by the Company on three years'
notice. Mr. Maier's base salary in fiscal 1996 totaled $536,000. Mr. Maier is
not eligible to participate in the ESOP. Mr. Maier was granted options to
purchase the Company's Common Stock under the 1995 Stock Option Plan. See "Long
Term Incentive Plans". See also "Options Outstanding as of June 30, 1996."
The CEO Agreement also provides that the Board of Directors will from time
to time evaluate the Company's progress and attainment under the direction of
Mr. Maier and annually consider increasing his
10
<PAGE> 15
base salary pursuant to a salary "merit budget" (performance based) program that
may be adopted by the Company. The Compensation Committee is responsible for
making recommendations to the Board of Directors regarding the nature and
criteria of such programs. In the past, such programs have generally been
comparable to those provided by the Company to other of its employees.
LONG TERM INCENTIVE PLANS
The Company maintains two long term incentive plans in which executive
officers of the Company participate: (i) the ESOP and (ii) the 1995 Stock Option
Plan.
ESOP. The Company maintains the ESOP for the benefit of its salaried and
hourly employees and enables them to share in the growth of the Company. The
ESOP is a stock bonus plan, designed to be invested primarily in Common Stock of
the Company and qualified under section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code"). On a quarterly basis, the Company makes a
contribution to the ESOP equal to a specified percentage of the cash
compensation received by the ESOP participants in the quarter. That amount is
used by the ESOP to repay loans from the Company, which repayment enables the
ESOP to allocate shares of Common Stock of the Company to participants. Each
ESOP participant is 100% vested at all times in shares allocated to his or her
account in the ESOP. Mr. Maier, as the CEO and President of the Company, is not
eligible to participate in the ESOP.
1995 Stock Option Plan. The 1995 Stock Option Plan was adopted primarily
to provide long-term incentives and rewards to executive officers and senior
managers. Options granted under the 1995 Stock Option Plan are designed to
continue the link between executive compensation and increases in stockholder
equity, to provide incentives to executive officers tied to growth of the share
price over time and to encourage continued employment with the Company. Options
granted under the 1995 Stock Option Plan generally are not exercisable for a
period of three years until April 1998. There were no options granted in fiscal
year 1996.
POLICY REGARDING SECTION 162(M) OF THE INTERNAL REVENUE CODE
With certain exceptions, Section 162(m) of the Code limits the Company's
deduction of compensation paid to certain executive officers to $1 million for
each executive for a taxable year (including any deductions otherwise allowable
with respect to the exercise of an Option). If Options are granted pursuant to
the 1995 Stock Option Plan before the Company's 1999 annual meeting and the 1995
Stock Option Plan is not terminated or modified prior to such time, the Company
believes that such Options should qualify for a special transition rule which
exempts from such limitation compensation paid pursuant to a plan that was in
existence before a corporation went public. In any event, given that the Options
granted under the 1995 Stock Option Plan generally are not exercisable for a
period of three years from the date of the IPO, no executive officer received
compensation in excess of $1 million for the Company's 1996 fiscal year and,
therefore, the deduction limitation of Section 162(m) should not apply to the
Company for such fiscal year.
THE COMPENSATION COMMITTEE
<TABLE>
<S> <C>
MARTIN J. MANLEY (CH) DOUGLAS M. LAWSON
SAM CAMENS RUSSELL W. MAIER
RICHARD F. CELESTE JOHN J. RICHARDS
</TABLE>
11
<PAGE> 16
COMPENSATION TABLES AND OTHER INFORMATION
The following tables set forth information with respect to the Chief
Executive Officer and the four other most highly compensated executive officers
of the Company for the three fiscal years ended June 30, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------
OTHER
ANNUAL ALL OTHER
FISCAL COMPEN- COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY SATION(1) SATION(2)
- ----------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Russell W. Maier................... 1996 $551,622(3) $ 91,667 $ 12,750
President and Chief 1995 490,000 88,720 12,743
Executive Officer 1994 490,000 73,283 13,660
James B. Riley..................... 1996 253,000 -0 - 11,533
Executive Vice President and 1995 235,000 -0 - 16,978
Chief Financial Officer 1994 217,440 -0 - 19,702
Stephen S. Higley.................. 1996 227,000 24,016 14,267
Vice President and President - 1995 206,000 -0 - 20,353
Specialty Steels Division 1994 190,000 -0 - 20,535
Harold V. Kelly.................... 1996 217,000 32,378 18,116
Executive Vice President and 1995 205,000 27,124 22,499
General Counsel 1994 195,600 -0 - 25,872
James T. Anderson.................. 1996 240,000 28,085 16,070
Vice President and President - 1995 220,200 -0 - 20,373
Bar Products Division 1994 205,000 -0 - 21,955
<FN>
- ---------------
(1) Other Annual Compensation for Mr. Maier in 1996, 1995 and 1994,
respectively, includes $29,011, $30,967 and $29,672 of supplemental salary
available to purchase benefits under a cafeteria plan, $60,573, $56,946 and
$42,409 for contribution to a trust providing for the difference between the
amount needed to fund an agreed upon retirement benefit and the maximum
amount that may be contributed to the Company's Defined Contribution Pension
Plan under the Code and $2,083, $807 and $1,202 for other perquisites; and
for Mr. Kelly in 1996 these amounts were $17,788, $17,326 and $8,751,
respectively. For all other named individuals, this category excludes the
value of perquisites and personal benefits received by them because such
perquisites and personal benefits do not exceed 10% of their respective
salaries.
Other Annual Compensation for Mr. Higley in 1996 includes $13,200 of
supplemental salary available to purchase benefits under a cafeteria
plan, $9,522 for contributions to a trust providing for the difference
between the amount needed to fund an agreed upon retirement benefit and the
maximum amount that may be contributed to the Company's Defined Contribution
Pension Plan under the Code and $1,294 for other perquisites.
Other Annual Compensation for Mr. Kelly in 1996 and 1995, respectively,
includes $17,788 and $17,326 of supplemental salary available to
purchase benefits under a cafeteria plan, $10,374 and $8,751 for
contributions to a trust providing for the difference between the amount
needed to fund an agreed upon retirement benefit and the maximum amount that
may be contributed to the Company's Defined Contribution Pension Plan under
the Code and $4,216 and $1,047 for other perquisites.
Other Annual Compensation for Mr. Anderson in 1996 includes $15,900 of
supplemental salary available to purchase benefits under a cafeteria
plan, $11,137 for contributions to a trust providing for the difference
between the amount needed to fund an agreed upon retirement benefit and the
maximum amount that may be contributed to the Company's Defined Contribution
Pension Plan under the Code and $1,048 for other perquisites.
(2) All Other Compensation reflects amounts contributed by the Company to the
Company's Defined Contribution Pension Plan and the ESOP allocation for the
named individuals except for Mr. Maier who does not participate in the ESOP.
(3) Includes $15,622 of salary earned in fiscal year 1995 but paid in fiscal
year 1996.
</TABLE>
12
<PAGE> 17
Employment Agreements
Only Mr. Maier is employed pursuant to an employment agreement. See
discussion above under "CEO Compensation" in the Compensation Committee Report.
Employee Common Stock Ownership Plan
The Company maintains the ESOP for the benefit of substantially all of its
salaried and hourly employees. The ESOP is a stock bonus plan, designed to be
invested in Common Stock and intended to be qualified under section 401(a) of
the Code.
On a quarterly basis, the Company makes a contribution to the ESOP to
reflect certain percentages of cash compensation received by the ESOP
participants in the quarter. The ESOP Trustee in turn utilizes the entire
contribution to pay to the Company principal and interest on the loans made in
1989 by the Company to the ESOP (the "ESOP Loans" consisting of the loans in the
original principal amount of $190.0 million and $30.0 million, respectively). At
June 30, 1996 the unpaid balances were $18,407,960 and $29,312,728,
respectively. The percentage of cash compensation utilized for fiscal 1996 was
18% (subject to limitations imposed by the Code) and will continue at that rate
until the ESOP Loans are repaid. Common stock is allocated to each participant's
account on an annual basis.
Each ESOP participant is 100% vested at all times in shares allocated to
his or her account. Participants have pass-through voting rights with respect to
Common Stock allocated to their accounts. Pursuant to the terms of the ESOP,
because the IPO created an established market for the Common Stock, Common Stock
is now distributed to ESOP participants upon their termination of service with
the Company for any reason or to ESOP participants who are active Company
employees upon attaining the age of 70 1/2. In addition, an ESOP participant who
is at least 55 years old with at least 10 years of participation in the ESOP and
who seeks diversification can elect to receive a partial distribution of his or
her allocated shares of up to 25% over the first five years and an additional
25% thereafter.
OPTIONS OUTSTANDING AS OF JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING OPTIONS
AT FISCAL YEAR
NAME END(1)
- ------------------------------------- --------------------
<S> <C>
Russell W. Maier..................... 540,000
James B. Riley....................... 120,000
James T. Anderson.................... 96,000
Harold V. Kelly...................... 96,000
Stephen S. Higley.................... 109,200
<FN>
- ---------------
(1) Options are generally not exercisable prior to May 1998. Based on the market
price of the Company's common stock at June 30, 1996, none of the options is
in-the-money.
</TABLE>
13
<PAGE> 18
PERFORMANCE GRAPH
The following performance graph compares the performance of an investment
in the Company's Common Stock since it began to be publicly traded on April 28,
1995 with that of the total return of the Standard and Poor's S&P 500 Composite
Stock Price Index (the "S&P 500 Index") and an index of peer companies selected
by the Company. The peer group consists of Birmingham Steel Corporation, Inland
Steel Industries, Inc., Kentucky Electric Steel, Inc., Quanex Corporation and
The Timken Company. The peer group previously included Bliss and Laughlin
Industries, Inc. which was merged into Bar Technologies, Inc. during fiscal year
1996. The performance graph excludes Bliss and Laughlin Industries, Inc. for all
periods reflected. The graph assumes the value of the investment in the
Company's Common Stock and each index was $100 on April 28, 1995 and that all
dividends were reinvested. There can be no assurance that future stock
performance will correlate with past stock performance.
COMPARISON OF 14 MONTH CUMULATIVE TOTAL RETURN*
Among Republic Engineered Steels, Inc., The S&P 500 Index
and a Peer Group
<TABLE>
<CAPTION>
REPUBLIC
Measurement Period ENGINEERED
(Fiscal Year Covered) STEELS, INC. PEER GROUP S&P 500
<S> <C> <C> <C>
4/28/95 100 100 100
6/95 97 112 106
6/96 44 89 134
</TABLE>
*$100 invested on 04/28/96 in stock or index -- including reinvestment of
dividends. Fiscal year ending June 30.
14
<PAGE> 19
INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP as the Company's
independent auditors to conduct the audit of the Company's books and records for
the fiscal year ended June 30, 1997. KPMG Peat Marwick LLP also served as the
Company's independent auditors for the previous fiscal year. Representatives of
KPMG Peat Marwick LLP are expected to be present at the Annual Meeting to
respond to questions and to make a statement should they so desire.
OTHER MATTERS
At the date of this Proxy Statement, the Company has no knowledge of any
business other than that described above that will be presented at the Annual
Meeting. If any other business should come before the Annual Meeting, it is
intended that the persons named in the enclosed proxy will have discretionary
authority to vote the shares which they represent.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 1997 ANNUAL MEETING
In accordance with rules promulgated by the Securities and Exchange
Commission, any stockholder who wishes to submit a proposal for inclusion in the
proxy material to be distributed by the Company in connection with the 1997
Annual Meeting must have done so no later than June 5, 1997.
REPORTS
The Company has furnished to each person whose proxy is being solicited and
to each ESOP participant a copy of the Company's 1996 Annual Report which
includes its Form 10-K (without exhibits) for the fiscal year ended June 30,
1996, as filed with the Securities and Exchange Commission, including the
financial statements and schedules thereto. Requests for additional copies of
the Company's 1996 Annual Report should be directed in writing to the corporate
Secretary at the address below.
By order of the Board of Directors
/s/ James D. Donohoe
James D. Donohoe
Secretary
Republic Engineered Steels, Inc.
410 Oberlin Road, S.W.
Massillon, Ohio 44647
October 2, 1996
15
<PAGE> 20
ADMINISTRATIVE COMMITTEE
EMPLOYEE COMMON STOCK OWNERSHIP PLAN
410 OBERLIN ROAD, S.W.
MASSILLON, OHIO 44647
------------
Dear ESOP Participant:
Please read this letter carefully as it includes information regarding your
right to vote shares of Common stock ("Common Stock") of Republic Engineered
Steels, Inc. ("Republic") allocated to your account under the Republic
Engineered Steels, Inc. Employee Common Stock Ownership Plan (the "ESOP") at the
1995 Annual Meeting of Stockholders (the "Annual Meeting"), which will be held
on Wednesday, October 23, 1996, at 6:00 P.M., local time, at Washington High
School, One Paul E. Brown Drive, N.E., Massillon, Ohio 44646. At the meeting,
stockholders will elect seven directors of Republic.
In connection with the Annual Meeting, the Board of Directors of Republic
is soliciting proxies from all of its stockholders, including State Street Bank
and Trust Company, in its capacity as trustee of the ESOP (the "ESOP Trustee").
The ESOP Trustee is forwarding a copy of the Notice of Annual Meeting and the
Board of Directors' Proxy Statement and accompanying materials to you in
connection with the solicitation of your voting instructions.
Although Republic's Common Stock is now publicly traded and other
stockholders may vote at the Annual Meeting, the voting procedure with respect
to shares allocated to the accounts of ESOP participants has not changed.
Pursuant to the terms of the ESOP, the committee administering the ESOP (the
"Administrative Committee") is hereby soliciting your voting instructions and
will direct the ESOP Trustee to vote the shares of Common Stock held by the
trust (the "ESOP Trust") in accordance with such instructions.
The ESOP provides that the shares of Common Stock allocated to a
participant's account under the ESOP will be voted as the participant instructs
and that shares held by the ESOP Trust for which no instructions are received
from participants (unvoted shares) and shares held by the ESOP Trust which are
not yet allocated to participants (unallocated shares) be voted in the same
proportion as the votes received from those participants who do submit
instructions. Notwithstanding such provisions, the Administrative Committee and
the ESOP Trustee must abide by the fiduciary obligations imposed by federal law.
Accordingly, although participants in the ESOP have the right to instruct the
Administrative Committee as to how to issue directions on the voting of Common
Stock allocated to their accounts, the Administrative Committee and the ESOP
Trustee each has the continuing obligation, even after the receipt of such
instructions or directions, to determine whether to follow such instructions or
directions based on its evaluation of the facts and circumstances and to
override the directions of the participants in certain very limited
circumstances.
For participants in the ESOP, a Ballot, rather than a Proxy has been
enclosed for you to provide voting instructions. To insure the confidentiality
of your voting instructions, Buck Consultants, Inc. has been retained by the
Administrative Committee to collect and tabulate the voting instructions of the
ESOP participants. The instructions received from participants in the ESOP will
be kept strictly confidential. None of Republic, the United Steelworkers of
America AFL/CIO (the "USWA") or any member of the Administrative Committee will
know the voting instruction of any participant except (i) where disclosure is
required by applicable law, (ii) where disclosure of the vote of an ESOP
participant is expressly requested by such participant or (iii) where Republic
concludes in good faith that a bona fide dispute exists as to the authenticity
of one or more ballots or votes, or as to the accuracy of any tabulation of such
ballots or votes.
ESOP PARTICIPANTS ARE ENTITLED TO ATTEND AND PARTICIPATE IN THE ANNUAL
MEETING BUT INSTEAD OF BEING ENTITLED TO VOTE IN PERSON AT THE ANNUAL MEETING,
THEY MAY, IN ACCORDANCE WITH THE PROVISIONS OF THE ESOP, ONLY INSTRUCT THE
ADMINISTRATIVE COMMITTEE AS TO HOW TO VOTE SHARES ALLOCATED TO THEIR ACCOUNTS BY
COMPLETING THE ENCLOSED BALLOT. YOUR VOTING INSTRUCTION IS IMPORTANT AND, TO BE
SURE IT IS COUNTED, THE ENCLOSED BALLOT MUST BE MARKED WITH YOUR VOTE, SIGNED
AND RETURNED IN THE ACCOMPANYING PRE-ADDRESSED, POSTAGE PRE-PAID ENVELOPE SO
THAT IT IS RECEIVED BY OCTOBER 18, 1996.
Sincerely yours,
/s/ John B. George
-----------------------------
John B. George
Chairman
ESOP Administrative Committee
October 2, 1996
[GRAPHIC]
<PAGE> 21
REPUBLIC ENGINEERED STEELS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 23, 1996 AT 6:00 P.M.
The undersigned stockholder of Republic Engineered Steels, Inc.
(the "Company") hereby appoints Harold V. Kelly and James D. Donohoe,
and each of them, as attorneys and proxies, each with power of
substitution and revocation, to represent the undersigned at the
Annual Meeting of Stockholders of the Company to be held on October
23, 1996, and at any adjournments or postponements thereof, with
authority to vote all shares of Common Stock of the Company held or
owned by the undersigned on October 1, 1996 in accordance with the
directions indicated herein.
Item 1. ELECTION OF DIRECTORS:
/ / FOR all nominees listed below (except as marked to the contrary
below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees for Directors:
James B. Riley, Stephen S. Higley, Sam Camens, Martin J. Manley,
Walter C. Meck, Gary E. Lenhart and Rudy Kogut.
(Instruction: To withhold authority to vote for any individual nominee
named above, strike a line through that nominee's name)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE
NOMINEES
Item 2. In their discretion, the proxies are authorized to vote upon
such other business as may properly be presented at the
meeting or any adjournments or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THIS PROXY
WILL BE VOTED FOR ITEM 1 AND PURSUANT TO ITEM 2.
Dated _________________ , 1996
------------------------------
(Signature)
------------------------------
(Signature if held jointly)
(Please date and sign exactly
as name appears hereon. When
signing as attorney,
administrator, trustee,
custodian or guardian, give
full title as such. Where more
than one owner, all should
sign. Proxies executed by a
partnership or corporation
should be signed in the full
partnership or corporate name
by a partner or authorized
officer.)
<TABLE>
<S> <C>
P
R
O
X
Y
</TABLE>
<PAGE> 22
REPUBLIC ENGINEERED STEELS, INC.
BALLOT SOLICITED ON BEHALF OF THE ADMINISTRATIVE COMMITTEE OF THE ESOP
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 23, 1996 AT 6:00 P.M.
By signing and returning this Ballot in the accompanying
pre-addressed, postage pre-paid envelope, you will be directing the
fiduciary of the Republic Engineered Steels, Inc. Employee Common
Stock Ownership Plan ("ESOP") as to how to vote the shares of Common
Stock of Republic Engineered Steels, Inc. (the "Company") allocated to
your account in the ESOP (and a proportional number of the ESOP's
unallocated and unvoted shares) at the Annual Meeting of Stockholders
of the Company scheduled to be held on October 23, 1996, and at any
adjournments or postponements thereof.
Item 1. ELECTION OF DIRECTORS:
/ / FOR all nominees listed below (except as marked to the contrary
below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees for Directors:
James B. Riley, Stephen S. Higley, Sam Camens, Martin J. Manley,
Walter C. Meck, Gary E. Lenhart and Rudy Kogut.
(Instruction: To withhold authority to vote for any individual nominee
named above, strike a line through that nominee's name)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE
NOMINEES
Item 2. In its discretion, the fiduciary of the ESOP is authorized to
vote upon such other business as may properly be presented at
the meeting or any adjournments or postponements thereof.
[GRAPHIC]
THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT HE OR SHE HAS READ AND UNDERSTANDS
THIS BALLOT AND THE ACCOMPANYING PROXY STATEMENT AND ACCOMPANYING MATERIALS TO
HIS OR HER SATISFACTION.
AFTER COMPLETING AND SIGNING THIS BALLOT, PLEASE RETURN THIS BALLOT IN THE
ACCOMPANYING PRE-ADDRESSED, POSTAGE PRE-PAID ENVELOPE. YOUR VOTE WILL BE KEPT
CONFIDENTIAL. NEITHER THE COMPANY NOR THE UNITED STEELWORKERS OF AMERICA WILL BE
GIVEN INFORMATION AS TO YOUR VOTING INSTRUCTIONS (EXCEPT AS PROVIDED IN THE
ACCOMPANYING LETTER FROM THE ESOP ADMINISTRATIVE COMMITTEE DATED OCTOBER 2,
1996).
Dated _________________ , 1996
------------------------------
(Signature)
(Please date and sign exactly
as name appears hereon.)
[GRAPHIC]
<TABLE>
<S> <C>
B
A
L
L
O
T
</TABLE>
