WILLIAMS INDUSTRIES, INCORPORATED
8624 J.D. Reading Drive
Manassas, Virginia 20109
NOTICE OF ANNUAL MEETING TO SHAREHOLDERS
To Be Held November 8, 2003
To the Shareholders of
Williams Industries, Incorporated:
The Annual Meeting of the Shareholders of Williams Industries, Incorporated
will be held at the Ernst Community Center of Northern Virginia Community
College, 8333 Little River Turnpike, Fairfax, Virginia, (Route 236 at the
intersection of Wakefield Chapel Road, just west of the Intersection of
Interstate 495 and Route 236) at 10:00 A.M. on November 8, 2003 for the
following purposes:
(1) To elect seven directors to serve until the next Annual Meeting or until
their successors are elected and qualified.
(2) To approve adoption of an Equity Compensation Plan for directors.
(3) To transact such other business as may properly come before the Annual
Meeting and any adjournments thereof.
Only shareholders of record at the close of business on September 19, 2003
are entitled to notice of the Annual Meeting and to vote at the Annual
Meeting. A list of such shareholders of record will be available at the
Company's executive offices for inspection by shareholders for a period of at
least ten days prior to the Annual Meeting. You are urged to execute the
enclosed proxy and return it in the accompanying envelope at your earliest
convenience. Such action will not affect your right to vote in person should
you find it possible to attend the meeting.
By Order of the Board of Directors
/s/ Marianne V. Pastor, Secretary
Marianne V. Pastor
Secretary
WILLIAMS INDUSTRIES, INCORPORATED
8624 J. D. Reading Drive
Manassas, Virginia 20109
ANNUAL MEETING OF SHAREHOLDERS
To be Held November 8, 2003
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies to be used at the Annual Meeting of Shareholders of Williams
Industries, Incorporated (the "Company"), to be held at the Ernst Community
Center of Northern Virginia Community College, 8333 Little River Turnpike,
Fairfax, Virginia, (Route 236 at the intersection of Wakefield Chapel Road,
just west of the intersection of Interstate 495 and Route 236) at 10:00 A.M.
on Saturday, November 8, 2003, and at all adjournments thereof. It is
anticipated that this proxy material will be mailed to shareholders on or
about October 7, 2003.
The solicitation of the proxy accompanying this statement is being made
by the management of the Company, and the cost of solicitation will be borne
by the Company. The solicitation may be made by mail, telephone or oral
communication with shareholders. The Annual Report to Shareholders for the
Fiscal Year ended July 31, 2003 accompanies this proxy statement. Additional
copies of the Annual Report may be obtained by writing to the Secretary of
the Company at P.O. Box 1770, Manassas, Virginia 20108. The financial
statements for the period ending July 31, 2003, included in the Annual Report
to Shareholders, were audited by Aronson and Company, the Company's current
independent certified public accountants. It is anticipated that
representatives of Aronson and Company will be present at the Annual Meeting
and will be given the opportunity to make a statement and respond to
questions.
A proxy for use at the Annual Meeting is enclosed. Any shareholder who
executes and delivers such proxy has the right to revoke it at any time
before it is exercised, by filing with the Secretary of the Company either an
instrument revoking it or a duly executed proxy bearing a later date. In
addition, the powers of the proxy holder will be suspended if the person
executing the proxy is present at the meeting and elects to vote in person.
The only outstanding voting security of the Company is its Common Stock,
$.10 par value, of which there were issued and outstanding 3,586,880 shares
on September 19, 2003, which is the record date for the purpose of
determining the shareholders entitled to notice of and to vote at the Annual
Meeting. With the possible exception of the election of directors, each
holder of Common Stock will be entitled to one vote, in person or by proxy,
for each share of Common Stock outstanding in the shareholder's name on the
books of the Company as of the record date. While the Company's Articles of
Incorporation provide for cumulative voting in an election of directors, the
Virginia Code provides that shares otherwise entitled to vote cumulatively
not be voted cumulatively at a particular meeting unless the meeting notice
or proxy statement states conspicuously that cumulative voting is authorized;
or unless a shareholder gives notice to the secretary of the corporation not
less than 48 hours before the time set for the meeting of his intent to
cumulate his votes during the meeting. Cumulative voting means that the
shareholders are entitled to multiply the number of votes they are entitled
to cast by the number of directors for whom they are entitled to vote and
cast the product for a single candidate or distribute the product among two
or more candidates. If one shareholder gives his notice, all other
shareholders are entitled to cumulate their vote. The Company does not
intend that there be cumulative voting at the meeting, but in the event
cumulative voting should be instituted by a shareholder, the Company's proxy
holders will use their discretion in voting any unmarked proxies. All marked
proxies will be voted for nominees as directed in the proxy, but marked
proxies may not authorize voting more than one vote per nominee.
PROPOSAL I - ELECTION OF DIRECTORS
Nominees
The Board of Directors has fixed the number of directors to be elected
at the Annual Meeting at seven, each to hold office until the next Annual
Meeting and until the director's successor shall be elected and qualified.
The Company has no standing nominating committee; the Board of Directors
chooses management's nominees.
The Company's transfer agent will be appointed to tabulate shares
present, in person or by proxy, and to tabulate votes. Abstentions will be
counted as present at the meeting and will be recorded as abstentions. They
will not be recorded as votes either for or against the nominees. So long as
a quorum (a majority of the outstanding shares) is present, directors will be
elected by plurality vote; i.e., the seven nominees receiving the most votes
will be elected. Thus, neither a vote against nor an abstention will have any
effect on the outcome of the election of directors; only votes for a nominee
will have any such effect. Generally, shares held of record by a broker or
other nominee for the benefit of a beneficial owner may only be voted by that
broker or nominee, and if the broker or nominee does not vote the shares, the
shares will not be tabulated as present or voting at the meeting. However, as
provided by Virginia law, the Company may, but is not required to, accept the
vote of a beneficial owner upon presentation of evidence acceptable to the
Company that the voter is indeed the beneficial owner of the shares. The
following table sets forth information concerning the nominees:
Nominees
Name Age Position with the Company Elected
Frank E. Williams, III (1) 44 President, Chairman of the 1991 (2)
Board, Chief Financial Officer
Frank E. Williams, Jr. (l)(2) 69 None 1970
R. Bentley Offutt (3)(4) 65 None 1994
Stephen N. Ashman (3)(4) 55 None 1998
William J. Sim (2)(3) 58 None 1998
Thomas C. Mitchell (4) 64 None 2002
John A. Yerrick (5) 63 Nominee
(1) Frank E. Williams, Jr. may be considered a "control person" of the
Company, as the term control is defined by the rules of the Securities and
Exchange Commission. Mr. Williams, III is the son of Mr. Williams, Jr.
(2) Member of standing Executive Committee. This committee, which acts
on behalf of the Board in situations where Board action is necessary but not
obtainable on short notice and if such action is authorized by applicable
law, met five times during the year and also met as a "committee of the
whole" with other board members present either in person or by conference
call twice during the year.
(3) Member of standing Audit Committee. Mr. Ashman is chairman of this
committee. This committee, which met four times during the past fiscal year,
consults with and authorizes the engagement of the Company's independent
auditors and provides recommendations to the Board concerning the Company's
accounting procedures.
(4) Member of standing Compensation Committee. Mr. Offutt is chairman of
this committee, which met two times during the last fiscal year, sets the
compensation for the President and establishes guidelines, to be implemented
within the President's discretion, for the compensation of other officers.
(5) The Company's Board of Directors, acting within the authority granted
it in the Company's By-Laws, have increased by one the number of directors to
be elected this year. Mr. Yerrick is the nominee to fill this new seat.
Because of his prior associations with the company, Mr. Yerrick will not be
considered as an independent director. Mr. Williams, III, and Mr. Williams,
Jr., are also not considered to be independent. The board's remaining four
directors meet the SEC requirements as independent directors.
The Nominees have had the following principal occupations or employment for
at least the past five years:
Mr. Williams, III has held the position of Chairman of the Board and
President since November 1994. On September 8, 1994, he was elected Chief
Financial Officer. He was elected as a vice president of the Corporation in
1991. For more than five years prior thereto he was an officer of various
Company subsidiaries and remains an officer and/or director of several
subsidiaries.
Mr. Williams, Jr., until November 1994, was the Chairman of the Board and
President of Williams Industries, Inc. He is a founder and Chairman of
Bosworth Steel Erectors, Inc., formerly known as the Williams and Beasley
Company; the Chairman of the Board of Williams Enterprises of Georgia, Inc.;
and the principal owner of Structural Concrete Products, LLC; all
organizations that are not otherwise affiliated with Williams Industries,
Inc.
Mr. Offutt is the founder and president of Offutt Securities, Inc., a
Baltimore investment research firm specializing in high growth companies with
market capitalizations in a range of $60 million to $1 billion. Mr. Offutt
has worked in institutional research for more than 25 years.
Mr. Ashman is a principal with SAS advisors, an area consulting firm.
Effective August 2002, he was elected Chairman of the Board of Directors of
Capital Bank, N.A., and its holding company. Mr. Ashman is also on the board
of directors of Prudent Capital, a mezzanine fund in Washington, D.C., and
NextGen Capital, a venture capital fund in Fairfax, VA. He is active in a
number of community organizations and is a board member of five community
groups.
Mr. Sim is the President and Chief Operating Officer of Potomac Electric
Power Company (PEPCO) of Washington, D. C., a position he assumed on August
1, 2002. Prior to that time, he was Senior Vice President for Power
Delivery for PEPCO. Mr. Sim is also active in a number of business and civic
organizations, as well as being a registered professional engineer. He is on
the board of directors of the Washington Building Congress, a regional
construction-industry association, and is also on the Board of Visitors of
the A. James Clark School of Engineering at the University of Maryland.
Mr. Mitchell currently is the president and CEO of Delmarva Real Estate
Management Group. He previously was the president and owner of Davenport
Insulation Group. Prior to that time, he was the president of a subsidiary
of Washington Gas Light Company. Mr. Mitchell is active in a number of
Maryland civic organizations and is a licensed real estate broker.
Mr. Yerrick is a self-employed consultant, a position he has held since June
2002. Prior to that time, he was a senior audit partner in the international
accounting firm of Deloitte & Touche. During his 39 years with the firm, Mr.
Yerrick held a variety of positions including Partner-in-Charge of Audit for
the Washington, DC practice, Managing Partner for the Baltimore practice and
most recently Deputy Professional Practice Director for the Washington,
DC/Baltimore practice. He is presently serving on the board of a privately
held company, and serves on the annual benefit committee of Catholic
Charities of the Archdiocese of Washington and the finance committee of
Rockville Arts Place, a nonprofit organization promoting art in Montgomery
County Maryland.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR"
THE ELECTION OF DIRECTORS OF THE NOMINEES NAMED ABOVE
Further Information Concerning the Board of Directors
During the past fiscal year, the Board of Directors held five regular
meetings. All directors attended more than 75% of the board meetings during
the fiscal year. Numerous committee meetings, involving individual directors
in different capacities, were also held.
Executive Officers
The executive officers of the Company serve at the discretion of the
Board and presently include: Frank E. Williams, III, Chairman of the Board,
Chief Executive Officer, and Chief Financial Officer.
Compliance with Section 16 of the Securities Exchange Act of 1934, as amended
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and holders of 10% or
more of the Company's Common Stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership
of equity securities of the Company. The Company believes that all reports
required pursuant to Section 16(a) with respect to the 2003 fiscal year were
filed in a timely fashion, except that options granted to employees were
reported on Forms 5 filed 9/15/03 rather than on Forms 4 on 2/11/03.
Corporate Governance and Other Matters
The Board of Directors selects the nominees for directors. The
Company's by-laws also permit shareholders eligible to vote at the Annual
Meeting to make nominations for directors, through written notice no later
than 60 days prior to the date of the anniversary of the immediately
preceding annual meeting, to the Secretary of the Company. The by-laws also
permit shareholders to propose other business to be brought before an annual
meeting, provided that such proposals are made pursuant to the same timely
notice in writing to the Secretary of the Company. No such nominations or
proposals have been received in connection with the Annual Meeting.
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth information regarding ownership, as of
September 19, 2003 of the Common Stock of the Company by: (1) each person
known by the Company to own beneficially more than 5 percent of the Common
Stock; (2) each director; (3) each nominee for director; and (4) all officers
and directors as a group. Except as noted, the persons listed possess all
ownership rights attached to the shares opposite their name, including the
right to vote and dispose of the shares.
Directors:
Beneficial Owner Number of Shares Percentage of Class
Frank E. Williams, Jr. 1,610,233 (l)(3) 42.86 (1)
Frank E. Williams, III 1,104,299 (2)(3) 29.39 (2)
R. Bentley Offutt 20,463 (3) 0.54
Stephen N. Ashman 26,963 (3) 0.72
William J. Sim 26,963 (3) 0.72
Thomas C. Mitchell 6,437 (3) 0.17
John A. Yerrick 0
Officers and Directors as
a group (11 persons) 1,779,533 (3) (4) 47.36%
(1) Includes 158,705 shares owned by his wife, as to which Mr. Williams, Jr.
disclaims beneficial ownership; 986,346 shares owned or controlled by the
Williams Family Limited Partnership of which the Williams Family Corporation
(of which Mr. Williams, Jr. is the President and controlling person) is the
General Partner; 75,900 shares from the estate of F. Everett Williams of
which Mr. Williams, Jr. is executor; 3,000 shares as trustee for a minor
child; and 1,000 shares held by the Williams Family Foundation, a charitable
organization exempt under Section 501(c)(3) of the Internal Revenue code of
1986. The Foundation's purpose is to use and apply its income and principal
assets exclusively for charitable, scientific, literary, and educational
purposes. Mr. Williams, Jr. is a trustee of the Foundation and votes the
stock. The business address of Mr. Williams, Jr. is 2789-B Hartland Road,
Falls Church, Virginia 22043.
(2) Includes 986,346 shares owned or controlled by the Williams Family
Limited Partnership, duplicative of the shares listed for Mr. Williams, Jr.,
but included here because Mr. Williams, III, has a beneficial interest in
these shares; 304 shares owned by his wife to which Mr. Williams, III,
disclaims beneficial interest, and 3,000 shares held in trust for his minor
child. Mr. Williams, III, is also a trustee of the Williams Family
Foundation.
(3) Includes options granted to directors.
(4) Includes 21,321 shares owned directly by H. Arthur Williams, the son of
Mr. Frank E. Williams, Jr., and the brother of Mr. Frank E. Williams, III.
Mr. H. Arthur Williams is a Vice President of Williams Industries and he also
has a beneficial interest in the Williams Family Limited Partnership. These
shares are described in Items 1 and 2 of the preceding table.
Based on research of records of the Securities and Exchange Commission and on
information from the Nasdaq National Market reports, the Company believes
that there are no additional holders with more than a five percent position
in the Company's stock at this time.
EXECUTIVE OFFICERS AND DIRECTORS COMPENSATION
General
- -------
The following table sets forth the total annual compensation paid or accrued
by the Company to or for the account of Mr. Frank E. Williams, III, the
Company's Chief Executive Officer. Mr. Williams, III, has no employment
contracts, termination of employment or change-in-control arrangements,
pension plans, options (other than those disclosed herein) or any long term
incentive arrangements with the Company. Mr. Williams, III, as do other
eligible employees, participates in the Company's 401(k) plan, which provides
for Company contributions.
SUMMARY COMPENSATION TABLE
Annual Compensation
--------------------------
Name and Year Annual Compensation
Principal Position ---- ---------------------------------------------
- ------------------- Salary Other Bonus Long-Term
-------- ---------- ----------- ----------
Frank E. 2003 $148,511 $ 8,840(1) $108,000(2) $ 9,930(3)
Williams, III 2002 $141,683 $ 6,850(1) $120,880(4) $22,440(5)
Chief Executive 2001 $136,223 $10,490(1) $43,480(6) $10,710(7)
Officer
(1) Includes car allowance and directors' meeting fees
(2) Mr. Williams, III, was paid $78,000 for prior years accrued bonus
and was granted $30,000 for Fiscal 2002, for which he has not been
paid.
(3) Mr. Williams, III, was granted options for 3,000 shares of Williams
Industries' stock at $3.91 per share.
(4) Mr. Williams, III, was paid $43,480 for prior years accrued bonus and
was granted $77,400 bonus for Fiscal 2001, for which he has not been
paid.
(5) Mr. Williams, III, was granted options for 4,000 shares of Williams
Industries' stock at $5.61 per share.
(6) Paid in Fiscal 2002
(7) Mr. Williams, III, was granted options for 3,500 shares of Williams
Industries' stock at $3.06 per share.
In addition to the above, on July 12, 2003 during a regularly scheduled
meeting of the Board of Directors of the Company, upon motion of Mr. Stephen
Ashman, chairman of the Audit Committee, and seconded by Mr. Thomas Mitchell,
the independent directors of the Company voted to compensate Mr. Williams,
III, in the amount of $50,000 for agreeing to provide his personal guaranty
on a Company bond for the Woodrow Wilson Bridge project. This compensation,
which has not yet commenced, will be paid over the life of the Woodrow Wilson
Bridge contract, proportional to the payments received by the Company divided
by the contract price.
Directors' Fees
The Company's "outside" directors are compensated $650 per month for
serving as directors; $250 per meeting attended in person; $100 per telephone
meeting; $200 per committee meeting attended; and a stock grant of restricted
stock equal to $600 per month to be calculated monthly using the current
share price at the end of the month with the shares to be accumulated and
transferred once a year in January. The Chairman of the Audit Committee
receives an additional stipend of $500 per month and other committee chairs
receive $50 per month. Mr. Williams, III, is considered to be an "insider"
and does not receive the compensation previously noted. All directors are
reimbursed traveling expenses incurred in connection with meetings, with five
such meetings normally being held each year.
The Company also issues options to non-employee directors on an annual
basis. The options and shares issued upon exercise of these options are
issued pursuant to Rule 144 of the 1933 Securities Act. Each non-employee
director received 3,000 options at $3.55 for 2003.
PROPOSAL II - TO APPROVE DIRECTOR'S EQUITY COMPENSATION PLAN
In 1996 the Company's shareholders approved an Incentive Compensation
Plan that provides various types of incentive compensation that may be
awarded to employees by the Compensation Committee. This Plan excludes
participation by directors who are not employees. The proxy soliciting
material used in obtaining approval of the Plan noted this exclusion, but
also noted that non-employee directors might be granted bonus shares of
Common Stock outside of the Plan. On August 1, 2000 the Company began an
arrangement under which the non-employee directors receive shares of Common
Stock equal to $600 per month, calculated monthly using the market price at
the end of the month, with the shares accumulated and transferred once a year
in January. In addition, in May 1998 each of the four non-employee directors
received options for 3,000 shares, exercisable at 2.75 per share for five
years; in January 1999 the two new board members each received options for
5,000 shares and the remaining three non-employee directors each received
options for 2,500 shares at $2.75; in January 2000 each of the five non-
employee directors received options for 2,500 shares at $3.34; in January
2001 each received 2,500 at $2.78; in January 2002 each received 2,500 at
$4.50; and each non-employee director received 3,000 options at $3.55 for
2003. All of these options were for a period of five years.
Effective June 30, 2003, NASDAQ, the market system upon which the
Company's shares are traded, adopted an amendment to NASD Rule 4350(i)(1)(A)
which effectively requires that shareholders approve such arrangements in the
future. Consequently, we are seeking shareholder approval of the equity
compensation plan for non-employee directors as summarized below. The
affirmative vote of a majority of the shares of Common Stock present in
person or by proxy at the meeting is required to approve the Plan. The Board
of Directors unanimously recommends a vote for approval of the Plan.
1. Shares Reserved. 100,000 shares of Common Stock are reserved for issue
under the Plan. If an award lapses or the participant's rights with respect
to such otherwise terminate, any shares subject to such award will again be
available for future awards under the Plan.
2. Administration. All grants under the Plan will be determined by the
Compensation Committee of the Company's Board of Directors (the "Compensation
Committee").
3. Eligibility. An award may be granted to any director who is not an
employee of the Company. Directors who are employees may receive equity
awards under the Company's 1996 Incentive Compensation Plan, but not under
this Plan.
4. Awards. Under the Plan, the following types of awards may be granted.
No consideration will be paid by the participant on account of any grant.
* Restricted Stock. The Compensation Committee may grant annual awards
of shares of Common Stock bearing restrictions ("Restricted Stock")
prohibiting a transfer of the Restricted Stock for a period of time (except
for certain transfers by operation of the law not at the volition of the
participant). The Compensation Committee will establish the number of shares
to be granted to each non-employee director and the terms and conditions of
each grant. However, the fair market value of the number of shares issued to
any director in any year cannot exceed $15,000 and the non-transferability
period must be at least six months. On completion of the non-transferability
period the restrictions will expire. The grant of Restricted Stock will not
result in Federal taxable income to a participant or a tax deduction to the
Company. When the restrictions expire, a participant will realize ordinary
taxable income in an amount equal to the fair market value of the stock at
the time the restrictions expire, and the Company will be entitled to a
corresponding deduction.
* Options. The Compensation Committee may grant options to purchase
shares of Common Stock. The exercise price and expiration date of the
options will be determined at the discretion of the Compensation Committee,
except that the exercise price must be at least 50% of the fair market value
of the stock at the date of grant, the expiration date must be no later than
10 years after date of grant, and the exercise price and expiration dates
cannot be changed after the date of grant. These options will be non-
qualified options not entitled to favorable Federal tax treatment under the
Internal Revenue Code. The grant of an option will not result in taxable
income to the participant or a tax deduction for the Company, however upon
exercise of an option the participant will recognize compensation taxable as
ordinary income in an amount equal to the difference between the exercise
price and the fair market value of the stock on the date of exercise, and the
Company will be entitled to a corresponding deduction.
5. Accounting Effect. Accounting principles will require that restricted
share awards be charged against earnings on a pro-rata basis over the
restrictions period and will be based on the value of the stock at the date
of grant. Options will not be charged against earnings.
6. Amendment of Plan. The Plan may be amended by the Compensation Committee
to correct typographical errors, to clarify ambiguities and to make other
such editorial changes. However, except by shareholder approval, the Plan
may not be amended: (1) to change the expiration date of the Plan; (2) to
increase the number of shares to be issued under the Plan (other than to
reflect a reorganization, stock split, merger, spin-off or similar
transaction); (3) to decrease the exercise price or change the expiration
date of outstanding options; (4) to increase the value of restricted stock
which may be issued to any participant; (5) to expand the class of
participants in the Plan; (6) to expand the types of options or award under
the Plan; or (7) to make any other amendment which materially changes the
terms of the Plan.
6. Expiration Date. The Plan will expire 10 years after its approval by
shareholders.
Compensation Committee Report
Pursuant to rules adopted by the Securities and Exchange Commission
designed to enhance disclosure of public companies' policies toward executive
compensation, set forth below is a report submitted by the Company's
Compensation Committee (the Committee) addressing the Company's compensation
policies with respect to executive officers.
The Compensation Committee consisted of R. Bentley Offutt, Chairman,
Stephen N. Ashman and Thomas C. Mitchell. The Compensation Committee is
responsible for establishing and administering the policies that govern
annual compensation, bonuses, stock options and all other forms of
compensation for corporate executive officers. In November of each year,
salaries are discussed in committee, changes are recommended to the Board,
and voted on by the Board for the forthcoming calendar year.
The Committee structures executive compensation in a manner designed to
provide competitive levels of compensation and to assist the Company in
attracting and retaining qualified executives. Compensation is a direct
result of the company's performance and therefore can be said to be
performance driven. The Committee calculates executive compensation,
including bonuses, with a specific formula based on the Company's results.
Certain thresholds have to be achieved prior to the authorization for any
bonus. The Committee is generally familiar with executive compensation paid
in the Washington, D.C. metropolitan area, but has not made a detailed
comparison of the Company's executive compensation as compared to other
companies in the area or the industry. The Committee recommends executive
compensation to the full Board of Directors, which considers substantially
the same factors as the Committee in determining whether to approve its
recommendations.
/s/ R. Bentley Offutt, Chairman
/s/ Stephen N. Ashman
/s/ Thomas C. Mitchell
Compensation Committee Interlocks and Insider Participation
Mr. Williams, III is a director and the Chief Executive Officer of the
Company. Mr. H. Arthur Williams, the president of a Company subsidiary, is
the brother of Mr. Williams, III, and the son of Mr. Frank E. Williams, Jr.,
a Company director. The Williams family is considered to be a "control
group" of the Company, as the term control is defined by the Securities and
Exchange Commission.
Certain Transactions
Mr. Frank E. Williams, Jr., who owns or controls approximately 40% of the
Company's stock at July 31, 2003, and is a director of the Company, also
owns controlling interests in the outstanding stock of Williams Enterprises
of Georgia, Inc., and Structural Concrete Products, LLC. Additionally, Mr.
Williams, Jr. owns a substantial interest in Bosworth Steel Erectors, Inc.
(formerly Williams and Beasley Company). Revenue earned and costs incurred
with these entities during the three years ended July 31, 2003, 2002 and 2001
are reflected below. In addition, amounts receivable and payable to these
entities at July 31, 2003 and 2002 are also reflected below.
(in thousands) 2003 2002 2001
------ ------ ------
Revenues $2,442 $2,681 $1,630
Billings to entities $1,293 $2,931 $1,681
Cost incurred from $1,478 $2,007 $ 498
Balance at July 31,
2003 2002
------ ------
Accounts Receivable $1,680 $1,410
Accounts Payable $ 303 $ 247
In July 2003, the Company purchased a 30-ton overhead crane from Mr.
Williams, Jr. for approximately $28,000. The purchase was reviewed and
approved by the Audit Committee of the Company's Board of Directors prior to
finalizing the payment.
Mr. Williams, Jr. is a former director of Concrete Structures, Inc.
(CSI), a former subsidiary of the Company, which was operating under the
supervision of the U.S. Bankruptcy Court for the Eastern District of
Virginia, Richmond Division. During the year ended July 31, 2001, the Company
agreed to accept approximately $130,000 as full and final payment on a note
receivable from CSI. Since the note was fully reserved, this amount was
recognized as Other Income during the year ended July 31, 2001.
The Company is obligated to the estate of F. Everett Williams, a former
director of the Company, for a Demand Note Payable of approximately $88,000.
The note, at 10% simple interest, is not secured. The Company recognized
interest expense for the three years ended July 31, 2003, 2002 and 2001 as
follows:
(in thousands) 2003 2002 2001
------ ------ ------
Interest Expense $ 9 $ 9 $ 9
Balance at July 21,
2003 2002 2001
------ ------ ------
Note Payable $ 88 $ 88 $ 88
Accrued interest payable $ 64 $ 55 $ 46
The Company is obligated to the Williams Family Limited Partnership
under a lease agreement for real property with an option to purchase. The
partnership is controlled by individuals who own, directly or indirectly,
approximately 43% of the Company. The lease, which has an original term of
five years and an extension option for five years, commenced February 15,
2000. The Company recognized lease expense for the three years ended July 31,
2003, 2002 and 2001 as follows:
(in thousands) 2003 2002 2001
------ ------ ------
Lease Expense $ 56 $ 61 $ 84
During the year ended July 31, 2002, the Company entered into an
agreement with Alabama Structural Products (ASP), Inc., a subsidiary of a
company owned by Frank E. Williams, Jr., a Director of the Company, to lease
a 21,000 square foot building in Gadsden, Alabama for the expansion of
S.I.P., Inc. of Delaware. The lease payment is $2,500 per month.
Additionally, the Company has a labor reimbursement agreement with ASP to
provide labor to operate the Gadsden plant.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors is composed of three outside
directors. The committee's Chairman, Stephen N. Ashman, an independent
director, is a Certified Public Accountant who serves as the Audit
Committee's financial expert. The Audit Committee's primary function is to
oversee the Company's system of internal controls, financial reporting
practices and audits to determine that their quality, integrity and
objectivity are sufficient to protect stockholder interests. Each member of
the Committee is an independent director as defined by the National
Association of Securities Dealers (NASD) rules. The committee has adopted a
writer charter, which has been approved by the Board of Directors, and which
is set forth in Appendix A of this Proxy Statement.
The Audit Committee, either in person or by conference call, met four times
during Fiscal 2003 to review the overall audit scope, plans and results of
the independent auditors, the Company's internal controls, emerging
accounting issues, expenses, and audit fees. The Committee met separately
without management present and with the independent auditors to discuss the
audit. The Committee reviewed the Company's annual financial statements
prior to issuance. Audit Committee findings are reported to the full Board
of Directors.
Aronson and Company, the Company's independent auditor for 2003, is
responsible for expressing an opinion on the conformity of the Company's
audited financial statements with generally accepted accounting principles.
The Committee has discussed with Aronson and Company the matters that are
required to be discussed by the Statement on Auditing Standards No. 61
(Communication with Audit Committees). Aronson and Company has provided to
the Committee the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and the Committee discussed with Aronson and Company that firm's
independence. The Committee is satisfied that Aronson and Company does not
currently provide any non-audit services to the company.
The Audit Committee is satisfied that the internal control system is adequate
and that the Company employs appropriate accounting and auditing procedures.
Based on these considerations, the 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 2003 The foregoing report is provided by the
following independent directors, who constitute the Audit Committee:
/s/ Stephen N. Ashman, Chairman
/s/ R. Bentley Offutt
/s/ William J. Sim
INDEPENDENT AUDITORS
Aronson and Company served as the Company's independent certified public
accountants during the year ended July 31, 2003 and performed the audit for
that year. In order to assure that the Company's audit fees are competitive
and consistent with necessary services, the Company's audit committee reviews
proposals from independent certified public accounting firms, including
Aronson and Company, seeking to serve as the Company's independent auditors.
Representatives of Aronson and Company are expected to be present at the
Annual Meeting, will have the opportunity to make a statement and to respond
to appropriate questions from stockholders.
Audit Fees. The aggregate fees to be paid to Aronson and Company for
professional services rendered for the audit of the Company's annual
financial statements for the fiscal year ended July 31, 2003 (the "2003
fiscal year") and the reviews of the financial statements included in the
Company's Form 10-Q's for the 2003 fiscal year will total approximately
$95,000. This fee includes payment for Aronson and Company's audit of the
company's employee benefit plans.
Financial Information Systems Design and Implementation Fees. There were no
fees billed for professional services related to financial information
systems design and implementation by Aronson and Company for the 2003 fiscal
year.
All Other Fees. The total aggregate fees that will be billed for services
rendered by Aronson and Company, including statutory audits and other
regulatory compliance reporting, including the $95,000 shown in the prior
item in this section, will be $117,000.
OTHER MATTERS
No business other than that set forth above is expected to come before
the Annual Meeting or any adjournment thereof. Should other business
properly come before the meeting or any adjournment thereof, the proxy
holders will vote upon the same, according to their discretion and best
judgment.
COMMON STOCK PERFORMANCE
The following chart compares the value of $100 invested on August 3,
1998 in the Company's common stock, the Russell 2000 index and a Peer Group
Index consisting of the common stocks issued by four companies selected by
management. The Russell 2000 Index represents a broad market group which
management believes more nearly represents the Company's market
capitalization than the NASDAQ Composite Index in which the Company
participates. The Peer Group was chosen as the nearest practicable
representative peer group of companies that meet Securities and Exchange
Commission requirements. However, management believes that the Company's mix
of products and services over the period represented was unique in the heavy
construction industry, with no other publicly traded company being truly
comparable.
[chart not shown on EDGAR]
year ended July 31:
1998 1999 2000 2001 2002 2003
Williams Industries 100 85.51 62.63 89.24 102.97 83.52
Peer Group Index 100 73.47 58.56 90.33 51.74 72.07
Russell 2000 Index 100 107.58 121.11 117.28 94.63 115.16
The broad market index chosen was: The peer group was made
Russell 2000 Index up of the following companies:
Granite Construction Inc.
The peer group chosen was: Meadow Valley Corp.
Customer selected stock list Perini Corp.
Schuff International, Inc.
SHAREHOLDER PROPOSALS
Any shareholder of the Company who wishes to present a proposal to be
considered at the next Annual Meeting of Shareholders and who wishes to have
the proposal presented in the Company's Proxy Statement for such meeting must
deliver such proposal in writing to the Company's principal executive offices
not later than June 12, 2004. If the shareholder does not want the proposal
presented in the Company's proxy, the Company's By-Laws provide that a
proposal for consideration at the annual meeting must be submitted to the
Company by written notice at least sixty days prior to the anniversary date
of the preceding meeting or not later than September 9, 2004.
MISCELLANEOUS
The management of the Company knows of no matters to be presented at the
meeting other than the election of directors and the ratification of the
director's equity compensation plan. However, if other matters come before
the meeting, it is the intention of the persons named in the accompanying
proxy to vote the proxy in accordance with their judgments on such matters,
and discretionary authority to do so is included in the proxy.
AT THE WRITTEN REQUEST OF ANY RECORD HOLDER OF THE COMMON STOCK ON THE
RECORD DATE, SEPTEMBER 19, 2003, OR OF ANY BENEFICIAL HOLDER OF SUCH SHARES
ON SUCH DATE WHO MAKES A GOOD FAITH REPRESENTATION THAT SUCH SHAREHOLDER WAS
SUCH A BENEFICIAL HOLDER, THE COMPANY WILL SUPPLY TO SUCH A SHAREHOLDER A
COPY OF THE COMPANY'S FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE FISCAL YEAR ENDED JULY 31, 2003. PLEASE ADDRESS ALL
REQUESTS TO WILLIAMS INDUSTRIES, INCORPORATED, P.O. BOX 1770, MANASSAS,
VIRGINIA 20108.
FOLD AND DETACH HERE
WILLIAMS INDUSTRIES, INCORPORATED
8624 J.D. Reading Drive
Manassas, Virginia 20109
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints R. Bentley Offutt and William J. Sim as
Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all shares
of common stock of Williams Industries, Incorporated held of record by the
undersigned on September 19, 2003 at the Annual Meeting of Shareholders to
be held on November 8, 2003.
1. ELECTION OF DIRECTORS:
FOR all nominees listed below (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below:
Stephen N. Ashman, Thomas C. Mitchell, R. Bentley Offutt,
William J. Sim, Frank E. Williams, Jr., Frank E. Williams, III, John A. Yerrick
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2. ADOPTION OF AN EQUITY COMPENSATION PLAN FOR DIRECTORS
INSTRUCTION: Circle "Yes" if in favor of the plan.
Circle "No" if opposed to the plan.
YES NO
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
_____________________________________________________________________________
This proxy, when properly executed will be voted in the manner directed
herein by the undersigned shareholder(s). If no direction is made, this
proxy will be voted FOR Proposal 1 and YES for Proposal 2.
FOLD AND DETACH HERE
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Please mark, sign, date and return the proxy card promptly
using the enclosed envelope.
Dated: ___________________________________________, 2003
Signature:
Signature if jointly held: