Nucor Corporation Form 10-Q

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rk5k2D6SrYKJGR+SQh1UcgW7RRzZwaDYyMhnDS3Y4QpUyfBtujXocgSj079bdh25 Hr6IDupCMnf0gm21K5mOow== 0001193125-03-030866.txt : 20030807 0001193125-03-030866.hdr.sgml : 20030807 20030807161251 ACCESSION NUMBER: 0001193125-03-030866 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20030705 FILED AS OF DATE: 20030807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUCOR CORP CENTRAL INDEX KEY: 0000073309 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 131860817 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04119 FILM NUMBER: 03828820 BUSINESS ADDRESS: STREET 1: 2100 REXFORD RD CITY: CHARLOTTE STATE: NC ZIP: 28211 BUSINESS PHONE: 7043667000 MAIL ADDRESS: STREET 1: 2100 REXFORD ROAD CITY: CHARLOTTE STATE: NC ZIP: 28211 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR CORP OF AMERICA INC DATE OF NAME CHANGE: 19680911 FORMER COMPANY: FORMER CONFORMED NAME: AZTEC MECHANICAL CONTRACTORS INC DATE OF NAME CHANGE: 19660629 10-Q 1 d10q.htm NUCOR CORPORATION FORM 10-Q Nucor Corporation Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended July 5, 2003

Commission file number 1-4119

NUCOR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

13-1860817

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

2100 Rexford Road, Charlotte, North Carolina		28211
(Address of principal executive offices)		(Zip Code)

(704) 366-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

78,206,291 shares of common stock were outstanding at July 5, 2003.

Nucor Corporation

Form 10-Q

July 5, 2003

INDEX

		Page

Part I	Financial Information

Item 1	Financial Statements

	Condensed Consolidated Statements of Earnings—Six Months (26 Weeks) and Three Months (13 Weeks) Ended July 5, 2003 and June 29, 2002	3

	Condensed Consolidated Balance Sheets—July 5, 2003 and December 31, 2002	4

	Condensed Consolidated Statements of Cash Flows—Six Months (26 Weeks) Ended July 5, 2003 and June 29, 2002	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

Item 3	Quantitative and Qualitative Disclosures About Market Risk	11

Item 4	Controls and Procedures	12

Part II	Other Information

Item 4	Submission of Matters to a Vote of Security Holders	13

Item 6	Exhibits and Reports on Form 8-K	13

Signatures		13

List of Exhibits to Form 10-Q		14

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Nucor Corporation Condensed Consolidated Statements of Earnings (Unaudited)

	Six Months (26 Weeks) Ended						Three Months (13 Weeks) Ended
	July 5, 2003			June 29, 2002			July 5, 2003		June 29, 2002
Net sales	$	3,000,731,871		$	2,278,669,187		$	1,520,460,884	$	1,198,032,206

Costs, expenses and other:
Cost of products sold		2,860,570,376			2,049,383,477			1,454,145,488		1,069,645,860
Marketing, administrative and other expenses		86,128,949			78,480,294			45,938,117		41,206,520
Interest expense, net		13,614,346			5,915,809			6,547,063		3,003,764
Minority interests		10,585,206			54,219,010			4,346,126		24,468,760
Other income		(2,300,855	)		(29,900,000	)		—		(29,900,000	)

		2,968,598,022			2,158,098,590			1,510,976,794		1,108,424,904

Earnings before income taxes		32,133,849			120,570,597			9,484,090		89,607,302
Provision for income taxes		5,927,000			40,560,000			1,059,000		29,859,000

Net earnings	$	26,206,849		$	80,010,597		$	8,425,090	$	59,748,302

Net earnings per share:
Basic	$	0.34		$	1.03		$	0.11	$	0.77

Diluted	$	0.33		$	1.02		$	0.11	$	0.76

Average shares outstanding:
Basic		78,187,447			78,002,299			78,192,924		78,084,879
Diluted		78,282,109			78,244,881			78,316,413		78,358,436
Dividends declared per share	$	0.40		$	0.38		$	0.20	$	0.19

See notes to condensed consolidated financial statements.

Nucor Corporation Condensed Consolidated Balance Sheets (Unaudited)

	July 5, 2003			Dec. 31, 2002
Assets
Current assets:
Cash and short-term investments	$	182,276,227		$	219,004,868
Accounts receivable		527,286,836			483,607,972
Inventories		582,828,408			588,989,548
Other current assets		134,808,709			123,759,260

Total current assets		1,427,200,180			1,415,361,648
Property, plant and equipment		2,877,998,324			2,932,058,102
Other assets		45,220,938			33,581,467

Total assets	$	4,350,419,442		$	4,381,001,217

Liabilities and stockholders’ equity
Current liabilities:
Long-term debt due within one year	$	—		$	16,000,000
Accounts payable		290,630,011			247,229,067
Federal income taxes		4,105,981			8,948,999
Salaries, wages and related accruals		106,990,449			116,246,817
Accrued expenses and other current liabilities		201,561,120			203,110,945

Total current liabilities		603,287,561			591,535,828

Long-term debt due after one year		878,550,000			878,550,000

Deferred credits and other liabilities		381,436,481			371,271,399

Minority interests		168,097,467			216,654,501

Stockholders’ equity:
Common stock		36,277,592			36,271,453
Additional paid-in capital		100,125,457			99,395,806
Retained earnings		2,636,509,954			2,641,581,152

		2,772,913,003			2,777,248,411
Treasury stock		(453,865,070	)		(454,258,922	)

Total stockholders’ equity		2,319,047,933			2,322,989,489

Total liabilities and stockholders’ equity	$	4,350,419,442		$	4,381,001,217

See notes to condensed consolidated financial statements.

Nucor Corporation Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six Months (26 Weeks) Ended
	July 5, 2003			June 29, 2002
Operating activities:
Net earnings	$	26,206,849		$	80,010,597
Adjustments:
Depreciation of plant and equipment		183,038,613			152,019,727
Minority interests		10,577,391			54,215,724
Changes in (exclusive of acquisitions):
Current assets		(48,580,089	)		(111,595,038	)
Current liabilities		27,751,733			142,295,875
Other		7,777,356			(13,290,487	)

Cash provided by operating activities		206,771,853			303,656,398

Investing activities:
Capital expenditures		(94,074,891	)		(76,491,618	)
Investment in affiliates		(9,201,362	)		(3,405,247	)
Acquisitions		(34,941,411	)		—

Cash used in investing activities		(138,217,664	)		(79,896,865	)

Financing activities:
Repayment of long-term debt		(16,000,000	)		(1,900,000	)
Issuance of common stock		1,129,642			16,524,568
Distributions to minority interests		(59,134,425	)		(133,476,000	)
Cash dividends		(31,278,047	)		(29,678,296	)

Cash used in financing activities		(105,282,830	)		(148,529,728	)

Increase (decrease) in cash and short-term investments	$	(36,728,641	)	$	75,229,805

See notes to condensed consolidated financial statements.

Nucor Corporation— Notes to Condensed Consolidated Financial Statements (Unaudited)

BASIS OF INTERIM PRESENTATION: The information furnished in Item I reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods and are of a normal and recurring nature. The information furnished has not been audited; however, the December 31, 2002 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in Nucor’s annual report for the fiscal year ended December 31, 2002. Certain amounts for the prior year have been reclassified to conform to the 2003 presentation.

INVENTORIES: Inventories consist of approximately 42% raw materials and supplies, and 58% finished and semi-finished products, at July 5, 2003 (40% and 60%, respectively at December 31, 2002). Nucor’s manufacturing process consists of a continuous, vertically integrated process from which products are sold to customers at various stages throughout the process. Since most steel products can be classified as either finished or semi-finished products, these two categories of inventory are combined.

Inventories valued using the last-in, first-out (LIFO) method of accounting represent approximately 77% of total inventories as of July 5, 2003 and December 31, 2002. If the first-in, first-out (FIFO) method of accounting had been used, inventories would have been $55,528,000 higher at July 5, 2003 ($42,608,000 at December 31, 2002). Use of the lower of cost or market reduced inventories by $1,147,000 at July 5, 2003 ($1,319,000 at December 31, 2002).

ACCOUNTING FOR STOCK OPTIONS: Nucor accounts for stock options granted to employees and directors using the intrinsic value method, under which no compensation expense is recorded since the exercise price of the stock options is equal to the market price of the underlying stock on the grant date. Had compensation cost for the stock options issued been determined consistent with FASB Statement No. 123, Accounting for Stock-Based Compensation, net earnings and earnings per share would have been reduced to the following pro forma amounts:

	Six Months (26 Weeks) Ended						Three Months (13 Weeks) Ended
	July 5, 2003			June 29, 2002			July 5, 2003			June 29, 2002
Net earnings—as reported	$	26,206,849		$	80,010,597		$	8,425,090		$	59,748,302
Pro forma stock-based compensation cost		(3,483,946	)		(2,505,334	)		(1,946,381	)		(1,334,821	)

Net earnings—pro forma	$	22,722,903		$	77,505,263		$	6,478,709		$	58,413,481

Net earnings per share—as reported:
Basic	$	0.34		$	1.03		$	0.11		$	0.77
Diluted	$	0.33		$	1.02		$	0.11		$	0.76
Net earnings per share—pro forma:
Basic	$	0.29		$	0.99		$	0.08		$	0.75
Diluted	$	0.29		$	0.99		$	0.08		$	0.75

The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and experience.

Nucor Corporation—Notes to Condensed Consolidated Financial Statements (Unaudited), continued

CONTINGENCIES: Nucor is subject to environmental laws and regulations established by federal, state and local authorities, and, accordingly, makes provision for the estimated costs of compliance. Of the undiscounted total $62,084,000 of accrued environmental costs at July 5, 2003 ($82,768,000 at December 31, 2002), $23,984,000 was classified in accrued expenses and other current liabilities ($37,418,000 at December 31, 2002) and $38,100,000 was classified in deferred credits and other liabilities ($45,350,000 at December 31, 2002). The decrease in accrued environmental costs is primarily due to a cash payment of $15,000,000 in the first quarter of 2003 for settlement of a lawsuit. During the second quarter and first half of 2003, Nucor revised estimates as additional information was obtained, reducing environmental reserves by $397,000 and $3,067,000, respectively. The majority of the change in estimate in the first half of 2003 occurred in the first quarter and related to Nucor-Yamato Steel Company, of which Nucor owns 51%.

Other contingent liabilities with respect to product warranties, legal proceedings and other matters arise in the normal course of business. In the opinion of management, no such matters exist which would have a material effect on the consolidated financial statements.

OTHER INCOME: In the first quarter of 2003 and the second quarter of 2002, Nucor received $2,300,000 and $29,900,000, respectively, related to graphite electrodes anti-trust settlements.

SEGMENTS: Nucor reports its results in two segments, steel mills and steel products. The steel mills segment includes carbon and alloy steel in sheet, bars, structural and plate. The steel products segment includes steel joists and joist girders, steel deck, cold finished steel, steel fasteners, metal building systems and light gauge steel framing. The segments are consistent with the way Nucor manages its business, which is primarily based upon the similarity of the types of products produced and sold by each segment.

Interest expense (income), minority interests, other income and certain marketing, administrative and other expenses, such as changes in the LIFO reserve and environmental accruals, are shown under Corporate/eliminations/other. Corporate assets primarily include cash and short-term investments, deferred income tax assets and investment in affiliates.

	Six Months (26 Weeks) Ended						Three Months (13 Weeks) Ended
	July 5, 2003			June 29, 2002			July 5, 2003			June 29, 2002
Net sales to external customers:
Steel mills	$	2,618,182,211		$	1,942,843,345		$	1,320,302,725		$	1,015,804,601
Steel products		382,549,660			335,825,842			200,158,159			182,227,605

	$	3,000,731,871		$	2,278,669,187		$	1,520,460,884		$	1,198,032,206

Intercompany sales:
Steel mills	$	238,833,487		$	153,113,243		$	127,767,692		$	79,400,736
Steel products		2,094,063			2,417,335			1,235,035			1,557,516
Corporate/eliminations/other		(240,927,550	)		(155,530,578	)		(129,002,727	)		(80,958,252	)

	$	—		$	—		$	—		$	—

Earnings (loss) before income taxes:
Steel mills	$	102,385,932		$	181,796,596		$	47,817,481		$	103,519,656
Steel products		(12,246,688	)		(1,278,145	)		(3,099,034	)		1,848,145
Corporate/eliminations/other		(58,005,395	)		(59,947,854	)		(35,234,357	)		(15,760,499	)

	$	32,133,849		$	120,570,597		$	9,484,090		$	89,607,302

Nucor Corporation—Notes to Condensed Consolidated Financial Statements (Unaudited), continued

	July 5, 2003		Dec. 31, 2002
Segment assets:
Steel mills	$	3,897,914,109	$	4,017,013,672
Steel products		320,547,092		302,444,958
Corporate/eliminations/other		131,958,241		61,542,587

	$	4,350,419,442	$	4,381,001,217

ACQUISITION: On March 24, 2003, Nucor’s wholly owned subsidiary, Nucor Steel Kingman, LLC, purchased substantially all of the assets of the Kingman, Arizona steel facility of North Star Steel (“North Star”) for approximately $35,000,000. The purchase price did not include working capital and Nucor assumed no material liabilities of the North Star operation. The acquisition was not material to the consolidated financial statements and did not result in goodwill or other intangible assets.

EARNINGS PER SHARE: The computations of basic and diluted earnings per share are as follows:

	Six Months (26 Weeks) Ended				Three Months (13 Weeks) Ended
	July 5, 2003		June 29, 2002		July 5, 2003		June 29, 2002
Basic earnings per share:
Basic net earnings	$	26,206,849	$	80,010,597	$	8,425,090	$	59,748,302

Average shares outstanding		78,187,447		78,002,299		78,192,924		78,084,879

Basic net earnings per share	$	0.34	$	1.03	$	0.11	$	0.77

Diluted earnings per share:
Diluted net earnings	$	26,206,849	$	80,010,597	$	8,425,090	$	59,748,302

Diluted average shares outstanding:
Basic shares outstanding		78,187,447		78,002,299		78,192,924		78,084,879
Dilutive effect of stock options and other		94,662		242,582		123,489		273,557

		78,282,109		78,244,881		78,316,413		78,358,436

Diluted net earnings per share	$	0.33	$	1.02	$	0.11	$	0.76

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements made in this quarterly report are forward-looking statements that involve risks and uncertainties. These forward-looking statements reflect the Company’s best judgment based on current information, and although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that other factors will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the results and expectations discussed herein. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including steel scrap; (2) availability and cost of electricity and natural gas; (3) competitive pressure on sales and pricing, including pressure from imports and substitute materials; (4) uncertainties surrounding the global economy, including excess world capacity for steel production; (5) U.S. and foreign trade policy affecting steel imports or exports, including adjustments, repeals or lapses of existing U.S. tariffs on imported steel and adverse outcomes of pending and future trade cases alleging unlawful practices in connection with the importing of steel into the U.S.; (6) changes in significant government regulations affecting environmental compliance; (7) the cyclical nature of the domestic steel industry; (8) capital investments and their impact on the Company’s performance; (9) our safety performance; and (10) other factors described in the Company’s filings with the Securities and Exchange Commission.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements included elsewhere in this report, as well as the audited financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Nucor’s Annual Report on Form 10-K for the year ended December 31, 2002.

Operations

Net sales for the second quarter of 2003 increased 27% from the second quarter of 2002 primarily due to a 25% increase in total tons shipped to outside customers and to a 2% increase in average sales price per ton from $351 in the second quarter of 2002 to $357 in the second quarter of 2003. The increase in total tons shipped was driven by the acquisitions of the assets of Trico Steel Company, LLC in July 2002 and the assets of Birmingham Steel Corporation in December 2002. Excluding the increases resulting from these acquisitions, total tons shipped to outside customers increased 1% from the second quarter of 2002 to the second quarter of 2003 and increased 4% from the first half of 2002 to the first half of 2003.

Net sales for the first half of 2003 increased 32% from the first half of 2002. Average sales price per ton increased 2% from $342 in the first half of 2002 to $350 in the first half of 2003, while total tons shipped to outside customers increased 29%. In the steel mills segment in the first half of 2003, steel production was 8,545,000 tons, compared with 6,754,000 tons produced in the first half of 2002. Total steel shipments were 8,643,000 tons in the first half of 2003, compared with 6,665,000 tons in last year’s first half. Steel shipments to outside customers were 7,993,000 tons in the first half of 2003, compared with 6,156,000 tons in the first half of 2002. In the steel products segment, steel joist production during the first half of 2003 was 235,000 tons, compared with 210,000 tons in the first half of 2002. Steel deck sales were 172,000 tons, compared with 137,000 tons in last year’s first half. Cold finished steel sales were 128,000 tons, compared with 113,000 tons in the first half of 2002.

The major component of cost of products sold is raw material costs. In the second quarter of 2003, the average price of raw materials increased approximately 19% from the second quarter of 2002, and increased approximately 21% in the first half of 2003 compared with the first half of 2002. The average prices of raw materials used in the steel mills segment and the steel products segment increased approximately 21% and 7%, respectively, from the second quarter of 2002 and increased approximately 22% and 8%, respectively, from the first half of 2002. The average scrap and scrap substitute cost per ton used in our steel mills segment was $131 in the second quarter of 2003, an increase of 22% from $107 in the second quarter of 2002, and was $127 in the first half of 2003, an increase of 25% from $102 in the first half of 2002. Another component of costs of products sold is energy costs. Total energy costs increased approximately $3 per ton from the second quarter of 2002 to the second quarter of 2003 and increased approximately $4 per ton from the first half of 2002 to the first half of 2003.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, continued

Pre-operating and start-up costs of new facilities increased to $33,500,000 in the second quarter of 2003, compared with $8,900,000 in the second quarter of 2002. For the first half of 2003, pre-operating and start-up costs increased to $60,200,000, compared with $32,400,000 in the first half of 2002. In 2003, these costs primarily related to the start-up of the sheet mill in Decatur, Alabama (formerly Trico Steel Company, LLC) and the Castrip^{^®} facility at our sheet mill in Crawfordsville, Indiana. In 2002, these costs primarily related to the start-up of the plate mill in Hertford County, North Carolina, the Vulcraft facility in Chemung, New York and the Castrip facility.

Pre-operating and start-up costs were higher than expected in the second quarter of 2003 primarily due to the failure to realize projected improvements in the operating performance of the sheet mill in Decatur, Alabama. Equipment failures resulted in the shutdown of the mill for two days in May and reduced the production capacity for this facility by 50% for most of the quarter. These equipment problems also reduced the range of products that could be produced and negatively impacted yield during May and June. The equipment failures are being addressed and are not expected to require significant additional expenditures to correct.

Additionally, the second quarter was negatively impacted by six days of unanticipated downtime at the plate mill in Hertford County, North Carolina. Costs related to this downtime, which include a power outage and caster and rolling mill modifications, were greater than anticipated.

During the second quarter and first half of 2003, Nucor revised estimates for environmental reserves as additional information was obtained, reducing environmental reserves by $397,000 and $3,067,000, respectively. The majority of the change in estimate occurred during the first quarter of 2003 and related to Nucor-Yamato Steel Company, of which Nucor owns 51%.

Gross margins were approximately 4% for the second quarter of 2003 and approximately 5% for the first half of 2003, compared with approximately 11% for the second quarter of 2002 and approximately 10% for the first half of 2002.

The major components of marketing, administrative and other expenses are freight and profit sharing costs. Unit freight costs decreased approximately 5% from the second quarter of 2002 to the second quarter of 2003, and decreased approximately 2% in the first half of 2003 compared with the first half of 2002.

Profit sharing costs, which are based upon and generally fluctuate with pre-tax earnings, decreased approximately 19% from the second quarter of 2002 to the second quarter of 2003, and decreased approximately 20% in the first half of 2003 compared with the first half of 2002. Nucor accrued $6,700,000 ($4,400,000 after tax and profit sharing) during the second quarter of 2003 in compensation expense anticipated to be paid under the new incentive compensation plans that Nucor’s stockholders approved at the Company’s annual meeting of stockholders in May 2003. Of this amount, approximately 40% was actually attributable to compensation expense for the first quarter of 2003 that, under generally accepted accounting principles, the Company could not accrue before the stockholders approved the new incentive compensation plans.

Interest expense, net of interest income, increased from the second quarter of 2002 to the second quarter of 2003, and increased from the first half of 2002 to the first half of 2003, primarily due to an increase in long-term debt and a decrease in short-term investments.

Minority interests represent the income attributable to the minority partners of Nucor’s less than 100% owned joint venture, Nucor-Yamato Steel Company. Under the partnership agreement, the minimum amount of cash to be distributed each year to the partners of Nucor-Yamato Steel Company is the amount needed by each partner to pay applicable U.S. federal and state income taxes. In the second quarter and first half of 2003 and 2002, the amount of cash distributed to minority interest holders exceeded amounts allocated to minority interests based on mutual agreement of the general partners; however, the cumulative amount of cash distributed to partners was less than the cumulative net earnings of the partnership.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, continued

Nucor reported other income of $2,300,000 and $29,900,000 in the first half of 2003 and 2002, respectively, related to graphite electrodes anti-trust settlements.

Nucor had an effective tax rate of 11.2% in the second quarter of 2003 compared with 33.3% in the second quarter of 2002 and had an effective tax rate of 18.4% in the first half of 2003, compared with 33.6% in the first half of 2002. The decrease in the effective tax rate is primarily due to state income tax credits, resolution of certain tax issues and the effect of reduced pre-tax earnings.

Net earnings decreased during the second quarter and first half of 2003 compared with the second quarter and first half of 2002 due to decreased margins, increased pre-operating and start-up costs, increased expense associated with new incentive compensation plans, decreased income from graphite electrodes anti-trust settlements and increased interest expense. The decrease in net earnings was partially offset by a decrease in the effective tax rate.

Liquidity and capital resources

The current ratio was 2.4 at the end of the first half of 2003 and at year-end 2002. The percentage of long-term debt to total capital was 26% at the end of the first half of 2003 and at year-end 2002. Nucor has a simple capital structure with no off-balance sheet arrangements or relationships with unconsolidated special purpose entities.

Capital expenditures increased approximately 23% from the first half of 2002 to the first half of 2003. In addition, during the first quarter of 2003, Nucor Steel Kingman, LLC, a wholly owned subsidiary of Nucor Corporation, purchased substantially all of the assets of the Kingman, Arizona steel facility of North Star Steel for approximately $35,000,000. The acquisition was not material to the consolidated financial statements and did not result in goodwill or other intangible assets. Capital expenditures are projected to be less than $300,000,000 for all of 2003.

Funds provided from operations, existing credit facilities and new borrowings are expected to be sufficient to meet future capital expenditure and working capital requirements for existing operations for at least the next 24 months. Nucor has the financial ability to borrow additional funds to finance major acquisitions and still maintain reasonable leverage.

Nucor’s directors have approved the purchase of up to 15,000,000 shares of Nucor common stock. There were no repurchases during the first half of 2003 or 2002. Since the inception of the stock repurchase program in 1998, a total of approximately 10,800,000 shares have been repurchased at a cost of about $445,000,000.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Management does not believe our exposure to market risk has significantly changed since December 31, 2002 and does not believe that such risks will result in significant adverse impacts to our financial condition or results of operations.

Item 4. Controls and Procedures

Our management, including our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in this Form 10-Q quarterly report has been appropriately recorded, processed, summarized and reported. Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures are effective at the reasonable assurance level.

Our management, including our principal executive and principal financial officers, has evaluated any changes in our internal control over financial reporting that occurred during the quarterly period covered by this report, and has concluded that there was no change that occurred during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

At the annual meeting of stockholders held on May 8, 2003, the following actions were taken:

Two directors were elected for terms of three years expiring in 2006: 65,005,778 shares were voted for Clayton C. Daley, Jr. (1,550,348 abstained) and 64,993,195 shares were voted for Harvey B. Gantt (1,562,931 abstained). Peter C. Browning, Daniel R. DiMicco, Victoria F. Haynes, James D. Hlavacek, Raymond J. Milchovich and Thomas A. Waltermire continue to serve as directors of the Company.

The 2003 Key Employees Incentive Stock Option Plan was approved by a vote of 52,075,021 votes for, 5,729,411 votes against and 740,680 votes abstaining. The Annual and Long-Term Senior Officers Incentive Compensation Plans were approved by a vote of 55,343,187 votes for, 2,410,307 votes against and 791,620 votes abstaining.

Item 6. Exhibits and Reports on Form 8-K

a. List of Exhibits:

Exhibit No.		Description of Exhibit

10.1		2003 Key Employees Incentive Stock Option Plan (1)

10.2		Senior Officers Annual Incentive Plan (1)

10.3		Senior Officers Long-Term Incentive Plan (1)

31.1		Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)

Indicates a management compensatory plan.

b. Reports on Form 8-K:

On July 25, 2003, Nucor filed a current report on Form 8-K under Item 9, pursuant to Item 12, concerning the issuance of the news release reporting its financial results for the fiscal quarter ended July 5, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Nucor Corporation has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NUCOR CORPORATION

Date: August 7, 2003	By:	/s/ TERRY S. LISENBY
		Terry S. Lisenby Chief Financial Officer, Treasurer and Executive Vice President

NUCOR CORPORATION

List of Exhibits to Form 10-Q—July 5, 2003

Exhibit No.		Description of Exhibit

10.1		2003 Key Employees Incentive Stock Option Plan

10.2		Senior Officers Annual Incentive Plan

10.3		Senior Officers Long-Term Incentive Plan

31.1		Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-10.1 3 dex101.htm KEY EMPLOYEES INCENTIVE STOCK OPTION PLAN Key Employees Incentive Stock Option Plan

Exhibit 10.1

NUCOR CORPORATION

2003 KEY EMPLOYEES INCENTIVE STOCK OPTION PLAN

PURPOSES: The purposes of this Plan are to provide greater incentive for key employees, to attract and retain key employees of outstanding competence, and to further the identity of interests of key employees with those of Nucor Corporation’s stockholders.

DURATION: This Plan shall commence on July 1, 2003 and shall terminate on June 30, 2010.

NUMBER OF SHARES: The total number of shares of Nucor Corporation’s common stock, which may be issued upon exercise of options granted under this Plan is five million (5,000,000).

ADMINISTRATION AND GRANTING OF OPTIONS: This Plan shall be administered by the members of the Compensation and Executive Development Committee of the Board of Directors (the “Committee”) who are “outside directors” of Nucor Corporation within the meaning of Internal Revenue Code Section 162(m)(4)(C)(i). The Committee may authorize the granting of options under terms and conditions not inconsistent with this Plan.

OPTIONEES: Options may be granted under this Plan only to key employees and officers of Nucor Corporation or a subsidiary, including key employees and officers who are members of the Board of Directors of Nucor Corporation or a subsidiary. No optionee may own (directly or indirectly), at the date of grant, more than two percent (2%) of the total combined voting power or value of all classes of stock of Nucor Corporation or a subsidiary. In addition, the maximum number of shares of Nucor Corporation common stock with respect to which options may be granted to a key employee or officer during a calendar year is one hundred thousand (100,000) shares.

OPTION PRICE: The exercise price of options granted under this Plan shall be one hundred percent (100%) of the fair market value of Nucor Corporation’s common stock on the date of grant.

OPTION TERM: The term of each option granted under this Plan shall not exceed seven (7) years from the date of grant.

EXERCISABILITY: Options granted under this Plan shall be exercisable during the optionee’s lifetime only by the optionee.

TRANSFERABILITY: Options granted under this Plan shall be transferable only by will or the laws of descent and distribution.

10.

OTHER PROVISIONS: (a) If any options under this Plan expire or terminate without being fully exercised, the unpurchased shares shall again become available for grant of options under this Plan. (b) The number or kind of shares which may be issued under this Plan, and in appropriate circumstances the price per share, shall be equitably adjusted (with respect to options granted and to be granted) for stock dividends, splits or combinations, mergers, reorganizations, liquidations or other comparable corporate events. Any such adjustments shall be made by Nucor Corporation’s Board of Directors in good faith and shall be binding on all optionees. (c) This Plan may be amended by Nucor Corporation’s Board of Directors at any time, provided that no amendments shall increase the number of shares in Paragraph 3 or change the optionees in Paragraph 5, unless approved by Nucor Corporation’s stockholders. (d) Except for adjustments made pursuant to Section 10(b), neither Nucor Corporation’s Board of Directors nor the Committee shall have the discretion or authority, without stockholder approval, to reduce or decrease the exercise price for any outstanding option, cancel an outstanding option for the purpose of replacing or regranting such option with an exercise price that is less than the original exercise price of the option or otherwise reduce the exercise price of an outstanding option.

EX-10.2 4 dex102.htm SENIOR OFFICERS ANNUAL INCENTIVE PLAN Senior Officers Annual Incentive Plan

Exhibit 10.2

NUCOR CORPORATION

SENIOR OFFICERS ANNUAL INCENTIVE PLAN

Effective January 1, 2003

Table of Contents

ARTICLE I	INTRODUCTION	1
ARTICLE II	DEFINITIONS	1
ARTICLE III	ADMINISTRATION	2
ARTICLE IV	PERFORMANCE AWARDS	2
4.1	Performance Awards	2
4.2	Performance Award Payments	3
4.3	Deferrals of Performance Awards	3
ARTICLE V	MISCELLANEOUS	5
5.1	Amendment or Termination	5
5.2	Assignability	5
5.3	Source of Benefits	5
5.4	No Promise of Continued Employment	5
5.5	Applicable Law	5
5.6	Stockholder Approval	5

ARTICLE I

INTRODUCTION

Nucor Corporation hereby adopts and establishes the Nucor Corporation Senior Officers Annual Incentive Plan to provide annual incentive compensation to senior officers based on the performance of Nucor Corporation consistent with the “performance based compensation” requirements of Section 162(m) of the Code.

ARTICLE II

DEFINITIONS

For purposes of the Plan, the following terms shall have the following meanings:

“Adjusted Net Earnings” for a Performance Period means the consolidated net earnings reported by the Company and its subsidiaries for the Performance Period in accordance with generally accepted accounting principles, before reported extraordinary items, but after charges or credits for taxes measured by income and Performance Awards under this Plan and performance awards under the Nucor Corporation Senior Officers Long-Term Incentive Plan.

“Average Stockholders’ Equity” for a Performance Period means the average of the Stockholders’ Equity of the Company as of the last day of the immediately preceding Performance Period and the last day of each fiscal month in the Performance Period.

“Beneficiary” means the person or persons designated by the Eligible Employee who are to receive any amounts payable under the Plan following the death of the Eligible Employee.

“Board of Directors” or “Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” means Nucor Corporation, a Delaware corporation.

“Compensation” means the base salary paid or payable to an Eligible Employee for a Performance Period, before reduction pursuant to any plan or agreement of the Company whereby compensation is deferred, including, without limitation, a plan whereby compensation is deferred in accordance with Code Section 401(k) or reduced in accordance with Code Section 125. Compensation shall not include any other form of compensation, whether taxable or non-taxable, including, but not limited to, annual or long-term incentive compensation, commissions, gains from the exercise or vesting of stock options, restricted stock or other equity-based awards or other forms of additional compensation.

“Committee” means all members of the Compensation and Executive Development Committee of the Board of Directors who are “outside directors” of the Company within the meaning of Section 162(m)(4)(C)(i) of the Code.

“Deferral Account” means the individual bookkeeping account maintained by the Company for an Eligible Employee to record the Eligible Employee’s Deferral Amounts and Deferral Incentive credits.

“Deferral Agreement” means the agreement or agreements entered into by an Eligible Employee which specify the Eligible Employee’s Deferral Amount.

“Deferral Amount” means the amount of a Performance Award that an Eligible Employee elects to defer under the Deferral Agreement.

“Deferral Incentive” means the incentive amount the Company will credit to an Eligible Employee’s Deferral Account pursuant to Section 4.3(b) based on the Eligible Employee’s Deferral Amount.

“Eligible Employee” means an Employee who is designated as the Chairman or a Vice Chairman of the Board or the Chief Executive Officer, the President, the Chief Financial Officer, an Executive Vice President or a Vice President of the Company and any other Employee who is a senior officer of the Company and designated by the Committee as an Eligible Employee.

“Employee” means any person, including a member of the Board, employed by the Company on a regular, full-time basis.

“Net Sales” means the consolidated net sales reported by the Company and its subsidiaries for a Performance Period in accordance with generally accepted accounting principles.

“Peer Group” for a Performance Period means a group of not less than five (5) steel industry competitors designated by the Committee not later than ninety (90) days after the beginning of the Performance Period.

“Performance Award” means the incentive compensation awarded and payable to an Eligible Employee pursuant to Section 4.1 for the Performance Period.

“Performance Period” means the fiscal year of the Company beginning on January 1 and ending on December 31.

“Plan” means the Nucor Corporation Senior Officers Annual Incentive Plan, as set forth herein and as amended from time to time.

“Return on Average Stockholders’ Equity” for a Performance Period means an amount, expressed as a percentage, determined by dividing (a) the Company’s Adjusted Net Earnings for the Performance Period by (b) the Company’s Average Stockholders’ Equity for the Performance Period.

“Revenue Growth” for a Performance Period means the percentage increase in the Company’s Net Sales for the Performance Period over the immediately preceding Performance Period.

“Stockholders’ Equity” means the sum of (a) issued capital stock, (b) additional paid-in capital and (c) earnings retained in the business and reserves created by appropriations therefrom, minus the cost of treasury stock, all as shown in the Company’s consolidated balance sheet.

ARTICLE III

ADMINISTRATION

The Plan shall be administered by the Committee. The Committee shall have all of the powers necessary to enable it to properly carry out its duties under the Plan. Not in limitation of the foregoing, the Committee shall have the power to construe and interpret the Plan and to determine all questions that shall arise thereunder. The Committee shall have such other and further specified duties, powers, authority and discretion as are elsewhere in the Plan either expressly or by necessary implication conferred upon it. The Committee may appoint such agents, who need not be members of the Committee, as it may deem necessary for the effective performance of its duties, and may delegate to such agents such powers and duties as the Committee may deem expedient or appropriate that are not inconsistent with the intent of the Plan. The decision of the Committee upon all matters within its scope of authority shall be final and conclusive on all persons.

ARTICLE IV

PERFORMANCE AWARDS

4.1

Performance Awards

(a) Maximum Performance Awards. The maximum Performance Award that may be made to an Eligible Employee for a Performance Period shall be three hundred percent (300%) of the Eligible Employee’s Compensation for the Performance Period. Seventy-five percent (75%) of the maximum Performance Award for a Performance Period (i.e., 225% of the Eligible Employee’s Compensation for the Performance Period) shall be available for award based on the Company’s Return on Average Stockholders’ Equity for the Performance Period in accordance with Section 4.1(b). Twenty-five percent (25%) of the maximum Performance Award for a Performance Period (i.e., 75% of the Eligible Employee’s Compensation for the Performance Period) shall be available for award based on the Company’s relative Revenue Growth for the Performance Period in accordance with Section 4.1(c).

(b) Performance Awards Based on Return on Average Stockholders’ Equity. The maximum Performance Award of two hundred twenty-five percent (225%) of each Eligible Employee’s Compensation for a Performance Period shall be awarded under this Section 4.1(b) if the Company’s Return on Average Stockholders’ Equity for the Performance Period equals or exceeds twenty percent (20%). Not later than ninety (90) days after the beginning of each Performance Period, the Committee shall designate, in writing, a threshold Return on Average Stockholders’ Equity for the Performance Period of not less three percent (3%) and not more than seven percent (7%) which must be achieved by the Company before any Performance Awards may be made under this Section 4.1(b) for the Performance Period. In the event the threshold Return on

Average Stockholders’ Equity established by the Committee for a Performance Period is achieved by the Company, a Performance Award of twenty percent (20%) of each Eligible Employee’s Compensation for the Performance Period shall be awarded under this Section 4.1(b). In the event the Return on Average Stockholders’ Equity for a Performance Period exceeds the threshold established by the Committee for a Performance Period but is less than twenty percent (20%), the amount of the Performance Award, expressed as a percentage of each Eligible Employee’s Compensation for the Performance Period, awarded under this Section 4.1(b) for the Performance Period shall be determined by linear interpolation.

(c) Performance Awards Based on Relative Revenue Growth. Not later than ninety (90) days after the beginning of each Performance Period, the Committee shall designate, in writing, the amounts of the Performance Awards that will be made to each Eligible Employee, expressed as a percentage of the Eligible Employee’s Compensation for the Performance Period up to the maximum Performance Award of seventy-five percent (75%) of the Eligible Employee’s Compensation that may be awarded under this Section 4.1(c), for levels of Revenue Growth for the Performance Period when ranked against the revenue growth of the members of the Peer Group for the Performance Period, provided, however, the Committee’s designation of the amount of the Performance Award for each rank shall provide approximately linear progression from the minimum to the maximum award that may be made under this Section 4.1(c). The Company’s Peer Group ranking under this Section 4.1(c) and the corresponding annual Performance Awards shall be based on the most recent four (4) fiscal quarters of available financial information for a Peer Group member.

(d) Reduction or Forfeiture of Performance Awards. Notwithstanding the foregoing:

(i) if the Company has no reported net earnings for a Performance Period, no Performance Awards will be made with respect to the Performance Period; and

(ii) the Committee in its sole and exclusive discretion may reduce (including a reduction to zero) the amount of the Performance Awards otherwise payable to Eligible Employees under the Plan for a Performance Period, provided the same percentage reduction is made to all of the Performance Awards otherwise payable for the Performance Period.

4.2

Performance Award Payments

Subject to an Eligible Employee’s election in accordance with Section 4.3 to defer the payment of a Performance Award, an Eligible Employee’s Performance Award shall be paid by the Company to the Eligible Employee in cash, less applicable payroll and withholding taxes, within thirty (30) days after the later of (i) the completion of the independent audit of the Company’s financial statements for the Performance Period or (ii) the date the Committee certifies in writing the amount of Performance Awards payable under Section 4.1.

4.3

Deferrals of Performance Awards

(a) Deferral Agreement. Each Eligible Employee may elect, by entering into a Deferral Agreement with the Company, to defer any portion up to fifty percent (50%) (in increments of ten percent (10%)) of the Performance Award otherwise payable to the Eligible Employee for a Performance Period. To be effective to defer the payment of a Performance Award, an Eligible Employee must complete and return a Deferral Agreement to the Company in accordance with procedures established by the Committee for such purpose prior to the beginning of the Performance Period; provided, however, (i) Deferral Agreements for the deferral of Performance Awards for the first Performance Period commencing January 1, 2003 may be completed within thirty (30) days of the Committee’s notification of Eligible Employees of their eligibility to participate in the Plan and to defer Performance Awards hereunder and (ii) an Employee who first becomes an Eligible Employee during a Performance Period may enter into a Deferral Agreement for the deferral of a Performance Award for the Performance Period within thirty (30) days of the date the Eligible Employee is notified of his or her eligibility to participate in the Plan. The amount of any Performance Award that is deferred pursuant to the Eligible Employee’s Deferral Agreement is referred to in the Plan as the Deferral Amount.

An Eligible Employee’s Deferral Agreement shall be effective for one Performance Period. Therefore, an Eligible Employee must complete and sign a Deferral Agreement and return the agreement to the representative of the Company designated by the Committee prior to the beginning of each Performance Period for which a deferral of a Performance Award is intended to be made.

(b) Deferral Accounts; Deferral Incentive. An Eligible Employee’s Deferral Amount shall be converted to a number of common stock units determined by dividing the Deferral Amount by the closing price at which shares of the Company’s common stock are sold regular way on the New York Stock Exchange on the date the Deferral Amount would otherwise be paid to the Eligible Employee. Such common stock units shall be credited to a Deferral Account established and maintained on the books and records of the Company. In the event an Eligible Employee defers a Performance Award under the Plan, the Company shall credit a Deferral Incentive in the form of additional common stock units to the Eligible Employee’s Deferral Account. The number of common stock units comprising the Deferral Incentive for an Eligible Employee shall be determined by multiplying twenty-five percent (25%) by the number of common stock units resulting from the conversion of the Eligible Employee’s Deferral Amount into common stock units.

(c) Dividend Equivalent Payments; Adjustments to Common Stock Units. The Company shall pay to each Eligible Employee in cash, less applicable payroll and withholding taxes, within thirty (30) days after the payment date of any cash dividend with respect to shares of the Company’s common stock a dividend equivalent payment equal to the number of common stock units credited to the Eligible Employee’s Deferral Account as of the record date for such dividend multiplied by the per share amount of the dividend.

In the event a dividend with respect to shares of the Company’s common stock shall be declared and paid in additional shares or in the event the outstanding shares of the Company’s common stock shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation or changed into or exchanged for cash or property or the right to receive cash or property, then the Committee shall in its discretion equitably adjust the common stock units credited to the Deferral Accounts under the Plan to prevent substantial dilution or enlargement of the rights of Eligible Employees under the Plan.

(d) Vesting. An Eligible Employee shall be fully vested in the portion of the Eligible Employee’s Deferral Account attributable to the Eligible Employee’s Deferral Amounts. An Eligible Employee shall become fully vested in the portion of the Eligible Employee’s Deferral Account attributable to the Company’s Deferral Incentives upon attainment of age fifty-five (55) while employed by the Company or in the event the Eligible Employee dies or becomes disabled while employed by the Company. In the event an Eligible Employee terminates employment prior to attaining age fifty-five (55) for any reason other than death or disability, the portion of the Eligible Employee’s Deferral Account that is not vested shall be forfeited.

(e) Payment of Deferral Accounts. The vested portion of an Eligible Employee’s Deferral Account shall be paid to the Eligible Employee as soon as practicable following the termination of the Eligible Employee’s employment with the Company for any reason. The form of payment shall be one share of the Company’s common stock for each common stock unit credited to the vested portion of the Deferral Account and cash for any fractional unit. An Eligible Employee may elect a single sum payment of the Eligible Employee’s Deferral Account or payment in installments over a term certain of not more than five (5) years. An Eligible Employee may change the method of payment by electing a new payment method at least twelve (12) full calendar months prior to the termination of the Eligible Employee’s employment with the Company. Payment election changes submitted less than twelve (12) full calendar months prior to the termination of an Eligible Employee’s employment with the Company shall be null and void. In the event an Eligible Employee fails to make a valid method of payment election, distribution of the Eligible Employee’s Deferral Account shall be made in a single sum payment of shares of Company common stock and cash for any fractional unit credited to the Deferral Account.

(f) Payment Following Death. An Eligible Employee may designate and change at any time the Beneficiary who is to receive distribution of the vested portion of the Participant’s Deferral Account in the event of the Eligible Employee’s death. Any such designation or change shall not be effective until received by the representative of the Company designated by the Committee. If an Eligible Employee has not properly designated a Beneficiary, if for any reason such designation shall not be legally effective, or if the designated Beneficiary shall predecease the Eligible Employee, then the Eligible Employee’s estate shall be treated as the Beneficiary.

In the event of an Eligible Employee’s death prior to distribution of all common stock units credited to the Eligible Employee’s Deferral Account, the Eligible Employee’s Beneficiary shall receive a distribution of the vested portion of such units (in the form of shares of Company common stock and cash for any fractional unit credited to the Deferral Account) as soon as practicable following the Participant’s death in a single sum payment.

ARTICLE V

MISCELLANEOUS

5.1

Amendment or Termination

The Board expressly reserves for itself and for the Committee the right and the power to amend or terminate the Plan at any time. Unless the Committee otherwise expressly provides at the time the action is taken, no Performance Awards shall be paid to any Eligible Employee on or after the date of any termination of the Plan.

5.2

Assignability

Eligible Employees shall not alienate, assign, sell, transfer, pledge, encumber, attach, mortgage, or otherwise hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder. No part of the amounts payable hereunder shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony, or separate maintenance, nor shall any person have any other claim to any benefit payable under this Plan as a result of a divorce or the Eligible Employee’s, or any other person’s, bankruptcy or insolvency.

5.3

Source of Benefits

The Company shall make any cash payments due under the terms of this Plan directly from its assets or from any trust that the Company may choose to establish and maintain from time to time. Shares of the Company’s common stock that may be issued under the Plan may be either authorized and unissued shares or shares which have been reacquired by the Company. Nothing contained in this Plan shall give or be deemed to give any Eligible Employee or any other person any interest in any property of any such trust or in any property of the Company, nor shall any Eligible Employee or any other person have any right under this Plan not expressly provided by the terms hereof, as such terms may be interpreted and applied by the Committee in its discretion.

5.4

No Promise of Continued Employment

Nothing in this Plan or in any materials describing or relating to this Plan grants, nor should it be deemed to grant, any person any employment right, nor does participation in this Plan imply that any person has been employed for any specific term or duration or that any person has any right to remain in the employ of the Company.

5.5

Applicable Law

The Plan shall be construed in accordance with and governed by the laws of the State of North Carolina.

5.6

Stockholder Approval

The effectiveness of the Plan shall be subject to its approval and ratification by the stockholders of the Company at the 2003 annual meeting of stockholders.

EX-10.3 5 dex103.htm SENIOR OFFICERS LONG-TERM INCENTIVE PLAN Senior Officers Long-Term Incentive Plan

Exhibit 10.3

NUCOR CORPORATION

SENIOR OFFICERS LONG-TERM INCENTIVE PLAN

Effective January 1, 2003

Table of Contents

ARTICLE I	INTRODUCTION	1
ARTICLE II	DEFINITIONS	1
ARTICLE III	ADMINISTRATION	2
ARTICLE IV	PERFORMANCE AWARDS	3
4.1	Performance Awards	3
4.2	Performance Award Payments	3
4.3	Deferrals of Restricted Stock Performance Awards	4
ARTICLE V	MISCELLANEOUS	5
5.1	Amendment or Termination	5
5.2	Assignability	5
5.3	Source of Benefits	5
5.4	No Promise of Continued Employment	5
5.5	Applicable Law	5
5.6	Stockholder Approval	5

ARTICLE I

INTRODUCTION

Nucor Corporation hereby adopts and establishes the Nucor Corporation Senior Officers Long-Term Incentive Plan to provide incentive compensation to senior officers based on Nucor Corporation’s long-term performance relative to that of its principal competitors in the steel industry and of certain other high-performing companies, consistent with the “performance based compensation” requirements of Section 162(m) of the Code.

ARTICLE II

DEFINITIONS

For purposes of the Plan, the following terms shall have the following meanings:

“Average Invested Capital” for a Performance Period means the average of the Invested Capital of the Company as of the last day of the immediately preceding Performance Period and the last day of each fiscal quarter in the Performance Period.

“Beneficiary” means the person or persons designated by the Eligible Employee who are to receive any amounts payable under the Plan following the death of the Eligible Employee.

“Board of Directors” or “Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” means Nucor Corporation, a Delaware corporation.

“Compensation” means the annual base salary rate paid or payable to an Eligible Employee as of the beginning of a Performance Period, before reduction pursuant to any plan or agreement of the Company whereby compensation is deferred, including, without limitation, a plan whereby compensation is deferred in accordance with Code Section 401(k) or reduced in accordance with Code Section 125. Compensation shall not include any other form of compensation, whether taxable or non-taxable, including, but not limited to, annual or long-term incentive compensation, commissions, gains from the exercise or vesting of stock options, restricted stock or other equity-based awards or other forms of additional compensation.

“Deferral Account” means the individual bookkeeping account maintained by the Company for an Eligible Employee to record the deferral of the Eligible Employee’s Restricted Stock Performance Award.

“Deferral Agreement” means the agreement or agreements entered into by an Eligible Employee which provide for the deferral of the Eligible Employee’s Restricted Stock Performance Award for a Performance Period.

“Employee” means any person, including a member of the Board, employed by the Company on a regular, full-time basis.

“High-Performing Peer Group” for a Performance Period means a group of not less than ten (10) high-performing companies in capital intensive industries designated by the Committee not later than ninety (90) days after the beginning of the Performance Period.

“Invested Capital” means the sum of (a) long-term debt (comprising bonds, debentures and promissory notes having a maturity at the time of execution of more than one (1) year), (b) issued capital stock, (c) additional paid-in capital and (d) earnings retained in the business and reserves created by appropriations therefrom, minus the cost of treasury stock, all as shown in the Company’s consolidated balance sheet.

“Performance Award” means the incentive compensation awarded and payable to an Eligible Employee pursuant to Section 4.1 for the Performance Period.

“Performance Period” means:

(a) the one (1) fiscal year period commencing on the January 1 coinciding with or immediately preceding the date an Eligible Employee commences participation in the Plan and ending on the immediately succeeding December;

(b) the two (2) fiscal year period commencing on the January 1 coinciding with or immediately preceding the date an Eligible Employee commences participation in the Plan and ending on December 31 of the immediately succeeding fiscal year; and

(c) each period of three (3) consecutive fiscal years of the Company commencing on the January 1 coinciding with or immediately preceding the date an Eligible Employee commences participation in the Plan and on each January 1 thereafter.

“Plan” means the Nucor Corporation Senior Officers Long-Term Incentive Plan, as set forth herein and as amended from time to time.

“Restricted Stock Performance Award” is defined in Section 4.2.

“Return on Average Invested Capital” for a Performance Period means an amount, expressed as a percentage, determined by dividing (a) the Company’s Adjusted Net Earnings for the Performance Period by (b) the Company’s Average Invested Capital for the Performance Period.

“Steel Peer Group” for a Performance Period means a group of not less than five (5) steel industry competitors designated by the Committee not later than ninety (90) days after the beginning of the Performance Period.

“Target Performance Award” for an Eligible Employee for a Performance Period means that number of shares of the Company’s common stock determined by dividing (a) eighty-five percent (85%) of the Eligible Employee’s Compensation for the Performance Period by (b) the closing price at which shares of the Company’s common stock are sold regular way on the New York Stock Exchange on the last trading day immediately preceding the beginning of the Performance Period. The Target Performance Award shall not be rounded up or down to a whole number of shares.

Notwithstanding the foregoing, in the event an Eligible Employee commences participation in the Plan effective as of any day other than January 1 or if the employment of an Eligible Employee is terminated during a Performance Period on or after the Eligible Employee attains age fifty-five (55) or due to the Eligible Employee’s death or disability, then in either of such events, the Eligible Employee’s Target Performance Award shall be adjusted by multiplying such Target Performance Award by a fraction, the numerator of which is number of complete calendar months during the Performance Period that the Eligible Employee was employed by the Company and participating in the Plan, and the denominator of which is the total number of calendar months in the Performance Period.

ARTICLE III

ADMINISTRATION

This Plan shall be administered by the Committee. The Committee shall have all of the powers necessary to enable it to properly carry out its duties under the Plan. Not in limitation of the foregoing, the Committee shall have the power to construe and interpret the Plan and to determine all questions that shall arise thereunder. The Committee shall have such other and further specified duties, powers, authority and discretion as are elsewhere in the Plan either expressly or by necessary implication conferred upon it. The Committee may appoint such agents, who need not be members of the Committee, as it may deem necessary for the effective performance of its duties, and may delegate to such agents such powers and duties as the Committee may deem expedient or appropriate that are not inconsistent with the intent of the Plan. The decision of the Committee upon all matters within its scope of authority shall be final and conclusive on all persons.

ARTICLE IV

PERFORMANCE AWARDS

4.1

Performance Awards

(a) Maximum Performance Awards. The maximum Performance Award that may be made to an Eligible Employee with respect to any Performance Period shall be two (2) times the Eligible Employee’s Target Performance Award for the Performance Period. All Performance Awards under the Plan shall be based on the Company’s relative Return on Average Invested Capital in accordance with Section 4.1(b).

(b) Awards Based on Relative Return on Average Invested Capital.

(i) Steel Peer Group. Fifty percent (50%) of the maximum Performance Award for a Performance Period (i.e., 100% of the number of shares of the Company’s common stock comprising the Eligible Employee’s Target Performance Award for the Performance Period) shall be available for award based on the Company’s Return on Average Invested Capital for the Performance Period relative to the return on average invested capital of each company in the Steel Peer Group for the Performance Period. Not later than ninety (90) days after the beginning of each Performance Period, the Committee shall designate, in writing, the amounts of the Performance Awards that will be made to each Eligible Employee, expressed as a percentage of the number of shares comprising the Eligible Employee’s Target Performance Award for the Performance Period, for levels of Return on Average Invested Capital for the Performance Period when ranked against the return on average invested capital of the members of the Steel Peer Group for the Performance Period.

(ii) High-Performing Peer Group. The remaining fifty percent (50%) of the maximum Performance Award for a Performance Period (i.e., 100% of the number of shares of the Company’s common stock comprising the Eligible Employee’s Target Performance Award for the Performance Period) shall be available for award based on the Company’s Return on Average Invested Capital for the Performance Period relative to the return on average invested capital of each company in the High-Performing Peer Group for the Performance Period. Not later than ninety (90) days after the beginning of each Performance Period, the Committee shall designate, in writing, the amounts of the Performance Awards that will be made to each Eligible Employee, expressed as a percentage of the number of shares comprising the Eligible Employee’s Target Performance Award for the Performance Period, for levels of Return on Average Invested Capital for the Performance Period when ranked against the return on average invested capital of the members of the High-Performing Peer Group for the Performance Period.

The Committee’s designation of the amount of the Performance Award for the Company’s rankings against the Steel Peer Group and the High-Performing Peer Group shall provide approximately equal progression in the amount of the award from the minimum to the maximum amount that may be awarded under Sections 4.1(b)(i) and (ii). The Company’s Steel Peer Group and High-Performing Peer Group rankings shall be based on the most recent available financial information for the members of the Steel Peer Group and High-Performing Peer Group.

(c) Reduction or Forfeiture of Performance Awards. Notwithstanding the foregoing:

(i) if the Company has no reported net earnings for a Performance Period, no Performance Awards will be made with respect to the Performance Period;

(iii) if the employment of an Eligible Employee is terminated during a Performance Period prior to the Eligible Employee’s attainment of age fifty-five (55) for any reason other than the Eligible Employee’s death or disability, the Eligible Employee shall not receive any Performance Award under the Plan for the Performance Period.

4.2

Performance Award Payments

An Eligible Employee’s Performance Award shall be paid by the Company to the Eligible Employee within thirty (30) days after the later of (i) the completion of the independent audit of the Company’s financial statements for the Performance Period or (ii) the date the Committee certifies in writing the amount of Performance Awards payable under Section 4.1. The value of fifty percent (50%) of the shares comprising an Eligible Employee’s Performance Award for a Performance Period, determined by multiplying the number of such shares by the closing price at which shares of the Company’s common stock

are sold regular way on the New York Stock Exchange on the last trading day of the Performance Period, shall be paid to the Eligible Employee in cash, less applicable payroll and withholding taxes. Subject to an Eligible Employee’s election in accordance with Section 4.3 to defer payment of the remaining portion of the Performance Award, the remaining fifty percent (50%) of the shares comprising the Eligible Employee’s Performance Award (the “Restricted Stock Performance Award”) shall be delivered to the Eligible Employee. The Restricted Stock Performance Award shares shall become vested in the Eligible Employee upon the Eligible Employee’s attainment of age fifty-five (55) while employed by the Company, in the event the Eligible Employee dies or becomes disabled while employed by the Company or, if earlier, in installments based on the Eligible Employee’s continued employment with the Company through each of the following vesting dates:

Vesting Date		Vested Portion of Restricted Stock Performance Award
1^st anniversary of payment date		33¹/3%
2^nd anniversary of payment date		66²/3%
3^rd anniversary of payment date		100%

In the event an Eligible Employee’s employment with the Company terminates for any reason, the Eligible Employee shall, for no consideration, forfeit to the Company coincident with such termination all shares in the Restricted Stock Performance Award that have not become vested in the Eligible Employee.

4.3

Deferrals of Restricted Stock Performance Awards

(a) Deferral Agreement. Each Eligible Employee may elect, by entering into a Deferral Agreement with the Company, to defer payment of all (and not less than all) of the Restricted Stock Performance Award otherwise payable to the Eligible Employee for a Performance Period. To be effective to defer the payment of a Restricted Stock Performance Award, an Eligible Employee must complete and return a Deferral Agreement to the Company in accordance with procedures established by the Committee for such purpose prior to the beginning of the Performance Period; provided, however, (i) Deferral Agreements for the deferral of Restricted Stock Performance Awards for the Performance Periods commencing January 1, 2003 may be completed within thirty (30) days of the Committee’s notification of Eligible Employees of their eligibility to participate in the Plan and to defer Restricted Stock Performance Awards hereunder and (ii) an Employee who first becomes an Eligible Employee during a Performance Period may enter into a Deferral Agreement for the deferral of a Restricted Stock Performance Award for the Performance Period within thirty (30) days of the date the Eligible Employee is notified of his or her eligibility to participate in the Plan.

(b) Deferral Accounts. In the event an Eligible Employee defers the payment of a Restricted Stock Performance Award, the number of shares comprising such award shall be converted into an equivalent number of common stock units, and such units shall be credited to a Deferral Account established and maintained in the Eligible Employee’s name on the books and records of the Company.

(d) Vesting. An Eligible Employee shall become vested in the common stock units credited to the Eligible Employee’s Deferral Account in accordance with the vesting provisions of Section 4.2 that would have applied to the Restricted Stock Performance Award shares from which such units were derived. In the event an Eligible Employee terminates employment prior to attaining age fifty-five (55) for any reason other than death or disability, the common stock units credited to the Eligible Employee’s Deferral Account that are not vested shall be forfeited.

ARTICLE V

MISCELLANEOUS

5.1

Amendment or Termination

5.2

Assignability

5.3

Source of Benefits

5.4

No Promise of Continued Employment

5.5

Applicable Law

The Plan shall be construed in accordance with and governed by the laws of the State of North Carolina.

5.6

Stockholder Approval

The effectiveness of the Plan shall be subject to its approval and ratification by the stockholders of the Company at the 2003 annual meeting of stockholders.

EX-31.1 6 dex311.htm CERTIFICATION Certification

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to Rule 13a-14(a)/15d-14(a)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Daniel R. DiMicco, certify that:

I have reviewed this quarterly report on Form 10-Q of Nucor Corporation;

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2003

/s/ DANIEL R. DIMICCO

Daniel R. DiMicco

Vice Chairman, President and

Chief Executive Officer

EX-31.2 7 dex312.htm CERTIFICATION Certification

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to Rule 13a-14(a)/15d-14(a)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Terry S. Lisenby, certify that:

I have reviewed this quarterly report on Form 10-Q of Nucor Corporation;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2003

/s/ TERRY S. LISENBY

Terry S. Lisenby

Chief Financial Officer, Treasurer

and Executive Vice President

EX-32.1 8 dex321.htm CERTIFICATION Certification

Exhibit 32.1

Certification of Principal Executive Officer

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

I, Daniel R. DiMicco, Vice Chairman, President and Chief Executive Officer (principal executive officer) of Nucor Corporation (the “Registrant”), certify, to the best of my knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended July 5, 2003 of the Registrant (the “Report”), that:

(1)

The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


/s/ DANIEL R. DIMICCO
Name:		Daniel R. DiMicco

Date: August 7, 2003

EX-32.2 9 dex322.htm CERTIFICATION Certification

Exhibit 32.2

Certification of Principal Financial Officer

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

I, Terry S. Lisenby, Chief Financial Officer, Treasurer and Executive Vice President (principal financial officer) of Nucor Corporation (the “Registrant”), certify, to the best of my knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended July 5, 2003 of the Registrant (the “Report”), that:

(1)

The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


		/s/ TERRY S. LISENBY
Name:		Terry S. Lisenby

Date: August 7, 2003

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