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:
( ) 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 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 appropriate box)
(x) No fee required
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a6(i)(2) or
Item 22a(2) of Schedule 14A
( ) 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 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:----------------------------------------------
SYNALLOY CORPORATION
Post Office Box 5627
Spartanburg, South Carolina 29304
NOTICE OF ANNUAL MEETING
May 18, 2000
TO THE STOCKHOLDERS OF SYNALLOY CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders of Synalloy
Corporation will be held at the corporate offices of the Company, Croft
Industrial Park, Spartanburg, South Carolina, on Thursday, May 18, 2000, at
10:00 a.m. local time. The following important matters will be presented
for your consideration:
To elect five (5) directors to serve until the next annual meeting of
shareholders and until their successors are elected and qualified;
To ratify the selection of Ernst & Young LLP, independent certified
public accountants, as independent auditors for fiscal year ending
December 30, 2000;
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 April 14, 2000 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 19, 2000
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 1999 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
May 18, 2000
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 May 18, 2000, 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 19, 2000.
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 April 14, 2000. On March 31, 2000, the
Company had outstanding 6,291,061 (excluding 1,708,939 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 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 2000 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 2000 Annual Meeting of
Shareholders, tentatively scheduled for April 27, 2001, 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 November 27, 2000 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 January 1, 2000, as filed with the Securities and Exchange
Commission, accompanies this Proxy Statement and is incorporated by
reference herein.
<TABLE>
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 March 31, 2000.
Amount and
Nature of Percent
Name and Address of Beneficial of
Beneficial Owner Ownership Class
<S> <C> <C>
Dimensional Fund Advisors, Inc. 533,132 (1) 8.47
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
Dimensional Fund Advisors, Inc. 481,850 (2) 7.66
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
T. Rowe Price Associates, Inc. 475,000 (3) 7.56
100 East Pratt Street
Baltimore, MD 21202
James G. Lane, Jr. 346,447 (4) 5.49
PO Box 5627
Spartanburg, SC 29304
(1) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor under Section 203 of the Investment Advisors
Act of 1940, furnishes investment advice to four investment
companies registered under the Investment Company Act of 1940, and
serves as investment manager to certain other investment vehicles,
including commingled group trusts. (These investment companies and
investment vehicles are the "Portfolios"). In its role as
investment advisor and investment manager, Dimensional possesses
both voting and investment power over the securities of the Issuer
described in this schedule that are owned by the Portfolios. All
securities reported in this schedule are owned by the Portfolios,
and Dimensional disclaims beneficial ownership of such securities.
This information was obtained from Dimensional 13G dated February
11, 2000.
(2) Royce & Associates, Inc. ("Royce") is an investment advisor
registered with the Securities & Exchange Commission under the
Investment Advisors Act of 1940. Mr. Charles M. Royce may be
deemed to be a controlling person of Royce and as such may be
deemed to beneficially own the shares of Common Stock of the
Company beneficially owned by Royce. Mr. Royce does not own any
shares outside of Royce and disclaims beneficial ownership of the
shares held by Royce. This information was obtained from Royce's
13G dated February 1, 2000.
(3) These securities are owned by various individual and institutional
investors, including the T. Rowe Price Small-Cap Value Fund, Inc.
which owns 450,000 shares, representing 7.2% of the shares
outstanding, 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, 2000.
(4) The aggregate number of shares of Common Stock owned beneficially
by Mr. Lane includes direct ownership of 150,574 shares; indirect
ownership of 8,473 shares held by the trustee under Synalloy's
401(k)/ESOP Plan, 1,400 shares held in an IRA, 171,750 shares
owned by his spouse of which Mr. Lane disclaims beneficial
ownership, and options to purchase 14,250 shares exercisable
within 60 days.
</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 re-
quested, 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 March 31, 2000,
and certain other information. The Board Committee assignments are as of
March 31, 2000.
<TABLE>
Common Stock
Beneficially
Owned
as of
Name, Age, Principal Occupation, Other Director March 31, 2000
Directorships and Other Information Since (Percent of
Class)
<S> <C> <C>
Sibyl N. Fishburn, age 64
Mrs. Fishburn is a graduate of Hollins College, 1979 96,993 (1)(6)
Roanoke, VA. She serves on the Board (1.54)
of the Virginia Nature Conservancy.
Mrs. Fishburn is a member of the Audit
and Nominating Committees
Richard E. Ingram, age 58
Mr. Ingram is Chairman of the Board and Chief 1989 37,700 (2)(6)
Executive Officer of BuildersFirst.com, *
an E business serving homebuilders with
construction loans and other products and services,
in Greenville, SC. He was Chairman of the Board
of Builder Marts of America, Inc. (BMA) from 1988 to
1999 and Chief Executive Officer from May 1998 to August
1999, a national distributor of lumber and building
materials in Greenville, SC. He is a director
of Ingram Enterprises, Inc., a privately-owned company.
He is also a Director of SLI (NYSE:SLI), a manufacturer
of various lighting products. He is a member
of the Executive, Nominating and
Compensation & Long-Term Incentive Committees.
James G. Lane, Jr., age 66
Mr. Lane has served as Chief Executive Officer 1986 346,447 (3)
and Chairman of the Board of the Company (5.49)
since 1987. He is a member of the
Executive and Nominating Committees.
Glenn R. Oxner, age 61
Mr. Oxner is Chairman and Chief Executive Officer of 1989 29,000 (4)(6)
Edgar M. Norris Co., Inc., an investment securities *
company in Greenville, SC. He is a
member of the Audit and Compensation
& Long-Term Incentive Committees.
Carroll D. Vinson, age 59
Mr. Vinson is owner of C. D. Vinson & Associates, 1987 21,925 (5)(6)
a consulting firm, and a principal in VH, LLC *
which is a privately-owned real estate investment
company. Until December 31, 1998,
Mr. Vinson was 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, and until September 30, 1998
Mr. Vinson served as Chief Operating
Officer of Insignia Properties Trust, a real estate
investment trust which is affiliated with Insignia.
He is a member of the Audit, Executive
and Compensation & Long-Term
Incentive Committees.
All Directors and Officers as a group 685,650 (7)
(10 including those listed above) (10.73)
* Less than one (1) percent
</TABLE>
(1) Includes indirect ownership of 7,065 shares by spouse; 19,000
shares held in trust for children of which Mrs. Fishburn's spouse
is trustee; and 8,000 shares held in irrevocable trust over which
Mrs. Fishburn has certain powers.
(2) Includes indirect ownership of 16,550 shares held by Donna C.
Ingram Trust and 900 shares held in an IRA.
(3) Includes indirect ownership of 8,473 shares held by the trustee
under Synalloy's 401(k)/ESOP Plan; 1,400 shares held by an IRA;
and 171,750 shares owned by his spouse and options to purchase
14,250 shares exercisable within 60 days.
(4) Includes 20,000 shares held jointly by Mr. Oxner and his spouse.
(5) Includes indirect ownership by spouse of 1,575 shares and 10,000
owned by a family partnership.
(6) Includes options to purchase 9,000 shares exercisable pursuant to
the 1994 Non-Employee Directors' Stock Option Plan.
(7) Includes 133,850 shares which are currently subject to exercisable
options, and 23,183 shares allocated under the Company's
401(k)/ESOP.
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, Chair, 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 one
time.
The Audit Committee members are Glenn Oxner, Chair, 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. At its February 10, 2000 meeting, The Board of Directors
adopted an Audit Committee Charter for the Company in accordance with Item
7 of schedule 14A under the Securities Exchange Act of 1934. A copy of this
Charter is attached as Appendix A to this Proxy Statement. The Company will
comply with the new proxy and information disclosure requirements for all
proxy and information statements relating to votes of the Company's
shareholders occurring after December 15, 2000.
The Compensation & Long-Term Incentive Committee, currently comprised of
Richard Ingram, Chair, 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 three meetings during the last
fiscal year.
The Nominating and evaluating and recommending candidates for election to
the Company's Board. This Committee met once in 1999. 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.
The Special Committee, comprised of Carroll Vinson, Chair, Sibyl Fishburn
and Glenn Oxner, reviews and evaluates proposals received by the Company
relative to the sale or merger of the Company or any significant part of
the Company. The Committee may consult with attorneys and investment
advisors and makes recommendations to the Board relative to the appropriate
response to any such matters. It met one time in 1999.
During fiscal year 1999, 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 $10,000
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. Pursuant to this arrangement, Ms. Fishburn was paid
$16,500, and Messrs. Ingram, Oxner, Vinson were paid $14,500, $18,500 and
$19,500, respectively, during fiscal 1999. Each non-employee director
receives an option to purchase 1,500 shares of the Company's stock upon
election or re-election (see Stock Option Plans).The Director who is an
employee is not paid extra compensation for his service on the Board or any
committee of the Board.
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 1999, all filing
requirements applicable to its officers and directors were met. Committee
is comprised of James Lane, Chair, Richard Ingram and Sibyl Fishburn. This
Committee is responsible for reviewing and recommending changes in size and
composition of the Board of Directors
THE BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's cash compensation policies are 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 infrequently except as a result of promotions or to establish
parity among senior managers. Mr. Lane's base salary was increased in 1999
after remaining unchanged since 1987. The intent is to provide senior
managers with base salaries lower than their peers in comparable companies.
Offsetting the lower 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, divisional and group
senior managers participate in profit sharing pools determined solely by
the performance of their respective subsidiary, division or group 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 he/she works. Mr.
Braam's salary is subject to an employment agreement negotiated at the time
Manufacturers Chemicals Corporation was purchased by the Company. No
performance criteria except profits as related to equity were used to
determine 1999 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 qualified stock option plans adopted in
1988 and 1998 that only rewards them if the price of the Company's stock
increases after the dates on which the options are granted. Options are not
granted on a regular basis nor on any specific criteria. They are granted
from time to time based on the Committee's determination that they will
likely increase the long-term motivation of the recipient without an
unreasonable amount of potential dilution to shares outstanding.
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 Com-
pany has selected as the most appropriate peer group the Russell 2000 which
is an index of companies with comparable market capitalizations.
<TABLE>
Comparison of 5-Year Cumulative Total Return
Among Synalloy Corporation, the S & P 500 Index
and the Russell 2000 Index
($100 invested on 12/31/94 in the stock or
index - including reinvestment of dividends.
Fiscal year ending December 31.)
Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99
<S> <C> <C> <C> <C> <C> <C>
SYNC 100 181.55 138.25 132.54 81.23 71.46
S & P 100 137.58 169.17 225.61 290.09 351.13
Russell 200 100 127.48 154.73 203.91 190.75 187.92
</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 January 1, 2000 exceeded $100,000.
<TABLE>
Summary Compensation Table
All
Other
Salary Bonus Compensation
Name, Age and Principal Position Year ($) ($) ($)
<S> <C> <C> <C> <C>
James G. Lane, Jr., Age 66 1999 180,000 - 6,400
Chairman of the Board and Chief 1998 120,000 - 6,400
Executive Officer since 1987. 1997 120,000 169,271 6,400
Ronald H. Braam, Age 56 1999 156,000 7,870 15,440
President, Synalloy Chemicals Group since 1998 156,000 10,451 13,716
December 1999; President of Manufacturers 1997 156,000 22,533 16,933
Chemicals, L.P., wholly-owned by the
Company from October 1996 to
December 1999. From 1976 to 1996
he was President of Manufacturers Soap
and Chemical Co., Inc. and
Manufacturers Chemicals Corp.,
the acquired companies.
Joseph N. Avento, Age 58 1999 120,000 113,825 4,800
President, Bristol Metals, L.P., wholly 1998 120,000 - 5,717
owned by the Company, since January 1992. 1997 120,000 22,924 6,400
Ronald L. Matthews, Age 51 1999 120,000 - 4,875
President of Blackman Uhler Colors
Group since December 1999.
From October 1996 to December 1999,
he was Sales Manager for Blackman Uhler
Chemical, a Division of the Company.
From 1991 through 1996, he was
Dyestuff Business Manager for Yorkshire
Americas, Greenville, South Carolina.
Gregory M. Bowie, Age 50 1999 107,000 40,000 4,880
Vice President, Finance since May 1994. 1998 104,000 15,000 5,593
1997 100,000 35,818 5,819
Herbert B. Moore, Jr., Age 54 1999 100,000 - 4,000
On December 1, 1999, Mr. Moore 1998 100,000 - 5,961
was named Executive Director of 1997 100,000 49,030 6,285
Business Development, Blackman Uhler
Colors Group. From September
1986 to December 1999, he was
President of Blackman Uhler Chemical,
a Division of the Company.
</TABLE>
NOTES
Employment Contracts - The Company has a written employment agreement with
James G. Lane, Jr. pursuant to which he is entitled to receive an annual
base salary, effective January 1, 2000, of $180,000 until December 31,
2000. In addition to his salary, he is entitled to "bonus-compensation"
equal to a percentage (4% for 2000) of net earnings before income taxes in
excess of a predetermined percent (10% for 2000) 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.
The Company has a written employment agreement with Mr. Braam that provides
an annual salary of $156,000 and participation in the Management Incentive
Plan, if any, for Manufacturers Chemicals Corporation through November 25,
2000. He is also a participant in the Management Incentive Plan beginning
January 1, 2000 for the Chemicals Group excluding Manufacturers Chemicals
subject to a minimum bonus in 2000 of $25,000.
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 2000) for Messrs. Avento, Matthews and
Braam of average shareholders' equity for the applicable division or
subsidiary. Mr. Lane and Mr. Bowie do not participate in these bonus plans.
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 150,500 options granted in the last
fiscal year. The Company's only long-term incentive plan is its qualified
stock option plans.
All Other Compensation - This item was comprised of the following items
during 1999: (a) Company contributions allocated to each named individual
pursuant to the 401(k)/Employee Stock Ownership Plan: J. G. Lane, Jr. -
$6,400 in 1999, 1998 and 1997; J. N. Avento - $4,800 in 1999, $5,717 in
1998 and $6,400 in 1997; R.L. Matthews - $$4,875 in 1999; G. M. Bowie -
$4,880 in 1999, $5,593 in 1998 and $5,819 in 1997; R. H. Braam - $6,400 in
1999 and 1998; and H. B. Moore, Jr. - $4,000 in 1999, $5,961 in 1998 and
$6,285 in 1997;(b) the full dollar value of the entire premiums paid by the
Company on behalf of the named individuals for split dollar life insurance
policies: R. H. Braam - $9,040 in 1999. A significant portion of the
insurance premiums reported for Mr. Braam is for life insurance policies
and such premiums are recovered by the Company from the proceeds of the
policies.
Stock Option Plans
Currently, there are options outstanding under the 1988, 1994 and 1998
Stock Option Plans and available to grant under the 1994 and 1998 Plans
which have been approved by stockholders. The 1988 and 1998 Plans provide
for such options to be granted to officers 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 1994 Plan provides for
such options to be granted to non-employee directors. 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. With
regard to the 1988 Plan, approved at the May 26, 1988 Annual Meeting and
the 1998 Plan, approved at the April 30, 1998 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 di-
vision of the Company in which he/she 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 1988 and 1998
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. The grant period for the 1988 Plan
expired in January 1998. In no event shall options under all Plans having
an aggregate fair market value in excess of $100,000 at the dates of grants
become exercisable by an optionee for the first time during a calendar
year. Under the 1994 Plan, approved at the April 29, 1994 Annual Meeting,
non-employed directors as of his or her election or re-election as a member
of the Board will automatically receive an option for 1,500 common shares.
In the event a person ceases to be a non-employee director for reasons
other than death, the unexpired options must be exercised within three
years not to exceed 10 years after date of grant. At March 31, 2000, there
were 402,000 options outstanding under all plans of which 186,800 were
exercisable.
<TABLE>
Option/SAR Grants in Last Fiscal Year
The table below sets forth the value of the stock options granted to the
named executive officers during fiscal 1999.
Option Grants In Last Fiscal Year
Market
% of Price
Total Required
Options to
# of Granted Realize
Securities To Grant Grant
Underlying Employees Exercise Date Date
Options/ in the or Base Present Present
SARS Fiscal Price Expiration Value Value
Name Granted Year ($/Sh) Date (1) ($) (2) ($/Sh)
<S> <C> <C> <C> <C> <C> <C>
J.G.Lane 11,250 7.48% 7.750 4/29/09 $52,763 $12.44
J.N. Avento 7,500 4.98% 7.750 4/29/09 35,175 12.44
H.B. Moore, Jr. 7,500 4.98% 7.750 4/29/09 35,175 12.44
G.M. Bowie 7,500 4.98% 7.750 4/29/09 35,175 12.44
R.H. Braam 7,500 4.98% 7.750 4/29/09 35,175 12.44
10,000 6.64% 7.282 12/1/09 44,100 11.69
------
17,500
R.L. Matthews 6,000 3.99% 7.750 4/29/09 28,140 12.44
10,000 6.64% 7.282 12/1/09 44,100 11.69
------
16,000
(1) The options may be exercised beginning one year after date of
grant at a rate of 20% annually on a cumulative basis and expire
10 years after date of grant.
(2) In accordance with SEC rules, the dollar amounts under this column
are the result of calculations using the Black-Scholes based
option valuation model. The Company's use of this model should not
be construed as an endorsement of its accuracy at valuing options.
The following weighted-average assumptions were used in the above
table: risk-free interest rate of five percent; dividend yield of
two percent; volatility factors of the expected market price of
the Company's Common Shares of .728; and an expected life of the
option of seven years. The Black-Scholes option valuation model
was developed for use in estimating the fair value of traded
options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected
stock price volatility. Because the Company's stock option plans
are not registered, optionees are required to hold the stock for a
minimum of one year after exercise. Because the Company's options
have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its options. The actual value
of the options, if any, will depend on the extent to which the
market value of the Common Stock exceeds the exercise price of the
option one year after the date of exercise.
</TABLE>
<TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Table
The following table summarizes the number of unexercised options held by
the named executives at fiscal 1999 year end.
Value of
Unexercised
in-the-
Number of Money
Unexercised Options at
at Fiscal Fiscal
Year-End Year End
Shares Shares Exercisable Exercisable
Acquired Acquired Value (E) (E)
on on Realized Unexercisable Unexercisable
Name Grant Exercise (1) (U) (U) (1)
<S> <C> <C> <C> <C> <C>
J.G. Lane 11,250 0 N/A 9,000(E) 0(E)
20,250(U) 0(U)
R. H. Braam 17,500 0 N/A 4,000(E) 0(E)
23,500(U) 0(U)
J. N. Avento 7,500 0 N/A 18,000(E) 0(E)
12,000(U) 0(U)
R.L. Matthews 16,000 0 N/A 1,600(E) 0(E)
18,400(U) 0(U)
G.M. Bowie 7,500 0 N/A 33,000(E) 0(E)
12,000(U) 0(U)
H.B. Moore, Jr 7,500 0 N/A 13,000(E) 0(E)
10,500(U) 0(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. The
closing stock price at fiscal year end was less than the exercise price on
all options outstanding except grants to Messrs. Matthews and Braam of
10,000 shares at $7.282.
</TABLE>
RETIREMENT PLANS
Salary Continuation Agreements
The Company has a salary continuation agreement with R. H. Braam which
provides for payments of $15,000 per annum in the event of pre-retirement
death or $40,000 per annum following retirement for 10 years. The Company
also has salary continuation agreements with six 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 $546,841.
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 any of
the investment funds offered; however, employee contributions cannot be
invested in Company stock.
Contributions by the Company are made primarily in Company Stock. For each
plan year, the Company contributes 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 4%
in 1999 and 2000. The matching contribution is allocated monthly. 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 con-
tributions have been made to the Plan.
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
1999, the Company's total matching contribution was $357,496.
APPROVAL OF INDEPENDENT AUDITORS
(Item 2 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 January 1, 2000. The selection of this firm for
fiscal year ending December 30, 2000, 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 au-
ditors for fiscal year ending December 30, 2000.
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 January 1, 2000.
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 30, 2000.
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 A
SYNALLOY AUDIT COMMITTEE CHARTER
Organization
The audit committee of the board of directors shall be comprised of at
least three directors who are independent of management and the Company.
Members of the audit committee shall be considered independent if they have
no relationship to the Company that may interfere with the exercise of
their independence from management and the Company. All audit committee
members will be financially literate, and at least one member will have
accounting or financial management expertise.
Statement of Policy
The audit committee shall provide assistance to the directors in fulfilling
their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices
of the company, and the quality and integrity of financial reports of the
company. In so doing, it is the responsibility of the audit committee to
maintain free and open communication between the directors, the independent
auditors, and the financial management of the company.
Responsibilities
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that
the corporate accounting and reporting practices of the company are in
accordance with all requirements and are of the highest quality. The
primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board and report the results
of their activities to the board. Management is responsible for preparing
the Company's financial statements, and the independent auditors are
responsible for auditing those financial statements.
In carrying out these responsibilities, the audit committee will:
- -Obtain the full board of directors' approval of this Charter and review
and reassess this Charter as conditions dictate (or at least annually).
- -Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the company and its divisions
and subsidiaries.
- -Have a clear understanding with the independent auditors that they are
ultimately accountable to the board of directors and the audit committee,
as the shareholders' representatives, who have the ultimate authority in
deciding to engage, evaluate, and if appropriate, terminate their services.
- -Meet with the independent auditors and financial management of the Company
to review the scope of the proposed audit and timely quarterly reviews for
the current year and the procedures to be utilized, the adequacy of the
independent auditor's compensation, and at the conclusion thereof review
such audit or review, including any comments or recommendations of the
independent auditors.
- -Review with the independent auditors, and financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the company, and elicit any recommendations for the improvement
of such internal controls or particular areas where new or more detailed
controls or procedures are desirable. Particular emphasis should be given
to the adequacy of internal controls to expose any payments, transactions,
or procedures that might be deemed illegal or otherwise improper.
- -Review reports received from regulators and other legal and regulatory
matters that may have a material effect on the financial statements or
related company compliance policies.
- -Review with management the proposed audit plans for the coming year, and
the coordination of such plans with the independent auditors.
- -Inquire of management and the independent auditors about significant risks
or exposures and assess the steps management has taken to minimize such
risks to the Company.
- -Review the quarterly financial statements with financial management and
the independent auditors prior to the filing of the Form 10-Q (or prior to
the press release of results, if possible) to determine that the
independent auditors do not take exception to the disclosure and content of
the financial statements and discuss any other matters required to be
communicated to the committee by the auditors. The chair of the committee
may represent the entire committee for purposes of this review.
- -Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders. Review with
financial management and the independent auditors the results of their
timely analysis of significant financial reporting issues and practices,
including changes in, or adoptions of, accounting principles and disclosure
practices, and discuss any other matters required to be communicated to the
committee by the auditors. Also review with financial management and the
independent auditors their judgments about the quality, not just
acceptability, of accounting principles and the clarity of the financial
disclosure practices used or proposed to be used, and particularly, the
degree of aggressiveness or conservatism of the organization's accounting
principles and underlying estimates, and other significant decisions made
in preparing the financial statements.
- -Provide sufficient opportunity for independent auditors to meet with the
members of the audit committee without members of management present. Among
the items to be discussed in these meetings are the independent auditors'
evaluation of the company's financial, accounting, personnel, and the
cooperation that the independent auditors received during the course of
audit.
- -Review accounting and financial human resources within the Company
Report the results of the annual audit to the board of directors. If
requested by the board, invite the independent auditors to attend the full
board of directors meeting to assist in reporting the results of the annual
audit or to answer other directors' questions (alternatively, the other
directors, particularly the other independent directors, may be invited to
attend the audit committee meeting during which the results of the annual
audit are reviewed).
- -On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships and professional services
as required by independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees. In addition, review with the independent
auditors the nature and scope of any disclosed relationships or
professional services and take, or recommend that the board of directors
take, appropriate action to ensure the continuing independence of the
auditors.
- -Review the report of the audit committee in the annual report to
shareholders and the Annual Report on Form 10-K disclosing whether or not
the committee had reviewed and discussed with management and the
independent auditors, as well as discussed within the committee (without
management or the independent auditors present), the financial statements
and the quality of accounting principles and significant judgments
affecting the financial statements. In addition, disclose the committee's
conclusion on the fairness of presentation of the financial statements in
conformity with GAAP based on those discussions.
- -Submit the minutes of all meetings of the audit committee to, or discuss
the matters discussed at each committee meeting with, the board of
directors.
Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if in its
judgment, that is appropriate.
- -Review the Company's disclosure in the proxy statement for its annual
meeting of shareholders that describes that the Committee has satisfied its
responsibilities under this Charter for the prior year. In addition,
include a copy of this Charter in the annual report of shareholders or the
proxy statement at least triennially or the year after any significant
amendment to the Charter.
SYNALLOY CORPORATION
POST OFFICE BOX 5627
SPARTANBURG, SC 29304
This Proxy is Solicited by The Board of Directors for the Annual Meeting of
Shareholders on May 18, 2000.
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 substi-
tution, 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 Thursday, May 18, 2000, 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.
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 and 2.
Please sign on reverse side and return in the enclosed postage-paid
envelope.
Please sign exactly as your name appears hereon. Joint owners should each
sign. Trustees, executors, administrators and others signing in a repre-
sentative capacity should indicate that capacity. An authorized officer may
sign on behalf of a corporation and should indicate the name of the corpo-
ration and his capacity.
(1) Election of Directors
For ----- Withhold -----
Nominees:
Sibyl N. Fishburn
Richard E. Ingram
James G. Lane, Jr.
Glenn R. Oxner
Carroll D. Vinson
FOR, except votes withheld from the following nominee(s):
- ------------------------------------
(2) Proposal to approve the selection of Ernst & Young LLP as auditors for
the fiscal year ending December 30, 2000.
For --- Against --- Abstain ---
(3) Upon any other matter that may properly come before the meeting or any
adjournment thereof, as the proxies in their discretion may determine.
Signature ------------------------------------Date------------------
Signature if held jointly----------------------Date-----------------
Please sign exactly as your name appears hereon. Joint owners should each
sign. Trustees, executors, administrators and others signing in a represen-
tative 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.
