UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Synalloy Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Post Office Box 5627
Spartanburg, South Carolina 29304
April 30, 2009
1. | To elect six directors to serve until the next Annual Meeting of Shareholders or until their successors are elected and qualified; |
2. | To act upon such other matters as may properly come before the meeting or any adjournment or adjournments thereof. |
Cheryl C. Carter
Secretary
March 27, 2009
CROFT INDUSTRIAL PARK
POST OFFICE BOX 5627
SPARTANBURG, SOUTH CAROLINA 29304
April 30, 2009
Quorum. 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. 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 2, 2009. On March 2, 2009, the Company had outstanding 6,253,916 (excluding 1,746,084 shares held in treasury) shares of Common Stock. Each share of Common Stock is entitled to one vote on each matter to be voted on at the meeting, except that in the election of Directors shareholders have cumulative voting rights.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIAL FOR THE SHAREHOLDERS’ MEETING TO BE HELD ON APRIL 30, 2009
The Company’s 2008 Annual Report and 2009 Proxy Statement are available via the Internet at: http://investor.synalloy.com.
ANNUAL REPORT ON FORM 10-K
THE COMPANY'S COMMON STOCK
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class |
Tontine Overseas Associates, L.L.C. Tontine Capital Partners, L.P. Tontine Capital Management, L.L.C. Jeffrey L. Gendell 55 Railroad Avenue Greenwich, CT 06830 | 465,754(1) | 7.45 |
1414 Avenue of the Americas New York, NY 10019 | 347,700(2) | 5.56 |
__________
(1) | According to the Schedule 13G filed February 12, 2009, these entities and Mr. Gendell expressly affirm that they are acting as members of a group with respect to these shares. The Schedule 13G further states that: Mr. Jeffrey L. Gendell is the managing member of Tontine Capital Management, LLC (“TCM”) and Tontine Overseas Associates, LLC (“TOA”), and in that capacity directs their operations. TOA serves as investment manager to Tontine Capital Overseas Master Fund, LP. TCM, the general partner of Tontine Capital Partners, L.P. (“TCP”) has the power to direct the affairs of TCP, including decisions respecting the disposition of the proceeds from the sale of the shares of the Company. Each of the clients of TOA has the power to direct the receipt of dividends from or the proceeds of sale of such shares. |
(2) | Royce & Associates, Inc. ("Royce") is an investment advisor registered with the Securities & Exchange Commission under the Investment Advisors Act of 1940. |
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Name of Beneficial Owner | Owned as of March 2, 2009 | Percent of Class |
216,928(1) | 3.47 | |
211,162(2) | ||
82,708(3) | 1.32 | |
60,224(4) | * | |
51,901(5) | ||
42,131(6) | * | |
30,150(7) | ||
25,026(8) | ||
21,415(8) | ||
741,595(9) | 11.86 |
__________
1. | Includes 26,984 shares held by an IRA; and 93,750 shares owned by his spouse, as to which Mr. Lane disclaims beneficial ownership. |
2. | Includes indirect ownership of 35,580 shares held by an IRA; 4,830 held by spouse; and 11,890 held in custodial accounts for minor children. A total of 153,702 shares are held in a margin account and are pledged as collateral. |
3. | Includes 39,300 shares which are subject to currently exercisable options; 9,647 shares allocated under the Company's 401(k)/ESOP; and 1,447 shares allocated to spouse under the Company's 401(k)/ESOP. |
4. | Includes exercisable options to purchase 6,000 shares. |
5. | Includes 29,593 shares which are subject to currently exercisable options; and 2,735 shares allocated under the Company's 401(k)/ESOP. |
6. | Includes 4,873 shares allocated under the Company's 401(k)/ESOP. |
7. | Includes 18,146 shares which are subject to currently exercisable options; and 4,306 shares allocated under the Company's 401(k)/ESOP. |
8. | Includes 5,605 shares held by spouse which are held in a margin account and may from time-to-time be pledged as collateral. |
9. | Includes 93,039 shares which are subject to currently exercisable options; and 23,008 shares allocated under the Company's 401(k)/ESOP. |
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Name, Age, Principal Occupation, Other Directorships and Other Information | Since |
Mrs. Fishburn is a graduate of Hollins University, Roanoke, VA. Mrs. Fishburn is a member of the Nominating/Corporate Governance and Compensation & Long-Term Incentive Committees | 1979 |
Mr. Lane served as Chief Executive Officer of the Company from 1987 until his retirement on January 31, 2002. He has served as Chairman of the Board since 1987 and is a member of the Executive Committee | 1986 |
Prior to his retirement, Mr. Vinson was Principal and Managing Member of VH, LLC, a private real estate investment company from 2000 to 2007. He is a member of the Audit, Executive, Nominating/Corporate Governance and Compensation & Long-Term Incentive Committees. | 1987 |
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 retired as Chief Executive Officer of, the law firm of Wright, Robinson, Osthimer & Tatum, Richmond, VA. He serves on the Audit, Nominating/Corporate Governance and Compensation & Long-Term Incentive Committees. | 2001 |
Mr. Bram is the founder and President of Horizon Capital Management, Inc., an investment advisory firm, founded in 1996, in Richmond, VA. Since 1995, he has also been a Managing Director with McCammon Group, a mediation and consulting company based in Richmond, VA. Mr. Bram has been the President of Bizport, Ltd., a document management company in Richmond, VA, since 2002. Since 1997, Mr. Bram has served as the CFO for TrialNet, Inc., an electronic billing company based in Richmond, VA. Mr. Bram serves on the Audit, Compensation and Long-Term Incentive and Nominating/Corporate Governance Committees. | 2004 |
Mr. Braam has served as President and Chief Executive Officer of Synalloy Corporation since January 1, 2006. Since December 1999, he has been President of the Company's Specialty Chemicals Group, which is comprised of Manufacturers Chemicals, LLC, Blackman Uhler, LLC, Organic Pigments, LLC and SFR, LLC, wholly-owned by the Company. Mr. Braam serves on the Executive Committee. | 2006 |
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The Audit Committee members are Carroll Vinson, Chair, Murray Wright and Craig Bram. The Audit Committee acts pursuant to a written charter adopted by the Board of Directors which is available on the Company's website at: www.synalloy.com. Each member of the Audit Committee is independent as defined in the NASDAQ Rules. The Audit Committee held six 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, reviewed and discussed the Forms 10-Q for each quarter with management and the independent auditors prior to filing with the Securities and Exchange Commission (“SEC”), met independently with the independent auditors, interviewed and selected the independent auditors, reviewed the Audit Committee Charter and had oversight of the development and implementation of the Company's Code of Conduct.
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composition of the Board of Directors and evaluating and recommending candidates for election to the Company's Board. This Committee also reviews and oversees corporate governance issues and makes recommendations to the Board related to the adoption of policies pursuant to rules of the SEC, the NASDAQ, and other governing authorities, and as required by the Sarbanes Oxley Act. This Committee met once in 2008.
In recommending and evaluating candidates, the Nominating/Corporate Governance Committee takes into consideration such factors as it deems appropriate based on the Company's current needs. These factors may include diversity, age, skills such as understanding of appropriate technologies and general finance, decision-making ability, inter-personal skills, experience with businesses and other organizations of comparable size, and the interrelationship between the candidate's experience and business background and other Board members' experience and business background. Additionally, candidates for director should possess the highest personal and professional ethics, and they should be committed to the long-term interests of the shareholders.
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Name, Age and Principal Position and Five-Year Business Experience |
Chief Financial Officer and Vice President, Finance since May 1994 |
Cheryl C. Carter, age 58 Corporate Secretary since June 1987. |
Michael D. Boling, age 54 President of Bristol Metals, LLC, a subsidiary of the Company, since October 1, 2005; Vice President of Bristol Metals' Piping Systems unit from 1987 to 2005. |
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further described below. Taken together, they fit the Company’s business model to achieve its long-term goals. Each element addresses different considerations, and without one or more of the elements, our long-term goals might not be achievable.
Given the fact that our manufacturing businesses have, in the past, been cyclical, the Company has attempted to attract and retain the best available talent at the low end of the industry base compensation scale. It is important for the Company to remain competitive with not only its domestic competition, but also its competitors participating in world markets. Therefore, the Company attempts at all levels of management and operations to control costs so that the Company can strive for a relatively low base cost structure. This provides a cushion for the Company in times of reduced profitability.
However, in order to remain competitive in the executive workforce marketplace and attract the talented executives the Company needs, notwithstanding the lower relative base compensation, the Company believes it is necessary to provide enhancement to base compensation when targeted levels of profitability are achieved. Accordingly, the Company maintains short- and long-term incentive compensation programs that tend to be somewhat more generous than those of some of its industry peers.
The three elements of executive compensation are more fully described below, as are the methods used in determining their values.
Base Compensation. The Committee determines base salaries by considering market forces in the area, and in the industry applicable to each business unit. For the reasons discussed above, base salaries are set toward the low end of a range defined by our peers of comparable size and in related industries.
In addition to peer group information, the Company considers the attributes of each individual executive, including but not limited to his or her longevity with the Company, his or her educational background and experience, the particular responsibilities of his or her position, the compensation of others with similar background, credentials and responsibilities, and his or her past level of performance, as well as prospective assumptions.
Short-Term Incentive Compensation. As discussed above, in order for the lower relative base compensation approach to be effective, the Company maintains a cash incentive program which tends to be somewhat more generous than that of our peers when profits are robust, and pays the employees nothing unless minimum returns on average shareholders’ equity are achieved. The cash incentive program compensates each manager eligible for such incentive compensation pursuant to a formula based upon returns on average equity in his business unit during the year. The intention is to make every senior manager’s cash compensation dependent upon measurable objective performance criteria. Subsidiary senior managers participate in profit sharing pools determined by the performance of their business units, while the Chief Executive Officer’s incentive compensation is based on consolidated profitability.
The formula employed with respect to the cash incentive program is to award an incentive pool to each business unit in an amount equal to 10% of operating income in excess of a threshold of 10% return on average shareholders’ equity employed in the business units. A minimum of 60% of the incentive will be paid to designated participants pro rata to their salaries. A maximum of 30% of the incentive pool may be distributed to employees who are not designated participants and a minimum of 10% and a maximum of 40% of the incentive pool may be paid to designated participants in any proportion as recommended by the Chief Executive Officer and approved by the Compensation & Long-Term Incentive Committee. Other senior managers at the Company’s headquarters, including the Chief Financial Officer, the Corporate Secretary and other senior executives, receive cash bonuses based upon their individual performance as determined by the Chief Executive Officer and the Compensation Committee & Long-Term Incentive Committee. In the past, cash bonuses have varied from a small percentage of the amount of cash bonuses allocated to the operating business units, to as much as 20% of that amount, depending upon specific circumstances. There is no maximum or minimum amount currently established for these individuals, but there has been an indirect linkage between the size of the cash bonus pool, and the amounts allocated to these individuals. The Chief Executive Officer’s cash bonus is specified in his employment contract, which extends through December 31, 2009 and is automatically extended for an additional year unless either party gives 90 days
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advance notice of intention to cancel the agreement. The employment contract provides a cash bonus equal to 5% of operating income before income taxes in excess of an amount equal to 10% of average stockholders' equity.
Long-Term Incentive Compensation. The Company also provides to senior managers a long-term incentive component to compensation. In 2004 and prior years, this component took the form of stock options pursuant to incentive stock option plans adopted in 1988 and 1998. For 2005 and future years, the Compensation & Long-Term Incentive Committee of the Board of Directors has recommended, and shareholders approved, awarding incentives through grants of restricted stock under the 2005 Stock Awards Plan. Grants of restricted shares instead of options are expected to benefit the Company in that such grants avoid the complicating issues of accounting for the cost of option grants and reduce the potential dilution to existing shareholders, while exposing the grantees to both the positive and negative aspects of changes in market price of the Company’s common stock over time. Grants of restricted stock augment the cash component of compensation in a number of ways. The grants vest in 20% increments over a period of five years from the date of grant as long as the employee remains employed by the Company. Over time, the program provides an incentive for the executive to remain with the Company in the long term, as vesting depends upon continued employment. Goals are prospective, and the executives are made aware, annually, of the Company’s long-term values and expectations. Cash compensation is necessarily focused in the near term. Long-term incentive compensation is focused largely on the future.
In allocating between cash and equity compensation, the Compensation & Long-Term Incentive Committee has taken into account the fact that the costs of stock grants under the Plan are a tax deductible expense to the Company measured on the date of vesting, whereas cash compensation is a direct expense to the Company in the time frame dictated by applicable accounting rules.
The granting of awards under the 2005 Stock Awards Plan begins with a determination by the Chief Executive Officer and the Compensation & Long-Term Incentive Committee of the dollar value of the stock available to be awarded for performance in a given year. The awards are made the following year and the total number of restricted shares available to be awarded is determined by dividing the previously determined dollar value of available stock by the average of the high and low sales prices on the trading day immediately prior to the determination date. The number of shares so determined is the maximum number that may be awarded to all participants for the prior year’s performance.
The Chief Executive Officer and the Compensation & Long-Term Incentive Committee also agree at the beginning of the performance year upon specific milestones, largely comprised of measurable business metrics which can be impacted by management. These goals are established and communicated to managers in February or March of each year. The Committee reviews progress towards the goals during the performance year and evaluates performance after the end of the year. Based on its evaluation, the Committee awards restricted shares to the participants as it deems appropriate.
The Committee has and uses its discretion to determine the number of shares awarded to each named executive officer. The Committee does not use multiple levels of performance which are tied to multiple levels of awards. Rather, it subjectively evaluates the extent to which an executive officer has achieved or made progress toward achieving the officer’s goals after considering the available data and it then uses its collective judgment to make awards it believes to be appropriate to the level of performance.
Corporate goals for 2008 included both financial and operating targets. Financial targets included, among others, revenue and profit growth, return on invested capital, and cost control. Operating targets included, among others, customer relationship issues, product quality and plant process efficiency.
No restricted stock grants were made in 2005. A total of 22,510 stock grants were made in February 2007 against a potential grant of 45,000 shares for 2006 plan participants’ performance. Goals for 2007 were established and communicated to plan participants early in 2007. Based on the Company’s achieving its goals and executive officers achieving their individual goals in 2007, a total of 11,480 stock grants were made against a potential grant of 24,465 shares at the Committee’s meeting in February 2008. Likewise, goals were established in 2008 and quarterly reports on progress toward goals were produced by each business unit and senior management, and communicated to the
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Committee for review. In February 2009, the Committee evaluated each business unit and senior management with respect to 2008 performance versus goals. As a result of this evaluation process, the Committee declared an award of 5,500 restricted shares to plan participants against a potential grant of 76,628 shares. The awards for 2008 were smaller than in previous years due to the level of achievement being lower, relative to goals.
The Committee has deferred setting a value of stock awards for 2009 pending revision of the criteria for awards to senior management The Committee’s goal is to apply certain common goals across all levels of senior management, in addition to specific goals within their area of responsibility, as in the past. The size of the grant pool may rise or fall over time, depending on the long-term performance of the Company. The Committee’s focus in setting this element of compensation is to achieve an appropriate balance among the three elements of executive compensation. Awards are granted in February so that the Committee has time to evaluate prior year goals against performance, and also to enable the participants to have the earliest possible awareness of what their goals are for the ensuing year. The Company does not employ a “claw back” or similar technique to reduce existing awards if performance falters in future years; instead, the goals are intended to induce continued improvement, and grading is rigorous. The entire system is intended to induce consistent and improving performance over time.
Other Matters. Executive officers make recommendations with respect to salaries of their subordinates. The Compensation & Long-Term Incentive Committee sets the salaries of the Chief Executive Officer, Chief Financial Officer, Corporate Secretary and the head of each business unit.
The Committee reviews all forms of executive compensation annually, and, based on its experience with this system, believes that is fair to the employees, and the Company, over time. The Committee also believes that the system provides motivation for employees to maximize shareholder value over the long term.
The process outlined above describes the mechanics of determining executive compensation at the Company in 2008. The Committee contemplates no major changes in the process for 2009.
Sibyl N. Fishburn
Craig C. Bram
Carroll D. Vinson
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Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (g) | (i) | (j) | ||||||||||||||||||
Ronald H. Braam | 2008 | $ | 200,000 | $ | 29,744 | $ | 165,873 | $ | 9,200 | $ | 404,817 | ||||||||||||||
President and CEO | 2007 | 200,000 | 75,000 | 526,381 | 11,926 | 813,307 | |||||||||||||||||||
2006 | 200,000 | 383,162 | 13,853 | 597,015 | |||||||||||||||||||||
Gregory M. Bowie | 2008 | $ | 178,333 | $ | 90,000 | $ | 24,742 | $ | 9,200 | $ | 302,275 | ||||||||||||||
CFO | 2007 | 170,000 | 155,000 | 62,500 | 9,000 | 396,500 | |||||||||||||||||||
2006 | 165,000 | 110,000 | 8,800 | 283,800 | |||||||||||||||||||||
Michael D. Boling | 2008 | $ | 150,000 | $ | 23,187 | $ | 221,169 | $ | 9,200 | $ | 403,556 | ||||||||||||||
President of Bristol | 2007 | 150,000 | 119,000 | 506,119 | 9,000 | 784,119 | |||||||||||||||||||
Metals, LLC subsidiary | 2006 | 150,000 | 350,000 | 8,800 | 508,800 | ||||||||||||||||||||
Cheryl C. Carter | 2008 | $ | 88,833 | $ | 25,000 | $ | 13,385 | $ | 5,689 | $ | 132,907 | ||||||||||||||
Corporate Secretary | 2007 | 83,000 | 50,000 | 31,250 | 4,720 | 168,970 | |||||||||||||||||||
2006 | 80,000 | 35,000 | 4,200 | 119,200 |
Bonuses - Mr. Bowie and Ms. Carter are paid a discretionary cash bonus based on various considerations, including the Company's financial results, compensation of other executive officers and an evaluation of their job performance. For more information on cash bonus compensation, see “Compensation Discussion and Analysis – Short-Term Incentive Compensation.”
Stock Awards – The information in this column relates to restricted stock awards. The amounts in this column represent the dollar amounts recognized for financial statement reporting purposes with respect to the fiscal year in accordance with FAS 123(R). The assumptions made in the valuation of these awards are set forth in Note J to the Company’s consolidated financial statements for the year ended January 3, 2009, which are included in the Company’s 2008 Annual Report on Form 10-K.
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excess of a predetermined percentage (10% for 2008) of average stockholders' equity. For more information on short-term incentive compensation, see the “Compensation Discussion and Analysis – Short-Term Incentive Compensation.”
All Other Compensation – The amounts shown in this column represent the Company’s contributions pursuant to the 401(k)/Employee Stock Ownership Plan for the named executives. Perquisites for each named executive officer were less than $10,000.
GRANTS OF PLAN-BASED AWARDS
Name (a) | Grant Date (b) | Estimated Possible Payouts Under Equity Incentive Plan Awards (1) | All Other Stock Awards Number of Shares of Stock or Units (#) (2) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) (3) | ||||||||||||||||
Target ($) (g) | Maximum ($) (h) | (i) | (k) | (l) | |||||||||||||||||
Ronald H. Braam | 2/12/2008 | - | - | 2,200 | $ | 13.52 | $ | 29,744 | |||||||||||||
Gregory M. Bowie | 2/12/2008 | - | - | 1,830 | 13.52 | 24,742 | |||||||||||||||
Michael D. Boling | 2/12/2008 | $ | 91,061 | $ | 285,325 | 1,715 | 13.52 | 23,187 | |||||||||||||
Cheryl C. Carter | 2/12/2008 | - | - | 990 | 13.52 | 13,385 |
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(2) Awards of restricted shares to the named executives in 2008 pursuant to the 2005 Stock Awards Plan based on achievement of pre-determined quantifiable and qualitative goals during 2007. The shares vest in 20% increments beginning one year from date of grant, and any unvested shares are forfeited upon termination of employment. Dividends accrue and are paid to named executives upon vesting of any portion of the restricted stock.
Awards of restricted shares were also made on February 12, 2009 to the named executives pursuant to the 2005 Stock Awards Plan for 2008 performance. Under the Plan awards of restricted stock were made to certain key executives based on achievement of pre-determined quantifiable and qualitative goals during 2008 as follows: Mr. Braam – 1,000 shares, Mr. Bowie – 1,500; and Ms. Carter – 1,000 shares. See Compensation Discussion and Analysis for more information on long-term incentive compensation.
(3) Computed in accordance with FAS 123(R).
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Option Awards | Stock Awards | |||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date (1) | Number of Shares or Units of Stock That Have Not Vested (2) (#) | Market Value of Shares or Units of Stock That Have Not Vested (3) ($) | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||
Ronald H. Braam | 6,500 | 0 | $ | 7.75 | 4/29/2009 | 4,600 | $ | 23,000 | ||||||||||||||
8,000 | 0 | 7.282 | 12/1/2009 | |||||||||||||||||||
4,800 | 0 | 4.65 | 4/25/2012 | |||||||||||||||||||
13,000 | 14,000 | 9.96 | 2/3/2015 | |||||||||||||||||||
Gregory M. Bowie | 7,500 | 0 | $ | 7.75 | 4/29/2009 | 3,830 | $ | 19,150 | ||||||||||||||
15,093 | 14,000 | 9.96 | 2/3/2015 | |||||||||||||||||||
Michael D. Boling | 0 | 0 | 5,523 | $ | 27,615 | |||||||||||||||||
Cheryl C. Carter | 6,000 | 0 | $ | 7.75 | 4/29/2009 | 1,990 | $ | 9,950 | ||||||||||||||
3,600 | 0 | 4.65 | 4/25/2012 | |||||||||||||||||||
8,546 | 1,454 | 9.96 | 2/3/2015 |
__________
(1) Options expiring April 29, 2009, vested as follows: 20% beginning April 29, 2000, 40% at April 29, 2001, 60% at April 29, 2002, 80% at April 20, 2003 and 100% at April 20, 2004. Stock options expiring April 25, 2012 vested as follows: 20% beginning on April 25, 2003, 40% at April 25, 2004, 60% at April 25, 2005, and the remaining 12,800 shares granted to the named executive officers vested on December 20, 2005 as a result of the Board of Directors' resolution to accelerate the vesting schedules of substantially all outstanding unvested options issued to officers and key employees effective as of the date of the resolution. Options expiring February 3, 2015 vest as follows: 16,454 options granted vested on December 20, 2005 as a result of a Board of Directors' resolution to accelerate the vesting schedules described above; no options vested in 2006; 6,201 shares vested on February 3, 2007 for Messrs. Braam and Bowie; 7,000 options vested on February 3, 2008 for Messrs. Braam and Bowie; 7,000 options will vest on February 3, 2009 for Messrs. Braam and Bowie; and 7,000 options for Messrs. Braam and Bowie and 1,454 options for Ms. Carter will vest on February 3, 2010.
(2) Includes restricted stock awards granted February 12, 2007 of which 20% vest annually beginning February 12, 2008; and restricted stock awards granted February 12, 2008 of which 20% vest annually beginning February 12, 2009. Stock awards are subject to the recipient’s continuing to be employed by the Company and other conditions described under “Equity Plans—Stock Awards Plan” below.
(3) Based on the January 2, 2009 closing stock price of $5.00 per share.
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Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
(a) | (d) | (e) | ||||||
Ronald H. Braam | 600 | $ | 8,112 | |||||
Gregory M. Bowie | 500 | 6,760 | ||||||
Michael D. Boling | 952 | 12,871 | ||||||
Cheryl C. Carter | 250 | 3,380 |
Name | Fees Earned or Paid in Cash ($) (1) | Total | ||||||
(a) | (b) | (h) | ||||||
James G. Lane, Jr. | $ | 48,000 | $ | 48,000 | ||||
Sibyl N. Fishburn | 43,000 | 43,000 | ||||||
Carroll D. Vinson | 53,000 | 53,000 | ||||||
Murray H. Wright | 50,500 | 50,500 | ||||||
Craig C. Bram | 48,000 | 48,000 |
__________
(1) As discussed above, each director elected to be paid $15,000 of his annual retainer in stock (959 shares each).
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Incentive stock options are not transferable other than by death and can only be exercised during the employee's lifetime by the employee. Under the 1994 Plan, in the event a person ceases to be a non-employee director for reasons other than death, the unexpired options must be exercised by the earlier of three years after termination of
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Board service not to exceed 10 years after date of grant. On December 20, 2005, the Board of Directors elected to accelerate vesting of 44,144 outstanding unvested stock options under the 1998 Stock Option Plan. At March 2, 2009, there were 128,243 options outstanding under both plans of which 98,789 were exercisable.
Shares representing awards that have not yet vested will be held in escrow by the Company and an employee will not be entitled to any voting rights with respect to any such shares. Share awards that have not vested will not be transferable.
The Board of Directors implemented an equity-based incentive compensation program pursuant to which it reserved 45,000 shares under the 2005 Stock Awards Plan for potential grant in 2007 to officers, including the named executive officers in the Summary Compensation Table, and certain key employees if they achieved pre-determined quantifiable and qualitative goals during 2006. As explained in connection with the Grants of Plan-Based Awards table, on February 12, 2007 a total of 22,510 restricted shares were awarded under this incentive program, of which 11,510 were awarded to the named executive officers, based on meeting pre-disclosed 2006 goals. Of these restricted share awards, 4,136 shares vested on February 12, 2008.
At its February 2007 meeting, the Compensation & Long-Term Incentive Committee set a number of shares with a market value on the date of grant of $400,000 under the Plan to ultimately be denominated in restricted shares for potential grants to officers and managers for 2007, including the named executive officers in the compensation table, subject to achieving pre-determined quantifiable and qualitative goals during 2007. On February 12, 2008, the Committee granted 11,480 restricted shares, of which 6,735 were awarded to the named executive officers, based on their achieving these goals in 2007.
At its February 2008 meeting, the Compensation & Long-Term Incentive Committee again set a number of shares with a market value on the date of grant of $400,000 under the Plan to ultimately be denominated in restricted shares for potential grants to officers and managers for 2008, including the named executive officers in the compensation table, subject to achieving pre-determined quantifiable and qualitative goals during 2008. As explained in connection with the Grants of Plan-Based Awards table, on February 12, 2009, a total of 5,500 shares were awarded under this incentive program, of which 3,500 were awarded to the named executive officers, based on meeting the pre-disclosed 2008 goals.
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Fiscal 2007 | % of Total | |||||||||||||||
$ | 269,500 | 88 | % | $ | 290,000 | 90 | % | |||||||||
Tax Fees: | ||||||||||||||||
Tax compliance/preparation | 32,000 | 11 | % | 28,000 | 9 | % | ||||||||||
3,800 | 1 | % | 2,625 | 1 | % | |||||||||||
Total Fees | $ | 305,300 | $ | 320,625 |
Audit Fees: Audit fees include fees billed for professional services rendered for the audit of the Company's consolidated financial statements and review of the interim condensed consolidated financial statements included in quarterly reports and services that are normally provided by the Company's independent auditor in connection with statutory and regulatory filings or engagements, and attest services, except those not required by statute or regulation. Audit fees also include services provided to us, totalling $110,000 in 2008 and $125,000 in 2007, in connection with our compliance with Section 404 of the Sarbanes-Oxley Act of 2002.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
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authority to pre-approve audit and permissible non-audit services, provided such pre-approval decision is presented to the full Committee at its next scheduled meeting. During 2008, all audit and permitted non-audit services were pre-approved by the Committee.
Carroll D. Vinson, Chair
Murray H. Wright
Craig C. Bram
Cheryl C. Carter
Secretary
Secretary
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PROXY 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 30, 2009
The undersigned hereby appoints Gregory M. Bowie and Cheryl C. Carter, or either 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 its corporate offices, 2155 West Croft Circle, Spartanburg, South Carolina 29302 on Thursday, April 30, 2009 at 10:00 a.m. local time, and at any adjournment thereof, upon such business as may properly come before the meeting.
The 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 proposal.
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 election of all the director nominees in proposal 1.
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Internet - Access "www.voteproxy.com" and follow the on-screen instructions. Have your proxy card available when you access the web page, and use the Company Number and Account Number shown on your proxy card.
Vote online until 11:59 PM EST the day before the meeting.
Mail - Date, sign and mail your proxy card in the envelope provided as soon as possible.
In Person - You may vote your shares in person by attending the Annual Meeting.
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, proxy statement and proxy card are available at http://investor.synalloy.com
Please sign, date and return your proxy card promptly in the enclosed envelope. Please mark your vote in blue or black ink as shown here. X
Proposal 1. Election of Directors | |||
____ | For All Nominees | Nominees | |
___ | Sibyl N. Fishburn | ||
____ | Withhold Authority For All Nominees | ___ | James G. Lane, Jr. |
___ | Ronald H. Braam | ||
____ | For All Except | ___ | Craig C. Bram |
(See Instructions below) | ___ | Carroll D. Vinson | |
___ | Murray H. Wright |
Instructions: To withhold authority to vote for any individual nominee(s) mark 'FOR ALL EXCEPT' and fill in the circle next to each nominee you wish to withhold, as shown here.
2. Upon any other matter that may properly come before the meeting or any adjournment thereof, as the proxies in their discretion may determine.
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.
__________________________________________________________________________________________________________________
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 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.