SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange act of 1934
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12
SYNALLOY CORPORATION
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(Name of Registrant as Specified In Its Charter)
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Exchange Act Rule 14a-6(i)(3).
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SYNALLOY CORPORATION
Post Office Box 5627
Spartanburg, South Carolina 29304
NOTICE OF ANNUAL MEETING
April 30, 1997
TO THE STOCKHOLDERS OF SYNALLOY CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders
of Synalloy Corporation will be held at the general offices of
the Company, Croft Industrial Park, Spartanburg, South
Carolina, on Wednesday, April 30, 1997, at 10:00 a.m. local
time. The following three important matters will be presented
for your consideration:
1. To elect five (5) directors to serve until the next
annual meeting of shareholders and until their successors
are elected and qualified;
2. To ratify the selection of Ernst & Young LLP, independent
certified public accountants, as independent auditors for
fiscal year ending January 3, 1998;
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
14, 1997 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
March 31, 1997
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 1996 Annual Report on Form 10K is furnished herewith.
SYNALLOY CORPORATION
CROFT INDUSTRIAL PARK
POST OFFICE BOX 5627
SPARTANBURG, SOUTH CAROLINA 29304
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 30, 1997
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 Wednesday, April
30, 1997, 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 31, 1997.
Quorum and Vote Required. The presence, in person or by proxy, of
a majority of the outstanding shares of Common Stock of the
Company is necessary to constitute a quorum at the Annual Meeting.
Voting Rights. The securities which can be voted at the Annual
Meeting consist of Common Stock of the Company, $1.00 par value
per share, its only class of issued and outstanding capital stock.
The record date for determining the holders of Common Stock who
are entitled to notice of and to vote at the Annual Meeting is
March 14, 1997. On February 21, 1997, the Company had outstanding
6,985,917 (excluding 1,014,083 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 1998 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
1998 Annual Meeting of Shareholders, tentatively scheduled for
April 30,1998, must be sent certified mail, return receipt
requested and received at the Company's Executive Offices, Post
Office Box 5627, Spartanburg, South Carolina 29304, addressed to
the attention of the Secretary by December 1, 1997 in order to be
included in the Proxy Statement and form of proxy relating to such
meeting.
SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT
The Company's Annual Report to Stockholders including Form 10-K
for the year ended December 28, 1996, as filed with the Securities
and Exchange Commission, accompanies this Proxy Statement and is
incorporated by reference herein.
BENEFICIAL OWNERS OF MORE THAN FIVE (5%) PERCENT OF
THE COMPANY'S COMMON STOCK
The table below details certain information regarding any person who is
known by the Company to be the beneficial owner of more than five (5%)
percent of the Company's Common Stock as of February 21, 1997.
Name and Address of Beneficial Owner Amount and Nature of
Beneficial Ownership Percent of
Class
T. Rowe Price Associates, Inc. 610,750 (1) 8.7
100 East Pratt Street
Baltimore, MD 21202
Wellington Management Company, LLP 500,300 (2) 7.2
75 State Street
Boston, MA 02109
James G. Lane, Jr. 396,672 (3) 5.7
PO Box 5627
Spartanburg, SC 29304
Dimensional Fund Advisors, Inc. 356,882 (4) 5.1
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
(1) These securities are owned by various individual and
institutional investors, which T. Rowe Price Associates, Inc.
("Price Associates") serves as investment adviser with power to
direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities Exchange
Act of 1934, Price Associates is deemed to be a beneficial owner
of such securities; however, Price Associates expressly disclaims
that it is, in fact, the beneficial owner of such securities. This
information was obtained from Price Associates' Schedule 13G dated
February 14, 1997.
(2) Wellington Management Company, LLP, ("WMC") is an investment
adviser registered with the Securities and Exchange Commission
under the Investment Advisers Act of 1940, as amended. As of
December 31, 1996, WMC, in its capacity as investment adviser, may
be deemed to have beneficial ownership of 500,300 shares of common
stock of Synalloy Corporation that are owned by numerous
investment advisory clients, none of which is known to have such
interest with respect to more than five percent of the class. As
of December 1996, WMC had shared voting power of 250,200 shares
and share dispositive power of 500,300 shares. This information
was obtained from Wellington's Schedule 13G dated January 24,
1997.
(3) The aggregate number of shares of Common Stock owned beneficially
by Mr. Lane includes direct ownership of 265,324 shares; indirect
ownership of 6,198 shares held by the trustee under Synalloy's
401(k)/ESOP Plan, 1,400 shares held in an IRA, and 123,750 shares
owned by his spouse of which Mr. Lane disclaims beneficial ownership.
(4) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of
356,882 shares of Synalloy Common Stock as of December 31, 1996,
all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans,
all of which Dimensional Fund Advisors, Inc. serves as investment
manager. Dimensional disclaims beneficial ownership of all such
shares. This information was obtained from Dimensional's Schedule
13G dated February 5, 1997.
ELECTION OF DIRECTORS (Item 1 on Proxy Card)
The Certificate of Incorporation of the Company provides that the
Board of Directors shall consist of not less than three nor more than
fifteen individuals. Upon recommendation of the Nominating Committee,
the Board of Directors fixed the number of directors constituting the
full Board at five members and recommends that the five nominees
listed in the table which follows be elected as directors to serve
for a term of one year until the next succeeding Annual Meeting and
until their successors are elected and qualified. Each of the
nominees has consented to be named in this Proxy Statement and to
serve as a director if elected.
If cumulative voting is not requested, the holders of the Board of
Directors' proxies will vote the proxies received by them for the
election as directors of the five persons named below. If cumulative
voting is requested, the holders of the Board of Directors' proxies
will vote the proxies received by them cumulatively for some or all
of the nominees in such manner as may be determined at the time by
the proxy holders.
While the Board of Directors expects that all of the nominees will
serve as directors, if, at the time of the Annual Meeting of
Shareholders, or any adjournment(s) thereof, a situation should arise
making it impossible for one or more of the nominees to serve, the
holders of the enclosed proxy will vote for such substitute nominee
as the Board of Directors recommends.
The Board of Directors recommends that stockholders vote "FOR" the
proposal to elect the five nominees listed below as directors of the
Company.
The election of directors requires the affirmative vote of the
holders of a plurality of votes given for each director to be
elected.
The following table sets forth the names of nominees for director,
their age, the year in which they were first elected a director, a
brief description of their principal occupation and business
experience during the last five years, all directorships of publicly
held companies other than the Company, and the number of shares of
the Company's Common Stock beneficially owned by them directly or
indirectly, as of February 21, 1997, and certain other information.
The Board Committee assignments are as of February 21, 1997.
Common Stock
Name, Age, Principal Occupation, Beneficially
Other Directorships and Owned as of
Other Information February 21, 1997
Director Since (Percent of Class)
Sibyl N. Fishburn, age 61 1979 101,212 (1)(6)
Mrs. Fishburn is a graduate of Hollins (1.5)
College, Roanoke, VA. She serves on the
Board of the Virginia Nature Conservancy.
Mrs. Fishburn is a member of the Audit
and Nominating Committees.
Richard E. Ingram, age 55 1989 33,935 (2)(6)
Mr. Ingram has been Chairman of the Board (*)
of Builder Marts of America, Inc. (BMA),
Greenville, SC, a national distributor
of lumber and building materials, since
November 1988 and was Chief Executive
Officer until November 1993. He was a
founding Director of Carolina First Holding
and Carolina First Bank from 1986 to 1996
and Ingram Enterprises, Inc., a privately-
owned company. He is also a Director of
Columbia Lumber, a retail lumber business;
TelPan, Inc. a long distance provider in
Panama; and Chicago Miniature Lamp, Inc.,
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 63 1986 396,672 (3)
Mr. Lane has served as Chief Executive (5.7)
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 58 1989 23,500 (4)(6)
Mr. Oxner is Chairman and Chief Executive (*)
Officer of Edgar M. Norris Co., Inc.,
an investment securities company in
Greenville, SC. From 1989 to 1992 Mr.
Oxner was Senior Vice President of
NationsBank, and Managing Director
of NationsBank Investment Banking
Company. He is a member of the Audit
and Compensation & Long-Term Incentive
Committees.
Carroll D. Vinson, age 56 1987 17,425 (5)(6)
Mr. Vinson is President and a Director (*)
of Metropolitan Asset Enhancement Group,
a private real estate holding company
affiliated with Insignia Financial Group,
Inc. ("Insignia") in Greenville, SC.
He is also owner of C. D. Vinson &
Associates, a consulting firm. He was
President, Chief Executive Officer and a
Director of Angeles Corporation, a real
estate investment company in Los Angeles,
CA. between February 18, 1993 and
March 15, 1993. He was previously
employed by Insignia first as President
and Chief Operating Officer and then as
President and Chief Executive Officer of
Insignia Capital Corporation until
February 15, 1993. He is a member of the
Audit, Executive and Compensation & Long-Term
Incentive Committees.
All Directors and Officers as a group 660,752 (7)
(8 including those listed above) (9.5)
*Less than one percent (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 15,070 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; 900 shares held in an IRA; and 735 shares
held in the Ingram Foundation.
(3) Includes indirect ownership of 6,198 shares held by the
trustee under Synalloy's 401(k)/ESOP Plan;1,400 shares held by
an IRA; and 123,750 shares owned by his spouse.
(4) Includes 2,000 shares held jointly by Mr. Oxner and his
spouse.
(5) Includes indirect ownership by spouse of 11,575 shares.
(6) Includes options to purchase 4,500 shares exercisable
pursuant to the 1994 Non-Employee Directors' Stock Option
Plan.
(7) Includes 44,000 shares which are currently subject to
exercisable options, and 13,131 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*, 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*, Sibyl Fishburn and
Carroll Vinson. This Committee makes recommendations to the Board of
Directors regarding the selection of independent auditors; reviews
the independence of such auditors; approves the scope of the annual
audit activities of the independent auditors; approves the rendering
of any material non-audit services; approves the audit fee payable
to the independent auditors; reviews audit results; and reviews the
expense accounts of Company officers. During the past fiscal year,
this Committee held two meetings.
The Compensation & Long-Term Incentive Committee, currently
comprised of Richard Ingram*, Carroll Vinson, and Glenn Oxner, is
responsible for reviewing and making recommendations to the Board
related to salaries, wages, bonuses and benefits for officers of the
Company and for administering the Company's stock option program
including the granting of options thereunder. This Committee held
three meetings during the last fiscal year.
The Nominating Committee is comprised of James Lane*, Richard Ingram
and Sibyl Fishburn. This Committee is responsible for reviewing and
recommending changes in size and composition of the Board of
Directors and evaluating and recommending candidates for election to
the Company's Board. This Committee met once in 1996. The Nominating
Committee will consider nominees recommended by shareholders if the
recommendations are forwarded to the Secretary of the Company for
transmission to the Nominating Committee not less than 30 days nor
more than 60 days prior to the meeting, and are otherwise in
compliance with the Company's Bylaws. The Committee routinely meets
at the regular quarterly meeting of the Board of Directors next
preceding the Annual Meeting. Nominations for election as Directors
may also be made from the floor at the Annual Meeting of
Shareholders provided such nominations are in accordance with the
notice procedures set in the Company's Bylaws.
During fiscal year 1996, 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, an $8,000 annual retainer fee, and reimbursement for
travel and other expenses related to attendance at meetings.
Committee members presently receive a fee of $500 for each meeting
attended which is not held on the same day as a Board meeting.
Effective April 1997, the annual retainer will increase to $10,000.
Each non-employee director receives an option to purchase 1,500
shares (adjusted for a three-for-two stock split on June 12, 1995)
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.
*Denotes chairman of respective committee.
Compliance with Section 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and any persons who own
more than 10% of the common stock of the Company to file with the
Securities and Exchange Commission and the Nasdaq National Market
System reports of ownership and changes in ownership of common
stock. Officers and directors are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they
file. Based solely on review of the copies of such reports furnished
to the Company or written representation that no other reports were
required, the Company believes that, during 1996, all filing
requirements applicable to its officers and directors were met.
THE BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The basic policies that determine cash compensation for the
Company's executive officers, other than its Vice President,
Finance, were formulated in 1987. Some factors that were considered
in developing the policies were as follows. The Company had suffered
net losses in each of the previous five years. Return on average
equity had been below 10% in 14 of the previous 19 years. The
Chemical Segment incurred a loss in 1986 and sales were lower than
10 years earlier. The Metals Segment had losses for each of the
prior four years. Management changes included a new Chief Executive
Officer, a new President for the Chemical Division and restructuring
of management that increased the responsibility and authority of
certain senior managers.
The cash compensation policies implemented in 1987 were intended to
provide senior managers, including the executive officers, with
strong motivation to strive diligently to produce and maintain a
high level of profitability. The principal elements of the policies
are as follows. Base salaries are increased infrequently except as a
result of promotions or to establish parity among senior managers.
The intent is to provide senior managers with base salaries lower
than their peers in comparable companies. Offsetting the low
salaries are short-term incentive plans that provide cash bonuses
equal to a percent of profits before income taxes in excess of a
predetermined percentage of equity. Subsidiary and divisional senior
managers participate in profit sharing pools determined solely by
the performance of their respective subsidiary or division while the
Chief Executive Officer's bonus is based on consolidated
profitability. The overall effect is to make every senior manager's
cash compensation highly dependent on the profitability of the unit
for which they work. No performance criteria except profits as
related to equity were used to determine 1996 compensation for the
Chief Executive Officer and other executive officers other than the
Vice President, Finance.
The Summary Compensation Table and Notes thereto provide details of
the short-term incentives covering the Chief Executive Officer and
other executive officers other than the Vice President, Finance for
each of the past three years. It also shows for each of the past
three years the portion of cash compensation representing bonuses
dependent upon profitability.
The Vice President, Finance is paid a salary believed to be toward
the lower end of the range of salaries for this position in
comparable companies. He is also eligible for a discretionary bonus
based on various considerations, including the company's financial
results, compensation of other executive employees and an evaluation
of his job performance.
The Committee believes that the price of the Company's stock in the
long run will reflect the Company's growth and profitability. The
short-term incentives described above motivate senior management to
strive for such growth and profitability.
A long-term incentive is also provided to senior managers that links
their interests directly to those of the Company's shareholders.
Options are granted to executive officers under a qualified stock
option plan that only rewards them if the price of the Company's
stock increases after the dates on which the options are granted.
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 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
12/91 12/92 12/93 12/94 12/95 12/96
Synalloy Corporation 100 306 171 217 395 300
S & P 500 100 108 118 120 165 203
Russell 2000 100 119 141 139 178 207
$100 invested on 12/31/91 in stock or index including reinvestment
of dividends, fiscal 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 executive officers of the Company whose total cash
compensation for the fiscal year ended December 28, 1996 exceeded
$100,000.
Summary Compensation Table
All Other
Salary Bonus Compensation
Name, Age and Principal Position Year ($) ($) ($)
James G. Lane, Jr., Age 63 1996 120,000 291,126 4,500
Chairman of the Board and Chief 1995 120,000 894,431 (1) 4,500
Executive Officer since 1987. 1994 120,000 397,981 4,500
Joseph N. Avento, Age 55 1996 72,000 190,621 4,500
President, Bristol Metals, Inc., 1995 72,000 729,786 4,500
a wholly-owned subsidiary of the 1994 72,000 172,000 4,251
Company, since January 1992.
Herbert B. Moore, Jr., Age 51 1996 67,000 57,129 4,500
President, Blackman Uhler Chemical, 1995 67,000 124,120 4,500
a Division of the Company, 1994 67,000 151,129 4,500
since September 1986.
Gregory M. Bowie, Age 47 1996 83,200 45,478 4,500
Vice President, Finance since 1995 80,000 92,346 1,208
May 1994. From 1989 to 1994,
he was Vice President, Finance,
Lowndes Corporation, a fabricator
of concrete products primarily
for industrial and governmental
construction projects.
(1) $715,000 deferred under Deferred Compensation Agreement.
NOTES
Employment Contract - The Company has a written employment agreement
with James G. Lane, Jr. pursuant to which he is entitled to receive
an annual base salary of $120,000 until December 31, 1998. In
addition to his salary, he is entitled to "bonus-compensation" equal
to a percentage (5% for 1994, 4.5% for 1995 and 4% for 1996 and
1997) of net earnings before income taxes in excess of a
predetermined percent (10% for 1994,1995, 1996 and 1997) of average
shareholders' equity. This agreement also provides certain fringe
benefits and contains provisions for salary continuation benefits in
the event of Mr. Lane's disability or death, under specified
conditions, during the term of his employment by the Company.
Bonuses - Cash bonuses based on a short-term incentive plan provide
for bonuses to be paid to senior divisional managers in an aggregate
amount equal to 10% of the net earnings before income taxes in
excess of a predetermined percentage (10% in 1994, 1995 and 1996 and
15% in 1997) of average shareholders' equity for the applicable
division or subsidiary. Mr. Lane does not participate in these bonus
plans.
For 1994, the incentives shown above were calculated on net earnings
before deducting environmental cleanup charges since such charges
related to pre-1986 conditions.
Other Annual Compensation - No executive officer named in the cash
compensation table nor the executive officers of the Company as a
group received from the Company or any of its subsidiaries personal
benefits or any other compensation which is the lesser of either
$50,000 or 10% of the compensation reported in the cash compensation
table above.
Long-Term Compensation - There were 19,000 options granted in the
last fiscal year. The Company's only long-term incentive plan is its
qualified stock option plans.
All Other Compensation - The Company contributed to the 401(k)
Employee Stock Ownership Plan for the named executives as follows:
J. G. Lane, Jr. - $4,500 annually in 1996, 1995 and 1994; J. N.
Avento - $4,500 in 1996 and 1995 and $4,251 in 1994; H. B. Moore,
Jr. - $4,500 annually in 1996, 1995 and 1994; and G. M. Bowie -
$4,500 in 1996 and $1,208 in 1995.
Stock Option Plans
Currently, there are options outstanding and available to grant
under the 1988 and 1994 Stock Option Plans approved by stockholders.
The Plans provide for such options to be granted to officers, non-
employee directors and key employees of the Company, its
subsidiaries and divisions to provide them with an opportunity to
obtain an equity interest in the Company and to increase their stake
in the future growth and prosperity of the Company. The option price
for options granted under these plans is 100% of the fair market
value of the Company's Common Stock on the date the option is
granted. Certain restrictions exist as to the time in which options
can be exercised. With regard to the 1988 Plan, approved at the May
26, 1988 Annual Meeting, options may be exercised beginning one year
after date of grant at a rate of 20% annually on a cumulative basis.
In the event that (a) all or substantially all of the assets or
Common Stock of the Company (or a subsidiary or division of the
Company in which he/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 Plans after 10 years from
date of grant. The incentive stock options are not transferable
other than by death and can only be exercised during the employee's
lifetime by the employee. In no event shall options under all Plans
having an aggregate fair market value in excess of $100,000 at the
dates of grants become exercisable by an optionee for the first time
during a calendar year. Under the 1994 Plan, approved at the April
29, 1994 Annual meeting, non-employed directors as of his or her
election or re-election as a member of the Board will automatically
receive an option for 1,500 common shares (adjusted for a three-for-
two stock split on June 12, 1995). In the event a person ceases to
be a non-employee director for reasons other than death, the
unexpired options must be exercised within three years not to exceed
10 years after date of grant. At February 21, 1997, there were
143,108 options outstanding under all plans of which 74,108 were
exercisable.
Option/SAR Grants in Last Fiscal Year
No options were granted to the named executive officers during the
past fiscal year.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Table
The following table summarizes options granted and exercised during
1996 and presents the value of unexercised options held by the named
executives at fiscal year end.
Number of Value of
Unexercised Unexercised
Options at in-the-Money
Fiscal Year Options at
End Fiscal Year
Shares Value Exercisable (E) End
Acquired on Realized Unexercisable Exercisable (E)
Name Exercise (1) (2) (U) Unexercisable (U)
J. G. Lane, Jr. 6,000 $ 33,563 3,000 (E) $19,500 (E)
6,000 (U) 39,000 (U)
J. N. Avento 21,250 301,282 9,000 (E) 58,500 (E)
6,000 (U) 39,000 (U)
H. B. Moore, Jr. 4,000 22,375 5,000 (E) 32,500 (E)
6,000 (U) 39,000 (U)
G. M. Bowie 0 12,000 (E) 48,996 (E)
18,000 (U) 73,494 (U)
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.
Shares acquired in 1996 on exercise of options have not been
registered and cannot be freely traded in the open market for two
years after the exercise date. Based on a study of actual trades in
restricted stock as reported in a weekly national business magazine,
the Company believes that the fair market value of the shares on the
date of exercise were approximately 35% less than the average of the
high and low prices as quoted on NASDAQ National Market Listing.
Based on this valuation, the value realized would be as follows:
J.G. Lane, Jr. - $1,341; J. N. Avento - $183,211; and H.B. Moore,
Jr. - $894.
RETIREMENT PLANS
Salary Continuation Agreements
The Company 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 $550,689.
401(k)/ESOP Plan
The Company has a 401(k)/Employee Stock Ownership Plan (the "Plan").
All employees (except those employees who are entitled to
participate in Union-sponsored plans) who are 21 years or older will
be eligible to participate on any January 1 or July 1 following one
year of service with the Company.
Employees are permitted to contribute up to 20% of earnings not to
exceed a dollar amount set by the Internal Revenue Service on a
pretax basis through payroll deduction. Employees are permitted to
change the election daily and can revoke the election at any time.
Employee contributions are 100% vested at all times. The employee
can invest his deferred contribution in one or all of six (6) funds;
however, employee contributions cannot be invested in Company stock.
Contributions by the Company 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 3% in 1996 and 4% in 1997. The matching
contribution is allocated on June 30 and December 31 of each plan
year. In addition to the matching contribution, the Company may make
a discretionary contribution which shall be distributed to all
eligible participants regardless of whether they contribute to the
Plan. No discretionary contributions have been made to the Plan.
Participants must be actively employed on June 30 and December 31 in
order to share in the matching contribution and discretionary
contribution for the respective valuation periods.
Distributions are not permitted before age 59 1/2 except in the
event of death, disability, termination of employment or reason of
proven financial hardship as defined according to IRS guidelines.
The Plan provides for payment of the participant's account balance
upon death, disability or retirement in the form of cash or Company
stock or both. If employment terminates for reasons other than
retirement, disability or death (e.g. resignation or termination),
the discretionary portion of a participant's account balance will be
vested based as follows: Zero to four years services - 0% vested;
five or more years - 100% vested.
Unvested amounts are forfeited and allocated to participants
eligible to share for a plan year. The Plan permits rollovers from
qualified plans at the discretion of the Company. The ESOP is
permitted to borrow money to purchase Company stock. All Company
stock acquired by the Plan with the proceeds of a loan are
maintained in a suspense account and are withdrawn and allocated to
participant's accounts as the loan is paid. While a participant in
the Plan, employees may direct the trustee to vote shares allocated
to their account in accordance with their wishes.
All Plan assets are held by an independent trustee. The trustee
invests all assets and makes payment of Plan benefits. The Plan is
managed and administered by an independent administrator and a
Pension Committee comprised of the corporate officers of the
Company. Expenses incurred for the administration of the Plan are
paid by the Company. The Plan reserves to the Board of Directors of
the Company the right to amend the Plan in any manner or terminate
the Plan at any time. The Plan may be amended to preserve the
qualifications of the Plan under the applicable provisions of the
Internal Revenue Code, as amended from time to time. For the year
ended 1996, the Company's total matching contribution was $233,361.
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 December 28,
1996. The selection of this firm for fiscal year ending January 3,
1998, 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 January 3, 1998.
The Audit Committee, which is comprised of Directors who are not
employees of the Company, approves in advance all non-audit services
to be provided by Ernst & Young LLP and believes they have no effect
on audit independence.
Representatives of Ernst & Young LLP will be present at the Annual
Meeting with an opportunity to make statements, if they so desire,
and to respond to appropriate questions with respect to that firm's
examination of the Company's financial statements for the fiscal
year ended December 28, 1996.
The Board of Directors recommends a vote "FOR" ratification of the
selection of Ernst & Young LLP as independent auditors for the
fiscal year ending January 3, 1998.
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
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 30, 1997
The undersigned hereby appoints James G. Lane, Jr., Carroll D.
Vinson and Glenn R. Oxner, or any one or more of them, each with
power of substitution, as lawful proxy, to vote all the shares of
Common Stock of Synalloy Corporation which the undersigned would be
entitled to vote if personally present at the Annual Shareholders'
Meeting of Synalloy Corporation to be held at Spartanburg, S.C. on
Wednesday, April 30, 1997, 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.
(1) Election of Directors
__ FOR __ WITHHOLD __ FOR ALL EXCEPT
Sibyl N. Fishburn, Richard E. Ingram, James G. Lane, Jr.,
Glenn R. Oxner and Carroll D. Vinson
NOTE: If you do not wish your shares voted "For" a particular
nominee, mark the "For All Except," box and strike a line through
the nominee's (s) name(s). Your shares will be voted for the
remaining nominees(s).
(2) Proposal to approve the selection of Ernst & Young LLP as
auditors for the fiscal year ending January 3, 1998
__ 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.
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.
Date:-----------------------------
- ---------------------------------------------------
Signature of Stockholder(s)
Please sign this proxy exactly as your name appears hereon. Joint
owners should each sign. Trustees, executors, administrators and
others signing in a representative capacity should indicate that
capacity. An authorized officer may sign on behalf of a corporation
and should indicate the name of the corporation and his capacity.
_______________________________