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 or Rule 14a-12
SYNALLOY CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(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(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.
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2. Aggregate number of securities to which transaction applies:
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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.
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SYNALLOY CORPORATION
Post Office Box 5627
Spartanburg, South Carolina 29304
NOTICE OF ANNUAL MEETING
April 26, 2001
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, April 26, 2001,
at 10:00 a.m. local time. The following 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 ratify the selection of Ernst & Young LLP, independent certified
public accountants, as independent auditors for the fiscal year ending
December 29, 2001;
3. 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 1, 2001 are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
Cheryl C. Carter
Secretary
SYNALLOY CORPORATION
CROFT INDUSTRIAL PARK
POST OFFICE BOX 5627
SPARTANBURG, SOUTH CAROLINA 29304
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 26, 2001
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 April 26, 2001, 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 March 27, 2001.
Quorum and Voting. 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. If a share is represented for
any purpose at the annual meeting by the presence of the registered owner
or a person holding a valid proxy for the registered owner, it is deemed to
be present for purposes of establishing a quorum. Therefore, valid proxies
which are marked "Abstain" or "Withhold" and shares that are not voted,
including proxies submitted by brokers that are the record owners of shares
(so-called "broker non-votes"), will be included in determining the
number of votes present or represented at the annual meeting. If a quorum
is not present or represented at the meeting, the shareholders entitled to
vote who are present in person or represented by proxy have the power to
adjourn the meeting from time to time. If the meeting is to be reconvened
within 30 days, no notice of the reconvened meeting will be given other
than an announcement at the adjourned meeting. If the meeting is to be
adjourned for 30 days or more, notice of the reconvened meeting will be
given as provided in the Bylaws. At any reconvened meeting at which a
quorum is present or represented, any business may be transacted that might
have been transacted at the meeting as originally noticed.
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 1, 2001. On March 1, 2001, the
Company had outstanding 5,964,368 (excluding 2,035,632 shares held in
treasury) shares of Common Stock. 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 number of shares owned by
such holder multiplied by the number of directors to be elected, 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.Written
notice of revocation of a proxy or delivery of a later dated proxy will be
effective upon receipt by the Company. Attendance at the annual meeting
will not in itself constitute revocation of a proxy.
STOCKHOLDERS' PROPOSALS FOR THE 2001 ANNUAL MEETING OF SHAREHOLDERS
Any shareholder proposal to be considered by the Company for inclusion in
the proxy materials for the 2002 Annual Meeting of Shareholders must be
submitted in accordance with applicable regulations of the Securities and
Exchange Commission and received by the Company at its principal executive
offices, Croft Industrial Park, PO Box 5627, Spartanburg, SC 29304, no
later than November 26, 2001. In order for a shareholder to bring any
business or nominations before the 2002 Annual Meeting of Shareholders,
certain conditions set forth in the Company's Bylaws must be complied with,
including but not limited to, the delivery of a notice to the Secretary of
the Company not less than 30 nor more than 60 days in advance of the 2002
Annual Meeting which is tentatively scheduled on April 25, 2002.With
respect to any shareholder proposal not received by the Company prior to
February 11, 2002, proxies solicited by management of the Company will be
voted on the proposal in the discretion of the designated proxy agents.
SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT
The Company's Annual Report to Stockholders including Form 10-K for the
year ended December 30, 2000 (without exhibits), 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 March 1, 2001.
Name and Address of Beneficial Owner Amount and Nature Percent of Class
of Beneficial
Ownership
Dimensional Fund Advisors 546,332 (1) 9.16
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
Royce & Associates 481,850 (2) 8.10
1414 Avenue of the Americas
New York, NY 10019
T. Rowe Price Associates, Inc. 459,000 (3) 7.70
100 East Pratt Street
Baltimore, MD 21202
James G. Lane, Jr. 369,617 (4) 6.20
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 in-
formation was obtained from Dimensional's Schedule 13G dated February 2,
2001.
(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 Schedule 13G dated February 5, 2001.
(3) These securities are owned by various individual and institutional
investors, including the T. Rowe Price Small-Cap Value Fund, Inc. which
owns 459,000 shares, (7.7% of the shares outstanding), as to 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, 2001.
(4) The aggregate number of shares of Common Stock owned beneficially by
Mr. Lane includes direct ownership of 150,574 shares; indirect ownership of
793 shares held by the trustee under Synalloy's 401(k)/ESOP Plan, 25,000
shares held in an IRA, 173,750 shares owned by his spouse as to which Mr.
Lane disclaims beneficial ownership, and options to purchase 19,500 shares
exercisable within 60 days.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Common Stock as of March 1, 2001 by each director and nominee for
director and each executive officer of the Company for whom compensation
information is disclosed under the heading "Executive Compensation."
Name of Beneficial Owner Common Stock Beneficially Percent of
Owned as of March 1, 2001 Class
Sibyl N. Fishburn 98,493 (1)(5) 1.65
James G. Lane,Jr. 369,617 (2) 6.20
Glenn R. Oxner 30,500 (3)(5) *
Carroll D. Vinson 23,425 (4)(5) *
Murray H. Wright 110,000 (6) 1.84
Joseph N. Avento 68,413 (7) 1.15
Ronald H. Braam 17,964 (8) *
Ronald L. Matthews 9,555 (9) *
Gregory M. Bowie 48,035 (10) *
All Directors and Executive
Officers as a group (9 persons) 776,002 (11) 11.17
*Less than 1%.
(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 793 shares held by the trustee under
Synalloy's 401(k)/ESOP Plan; 25,000 shares held by an IRA; and 173,750
shares owned by his spouse, as to which Mr. Lane disclaims beneficial
ownership; and options to purchase 19,500 shares exercisable within 60
days.
(3) Includes 20,000 shares held jointly by Mr. Oxner and his spouse.
(4) Includes indirect ownership by spouse of 1,575 shares and 10,000
shares owned by a family partnership.
(5) Includes exercisable options to purchase 10,500 shares pursuant to
the 1994 Non-Employee Directors' Stock Option Plan.
(6) Includes indirect ownership of 45,000 shares held by an IRA.
(7) Includes 24,000 shares which are subject to currently exercisable
options, and 6,213 shares allocated under the Company's 401(k)/ESOP.
(8) Includes 13,000 shares which are subject to currently exercisable
options, and 2,464 shares allocated under the Company's 401(k)/ESOP.
(9) Includes 7,600 shares which are subject to currently exercisable
options, and 1,955 shares allocated under the Company's 401(k)/ESOP.
(10) Includes 39,000 shares which are subject to currently exercisable
options, 3,100 shares held by an IRA and 2,885 shares allocated under the
Company's 401(k)/ESOP.
(11) Includes 134,600 shares which are subject to currently exercisable
options, and 14,310 shares allocated under the Company's 401(k)/ESOP.
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.
If a quorum is present at the annual meeting, directors will be elected by
a plurality of the votes cast by shares present and entitled to vote at the
meeting.
The following table sets forth the names of nominees for director, their
ages, the years in which they were first elected directors, a brief
description of their principal occupations 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 each of them directly or indirectly, as of March 1,
2001, and certain other information. The Board Committee assignments are as
of March 1, 2001.
Name, Age, Principal Occupation, Other Directorships Director
and Other Information Since
Sibyl N. Fishburn, age 65 1979
Mrs. Fishburn is a graduate of Hollins College,
Roanoke, VA. She serves onthe Board of the Virginia
Nataure Conservancy. Mrs. Fishburn is a member
of the Audit, Nominating and Special Committees.
James G. Lane, Jr., age 67 1986
Mr. Lane has served as Chief Executive Officer and
Chairman of the Board of the Company since 1987.
He is a member of the Executive and Nominating
Committees.
Glenn R. Oxner, age 62 1989
At present, Mr. Oxner is an Executive Vice President
of Scott & Stringfellow, Inc., a securities firms
headquartered in Richmond, VA. From 1992 to 2001,
he was Chairman and Chief Executive Officer of
Edgar M. Norris Co., Inc., an investment securities
company in Greenville, SC. He Is a member of
the Audit, Executive, Special and Compensation &
Long-Term Incentive Committees.
Carroll D. Vinson 1987
Mr. Vinson is owner of C. D. Vinson & Associates,
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, Special and Compensation
& Long-Term Incentive Committees.
Murray H. Wright, age 55 Nominee
Mr. Wright is the founder and Managing Director of
Avitas Capital, LLC, A closely held investment
banking firm, founded in 1999, in Richmond, VA.
In 1986, he founded and is Chief Executive Officer
of the law firm of Wright, Robinson, Osthimer & Tatum,
Richmond, VA.
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, Special and Nominating Committees of the Board of
Directors.
The members of the Executive Committee are James Lane, Chair, Glenn Oxner
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 does 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. The Audit Committee acts pursuant to a written charter
adopted by the Board of Directors. A copy of the charter is attached to
this Proxy Statement as Appendix A. Each member of the Audit Committee is
independent as defined in Rule 4200(a)(14) of the National Association of
Securities Dealer's listing standards. The Audit Committee held four
meetings during the year. During these meetings, the Audit Committee
reviewed and discussed the audited financial statements to be included in
the Company's Annual Report on Form 10-K, and the Form 10-Qs for each
quarter prior to filing with the SEC with management and representatives of
Ernst & Young.
The Compensation & Long-Term Incentive Committee, currently comprised of
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 did not meet during the last fiscal year.
The Nominating Committee is comprised of James Lane, Chair 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 2000. 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 Annual Meeting of
Shareholders, 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 forth 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 twice in 2000.
During fiscal year 2000, the Board of Directors met five times. All members
of the Board except Richard Ingram, who resigned on October 20, 2000,
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
$16,000, and Messrs. Oxner and Vinson were paid $16,500 and $17,000, re-
spectively, during fiscal 2000. 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 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 2000, all filing requirements applicable to its officers and
directors were met.
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 2000 bonus compensation for the Chief Executive Officer and other
executive officers other than the Vice President, Finance and minimum
bonuses for Messrs. Braam and Matthews.
The Summary Compensation Table and Notes thereto provide details of the
short-term incentives provided to the Chief Executive Officer and other
executive officers (except 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 reward 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 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
Glenn R. Oxner and 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.
Synalloy Corporation
Comparison of Five-Year Cumulative Total Return
Synalloy Corporation, S & P 500 and the Russell 2000
Cumulative Total Return
12/95 12/96 12/97 12/98 12/99 12/00
Synalloy Corporation 100.00 76.15 73.00 44.74 39.36 25.72
S & P 500 100.00 122.96 163.98 210.84 255.22 231.98
Russell 2000 100.00 116.49 142.55 138.92 168.45 147.25
$100 invested on 12/31/95 in stock or index including reinvestments of
dividends. Calendar year ending December 31.
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 chief executive officer and the executive officers of the
Company whose total annual salary and bonus for the fiscal year ended
December 30, 2000 exceeded $100,000.
Summary Compensation Table
Annual Compensation
Name, Age and Principal Position Year Salary ($) Bonus ($) All Other
Compen-
sation
James G. Lane, age 67 2000 180,000 7,200
Chairman of the Board and Chief 1999 180,000 6,400
Executive Officer since 1987 1998 120,000 6,400
Ronald H. Braam, age 57 2000 156,240 25,000 17,076
President, Synalloy Chemicals Group 1999 156,000 7,870 15,440
Since December 1999; President of 1998 156,000 10,451 13,716
Manufacturers 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 59 2000 120,240 171,220 6,944
President, Bristol Metals, L. P., 1999 120,000 113,825 4,800
wholly owned by the Company, 1998 120,000 - 5,717
since 1992.
Ronald L. Matthews, age 52 2000 120,240 25,000 4,810
President, Blackman Uhler Colors 1999 120,000 - 4,875
Group since December 1999.
From October 1996 to December 1999,
he was Sales Manager, Blackman
Uhler Chemical, a Division
of the Company. From 1991
through 1996, he was Dyestuff
Business Manager for Yorkshire
Americas, Greenville, SC.
Gregory M. Bowie, age 51 2000 120,240 42,600 6,410
Vice President, Finance since 1999 107,000 40,000 4,880
May 1994. 1998 104,000 15,000 5,593
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, 2001, of $180,000 until December 31,
2001. In addition to his salary, he is entitled to "bonus-compensation"
equal to a percentage (4% for 2001) of net earnings before income taxes in
excess of a predetermined percent (10% for 2001) 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,
2001. He is also a participant in the Management Incentive Plan beginning
January 1, 2000 for the Chemicals Group excluding Manufacturers Chemicals.
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 2001) 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.The bonuses paid to Messrs. Braam and Matthews in 2000 were minimums
agreed upon for the first year after they assumed more responsibilities
when the Chemicals Segments was reorganized.
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 no 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: (a)
Company contributions allocated to each named individual pursuant to the
401(k)/Employee Stock Ownership Plan: J. G. Lane, Jr. - $7,200 in 2000,
1999 and 1998; J. N. Avento - $6,944 in 2000, $4,800 in 1999 and $5,717 in
1998; R.L. Matthews - $4,810 in 2000 and $4,875 in 1999; G. M. Bowie -
$6,410 in 2000, $4,880 in 1999 and $5,593 in 1998; R. H. Braam - $6,574 in
2000, 1999 and 1998; (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 - $10,502 in 2000. A significant portion of
the insurance premiums reported for Mr. Braam is for life insurance
policies and such premiums will be 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
division 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,
each non-employee director 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 1, 2001,
there were 396,250 options outstanding under all plans of which 283,400
were exercisable.
Option/SAR Grants in Last Fiscal Year
No options were granted to the named executive officers in 2000.
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 2000 year end.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Table
The following table summarizes the number of unexercised options help by
the named executives at fiscal 2000 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)
J.G. Lane 0 0 N/A 14,250(E) $ 0(E)
15,000(U) 0(U)
R. H. Braam 0 0 N/A 9,500(E) $ 0(E)
18,000(U) 0(U)
J. N. Avento 0 0 N/A 19,500(E) $ 0(E)
10,500(U) 0(U)
R.L. Matthew 0 0 N/A 5,600(E) $ 0(E)
14,400(U) 0(U)
G.M. Bowie 0 0 N/A 36,000(E) $ 0(E)
9,000(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.
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 assumptions
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 values
of the above agreements are accrued. The cumulative amount of this accrual
is $544,000.
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 contributions 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 2000 and 2001. 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
contributions 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 service
- 0% vested; five or more years - 100% vested.
Unvested amounts are forfeited and allocated to participants eligible to
participate 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 is maintained in a suspense account and is
withdrawn and allocated to participant's accounts as the loan is paid.
While a participant in the Plan, an employee may direct the trustee to vote
shares allocated to his or her account in accordance with his or her
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 qualification of the Plan under the applicable provisions of
the Internal Revenue Code, as amended from time to time. For the year ended
2000, the Company's total matching contribution was $359,696.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors has reviewed and discussed
with management the company's audited financial statements for the year
ended December 30, 2000. The Audit Committee has discussed with the
Company's independent auditors, Ernst & Young LLP, the matters required to
the discussed by SAS 61. The Audit Committee has also received the written
disclosures and the letter from Ernst & Young LLP, required by Independence
Standards Board Standard No. 1, and has discussed with Ernst & Young LLP,
their independence. Based on the review and discussions referred to above,
the Audit Committee recommended to the Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form 10-
K for the year ended December 30, 2000.
The Audit Committee
Glenn Oxner
Sibyl Fishburn
Carroll Vinson
APPROVAL OF INDEPENDENT AUDITORS
(Item 2 on Proxy Card)
The Board of Directors, at the recommendation of its Audit Committee,
selected 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 29, 2001. The selection of this firm for
fiscal year ending December 29, 2001, 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 29, 2001.
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, 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 29, 2001.
The Securities and Exchange Commission has recently adopted new regulations
relating to auditor independence. Among other things, the new rules require
companies to disclose in their proxy materials the following information
about fees billed by their independent auditors for services provided.
Audit Fees
During 2000, Ernst & Young LLP billed the Company an aggregate of $140,525
for professional services rendered for the audit of the Company's annual
financial statements for the year ended December 30, 2000 and reviews of
the financial statements included in the Company's Forms 10-Q for that
year. The Company does not expect to pay any additional fees during 2001
for such services provided in 2000.
Financial Information Systems Design and Implementation fees
Ernst & Young LLP did not provide any professional services for financial
information systems design or implementation for the fiscal year ended
2000.
All Other Fees
During the year ended December 30, 2000, Ernst & Young LLP billed the
Company an aggregate of $54,150 for the following professional services
provided during 2000: preparation of 1999 income tax return, audit of the
401(k) benefit plan for 1999 and assistance with income tax issues. The
Company does not expect Ernst & Young to bill any additional amounts during
2001 for such services provided in 2000.
The Audit Committee has reviewed the services provided by Ernst & Young LLP
discussed under the caption All Other Fees, and has considered whether the
provision of such services is compatible with maintaining Ernst & Young's
independence.
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
Membership
The audit committee shall be appointed by the board of directors and shall
be comprised of at least three directors. All members of the audit
committee shall be independent. A member shall be considered independent if
he or she is not an officer or employee of the Company and has no
relationship which, in the opinion of the Company's board of directors,
would interfere with the exercise of independent judgment in carrying out
his or her responsibilities. All audit committee members will be able to
read and understand fundamental financial statements, or will become able
to do so within a reasonable time after appointment to the audit committee
At least one member will have accounting or financial management
experience.
Responsibilities
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 its activities to the board in a manner which is consistent with
the members' duties as directors exercising their business judgment.
Management is responsible for preparing the Company's financial statements,
and the independent auditors are responsible for auditing those financial
statements. The Company recognizes that the members of the financial
management of the Company (including the internal audit staff), as well as
the independent auditors, have more knowledge and more detailed information
about the Company that do the members of the committee; consequently, in
carrying out its oversight responsibilities, the audit committee is not
providing any expert or special assurance as to the Company's financial
statements or any professional certification as to the independent
auditors' work.
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 circumstances.
The following shall be the principal recurring processes of the audit
committee in carrying out its oversight responsibilities. The processes are
set forth as a guide with the understanding that the committee may diverge
from this guide as it deems appropriate given the circumstances. The
processes are to:
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. The board of directors shall have the
ultimate authority and responsibility to select, evaluate, and where
appropriate, replace the independent auditors.
Review with the independent auditors and financial management of the
Company the scope of the proposed audit and quarterly reviews for the
current year and the procedures to be used, and the adequacy of the
independent auditor's staffing and compensation.
Make or cause to be made such other reviews or examinations as the
committee may deem advisable with respect to the adequacy and effectiveness
of the accounting and financial controls of the Company, and take such
action with respect thereto as the committee deems appropriate.
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.
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) 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 with management and the independent auditors the financial
statements to be contained in the Annual Report on Form 10-K (or the annual
report to shareholders if distributed prior to filing of the Form 10-K),
including their judgments about the quality, not just acceptability, of
accounting principles and the clarity of the financial disclosures used or
proposed to be used. Review with financial management and the independent
auditors 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.
Meet separately with the independent auditors without members of management
present to discuss the independent auditors' evaluation of the company's
financial accounting and personnel, and the cooperation that the
independent auditors received during the course of audit.
On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships with and professional
services to the Company as required by Independence Standards Board
Standard No. 1. In addition, review with the independent auditors any
disclosed relationships or professional services that may affect the
objectivity and independence of the auditors and take, or recommend that
the board of directors take, appropriate action to oversee the continuing
independence of the auditors.
Annually review and reassess the adequacy of this Charter.
Prepare a report, as required by the regulations of the Securities and
Exchange Commission, to be included in the Company's proxy statement for
its annual meeting of shareholders.
Authority to Investigate
The Committee shall have authority to investigate, as it deems appropriate,
any matter brought to its attention in the scope of its duties, and may
retain outside counsel and consultants to assist it.
===========================================================================
Proxy Voting Card
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 April 26, 2001
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, April 26, 2001, 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
James G. Lane, Jr.
Glenn R. Oxner
Carroll D. Vinson
Murray H. Wright
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 29, 2001.
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.