SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange act of 1934
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 to Rule 14a-11(c) or Rule 14a-12
SYNALLOY 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 approximate box):
(x) $125 per Exchange Act Rules 0-11(c)(1)(ii),
14a-6(i)(1), or 14a6(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:
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2) Aggregate number of securities to which transaction
applies:
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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):
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( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided
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:
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2) Form, Schedule or Registration Statement No.:
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SYNALLOY CORPORATION
Post Office Box 5627
Spartanburg, South Carolina 29304
NOTICE OF ANNUAL MEETING
April 30, 1996
TO THE STOCKHOLDERS OF SYNALLOY CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders of
Synalloy Corporation will be held at the general offices of the Company,
Croft Industrial Park, Spartanburg, South Carolina, on Tuesday, April
30, 1996, at 10:00 a.m. local time. The following three important
matters will be presented for your consideration:
1. To elect five (5) directors to serve until the next annual meeting
of shareholders and until their successors are elected and qualified;
2. To vote upon a proposal to amend Article IV of the Certificate
of Incorporation to increase the authorized Common Stock of the Company
from 8,000,000 shares, par value $1.00 per share, to 12,000,000 shares,
par value $1.00 per share;
3. To ratify the selection of Ernst & Young LLP, independent certified
public accountants, as independent auditors for fiscal year ending
December 28, 1996;
4. To act upon such other matters as may properly come before the
meeting or any adjournment or adjournments thereof.
All of the above matters are more fully described in the accompanying
Proxy Statement.
Only shareholders of record at the close of business on March 11,
1996 are entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
Cheryl C. Carter
Secretary
Spartanburg, South Carolina
April 1, 1996
Important: You are cordially invited to attend the meeting, but
whether or not you plan to attend, PLEASE VOTE, DATE, SIGN AND MAIL
the enclosed Proxy promptly. If you attend the meeting, you may
either vote by your proxy, or withdraw your proxy and vote in person.
The 1995 Annual Report on Form 10K is furnished herewith.
SYNALLOY CORPORATION
CROFT INDUSTRIAL PARK
POST OFFICE BOX 5627
SPARTANBURG, SOUTH CAROLINA 29304
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 30, 1996
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Synalloy Corporation (the "Company")
of proxies to be voted at the Annual Shareholders' Meeting to be
held at the general offices of the Company, Croft Industrial Park,
Spartanburg, South Carolina, on Tuesday, April 30, 1996, at 10:00
a.m. local time, and at all adjournment(s) thereof.
The approximate date on which this Proxy Statement and the accompanying
proxy card are first being sent or given to stockholders is April
1, 1996.
Quorum and Vote Required. The presence, in person or by proxy, of
a majority of the outstanding shares of Common Stock of the Company
is necessary to constitute a quorum at the Annual Meeting.
Voting Rights. The securities which can be voted at the Annual Meeting
consist of Common Stock of the Company, $1.00 par value per share,
its only class of issued and outstanding capital stock. The record
date for determining the holders of Common Stock who are entitled
to notice of and to vote at the Annual Meeting is March 11, 1996.
On February 26, 1996, the Company had outstanding 7,013,125 (excluding
986,875 shares held in treasury) shares of Common Stock having one
(1) vote per share. Each shareholder of Common Stock is entitled
in respect to each matter to be voted on at the meeting to one (1)
vote per share, except that in the election of Directors shareholders
have cumulative voting rights.
Each shareholder of Common Stock entitled to vote for the election
of Directors shall have the right to cumulate his votes either (1)
by giving to one candidate as many votes as shall equal the shares
owned by such holder, or (2) by distributing his votes on the same
principle among any number of candidates. Any shareholder who intends
to so vote his shares shall either (1) give written notice of such
intention to the Secretary of the Company not less than forty-eight
(48) hours before the time fixed for the Annual Meeting, or (2) announce
his intention in such meeting before the voting for Directors shall
commence. If a shareholder gives notice of his intention to cumulate
his votes, all shareholders entitled to vote at the meeting shall
without further notice be entitled to cumulate their votes.
Cost of Solicitation. The entire cost of soliciting these proxies
will be borne by the Company. The Company may make arrangements
with brokerage houses, nominees, fiduciaries and other custodians
to send proxies and proxy material to beneficial owners of the Company's
stock and may reimburse them for their expenses in so doing. Proxies
may be solicited personally or by telephone, telegram or mail by
directors, officers and regular employees of the Company without
additional compensation for such services. Synalloy has engaged the
services of W. F. Doring & Company, a firm specializing in proxy
solicitation, to solicit proxies and to assist in the distribution
and collection of proxy material for a fee estimated at approximately
$2,500 plus reimbursement of out-of-pocket expenses.
Voting by Proxy. In voting by proxy with regard to the election
of directors, stockholders may vote in favor of all nominees, withhold
their votes as to all nominees or withhold their votes as to specific
nominees. Stockholders should specify their choices on the accompanying
proxy card. All properly executed proxy cards delivered by stockholders
to the Company and not revoked will be voted at the Annual Meeting
in accordance with the directions given. If no specific instructions
are given with regard to the matters to be voted upon, the shares
represented by a signed proxy card will be voted "FOR" the election
of all directors, approval to amend Article IV of the Certificate
of Incorporation to increase the authorized Common Stock from 8,000,000
to 12,000,000 shares and to ratify the appointment of Ernst & Young
LLP as independent auditors. If any other matters properly come before
the Annual Meeting, the persons named as proxies will vote upon such
matters according to their judgment.
Revocability of Proxy. Any stockholder delivering a proxy has the
power to revoke it at any time before it is voted by giving written
notice to the Secretary of the Company, by a valid proxy bearing
a later date delivered to the Company or by attending the meeting
and voting in person.
STOCKHOLDERS' PROPOSALS FOR THE 1997
ANNUAL MEETING OF SHAREHOLDERS
Stockholders' proposals submitted pursuant to Rule 14a-8 of the Securities
Exchange Act of 1934 intended to be presented at the 1997 Annual
Meeting of Shareholders, tentatively scheduled for April 1997, must
be sent certified mail, return receipt requested and received at
the Company's Executive Offices, Post Office Box 5627, Spartanburg,
South Carolina 29304, addressed to the attention of the Secretary
by December 1, 1996 in order to be included in the Proxy Statement
and form of proxy relating to such meeting.
SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT
The Company's Annual Report to Stockholders including Form 10-K for
the year ended December 30, 1995, as filed with the Securities and
Exchange Commission, accompanies this Proxy Statement and is incorporated
by reference herein.
BENEFICIAL OWNERS OF MORE THAN FIVE (5%) PERCENT OF
THE COMPANY'S COMMON STOCK
The table below details certain information regarding any person
who is known by the Company to be the beneficial owner of more than
five (5%) percent of the Company's Common Stock as of February 26,
1996.
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
<S> <C> <C>
T. Rowe Price 512,550 (1) 7.3
100 East Pratt Street
Baltimore, MD 21201
James G. Lane, Jr. 394,845 (2) 5.6
Post Office Box 5627
Spartanburg, SC 29304
Putnam Investments, Inc. 379,600 (3) 5.4
One Post Office Square
Boston, MA 02109
Dimensional Fund Advisors, Inc. 359,782 (4) 5.1
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
(1) These securities are owned by various individual and institutional
investors, which T. Rowe Price Associates, Inc. ("Price Associates")
serves as investment adviser with power to direct investments and/or
sole power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates
is deemed to be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities. This information was obtained from Price
Associates' Schedule 13G dated February 14, 1996.
(2) The aggregate number of shares of Common Stock owned beneficially
by Mr. Lane includes direct ownership of 265,324 shares; indirect
ownership of 5,771 shares held by the trustee under Synalloy's 401(k)/ESOP
Plan; and 123,750 shares owned by his spouse of which Mr. Lane disclaims
beneficial ownership.
(3) Certain Putnam investment managers (together with their parent
corporation, Putnam Investments, Inc., and Marsh & McLennan Companies,
Inc.), are considered "beneficial owners" in the aggregate of 379,600
shares, or 5.4% of shares outstanding, of the Company's voting common
stock, which shares were acquired for investment purposes by such
investment managers for certain of their advisory clients. This information
was obtained from Putnam's Schedule 13G dated January 29, 1996.
(4) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 359,782
shares of Synalloy Common Stock as of December 31, 1995, all of which
shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of the
DFA Investment Trust Company, a Delaware business trust, or the DFA
Group Trust and DFA Participation Group Trust, investment vehicles
for qualified employee benefit plans, all of which Dimensional Fund
Advisors, Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares. This information was obtained
from Dimensional's Schedule 13G dated February 7, 1996.
</TABLE>
ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
The Certificate of Incorporation of the Company provides that the
Board of Directors shall consist of not less than three nor more
than fifteen individuals. Upon recommendation of the Nominating Committee,
the Board of Directors fixed the number of directors constituting
the full Board at five members and recommends that the five nominees
listed in the table which follows be elected as directors to serve
for a term of one year until the next succeeding Annual Meeting and
until their successors are elected and qualified. Each of the nominees
has consented to be named in this Proxy Statement and to serve as
a director if elected.
If cumulative voting is not requested, the holders of the Board of
Directors' proxies will vote the proxies received by them for the
election as directors of the five persons named below. If cumulative
voting is requested, the holders of the Board of Directors' proxies
will vote the proxies received by them cumulatively for some or all
of the nominees in such manner as may be determined at the time by
the proxy holders.
While the Board of Directors expects that all of the nominees will
serve as directors, if, at the time of the Annual Meeting of Shareholders,
or any adjournment(s) thereof, a situation should arise making it
impossible for one or more of the nominees to serve, the holders
of the enclosed proxy will vote for such substitute nominee as the
Board of Directors recommends.
The Board of Directors recommends that stockholders vote "FOR" the
proposal to elect the five nominees listed below as directors of
the Company.
The election of directors requires the affirmative vote of the holders
of a plurality of votes given for each director to be elected.
The following table sets forth the names of nominees for director,
their age, the year in which they were first elected a director,
a brief description of their principal occupation and business experience
during the last five years, all directorships of publicly held companies
other than the Company, and the number of shares of the Company's
Common Stock beneficially owned by them directly or indirectly, as
of February 26, 1996, and certain other information. The Board Committee
assignments are as of February 26, 1996.
*Less than one percent (1%).
<TABLE>
<CAPTION>
Name, Age, Principal Occupation, Director Since Common Stock
Other Directorships and Other Beneficially
Information Owned as of
February 26, 1996
(Percent of Class)
<S> <C> <C>
Sibyl N. Fishburn, age 60 1979 100,712
(1)(4)
Mrs. Fishburn is a graduate of Hollins (1.4)
College, Roanoke,VA. She serves on the
Board of the Virginia Nature Conservancy.
Mrs. Fishburn is a member of the Audit
and Nominating Committees.
Richard E. Ingram, age 54 1989 31,000 (2) (4)
Mr. Ingram has been Chairman of the Board (*)
of Builder Marts of America, Inc. (BMA),
Greenville, SC, a national distributor
of lumber and building materials, since
November 1988 and was Chief Executive
Officer until November 1993. Since
November 1, 1993 he has been President
and Chief Executive Office of Snyders Auto
Sales, a retail automobile dealer in
Greenville, SC. He is a Director of Carolina
First Holding and Carolina First Bank and
Ingram Enterprises, Inc., a real estate
development company. He is also a Director
of Columbia Lumber, a retail lumber business
and TelPan, Inc. a long distance provider
in Panama. He is a member of the Executive,
Nominating and Compensation & Long-Term
Incentive Committees.
James G. Lane, Jr., age 62 1986 394,845 (3)
Mr. Lane has served as Chief Executive (5.6)
Officer and Chairman of the Board of the
Company since 1987. He also served as President
of Bristol Metals, Inc., a subsidiary of the
Company, from January 1988 to January 1, 1992.
He is a member of the Executive and Nominating
Committees.
Glenn R. Oxner, age 57 1989 18,750 (4)
Mr. Oxner is Chairman and Chief Executive (*)
Officer of Edgar M. Norris Co., Inc.,
an investment securities company in Greenville,
SC. From 1989 to 1992 Mr. Oxner was Senior
Vice President of NationsBank, and Managing
Director of NationsBank Investment Banking
Company. He is a member of the Audit and
Compensation & Long-Term Incentive Committees.
Carroll D. Vinson, age 55 1987 15,925 (4) (5)
Mr. Vinson is President and a Director of (*)
Metropolitan Asset Enhancement Group, a
private real estate holding company affiliated
with Insignia Financial Group, Inc. ("Insignia")
in Greenville, SC. He is also owner of C. D.
Vinson & Associates, a consulting firm. He was
President, Chief Executive Officer and a
Director of Angeles Corporation, a real
estate investment company in Los Angeles,
CA. between February 18, 1993 and March 15, 1993.
He was previously employed by Insignia first
as President and Chief Operating Officer and
then as President and Chief Executive Officer
of Insignia Capital Corporation until
February 15, 1993. He is a member of the
Audit, Executive and Compensation & Long-Term
Incentive Committees.
All Directors and Officers as a group 658,780 (6)
(9 including those listed above) (9.4)
(1) Includes indirect ownership of 7,065 shares by spouse; 20,000
shares held in trust for children of which Mrs. Fishburn's spouse
is trustee; and 15,070 shares held in irrevocable trust over which
Mrs. Fishburn has certain powers.
(2) Includes indirect ownership of 15,115 shares held by Donna C.
Ingram Trust, 900 shares held in an IRA, and 735 shares held in the
Ingram Foundation.
(3) Includes indirect ownership of 5,816 shares held by the trustee
under Synalloy's 401(k)/ESOP Plan; and 123,750 shares owned by his
spouse.
(4) Includes options to purchase 3,000 shares exercisable pursuant
to the 1994 Non-Employee Directors' Stock Option Plan.
(5) Includes indirect ownership by spouse of 11,575 shares.
(6) Includes 26,000 shares which are currently subject to exercisable
options, and 14,210 shares allocated under the Company's 401(k)/ESOP.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES
The business and affairs of the Company are under the general management
of its Board of Directors as provided by the laws of Delaware and
the Bylaws of the Company. The Company has standing Executive, Audit,
Compensation & Long-Term Incentive, and Nominating Committees of
the Board of Directors.
The members of the Executive Committee are James Lane*, Richard Ingram
and Carroll Vinson. This Committee exercises the authority of the
Board of Directors in the management of the business of the Company
between the meetings of the Board of Directors. However, this Committee
shall not have, among other powers, the authority to amend the Certificate
of Incorporation or Bylaws, to adopt an agreement of merger or consolidation,
to recommend to the shareholders the sale, lease or exchange of the
Company's property and assets, to declare a dividend, or to authorize
the issuance of stock. During the past fiscal year, this Committee
met two times.
The Audit Committee members are Glenn Oxner*, Sibyl Fishburn and
Carroll Vinson. This Committee makes recommendations to the Board
of Directors regarding the selection of independent auditors; reviews
the independence of such auditors; approves the scope of the annual
audit activities of the independent auditors; approves the rendering
of any material non-audit services; approves the audit fee payable
to the independent auditors; reviews audit results; and reviews the
expense accounts of Company officers. During the past fiscal year,
this Committee held two meetings.
The Compensation & Long-Term Incentive Committee, currently comprised
of Richard Ingram*, Carroll Vinson, and Glenn Oxner, is responsible
for reviewing and making recommendations to the Board related to
salaries, wages, bonuses and benefits for officers of the Company
and for administering the Company's stock option program including
the granting of options thereunder. This Committee held one meeting
during the last fiscal year.
The Nominating Committee is comprised of James Lane*, Richard Ingram
and Sibyl Fishburn. This Committee is responsible for reviewing and
recommending changes in size and composition of the Board of Directors
and evaluating and recommending candidates for election to the Company's
Board. This Committee met once in 1995. The Nominating Committee
will consider nominees recommended by shareholders if the recommendations
are forwarded to the Secretary of the Company for transmission to
the Nominating Committee not less than 30 days nor more than 60 days
prior to the meeting, and are otherwise in compliance with the Company's
Bylaws. The Committee routinely meets at the regular quarterly meeting
of the Board of Directors next preceding the Annual Meeting. Nominations
for election as Directors may also be made from the floor at the
Annual Meeting of Shareholders provided such nominations are in accordance
with the notice procedures set in the Company's Bylaws.
During fiscal year 1995, the Board of Directors met four times. All
members of the Board attended 75% or more of the aggregate of the
total number of meetings of the Board of Directors and of the committees
of the Board on which they served.
Directors who are not employees of the Company presently receive
a fee of $1,000 for attendance at each meeting of the Board of Directors,
a $8,000 annual retainer fee, and reimbursement for travel and other
expenses related to attendance at meetings. Committee members presently
receive a fee of $500 for each meeting attended which is not held
on the same day as a Board meeting. The Director who is an employee
is not paid extra compensation for his service on the Board or any
committee of the Board.
*Denotes chairman of respective committee.
Compliance with Section 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and any persons who own
more than 10% of the common stock of the Company to file with the
Securities and Exchange Commission and the Nasdaq National Market
System reports of ownership and changes in ownership of common stock.
Officers and directors are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file. Based
solely on review of the copies of such reports furnished to the Company
or written representation that no other reports were required, the
Company believes that, during 1994, all filing requirements applicable
to its officers and directors were complied with except that Sibyl
N. Fishburn, Director, inadvertently filed late one report covering
two transactions.
THE BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The basic policies that determine cash compensation for the Company's
executive officers, other than its Vice President, Finance, were
formulated in 1987. Some factors that were considered in developing
the policies were as follows. The Company had suffered net losses
in each of the previous five years. Return on average equity had
been below 10% in 14 of the previous 19 years. The Chemical Segment
incurred a loss in 1986 and sales were lower than 10 years earlier.
The Metals Segment had losses for each of the prior four years. Management
changes included a new Chief Executive Officer, a new President for
the Chemical Division and restructuring of management that increased
the responsibility and authority of certain senior managers.
The cash compensation policies implemented in 1987 were intended
to provide senior managers, including the executive officers, with
strong motivation to strive diligently to produce and maintain a
high level of profitability. The principal elements of the policies
are as follows. Base salaries are increased only as a result of
promotions or to establish parity among senior managers. The intent
is to provide senior managers with base salaries lower than their
peers in comparable companies. Offsetting the low salaries are short-term
incentive plans that provide cash bonuses equal to a percent of profits
before income taxes in excess of a predetermined percentage of equity.
Subsidiary and divisional senior managers participate in profit sharing
pools determined solely by the performance of their respective subsidiary
or division while the Chief Executive Officer's bonus is based on
consolidated profitability. The overall effect is to make every senior
manager's cash compensation highly dependent on the profitability
of the unit for which they work. No performance criteria except profits
as related to equity were used to determine 1995 compensation for
the Chief Executive Officer and other executive officers other than
the Vice President, Finance.
The Summary Compensation Table and Notes thereto provide details
of the short-term incentives covering the Chief Executive Officer
and other executive officers other than the Vice President, Finance
for each of the past three years. It also shows for each of the past
three years the portion of cash compensation representing bonuses
dependent upon profitability.
The Vice President, Finance is paid a salary believed to be toward
the lower end of the range of salaries for this position in comparable
companies. He is also eligible for a discretionary bonus based on
various considerations, including the company's financial results,
compensation of other executive employees and an evaluation of his
job performance.
The Committee believes that the price of the Company's stock in the
long run will reflect the Company's growth and profitability. The
short-term incentives described above motivate senior management
to strive for such growth and profitability.
A long-term incentive is also provided to senior managers that links
their interests directly to those of the Company's shareholders.
Options are granted to executive officers under a qualified stock
option plan that only rewards them if the price of the Company's
stock increases after the dates on which the options are granted.
The Committee believes that the incentive programs provided to senior
managers have contributed significantly to the Company's improved
financial performance since 1987. The Committee reviews the compensation
of the Company's executive officers annually and believes such compensation
has been fair to both the executives and the Company's shareholders.
The Compensation & Long-Term Incentive Committee
Richard E. Ingram, Chairman
Glenn R. Oxner
Carroll D. Vinson
Common Stock Performance
As part of the executive compensation information presented in this
Proxy Statement, the Securities and Exchange Commission requires
a five-year comparison of stock performance for the Company with
stock performances of a broad equity market index and an index of
appropriate similar companies. The Company has selected as a broad
equity market index comparison the S&P 500. Because the Company is
in two distinctly different businesses, there is no similar industry
"peer" group with which to compare. Thus, the Company has selected
as the most appropriate peer group the Russell 2000 which is an index
of companies with comparable market capitalizations.
<TABLE>
SYNALLOY CORPORATION
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
SYNALLOY CORPORATION, S & P 500 AND THE RUSSELL 2000
<CAPTION>
--------Cumulative Total Return--------
12/90 12/91 12/92 12/93 12/94 12/95
<S> <C> <C> <C> <C> <C> <C>
Synalloy Corporation 100 183 558 312 397 720
S & P 500 100 130 140 155 157 215
Russell 2000 100 146 173 206 202 260
Indexed Total Return with dividends reinvested Base = 100
</TABLE>
REMUNERATION OF DIRECTORS AND OFFICERS
The following table sets forth the total annual compensation paid
or accrued by the Company and/or its subsidiaries to or for the account
of each of the executive officers of the Company whose total cash
compensation for the fiscal year ended December 30, 1995 exceeded
$100,000.
<TABLE>
Summary Compensation Table
<CAPTION>
Long
Term
Compen-
sation
Annual Compensation Awards
Name, Age and Principal Position Year Salary Bonus Options All
Other
Com-
pensa
tion
<S> <C> <C> <C> <C> <C>
James G. Lane, Jr., Age 62 1995 $120,000 $894,431 (1) 0 $4,500
Chairman of the Board and Chief 1994 120,000 397,981 0 4,500
Executive Officer since 1987. 1993 120,000 239,231 10000 7,075
Joseph N. Avento, Age 54 1995 72,000 729,786 0 4,500
President, Bristol Metals, Inc., 1994 72,000 172,000 0 4,251
a wholly-owned subsidiary of 1993 72,000 69,684 10,000 5,902
the Company, since January 1992.
He joined the Company in 1984
and served as Vice President
of Sales for 8 years.
Herbert B. Moore, Jr., Age 50 1995 67,000 124,120 0 4,500
President, Blackman Uhler 1994 67,000 151,129 0 4,500
Chemical,a Division of the 1993 67,000 105,057 10,000 6,474
Company, since September 1986.
Erwin C. Thornton, Age 67 1995 57,000 91,000 0 21,588
Executive Vice President, 1994 57,000 110,000 0 20,251
Blackman Uhler Chemical Division, 1993 57,000 83,400 0 20,282
since 1987.
Gregory M. Bowie, Age 46 1995 80,000 92,346 0 1,208
Vice President, Finance since
May 1994.From 1989 to 1994,
he was Vice President, Finance,
Lowndes Corporation, a fabricator
of concrete products primarily
for industrial and governmental
construction projects.
(1)$715,000 deferred under Deferred Compensation Agreement.
</TABLE>
NOTES
Employment Contract - The Company has a written employment agreement
with James G. Lane, Jr. pursuant to which he is entitled to receive
an annual base salary of $120,000 until December 31, 1998. In addition
to his salary, he is entitled to "bonus-compensation" equal to a
percentage (5% for 1993 and 1994, 4.5% for 1995 and 4% for 1996)
of net earnings before income taxes in excess of a predetermined
percent (10% for 1993, 1994,1995 and 1996) of average shareholders'
equity. This agreement also provides certain fringe benefits and
contains provisions for salary continuation benefits in the event
of Mr. Lane's disability or death, under specified conditions, during
the term of his employment by the Company.
Bonuses - Cash bonuses based on a short-term incentive plan provide
for bonuses to be paid to senior divisional managers in an aggregate
amount equal to 10% of the net earnings before income taxes in excess
of a predetermined percentage (10% in 1993, 1994, 1995 and 1996)
of average shareholders' equity for the applicable division or subsidiary.
Mr. Lane does not participate in these bonus plans.
For 1994, the incentives shown above were calculated on net earnings
before deducting environmental cleanup charges since such charges
related to pre-1986 conditions.
Other Annual Compensation - No executive officer named in the cash
compensation table nor the executive officers of the Company as a
group received from the Company or any of its subsidiaries personal
benefits or any other compensation which is the lesser of either
$50,000 or 10% of the compensation reported in the cash compensation
table above.
Long-Term Compensation - There were 4,000 options granted in the
last fiscal year. The Company's only long-term incentive plan is
its qualified stock option plans.
All Other Compensation - Includes the following plans which are detailed
under Retirement Plans.
<TABLE>
COMPANY CONTRIBUTIONS TO 401(K) SAVINGS PLAN
<CAPTION>
Named Executive 1995 1994 1993
<S> <C> <C> <C>
J.G. Lane, Jr. $4,500 $4,500 $7,075
J.N. Avento 4,500 4,251 5,902
H.B. Moore, Jr. 4,500 4,500 6,474
E.C. Thornton 4,500 4,212 5,118
G.M. Bowie 1,208
</TABLE>
<TABLE>
COMPANY CONTRIBUTIONS TO SALARY CONTINUATION AGREEMENTS
<CAPTION>
Named Executive 1995 1994 1993
<S> <C> <C> <C>
E.C. Thornton $17,088 $16,039 $15,164
</TABLE>
Stock Option Plans
Currently there are options outstanding under the 1983 Stock Option
Plan, and outstanding and available to grant under the 1988 and 1994
Stock Option Plans approved by stockholders. The Plans provide for
such options to be granted to officers, non-employed directors and
key employees of the Company, its subsidiaries and divisions to provide
them with an opportunity to obtain an equity interest in the Company
and to increase their stake in the future growth and prosperity of
the Company. The option price for options granted under these plans
is 100% of the fair market value of the Company's Common Stock on
the date the option is granted. Certain restrictions exist as to
the time in which options can be exercised. Under the 1983 Plan,
all options are presently 100% vested and the grant period has expired.
With regard to the 1988 Plan, approved at the May 26, 1988 Annual
Meeting, options may be exercised beginning one year after date of
grant at a rate of 20% annually on a cumulative basis. In the event
that (a) all or substantially all of the assets or Common Stock of
the Company (or a subsidiary or division of the Company in which
he is employed) is sold to an entity not affiliated with the Company,
or (b) a merger or share exchange with an unaffiliated party occurs
in which the Company is not the surviving entity, an option holder
may exercise in addition to the above, 50% of the options not otherwise
exercisable because of the holding period requirement subject to
certain limitations. No options may be exercised under the 1983 and
1988 Plans after 10 years from date of grant. The incentive stock
options are not transferable other than by death and can only be
exercised during the employee's lifetime by the employee. In no event
shall options under all Plans having an aggregate fair market value
in excess of $100,000 at the dates of grants become exercisable by
an optionee for the first time during a calendar year. Under the
1994 Plan, approved at the April 29, 1994 Annual meeting, non-employed
directors as of his or her election or re-election as a member of
the Board will automatically receive an option for 1,000 common shares.
In the event a person ceases to be a non-employee director for reasons
other than death, the unexpired options must be exercised within
three years not to exceed 10 years after date of grant. At February
26, 1996, there were 142,008 options outstanding under all plans
of which 64,008 were exercisable.
Option/SAR Grants in Last Fiscal Year
No options were granted to the named executive officers during the
past fiscal year.
<TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Table
The following table summarizes options granted and exercised during
1995 and presents the value of unexercised options held by the named
executives at fiscal year end.
<CAPTION>
Name Shares Acquired Value Number of Value of
On Exercise Realized Unexercised Unexercised
(1) (2) Options at in the Money
Fiscal Year-End Options at
Exercisable (E) Fiscal Year
Unexercisable (U) End
Exercisable (E)
Unexercisable
(U) (1)
<S> <C> <C> <C> <C>
J.G. Lane 20,000 $310,834 6,000 (E) $ 68,250 (E)
9,000 (U) 102,375 (U)
J.N. Avento 10,000 179,305 27,250 (E) 481,094 (E)
9,000 (U) 102,375 (U)
H.B. Moore, Jr. 0 6,000 (E) 68,250 (E)
9,000 (U) 102,375 (U)
E.C. Thornton 3,300 58,376
G.M. Bowie 0 6,000 (E) 53,748 (E)
24,000 (U) 214,992 (U)
(1) Values are calculated by subtracting the exercise price from
the average of the high and low prices as quoted on NASDAQ National
Market Listing on the date prior to exercise or at year end, as appropriate.
(2) Shares acquired in 1995 on exercise of options have not been
registered and cannot be freely traded in the open market for two
years after the exercise date. Based on a study of actual trades
in restricted stock as reported in a weekly national business magazine,
the Company believes that the fair market value of the shares on
the date of exercise were approximately 35% less than the average
of the high and low prices as quoted on NASDAQ National Market Listing.
Based on this valuation, the value realized would be as follows:
J.G. Lane, Jr. - $185,709; J. N. Avento - $109,743; and E. C. Thornton
- - $35,250.
</TABLE>
Retirement Plans
Salary Continuation Agreements
The Company has salary continuation agreements with one officer and
five former officers, which provide for payments at retirement or
death ranging from $9,750 to $28,500 per annum for 10 years in the
event of pre-retirement death or the longer of 10 years or life following
retirement. The present value of the future payments which will be
due at retirement are accrued annually through the retirement date.
The Company is the owner and beneficiary of life insurance policies
on the lives of these persons. Based upon reasonable assumption as
to mortality, dividends and other factors, the Company expects to
recover the cost of paying said benefits, including a factor for
the use of corporate funds, through keyman life insurance proceeds.
The present value of the above agreements are accrued. The cumulative
amount of this accrual is $552,353.
401(k)/ESOP Plan
The Company has a 401(k)/Employee Stock Ownership Plan (the "Plan").
All employees (except those employees who are entitled to participate
in Union-sponsored plans) who are 21 years or older will be eligible
to participate on any January 1 or July 1 following one year of service
with the Company.
Employees are permitted to contribute up to 20% of earnings not to
exceed a dollar amount set by the Internal Revenue Service on a pretax
basis through payroll deduction. Employees are permitted to change
the election daily and can revoke the election at any time. Employee
contributions are 100% vested at all times. The employee can invest
his deferred contribution in one or all of six (6) funds; however,
employee contributions cannot be invested in Company stock.
Contributions by the Company will be made primarily in Company Stock.
For each plan year, the Company shall contribute on behalf of each
participant who is eligible to share in matching contribution for
the plan year, a discretionary matching contribution equal to a percentage
which is determined each year by the Board of Directors subject to
a maximum of 3% in 1995 and 1996. The matching contribution is allocated
on June 30 and December 31 of each plan year. In addition to the
matching contribution, the Company may make a discretionary contribution
which shall be distributed to all eligible participants regardless
of whether they contribute to the Plan. No discretionary contributions
have been made to the Plan. Participants must be actively employed
on June 30 and December 31 in order to share in the matching contribution
and discretionary contribution for the respective valuation periods.
Distributions are not permitted before age 59 1/2 except in the
event of death, disability, termination of employment or reason of
proven financial hardship as defined according to IRS guidelines.
The Plan provides for payment of the participant's account balance
upon death, disability or retirement in the form of cash or Company
stock or both. If employment terminates for reasons other than retirement,
disability or death (e.g. resignation or termination), the discretionary
portion of a participant's account balance will be vested based as
follows: Zero to four years services - 0% vested; five or more years
- - 100% vested.
Unvested amounts are forfeited and allocated to participants eligible
to share for a plan year. The Plan permits rollovers from qualified
plans at the discretion of the Company. The ESOP is permitted to
borrow money to purchase Company stock. All Company stock acquired
by the Plan with the proceeds of a loan are maintained in a suspense
account and are withdrawn and allocated to participant's accounts
as the loan is paid. While a participant in the Plan, employees may
direct the trustee to vote shares allocated to their account in accordance
with their wishes.
All Plan assets are held by an independent trustee. The trustee invests
all assets and makes payment of Plan benefits. The Plan is managed
and administered by an independent administrator and a Pension Committee
comprised of the corporate officers of the Company. Expenses incurred
for the administration of the Plan are paid by the Company. The Plan
reserves to the Board of Directors of the Company the right to amend
the Plan in any manner or terminate the Plan at any time. The Plan
may be amended to preserve the qualifications of the Plan under the
applicable provisions of the Internal Revenue Code, as amended from
time to time. For the year ended 1995, the Company's total matching
contribution was $225,081.
APPROVAL OF INCREASING AUTHORIZED SHARES
(Item 2 on Proxy Card)
The Board of Directors has unanimously approved and recommends to
its shareholders an amendment (the "Proposed Amendment") to ARTICLE
IV of its Certificate of Incorporation increasing the number of shares
of Common Stock, $1.00 par value, which the Company has the authority
to issue from 8,000,000 shares to 12,000,000. The Proposed Amendment
would become effective upon the filing of a Certificate of Amendment
with the Secretary of State of Delaware; the Board of Directors'
resolution recommending the Proposed Amendment also provides that
Board of Directors may abandon such Proposed Amendment prior to filing
without further action by the Shareholders. Upon the effectiveness
of the Proposed Amendment, the fourth paragraph of ARTICLE IV of
the Company's Certificate of Incorporation would read in its entirety
as follows:
The aggregate number of shares of all classes of stock which the
Corporation shall have authority to issue is twelve million (12,000,000)
shares of Common Stock, par value one dollar ($1.00) per share.
Except as may be provided by the laws of the State of Delaware or
this Certificate of Incorporation, the holders of the Common Stock
shall have exclusively all rights of the stockholders. The holders
of the Common Stock shall be entitled to one (1) vote per share and
to vote such shares cumulatively at all elections of Directors of
the Corporation.
As of February 26, 1996, there were 7,013,125 shares of Common Stock
issued and outstanding and 986,875 shares of the Company's Common
Stock authorized and issued but owned by the Company and held as
"treasury shares." In addition, pursuant to the Rights Agreement
dated as of March 26, 1989 between the Company and Wachovia Bank
& Trust Co., N. A., as Rights Agent, the Board of Directors of the
Company has authorized and declared a dividend distribution of one
(1) right for each share of Common Stock of the Company outstanding
prior to a Distribution Date (as defined in the Plan). Each right
represents the right to purchase four-tenths (4/10ths) of one (1)
share of Common Stock subject to the terms and conditions of the
Rights Agreement. The Company also has an aggregate of 142,008 shares
of Common Stock reserved for issuance upon exercise of options granted
under the Company's Stock Option Plans (as described in "Remuneration
of Directors and Officers").
The Board of Directors believes it is important for the Company to
have a sufficient reserve of shares of Common Stock available for
potential future needs of the Company. Increasing the number of
authorized shares of the Company will provide shares which will be
available for both the issuance upon exercise of options as described
above and upon exercise of rights following a distribution event.
Moreover, increasing the number of authorized shares of Common Stock
makes more shares available for general corporate purposes, including
any future issuance of Common Stock for public or private offerings,
the payment of stock dividends and the subdivision of outstanding
shares through stock splits, the acquisition of other companies or
assets and any other desirable corporate purpose. Having such additional
authorized shares of Common Stock available for issuance in the future
will allow shares to be issued in many instances, by the Board of
Directors without the expense and delay of a special shareholders'
meeting. The Company does not have any plans, agreements, understandings
or arrangements that could or will result in the issuance of any
Common Stock except as discussed above. However, in certain circumstances,
the issuance of additional shares could substantially dilute existing
shareholders.
Under certain circumstances, the shares available for additional
issuance could be used to create voting impediments or to frustrate
persons seeking to effect a merger or otherwise gain control of the
Company. Also, any of such additional shares of Common Stock could
be privately placed with purchasers who might side with the management
of the Company in opposing any tender offer of a third party. However,
the Proposed Amendment is not being sought in order to frustrate
any attempt to acquire control of the Company and the Company is
not aware of any such intent. The Company does not have any other
charter provision which could be considered an anti-takeover measure.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE INCREASE
IN AUTHORIZED COMMON STOCK.
Approval of the Proposed Amendment requires the affirmative vote
of the holders of a majority of the outstanding shares of the Company's
Common Stock entitled to vote at the meeting. Abstentions and broker
non votes will not be counted in favor of the proposed amendment.
APPROVAL OF INDEPENDENT AUDITORS
(Item 3 on Proxy Card)
The Board of Directors, at the recommendation of its Audit Committee,
elected Ernst & Young LLP to conduct the annual examination of the
financial statements of the Company and its consolidated subsidiaries
for the fiscal year ended December 30, 1995. The selection of this
firm for fiscal year ending December 28, 1996, will be submitted
for ratification by the shareholders at the Annual Meeting. Ernst
& Young LLP has no financial interest, direct or indirect, in the
Company or any of its subsidiaries, and they do not have any connection
with the Company or any of its subsidiaries except in their professional
capacity as independent auditors.
The ratification by the shareholders of the selection of Ernst &
Young LLP as independent auditors is not required by law or by the
Bylaws of the Company. The Board of Directors consistent with previous
practices is, nevertheless, submitting this selection to the shareholders
to ascertain their views. If this selection is not ratified at the
Annual Meeting, the Board of Directors intends to reconsider its
selection of independent auditors for fiscal year ending December
28, 1996.
The Audit Committee, which is comprised of Directors who are not
employees of the Company, approves in advance all non-audit services
to be provided by Ernst & Young LLP and believes they have no effect
on audit independence.
Representatives of Ernst & Young LLP will be present at the Annual
Meeting with an opportunity to make statements, if they so desire,
and to respond to appropriate questions with respect to that firm's
examination of the Company's financial statements for the fiscal
year ended December 30, 1995.
The Board of Directors recommends a vote "FOR" ratification of the
selection of Ernst & Young LLP as independent auditors for the fiscal
year ending December 28, 1996.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Directors does not know of any other matters which may
come before the meeting. However, if any other matters do properly
come before the meeting, it is the intention of the persons named
as proxies to vote upon them in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Cheryl C. Carter
Secretary
APPENDIX - PROXY CARD
SYNALLOY CORPORATION
POST OFFICE BOX 5627. SPARTANBURG, SC 29304
PROXY
This proxy is Solicited by The Board of Directors for the Annual
Meeting of Shareholders on April 30, 1996.
The undersigned hereby appoints James G. Lane, Jr., Carroll D. Vinson
and Glenn R. Oxner, or any one or more of them, each with power of
substitution, as lawful proxy, to vote all the shares of Common Stock
of Synalloy Corporation which the undersigned would be entitled to
vote if personally present at the Annual Shareholders' Meeting of
Synalloy Corporation to be held at Spartanburg, S.C. on Tuesday,
April 30, 1996, at 10:00 a.m. local time, and at any adjournment
thereof, upon such business as may properly come before the meeting.
Said proxies will vote on the items set forth in the Notice of Annual
Meeting and Proxy Statement (receipt of which is hereby acknowledged)
as specified on this card, and are authorized to vote in their discretion
when a vote is not specified. If no specification is made, it is
the intention of said proxies to vote the shares represented by the
proxy in favor of the proposals.
Please sign on reverse side and return in the enclosed postage-paid
envelope.
(1) Election of Directors
- --- For all nominees listed (except as marked to the contrary)
- --- Withhold authority to vote for all nominees listed
Sibyl N. Fishburn, Richard E. Ingram, James G. Lane, Jr., Glenn R.
Oxner and Carroll D. Vinson
(To withhold authority to vote for any of the above nominees, write
that nominee's name below)
- -----------------------------------------------------------
(2) Proposal to amend Article IV of the Certificate of Incorporation
to increase the authorized Common Stock of the Company from 8,000,000
shares, par value $1.00 per share, to 12,000,000, par value $1.00
per share;
FOR AGAINST ABSTAIN
(3) Proposal to approve the selection of Ernst & Young as auditors
for the fiscal year ending December 28, 1996.
FOR AGAINST ABSTAIN
(4) Upon any other matter that may properly come before the meeting
or any adjournment thereof, as the proxies in their discretion may
determine.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made,
this Proxy will be voted for proposals 1, 2 and 3.
Date:---------------------------
- --------------------------------
- --------------------------------
Signature of Stockholder(s)
Please sign this proxy exactly as your name appears hereon. Joint
owners should each sign. Trustees, executors, administrators and
others signing in a representative capacity should indicate that
capacity. An authorized officer may sign on behalf of a corporation
and should indicate the name of the corporation and his capacity.
