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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. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
AMPCO-PITTSBURGH CORP.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
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Notes:
[LOGO OF AMPCO PITTSBURGH]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, APRIL 25, 2000
To the Shareholders of
Ampco-Pittsburgh Corporation
Notice is hereby given that the Annual Meeting of the Shareholders of Ampco-
Pittsburgh Corporation will be held in The Conference Room, 33rd Floor, 600
Grant Street, Pittsburgh, Pennsylvania, on Tuesday, April 25, 2000 at 10:00
a.m., for the following purposes:
1. To elect a class of two Directors for a term that expires in 2003.
2. To act upon a proposal to amend the Ampco-Pittsburgh Corporation 1997
Stock Option Plan to increase the aggregate number of shares with respect to
which Awards may be granted under the Plan.
3. To transact such other business as may properly come before the meeting
and any adjournment thereof.
Shareholders of record on March 7, 2000 are entitled to notice of and to
vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Rose Hoover
Rose Hoover, Secretary
Pittsburgh, Pennsylvania
March 15, 2000
All shareholders are cordially invited to attend the meeting in person. Your
vote is important and, whether or not you expect to attend in person, it is
requested that you PROMPTLY fill in, sign, and return the enclosed proxy card.
[LOGO OF AMPCO PITTSBURGH]
PROXY STATEMENT
March 15, 2000
Annual Meeting of Shareholders April 25, 2000
SOLICITATION OF PROXIES
This Statement is furnished in connection with the solicitation of proxies
to be used at the Annual Meeting of Shareholders of AMPCO-PITTSBURGH
CORPORATION (the "Corporation") to be held on April 25, 2000. The first
mailing of the proxy material to the shareholders is expected to be made on
March 15, 2000.
The accompanying proxy is solicited on behalf of the Board of Directors of
the Corporation. In addition to the solicitation of proxies by use of the
mails, proxies may be solicited by Directors and employees, in person or by
telephone, and brokers and nominees may be requested to send proxy material to
and obtain proxies from their principals. The Corporation will pay the costs
incurred for those solicitations of proxies and will pay Georgeson Shareholder
Communications, Inc., 17 State Street, 10th Floor, New York, New York, a fee
of $7,000, plus reimbursement of reasonable out-of-pocket expenses, for aid in
the solicitation of proxies.
Any shareholder has the power to revoke the proxy at any time prior to the
voting thereof. Revocation of the proxy will not be effective until notice
thereof has been given to the Secretary of the Corporation or until a duly
executed proxy bearing a later date is presented.
VOTING SECURITIES AND RECORD DATE
Only holders of record of Common Stock of the Corporation at the close of
business on March 7, 2000, will be entitled to vote at the meeting. On that
date, there were 9,602,621 shares of Common Stock outstanding. The holders of
those shares are entitled to one vote per share. In the election of Directors,
the shares may be voted cumulatively. Cumulative voting means that the number
of shares owned by each shareholder may be multiplied by the number of
Directors to be elected and that total voted for the nominees in any
proportion. Shares that are not voted cumulatively are voted on a one vote per
share basis for each nominee, except for those nominees, if any, for whom the
shareholder is withholding authority to vote.
REQUIRED VOTE
Under Pennsylvania law and the Corporation's by-laws, the presence of a
quorum is required to transact business at the 2000 Annual Meeting of
Shareholders. A quorum is defined as the presence, either in person or by
proxy, of a majority of the votes that all shareholders are entitled to cast
at the meeting. Abstentions, votes withheld from director nominees, and
broker-dealer non-votes will be counted for purposes of determining a quorum.
Assuming the presence of a quorum, the two nominees for director receiving the
highest number of votes will be elected directors.
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ELECTION OF DIRECTORS
A class of two Directors will be elected for a term of three years to fill
the class of Directors whose term expires in 2000. Both nominees for election
to the Board of Directors are currently Directors and were originally elected
by the shareholders. Both of the nominees were nominated by the Board of
Directors at its February 23, 2000 meeting and are willing to serve as
Directors if elected. If at the time of the Annual Meeting either nominee
should be unable or unwilling to stand for election, the proxies will be voted
for the election of such person, if any, as may be selected by the Board of
Directors to replace him.
The Board of Directors has no nominating committee. Under the Corporation's
By-laws, a shareholder may make nominations for Directors, but only in the
period that is not less than sixty (60) or more than ninety (90) days in
advance of the anniversary date of the previous year's annual meeting.
Proxies in the enclosed form will be voted, unless otherwise directed, for
the following nominees:
Nominees for Directors for a Term of Office Expiring in 2003:
William D. Eberle (age 76, Director since 1982). He is a private investor and
consultant and is Chairman of Manchester Associates, Ltd. and Showscan
Entertainment, Inc. He is also a director of Mitchell Energy & Development
Co., America Service Group, and Konover Property Trust.
Robert A. Paul (age 62, Director since 1970). He has been President and Chief
Executive Officer of the Corporation since September 20, 1994. For more than
five years before 1994, he was President and Chief Operating Officer of the
Corporation. He is also an officer and director of The Louis Berkman Company
and a director of National City Corporation.
Directors Whose Term of Office Expires in 2002:
Louis Berkman (age 91, Director since 1960). He has been Chairman of the Board
of the Corporation since September 20, 1994. He is also Chairman of the
Executive Committee of the Corporation and has been for more than five years.
He is also President and a director of The Louis Berkman Company (steel
products, fabricated metal products, building and industrial supplies).
Carl H. Pforzheimer, III (age 63, Director since 1982). For more than five
years he has been Managing Partner of Carl H. Pforzheimer & Co. (member of the
New York and American Stock Exchanges). He is also a director of U.S. Trust
Corporation.
Directors Whose Term of Office Expires in 2001:
Leonard M. Carroll (age 57, Director since 1996). He has been Managing
Director of Seneca Capital Management, Inc. (a private investment company)
since June, 1996. For more than five years before 1996, he was President and
Chief Operating Officer and a director of Integra Financial Corporation (a
bank holding company).
Laurence E. Paul (age 35, Director since 1998). He is a Managing Director of
Donaldson, Lufkin & Jenrette (Investment Banker). From 1997 to January 2000 he
was a Senior Vice President and from 1995 to 1997 he was a Vice President of
that firm.
Ernest G. Siddons (age 66, Director since 1981). He has been Executive Vice
President and Chief Operating Officer of the Corporation since September 20,
1994. For more than five years before 1994, he was Senior Vice President
Finance and Treasurer of the Corporation. From September 1996 to December
1997, he was President of Union Electric Steel Corporation, a subsidiary of
the Corporation.
The Board of Directors held five meetings in 1999. The Executive Committee
of the Board of Directors held one meeting and took action three times by
written consent. The Executive Committee is comprised of four Directors: Louis
Berkman, Robert A. Paul, Ernest G. Siddons and Leonard M. Carroll. The Salary
Committee is comprised of William D. Eberle, Chairman, Louis Berkman, Leonard
M. Carroll and Carl H. Pforzheimer, III. The Salary Committee met twice in
1999. The Stock Option Committee is comprised of William D. Eberle, Leonard M.
Carroll and Carl H. Pforzheimer, III. In 1999 all of the Directors attended
more than 75% of the applicable meetings. Each Director who is not employed by
the Corporation receives an annual retainer of
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$6,000 (payable quarterly), $1,000 for each Board meeting attended and $500
for each committee meeting attended. Attendance can be either in person or by
telephonic connection. Directors do not receive a fee for either Board or
Committee meetings if they do not attend.
Louis Berkman is the father-in-law of Robert A. Paul and the grandfather of
Laurence A. Paul (son of Robert A. Paul). There are no other family
relationships among the Directors and Officers.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT INCLUDING
NOMINEES
As of March 7, 2000, Louis Berkman owned directly 214,888 shares of the
Common Stock of the Corporation and had the right to acquire 60,000 shares
pursuant to a stock option. As of the same date, The Louis Berkman Company,
P.O. Box 576, Steubenville, Ohio, 43952, owned beneficially and of record
2,187,689 shares of the Common Stock of the Corporation. Louis Berkman, an
officer and director of The Louis Berkman Company, owns directly 61.94% of its
common stock. Robert A. Paul, an officer and director of The Louis Berkman
Company, disclaims beneficial ownership of the 38.06% of its common stock
owned by his wife. Louis Berkman and Robert A. Paul are trustees of The Louis
and Sandra Berkman Foundation and disclaim beneficial ownership of the 1,266
shares of the Corporation's Common Stock held by such Foundation.
In March, 1998, Gabelli Funds, Inc. and affiliates, Corporate Center, Rye,
NY 10580, filed an amendment to its Schedule 13D reporting they owned
1,893,500 shares or 19.77%. In February 2000, Dimensional Fund Advisors Inc.,
1299 Ocean Avenue, Santa Monica, CA 90401 filed a 13G disclosing that as of
December 31, 1999 it had sole voting and dispositive power of 819,000 shares
or 8.54% (all of which shares are held in portfolios of various investment
vehicles).
The following table sets forth as of March 7, 2000 information concerning
the beneficial ownership of the Corporation's Common Stock by the Directors
and Named Executive Officers and all Directors and Executive Officers of the
Corporation as a group:
Name of Amount and nature of Percent
beneficial owner beneficial ownership of class
---------------- -------------------- --------
Louis Berkman 2,463,843(1)(2) 25.7
Robert A. Paul (N) 117,922(2)(3) 1.2
Ernest G. Siddons 51,833(4) .5
Robert F. Schultz 20,200(5) .2
Terrence W. Kenny 12,500(6) .1
Carl H. Pforzheimer, III 2,733(7) *
Leonard M. Carroll 1,000 *
Laurence E. Paul 1,000 *
William D. Eberle (N) 200 *
Directors and Executive Officers
as a group (11 persons) 2,674,965(8) 27.9
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(N) Nominee for Director
*less than .1%
(1) Includes 214,888 shares owned directly, 60,000 shares which he has the
right to acquire within 60 days pursuant to a stock option, 2,187,689
shares owned by The Louis Berkman Company and 1,266 shares held by The
Louis and Sandra Berkman Foundation, of which Louis Berkman and Robert A.
Paul are Trustees, in which shares Mr. Berkman disclaims beneficial
ownership.
(2) The Louis Berkman Company owns beneficially and of record 2,182,989 shares
of the Corporation's Common Stock. Louis Berkman is an officer and
director of The Louis Berkman Company and owns directly 61.94% of its
common shares. Robert A. Paul, an officer and director of The Louis
Berkman Company, disclaims beneficial ownership of the 38.06% of its
common stock owned by his wife. The number of shares shown in the table
for Robert A. Paul does not include any shares held by The Louis Berkman
Company.
(3) Includes 42,889 shares owned directly, 60,000 shares which he has the
right to acquire within 60 days pursuant to a stock option and the
following shares in which he disclaims beneficial ownership: 13,767 shares
owned by his wife and 1,266 shares held by The Louis and Sandra Berkman
Foundation, of which Robert A. Paul and Louis Berkman are Trustees.
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(4) Includes 1,833 shares owned jointly with his wife and 50,000 shares which
he has the right to acquire within 60 days pursuant to a stock option.
(5) Includes 200 shares owned jointly with his wife and 20,000 shares he has
the right to acquire within 60 days pursuant to a stock option.
(6) Shares which he has the right to acquire within 60 days pursuant to a
stock option.
(7) Includes 1,000 shares owned directly, 800 shares held by a trust of which
he is a trustee and principal beneficiary, and the following shares he
disclaims beneficial ownership: 133 shares held by his daughter and 800
shares held by a trust of which he is a trustee.
(8) Includes 207,500 shares which certain officers have the right to acquire
within 60 days pursuant to stock options and excludes double counting of
shares deemed to be beneficially owned by more than one Director.
Unless otherwise indicated the individuals named have sole investment and
voting power.
EXECUTIVE COMPENSATION
The following table sets forth certain information as to the total
remuneration received for the past three years by the four most highly
compensated executive officers of the Corporation, including the Chief
Executive Officer (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Annual Compensation
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(a) (b) (c) (d) (g) (i)
Securities
Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Options (#)(2) Compensation ($)
--------------------------- ---- ---------- --------- -------------- ----------------
Robert A. Paul 1999 353,250 112,500 60,000
President and Chief 1998 330,500 66,000
Executive Officer 1997 308,750 94,500
Louis Berkman 1999 353,250 112,500 60,000
Chairman of the Board and 1998 330,500 66,000
Executive Committee 1997 308,750 94,500
Ernest G. Siddons 1999 316,500 100,800 50,000
Executive Vice President 1998 296,250 59,000 450,000(1)
and Chief Operating
Officer 1997 276,875 84,750 7,172(1)
Robert F. Schultz 1999 142,000 20,000 20,000
Vice President 1998 138,250 14,500
Industrial Relations 1997 134,500 18,500
and Senior Counsel
Terrence W. Kenny 1999 110,550 25,000 12,500
Group Vice 1998 N/A N/A
President 1997 N/A N/A
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(1) The 1997 amount in column (i) represents the value of the term portion of
a split dollar life insurance policy. In 1998, the Salary Committee
approved the payment to Mr. Siddons of an amount equal to the cash value
of that policy. Mr. Siddons has relinquished all rights to the policy and
the split dollar provisions have been terminated.
(2) Options granted on December 15, 1998 but were not exercisable until May
1999.
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The Corporation's 1997 Stock Option Plan permits the grant of options
exercisable for shares of Common Stock to corporate officers and other key
employees of the Corporation and its subsidiaries upon such terms, including
exercise price and conditions and timing of exercise, as may be determined by
the Stock Option Committee. The Stock Option Plan authorizes the grants of
awards up to a maximum of 300,000 shares of the Corporation's Common Stock,
however, the maximum number of Shares with respect to which stock options may
be granted to any one Participant in any fiscal year may not exceed 150,000.
During the fiscal year ended December 31, 1999, no options were granted.
The Corporation has a tax qualified retirement plan (the "Plan") applicable
to the Executive Officers, to which the Corporation makes annual
contributions, as required, in amounts determined by the Plan's actuaries. The
Plan does not have an offset for Social Security and is fully paid for by the
Corporation. Under the Plan, employees become fully vested after five years of
participation and normal retirement age under the Plan is age 65 but
actuarially reduced benefits may be available as early as age 55. The benefit
formula is 1.1% of the highest consecutive five year average earnings in the
final ten years, times years of service. Federal law requires that 5% owners
start receiving a pension no later than April 1 following the calendar year in
which the age 70 1/2 is reached. Louis Berkman is currently receiving $5,577 a
month pursuant to the Plan. As an active employee, Mr. Berkman continues to
receive credit for additional service rendered after age 70 1/2.
The Corporation adopted a Supplemental Executive Retirement Plan (SERP) in
1988, amended and restated in 1996, for all officers listed in the
compensation table, except Louis Berkman and Terrence W. Kenny, and certain
key employees, covering retirement after completion of ten years of service
and attainment of age 55. The combined retirement benefit at age 65 provided
by the Plan and the SERP is 50% of the highest consecutive five year average
earnings in the final ten years of service. The participants are eligible for
reduced benefits for early retirement at age 55. A benefit equal to 50% of the
benefit otherwise payable at age 65 is paid to the surviving spouse of any
participant, who has had at least five years of service, commencing on the
later of the month following the participant's death or the month the
participant would have reached age 55. In addition, there is an offset for
pensions from other companies. Certain provisions, applicable if there is a
change of control, are discussed below under Termination of Employment and
Change of Control Arrangement.
The following shows the estimated annual pension under the Plan and SERP, if
applicable, that would be payable, without offset, to the individuals named in
the compensation table assuming continued employment to retirement at age 65,
but no change in the level of compensation shown in such table:
Louis Berkman (1)
Robert A. Paul $232,875
Ernest G. Siddons $194,287(2)
Robert F. Schultz $ 81,000
Terrence W. Kenny $ 54,083
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(1) Mr. Berkman is currently receiving a pension pursuant to the Plan as
described above.
(2) Assumes employment until end of year.
Termination of Employment and Change of Control Arrangements
Mr. Berkman, Mr. Paul and Mr. Siddons have two year contracts (which
automatically renew for one year periods unless the Corporation chooses not to
extend) providing for compensation equal to five times their annual
compensation (with a provision to gross up to cover the cost of any federal
excise tax on the benefits) in the event their employment is terminated
(including a voluntary departure for good cause) and the right to equivalent
office space and secretarial help for a period of one year after a change in
control. Mr. Schultz and a certain key employee have two year contracts
providing for three times their annual compensation in the event their
employment is terminated after a change in control (including a voluntary
departure for good cause). In addition, Mr. Kenny and the two remaining Vice
Presidents have two year contracts providing for two times their annual
compensation in the event their employment is terminated after a change in
control (including a voluntary
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departure for good cause). All of the contracts provide for the continuation
of employee benefits, for three years for the three senior executives and two
years for the others, and the right to purchase the leased car used by the
covered individual at the Corporation's then book value. The same provisions
concerning change in control that apply to the contracts apply to the SERP and
vest the right to that pension arrangement. A change of control triggers the
right to a lump sum payment equal to the present value of the vested benefit
under the SERP if applicable.
Salary Committee Interlocks and Insider Participation in Compensation
Decisions
A Salary Committee is appointed each year by the Board of Directors.
Committee members abstain from voting on matters which involve their own
compensation arrangements. The Salary Committee for the year 1999 was
comprised of four Directors: William D. Eberle, Chairman, Louis Berkman,
Leonard M. Carroll and Carl H. Pforzheimer, III.
Louis Berkman is Chairman of the Board of Directors and Chairman of the
Executive Committee. He is also the President and a director of The Louis
Berkman Company. The Corporation's President and Chief Executive Officer,
Robert A. Paul, is also an officer and director of The Louis Berkman Company.
The Louis Berkman Company had certain transactions with the Corporation,
which are more fully described under "Certain Relationships and Related
Transactions."
Salary Committee Report on Executive Compensation
The Salary Committee approves salaries for executive officers within a range
from $150,000 up to $200,000 and increases in the salary of any executive
officers which would result in such officer earning a salary within such
range. Salaries of $200,000 per year and above must be approved by the Board
of Directors after a recommendation by the Salary Committee. Salaries for
executive officers below the level of $150,000 are set by the Chairman,
President and Executive Vice President of the Corporation.
The compensation of the Chief Executive Officer of the Corporation, as well
as the other applicable executive officers, is based on an analysis conducted
by the Salary Committee. The Committee does not specifically link remuneration
solely to quantitative measures of performance because of the cyclical nature
of the industries and markets served by the Corporation. In setting
compensation, the Committee also considers various qualitative factors,
including competitive compensation arrangements of other companies within
relevant industries, individual contributions, leadership ability and an
executive officer's overall performance. In this way, it is believed that the
Corporation will attract and retain quality management, thereby benefiting the
long-term interest of shareholders.
In 1999, the Salary Committee reviewed and approved salary increases and had
previously approved an incentive program for 1999 covering Louis Berkman,
Robert A. Paul and Ernest G. Siddons ("participants"). Incentive payments were
to be determined by formula, based exclusively on the Corporation's 1999
income from operations performance as compared to the Corporation's business
plan. These payments were to be limited to 30% of base salary of participants.
In 1999, the participants earned incentives of $112,500, $112,500 and
$100,800, respectively.
This report of the Salary Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Corporation
specifically incorporates this report and the information contained herein by
reference, and shall not otherwise be deemed filed under such Acts.
Louis Berkman
Leonard M. Carroll
William D. Eberle
Carl H. Pforzheimer, III
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Comparative Five-Year Total Returns*
Ampco-Pittsburgh Corporation, Standard & Poors 500 and Value Line Steel
(Integrated) Index
(Performance results through 12/31/99)
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG AMPCO PITTSBURGH CORPORATION S&P 500 INDEX
AND STEEL INTEGRATED INDEX
AMPCO Steel
Measurement period Pittsburgh S&P 500 Integrated
(Fiscal year Covered) Corporation Index Index
- --------------------- ----------- ------- ----------
- -
Measurement PT -
12/31/94 $100 $100 $100
FYE 12/31/95 $110.04 $137.50 $ 95.50
FYE 12/31/96 $124.48 $169.47 $ 99.26
FYE 12/31/97 $208.04 $226.03 $105.13
FYE 12/31/98 $118.35 $290.22 $ 99.51
FYE 12/31/99 $113.89 $349.08 $222.64
Assumes $100 invested at the close of trading on the last trading day preceding
January 1, 1995 in Ampco-Pittsburgh common stock, S&P 500, and Peer Group.
*Cumulative total return assumes reinvestment of dividends.
In the above graph, the Corporation has used Value Line's Steel (Integrated)
Industry for its peer comparison. The diversity of products produced by
subsidiaries of the Corporation made it difficult to match to any one product-
based peer group. The Steel Industry was chosen because it is impacted by some
of the same end markets that the Corporation ultimately serves, such as the
automotive, appliance and construction industries.
Historical stock price performance shown on the above graph is not
necessarily indicative of future price performance.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1999, the Corporation bought industrial supplies from The Louis Berkman
Company in transactions in the ordinary course of business amounting to
approximately $1,600,000. Additionally, The Louis Berkman Company paid the
Corporation $170,000 for certain administrative services. Louis Berkman and
Robert A. Paul are officers and directors, and Louis Berkman is a shareholder,
in that company. These transactions and services were at prices generally
available from outside sources. Transactions between the parties will take
place in 2000.
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RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
On February 23, 2000, the Board of Directors, upon recommendation of the
Audit Committee, selected Deloitte & Touche LLP ("D&T") as the independent
accountants for the year 2000.
Representatives of D&T will be in attendance at the Annual Meeting, will
have the opportunity to make a statement if they wish to do so and will
respond to appropriate questions.
The Audit Committee held four meetings in 1999 and was comprised of three
Directors: Carl H. Pforzheimer, III (Chairman), William D. Eberle and Leonard
M. Carroll. None of the Committee members is now, or has within the past five
years been, an employee of the Corporation. The Audit Committee reviews the
Corporation's accounting and reporting practices, including internal control
procedures, and maintains a direct line of communication with the Directors
and the independent accountants.
APPROVAL OF AMENDMENT TO THE 1997 STOCK OPTION PLAN
The Ampco-Pittsburgh Corporation Stock Option Plan (the "Plan") was adopted
by the shareholders in April 1997. In February 2000, the Board of Directors of
the Corporation adopted, subject to shareholder approval, an amendment to the
Plan to increase the aggregate number of shares with respect to which Awards
may be granted from 300,000 to 600,000. A summary of the Plan is contained in
Exhibit A to this Proxy Statement and is incorporated by reference in this
section. A copy of the proposed amendment to the Plan is attached hereto as
Exhibit B.
The Board of Directors recommends that shareholders vote FOR approval of the
adoption of the amendment to the 1997 Stock Option Plan.
SHAREHOLDER PROPOSALS FOR 2001
Any shareholder who wishes to place a proposal before the next Annual
Meeting of Shareholders must submit the proposal to the Corporation's
Secretary, at its executive offices, not less than 120 calendar days in
advance of the anniversary date of the release of this proxy statement to have
it considered for inclusion in the proxy statement for the Annual Meeting in
2001.
OTHER MATTERS
The Board of Directors does not know of any other business that will be
presented for action at the Meeting. Should any other matter come before the
Meeting, however, action may be taken thereon pursuant to proxies in the form
enclosed unless discretionary authority is withheld.
8
Exhibit A
Summary of the Ampco-Pittsburgh Corporation
1997 Stock Option Plan
Purposes:
The purposes of the Stock Option Plan are to promote the interests of the
Corporation and its shareholders by (i) attracting and retaining exceptional
officers and other key employees of the Corporation and its subsidiaries and
(ii) enabling such individuals to participate in the long-term growth and
financial success of the Corporation.
Administration/Eligible Participants:
The Stock Option Plan is administered by a Stock Option Committee of the
Board of Directors, or such other committee of the Board of Directors as may
be designated by the Board of Directors to administer the Stock Option Plan
(the "Committee").
Any officer or other key employee of the Corporation or any of its
subsidiaries shall be eligible to be designated a participant under the Stock
Option Plan (each a "Participant"). The Committee has the sole and complete
authority to determine the Participants to whom awards shall be granted under
the Stock Option Plan.
Number of Shares Authorized Under the Stock Option Plan:
The Stock Option Plan authorizes the grant of awards to Participants with
respect to a maximum of 300,000 shares of the Corporation's common stock
("Shares"). The proposed amendment will increase the maximum number to 600,000
Shares. These awards may be made in the form of (i) nonqualified stock options
or (ii) stock options intended to qualify as incentive stock options under
section 422 of the Internal Revenue Code of 1986, as amended; provided that
the maximum number of Shares with respect to which stock options may be
granted to any Participant in the Stock Option Plan in any fiscal year may not
exceed 150,000. If any Shares covered by an award granted under the Stock
Option Plan, or to which such an award relates, are forfeited, or if an award
has expired, terminated or been canceled for any reason whatsoever (other than
by reason of exercise or vesting), then the Shares covered by such award shall
again be, or shall become, Shares with respect to which awards may be granted
under the Stock Option Plan.
Substitute Awards
Awards may be made under the Stock Option Plan in assumption of, or in
substitution for, outstanding awards previously granted by the Corporation or
its affiliates or a company acquired by the Corporation or with which the
Corporation combines. The number of shares underlying any such assumed or
substitute awards shall be counted against the aggregate number of Shares
which are available for grant under awards made under the Stock Option Plan.
Terms and Conditions of Awards Under the Stock Option Plan
Non-qualified and incentive stock options granted under the Stock Option
Plan shall be subject to such terms, including exercise price and conditions
and timing of exercise, as may be determined by the Committee and specified in
the applicable award agreement or thereafter; provided that stock options that
are intended to qualify as incentive stock options will be subject to terms
and conditions that comply with such rules as may be prescribed by section 422
of the Code. Payment in respect of the exercise of an option granted under the
Stock Option Plan may be made in cash, or its equivalent, or (i) by exchanging
Shares owned by the optionee (which are not the subject of any pledge or other
security interest and which have been owned by such optionee for at
9
least six months) or (ii) subject to such rules as may be established by the
Committee, through delivery of irrevocable instructions to a broker to sell
the shares being acquired upon exercise of the option and to deliver promptly
to the Corporation an amount equal to the aggregate exercise price, or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the fair market value of such Shares so tendered to the
Corporation as of the date of such tender is at least equal to the aggregate
exercise price of the option. No Award shall be granted under the Plan after
December 21, 2007.
Adjustments
In the event that the Committee determines that any corporate transaction or
event affects the Shares such that an adjustment is determined by the
Committee in its discretion to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Stock Option Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number of Shares
or other securities of the Corporation (or number and kind of other securities
or property) with respect to which awards may be granted, (ii) the number of
Shares or other securities of the Corporation (or number and kind of other
securities or property) subject to outstanding awards, and (iii) the exercise
price with respect to any award or, if deemed appropriate, make provision for
a cash payment to the holder of an outstanding award in consideration for the
cancellation of such award.
Transferability
Each award, and each right under any award, shall be exercisable only by the
Participant during the Participant's lifetime, or, if permissible under
applicable law, by the Participant's guardian or legal representative.
Except as otherwise provided in an applicable award agreement, no award may
be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of descent
and distribution and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Corporation or any affiliate; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance.
Change of Control
In the event of a change of control (as defined in the Stock Option Plan),
any outstanding awards then held by Participants which are unexercisable or
otherwise unvested shall automatically be deemed exercisable or otherwise
vested, as the case may be, as of immediately prior to such change of control.
Amendment to Stock Option Plan
The Board may amend, alter, suspend, discontinue or terminate the Stock
Option Plan or any portion thereof at any time; provided that no such
amendment, alteration, suspension, discontinuation or termination shall be
made without shareholder approval if such approval is necessary to comply with
any tax or regulatory requirement applicable to the Plan and provided further
than any such amendment, alteration, suspension, discontinuance or termination
that would impair the rights of any holder or beneficiary of an award
theretofore granted shall not to that extent be effective without the consent
of the affected person.
Federal Income Tax Consequences Relating to Stock Options
The following summary of the Federal income tax consequences of the grant
and exercise of nonqualified and incentive stock options awarded under the
Stock Option Plan, and the disposition of Shares purchased pursuant to the
exercise of such stock options, is intended to reflect the current provisions
of the Code and the regulations thereunder. This summary is not intended to be
a complete statement of applicable law, nor does it address state and local
tax considerations.
10
No income will be realized by an optionee upon grant of a nonqualified stock
option. Upon exercise of a nonqualified stock option, the optionee will
recognize ordinary compensation income in an amount equal to the excess, if
any, of the fair market value of the underlying stock over the option exercise
price (the "Spread") at the time of exercise. The Spread will be deductible by
the Corporation for federal income tax purposes subject to the possible
limitations on deductibility under sections 280G and 162(m) of the Code of
compensation paid to executives designated in those sections. The optionee's
tax basis in the underlying shares acquired by exercise of a nonqualified
stock option will equal the exercise price plus the amount taxable as
compensation to the optionee. Upon sale of the shares received by the optionee
upon exercise of the nonqualified stock option, any gain or loss is generally
long-term or short-term capital gain or loss, depending on the holding period.
The optionee's holding period for shares acquired pursuant to the exercise of
a nonqualified stock option will begin on the date of exercise of such option.
Pursuant to currently applicable rules under Section 16(b) of the Exchange
Act of 1934, as amended ("Exchange Act"), the grant of an option (and not its
exercise) to a person who is subject to the reporting and short-swing profit
provisions under section 16 of the Exchange Act (a "Section 16 Person") begins
the six-month period of potential short-swing liability. The taxable event for
the exercise of an option that has been outstanding at least six months
ordinarily will be the date of exercise. If an option is exercised by a
Section 16 Person within six months after the date of grant, however, taxation
ordinarily will be deferred until the date which is six months after the date
of grant, unless the person has filed a timely election pursuant to section
83(b) of the Code to be taxed on the date of exercise. Pursuant to a recent
amendment to the rules under Section 16(b) of the Exchange Act, the six month
period of potential short-swing liability may be eliminated if the option
grant (i) is approved in advance by the Corporation's board of directors (or a
committee composed solely of two or more non-employee directors) or (ii)
approved in advance by the Corporation's shareholders, or subsequently
ratified by the Corporation's shareholders no later than the next annual
meeting of shareholders. If the conditions described in clauses (i) or (ii)
above are satisfied with respect to awards made under the Stock Option Plan,
the taxable event for the exercise of an option that satisfies such conditions
will be the date of exercise.
The payment by an optionee of the exercise price, in full or in part, with
previously acquired Shares will not affect the tax treatment of the exercise
described above. No gain or loss generally will be recognized by the optionee
upon the surrender of the previously acquired Shares to the Corporation, and
Shares received by the optionee, equal in number to the previously surrendered
Shares, will have the same tax basis as the Shares surrendered to the
Corporation and will have a holding period that includes the holding period of
the Shares surrendered. The value of Shares received by the optionee in excess
of the number of Shares surrendered to the Corporation will be taxable to the
optionee. Such additional Shares will have a tax basis equal to the fair
market value of such additional Shares as of the date ordinary income is
recognized, and will have a holding period that begins on the date ordinary
income is recognized.
The Code requires that, for incentive stock option treatment, Shares
acquired through exercise of an incentive stock option cannot be disposed of
before two years from the date of grant and one year from the date of
exercise. Incentive stock option holders will generally incur no federal
income tax liability at the time of grant or upon exercise of such options.
However, the Spread will be an "item of tax preference", which may give rise
to "alternative minimum tax" liability at the time of exercise. If the
optionee does not dispose of the Shares before two years from the date of
grant and one year from the date of exercise, the difference between the
exercise price and the amount realized upon disposition of the Shares will
constitute long-term capital gain or loss, as the case may be. Assuming both
the holding periods are satisfied, no deduction will be allowable to the
Corporation for federal income tax purposes in connection with the grant or
exercise of the option. If, within two years of the date of grant or within
one year from the date of exercise, the holder of shares acquired through the
exercise of an incentive stock option disposes of such Shares, the optionee
will generally realize ordinary taxable compensation at the time of such
disposition equal to the difference between the exercise price and the lesser
of the fair market value of the stock on the date of initial exercise or the
amount realized on the subsequent disposition, and such amount will generally
be deductible by the Corporation for federal income tax purposes, subject to
the possible limitations on deductibility under sections 280G and 162(m) of
the Code for compensation paid to executives designated in those sections.
11
Exhibit B
Amendment to the
Ampco-Pittsburgh Corporation
1997 Stock Option Plan
The first sentence of 4(a) of the Ampco-Pittsburgh Corporation 1997 Stock
Option Plan shall be amended to read in its entirety as follows:
Subject to adjustment as provided in Section 4(b), the aggregate number of
shares with respect to which Awards may be granted under the Plan shall be
600,000; and the maximum number of Shares with respect to which Options may be
granted to any Participant in any fiscal year shall be 150,000.
12
[LOGO OF AMPCO PITTSBURGH]
- -- PROXY -- -- PROXY --
This Proxy is Solicited on Behalf of the Board of Directors
THE UNDERSIGNED hereby appoints Louis Berkman, Robert A. Paul and Ernest G.
Siddons as proxies with full power of substitution, to vote as specified below
the shares of stock which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of AMPCO-PITTSBURGH CORPORATION, to be held in The
Conference Room, 33rd Floor, 600 Grant Street, Pittsburgh, PA, on Tuesday, April
25, 2000, at 10:00 a.m., and any adjournments thereof and to vote in their
discretion on such other matters as may properly come before the meeting.
WHEN PROPERLY EXECUTED THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN ITEM 1
(OR, IN THE DISCRETION OF THE PROXIES, THE SHARES MAY BE VOTED CUMULATIVELY) AND
FOR THE PROPOSAL IN ITEM 2.
PLEASE SIGN ON REVERSE SIDE and mail in the enclosed, postage prepaid
envelope.
* FOLD AND DETACH HERE *
Please mark [ X ]
your votes as
indicated in
this example
1. ELECTION OF DIRECTORS
FOR WITHHOLD (Instruction: To withhold authority to vote for
(except as authority any individual nominee, write that nominee's
directed) to vote for name on the line below the names of the nominees
for Directors.)
[ ] [ ]
The election of Robert A. Paul and William D.
Eberle for a term expiring in 2003.
-------------------------------------------------
2. A proposal to approve an amendment to the Ampco-Pittsburgh Corporation
1997 Stock Option Plan to increase the maximum number of shares with
respect to which Awards may be granted from 300,000 to 600,000 Shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
All proxies heretofore given or executed
with respect to the shares of stock
represented by this proxy are by the
filing of this proxy, expressly revoked.
PLEASE DO NOT FOLD, STAPLE OR DAMAGE.
Signature(s) ____________________________________________
Signature(s) ____________________________________________
Date ____________________________________________________
NOTE: Signature should conform exactly to name as stenciled hereon. Executors,
administrators, guardians, trustees, attorneys and officers signing for a
corporation should give full title. For joint accounts, each owner must sign.
* FOLD AND DETACH HERE *