-----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, H+8GvTQMrHhoSkcX6rdc3288VB2c1PVg3kZuf2/mk8DW7uInoBxk3ztxO8jgGQkW 5cu+/b8eIVhvuEklzJHvBw== 0000950144-98-002769.txt : 19980317 0000950144-98-002769.hdr.sgml : 19980317 ACCESSION NUMBER: 0000950144-98-002769 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19980316 EFFECTIVENESS DATE: 19980316 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSTEEL INDUSTRIES INC CENTRAL INDEX KEY: 0000764401 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS [3310] IRS NUMBER: 560674867 STATE OF INCORPORATION: NC FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-48011 FILM NUMBER: 98566311 BUSINESS ADDRESS: STREET 1: 1373 BOGGS DR CITY: MOUNT AIRY STATE: NC ZIP: 27030 BUSINESS PHONE: 9107862141 MAIL ADDRESS: STREET 1: 1373 BOGGS DRIVE CITY: MOUNT AIRY STATE: NC ZIP: 27030 FORMER COMPANY: FORMER CONFORMED NAME: EXPOSAIC INDUSTRIES INC DATE OF NAME CHANGE: 19880511 S-8 1 INSTEEL INDUSTRIES INC S-8 1 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------------ INSTEEL INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) NORTH CAROLINA 56-0674867 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1373 BOGGS DRIVE, MOUNT AIRY, NORTH CAROLINA 27030 - -------------------------------------------------------------------------------- (Address of principal executive offices, including zip code) INSTEEL INDUSTRIES, INC. RETURN ON CAPITAL INCENTIVE COMPENSATION PLAN INSTEEL INDUSTRIES, INC. DIRECTOR COMPENSATION PLAN - -------------------------------------------------------------------------------- (Full title of the plans) ---------- Howard O. Woltz, Jr. Chairman of the Board Insteel Industries, Inc. 1373 Boggs Drive Mount Airy, North Carolina 27030 (336) 786-2141 - -------------------------------------------------------------------------------- (Name, address and telephone number, including area code, of agent for service) CALCULATION OF REGISTRATION FEE ================================================================================ PROPOSED PROPOSED TITLE OF MAXIMUM MAXIMUM SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF TO BE TO BE PRICE OFFERING REGISTRATION REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE(1) - -------------------------------------------------------------------------------- Common Stock, no par value 150,000 shares $7.3125 $1,096,875.00 $323.58 ================================================================================ (1) Pursuant to Rule 457(c) and (h)(1), based on the average of the high and low prices of the registrant's common stock on March 12, 1998, as reported on the New York Stock Exchange. - -------------------------------------------------------------------------------- 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed by Insteel Industries, Inc. (the "Company") with the Securities and Exchange Commission (the "Commission") are incorporated herein by reference: (a) The Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997, filed with the Commission on December 10, 1997. (b) All other reports that have been filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year covered by the Annual Report on Form 10-K referred to in (a), above. (c) The description of the Company's Common Stock (No Par Value), which is incorporated by reference to the Company's Registration Statement on Form S-1 (SEC File No. 33-4929). All reports and other documents subsequently filed by the Company pursuant to Sections 13, 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold shall be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such reports and documents. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Sections 55-8-50 through 55-8-58 of the General Statutes of North Carolina prescribe the conditions under which indemnification may be obtained by a present or former director or officer who incurs expenses or liability as a consequence of a legal proceeding arising out of his activities as a director or officer. Mandatory Statutory Indemnification. Under the statutes, a North Carolina corporation must indemnify a director or officer who is wholly successful on the merits or otherwise in defending a proceeding in which he was involved by virtue of his being a director or officer of the corporation. This mandatory indemnification covers reasonable expenses and attorneys' fees. Permissive Statutory Indemnification. A North Carolina corporation may, but is not required by statute to, indemnify its directors and officers who conduct themselves in good faith and meet a reasonable belief test regarding the challenged conduct. If he was acting in his official capacity, the director or officer must have believed the challenged conduct was in the corporation's best interest; if he was acting otherwise, he must meet the test that he reasonably believed his conduct was not opposed to the corporation's best interest. Notwithstanding those tests, however, statutory indemnification is prohibited where the individual is held liable to the corporation or where he is held liable on the basis of an improperly received personal benefit. II - 1 3 Court-Ordered Indemnification. A director or officer may enforce his or her right to mandatory indemnification and, if the court determines the individual to be entitled to the mandatory indemnification, the court must also order the corporation to pay the reasonable expenses incurred to enforce the right, including counsel fees. The statutes authorize the court to provide indemnification in any case regardless of whether the individual has met the tests applicable to permissive indemnification upon a finding that the individual "is fairly and reasonably entitled to indemnification in view of all the relevant circumstances." [G.S. 55-8-54(2).] This relief is limited to reasonable expenses when there is liability to the corporation by the individual. Voluntary Indemnification. Notwithstanding the limits on statutory indemnification, a North Carolina corporation may voluntarily agree to indemnify its directors and officers by provisions in the articles of incorporation, the bylaws, a contract or a resolution of the Board of Directors against any liability, subject to the limitation that an individual cannot be indemnified on account of his activities which were at the time taken known or believed by him to be clearly in conflict with the best interests of the corporation. A North Carolina corporation may also obtain insurance to protect its directors and officers from personal liability. Exculpation of Directors from Liability. The articles of incorporation of a North Carolina corporation may exonerate directors (but not officers) from monetary liability for acts performed by them in their official capacity as directors. This exculpation may not include conduct that the director knew or believed was clearly in conflict with the best interests of the corporation, liability for unlawful distributions, transactions from which he derived an improper personal benefit or acts undertaken prior to the effective date of the adoption of the exculpation provision. [G.S. 55-8-54(2).] The Company's bylaws contain broad indemnification provisions covering both directors and officers of the Company. The Company's articles of incorporation contain the provision eliminating monetary liability of directors to the extent permitted by law. The Company has purchased insurance providing for indemnification of its directors and officers. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. The following exhibits are filed as a part of this Registration Statement: NUMBER DESCRIPTION ------ ----------- 4.1 Restated articles of incorporation of the Company, as amended, which are incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K, dated May 3, 1988 4.2 Bylaws of the Company, as last amended February 5, 1991, which are incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended September 30, 1991 5 Opinion of Womble Carlyle Sandridge & Rice, PLLC, as to the legality of the Common Stock being registered 23.1 Consent of Womble Carlyle Sandridge & Rice, PLLC, which is contained in its opinion filed as Exhibit 5 23.2 Consent of Arthur Andersen LLP II - 2 4 23.3 Consent of KPMG Peat Marwick LLP 24 Power of Attorney 99.1 Insteel Industries, Inc. Return on Capital Incentive Compensation Plan 99.2 Description of Insteel Industries, Inc. Director Compensation Plan ITEM 9. UNDERTAKINGS. (a) The Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II - 3 5 SIGNATURES THE REGISTRANT Pursuant to the requirements of the Securities Act of 1933, Insteel Industries, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Mount Airy, State of North Carolina, on this 16th day of March, 1998. INSTEEL INDUSTRIES, INC. By: /s/ H. O. Woltz III ------------------------------ H. O. Woltz III Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on March 16, 1998. /s/ H. O. Woltz III * /s/ Howard O. Woltz, Jr. * - -------------------------------------- ------------------------------------- Name: H. O. Woltz III Name: Howard O. Woltz, Jr. Title: Director, President and Title: Chairman of the Board Chief Executive Officer (principal executive officer) /s/ Michael C. Gazmarian /s/ Louis E. Hannen * - -------------------------------------- ------------------------------------- Name: Michael C. Gazmarian Name: Louis E. Hannen Title: Chief Financial Officer Title: Director (principal financial and accounting officer) /s/ Frances H. Johnson * /s/ Charles B. Newsome * - -------------------------------------- ------------------------------------- Name: Frances H. Johnson Name: Charles B. Newsome Title: Director Title: Director /s/ C. Richard Vaughn * /s/ John E. Woltz * - -------------------------------------- ------------------------------------- Name: C. Richard Vaughn Name: John E. Woltz Title: Director Title: Director By: /s/ H. O. Woltz, Jr. --------------------------------- Name: H. O. Woltz, Jr. Attorney-in-Fact II - 4 6 EXHIBIT INDEX TO REGISTRATION STATEMENT ON FORM S-8 OF INSTEEL INDUSTRIES, INC. EXHIBIT NO. DESCRIPTION - ----------- ----------- 4.1 Restated articles of incorporation of the Company, as amended, which are incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K, dated May 3, 1988 * 4.2 Bylaws of the Company, as last amended February 5, 1991, which are incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended September 30, 1991 * 5 Opinion of Womble Carlyle Sandridge & Rice, PLLC, as to the legality of the Common Stock being registered 23.1 Consent of Womble Carlyle Sandridge & Rice, PLLC, which is contained in its opinion filed as Exhibit 5 23.2 Consent of Arthur Andersen LLP 23.3 Consent of KPMG Peat Marwick LLP 24 Power of Attorney 99.1 Insteel Industries, Inc. Return on Capital Incentive Compensation Plan 99.2 Description of Insteel Industries, Inc. Director Compensation Plan - ------ * Incorporated by reference. EX-5 2 OPINION OF WOMBLE CARLYLE & SANDRIDGE 1 EXHIBIT 5 2 Womble [LOGO] 3300 One First Union Center Carlyle 301 South College Street Sandridge Charlotte, NC 28202-6025 & Rice A PROFESSIONAL LIMITED Telephone: (704) 331-4900 LIABILITY COMPANY Fax: (704) 331-4955 March 16, 1998 Insteel Industries, Inc. 1373 Boggs Drive Mount Airy, North Carolina 27030 Re: Registration Statement on Form S-8 with respect to the Insteel Industries, Inc. Return on Capital Incentive Compensation Plan and Insteel Industries, Inc. Director Compensation Plan Gentlemen: We have served as counsel for Insteel Industries, Inc. (the "Company") in connection with its registration under the Securities Act of 1933, as amended, of an aggregate of 150,000 shares of its common stock, no par value (the "Shares"), which are proposed to be offered and sold pursuant to the Insteel Industries, Inc. Return on Capital Incentive Compensation Plan and the Insteel Industries, Inc. Director Compensation Plan (individually, a "Plan" and collectively, the "Plans"), and pursuant to the Company's Registration Statement on Form S-8 (the "Registration Statement") to be filed with the Securities and Exchange Commission (the "Commission") with respect to the Shares. In rendering this opinion, we have relied upon, among other things, our examination of such records of the Company and certificates of its officers and of public officials as we have deemed necessary. We express no opinion as to matters under or involving the laws of any jurisdiction other than the corporate law of the State of North Carolina. Based upon the foregoing, and having regard for such legal considerations as we have deemed relevant, we are of the opinion that the Shares have been duly authorized and, upon issuance pursuant to the terms of the respective Plan, will be validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. WOMBLE CARLYLE SANDRIDGE & RICE A Professional Limited Liability Company By: /s/ Jane Jeffries Jones ---------------------------------- Jane Jeffries Jones EX-23.2 3 CONSENT OF ARTHUR ANDERSEN 1 EXHIBIT 23.2 2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated October 16, 1997, included in Insteel Industries, Inc.'s Form 10-K for the year ended September 30, 1997, and to all references to our firm included in this registration statement. Arthur Andersen LLP Charlotte, North Carolina March 3, 1998. EX-23.3 4 CONSENT OF KPMG PEAT MARWICK 1 EXHIBIT 23.3 Consent of KPMG Peat Marwick LLP The Board of Directors and Shareholders Insteel Industries, Inc. We consent to incorporation by reference in this registration statement on Form S-8 of Insteel Industries, Inc. of our report dated October 24, 1995, relating to the consolidated statements of earnings, shareholders' equity and cash flows of Insteel Industries, Inc. and subsidiaries for the year ended September 30, 1995 and related schedule for the year ended September 30, 1995 which report appears in the September 30, 1997 annual report on Form 10-K of Insteel Industries, Inc. KPMG Peat Marwick LLP Charlotte, North Carolina March 13, 1998 EX-24 5 POWER OF ATTORNEY 1 EXHIBIT 24 2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: We, the undersigned directors and officers of Insteel Industries, Inc., and each of us, do hereby make, constitute and appoint Howard O. Woltz, Jr. and H. O. Woltz III, and each of them (either of whom may act without the consent or joinder of the other), our attorneys-in-fact and agents with full power of substitution for us and in our name, place and stead, in any and all capacities, to execute for us and in our behalf the Registration Statement on Form S-8 under the Securities Act of 1933, and any post-effective amendments thereto, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as we might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, we the undersigned have executed this Power of Attorney this 19th day of February, 1998. /s/ Howard O. Woltz, Jr. /s/ H. O. Woltz III - ------------------------------------ ------------------------------------ Howard O. Woltz, Jr. H. O. Woltz III /s/ Michael C. Gazmarian /s/ Louis E. Hannen - ------------------------------------ ------------------------------------ Michael C. Gazmarian Louis E. Hannen /s/ Frances H. Johnson /s/ Charles B. Newsome - ------------------------------------ ------------------------------------ Frances H. Johnson Charles B. Newsome /s/ C. Richard Vaughn /s/ John E. Woltz - ------------------------------------ ------------------------------------ C. Richard Vaughn John E. Woltz EX-99.1 6 RETURN ON CAPITAL INCENTIVE COMPENSATION PLAN 1 EXHIBIT 99.1 2 INSTEEL INDUSTRIES INC. RETURN ON CAPITAL INCENTIVE COMPENSATION PLAN FOR KEY MEMBERS OF MANAGEMENT 1. Statement of Purpose The purpose of the Insteel Industries Inc. Return on Capital Incentive Compensation Plan For Key Members Of Management (the "Plan") is to encourage the creation of shareholder value by establishing a direct link between the Return on Capital (ROC) achieved and management's incentive compensation. The Participants contribute to the success of Insteel Industries Inc. (the "Company") through their ability and commitment to the Company. The Company desires to receive the benefits derived from the services of the Participants, to identify the continued interests of the Participants with the future success of the Company, and to provide an incentive compensation plan that encourages sustained achievement of the Company's objective to maximize shareholder wealth. 2. Definitions 2.1 Bonus Award "Bonus Award" means the dollar amount which results from the multiplication of the Bonus Percent for the year, by the Participant's Base Salary for the same year. 2.2 Bonus Percent "Bonus Percent" means the percentage amount which results from the multiplication of the Participant's Target Bonus Percent for the Year, by the Performance Factor for the same Year. 2.3 Bonus Bank "Bonus Bank" means the accrual account maintained by the Company for each Participant, into which either (i) the excess, for any Year, of any Bonus Award above One-Third of the Participant's Target Bonus Amount is credited; or (ii) the deficiency, for any Year, of any Award below zero (0) is debited; and/or (iii) the Bonus Bank Distribution, for any Year, as calculated in accordance with Section 5.3 is debited. Such account, for book accounting purposes, shall be accrued in accordance with generally accepted accounting principles. The Company does not and will not transfer cash into such accounts and the accounts exist only as bookkeeping records to evidence the Company's obligation to pay these amounts according to the Plan. No interest is credited on amounts in the Bonus Bank, and the individual's Bonus Bank balance shall never be less than zero (0). Participants are never vested in amounts in the Bonus Bank, and such amounts are not earned until the respective Distribution Date. 2.4. Base Salary "Base Salary" means the Participant's actual base salary compensation earned during the Year; or partial Year, in the event of death, Disability or Retirement during the year; excluding incentive payments, salary continuation, and other payments which are not, in the sole determination of the Committee, actual base salary. 2.5. Beneficiary "Beneficiary" means the person or persons designated as such in accordance with Section 6. 2.6. c* "c*" also referred to as the "Weighted Average Cost of Capital," means the Company's weighted average cost of debt and equity expressed as a percent. It represents the Company's minimum required rate of return on capital, as established by management. It shall be a rate rounded to the nearest whole percent. 2.7. Committee "Committee" means the Executive Compensation Committee. 2.8. Disability "Disability" means a bodily injury or diseases as determined by the Committee, that totally and continuously prevents the Participant, for at least six (6) consecutive months, from engaging in an "occupation" for pay or profit. During the first twenty-four (24) months of total disability, "occupation" means the Participant's regular 3 occupation. After that period, "occupation" means any occupation for which the Participant is reasonably fitted, based upon the Participant's education, training or experience as determined by the Committee. 2.9. Distribution "Distribution" means the cash payment and/or deferral amount resulting from a Bonus Award or from a Bonus Bank or from a combination thereof. 2.10. Distribution Date "Distribution Date" means the date on which the Employer makes Distributions of Participant Awards and/or Distributions from the Participants' Bonus Banks. The Distribution Date shall be once each Year and no later than December 15 of the Year following the Year for which an Award was calculated. 2.11. Effective Date "Effective Date" means October 1, 1996, the date on which the Plan commences. 2.12. Eligible Employee "Eligible Employee" means a regular, exempt, salaried employee of the Company who may be selected by management and recommended to the Executive Compensation Committee for participation. 2.13. Employer "Employer" (also referred to as the "Company") means Insteel Industries Inc. and its wholly owned subsidiaries. 2.14. Executive Compensation Committee "Executive Compensation Committee" (also referred to as the "Committee") means the Executive Compensation Committee of the Board of Directors of Insteel Industries Inc., which administers the Plan. 2.15. Expected Improvement Factor The annual increase in SV, above the average of the prior year's actual and target SV, required to produce a Performance Factor of 1.00 or the Target Bonus Percent. 2.16. Invested Capital "Invested Capital" means total assets less non-interest bearing current liabilities, and for the Year represents the average of each of twelve (12) month end amounts. 2.17. Leverage Factor "Leverage Factor" determines the sensitivity of the Bonus Award to performance - the slope of the SV-Bonus Award Line. 2.18. Net Operating Profit After Tax "Net Operating Profit After Tax" (also referred to as "NOPAT") means operating income before financing costs and income taxes reduced by income taxes which are computed by applying a statistical tax rate appropriate to the jurisdiction(s) in which the Company operates. The total Awards for all the incentive plans other than this Plan are charged to operating income of the Company prior to the computation of NOPAT. 2.19. Participant "Participant" means an Eligible Employee who has been recommended for participation in the Plan by management and approved by the Committee. Designation as a Participant must be renewed annually. 2.20. Performance Factor "Performance Factor" means that number described in Section 4.2 which is multiplied by a Participant's Target Bonus Percent to arrive at such Participant's Bonus Percent. 2.21. Plan "Plan" means this 1995 Return on Capital Incentive Compensation Plan for Key Members of Management, as it may be hereafter amended. 4 2.22. Retirement "Retirement" means termination of employment by a Participant for whatever reason other than death or Disability after attainment of age fifty-five (55), or, if prior to having attained age fifty-five (55), only after having obtained prior permission of the Committee. A Participant who has experienced a Retirement as defined herein shall be termed a "Retiree." 2.23. Shareholder Value "Shareholder Value," also referred to as "SV," for the Company means the amount obtained by subtracting (i) a capital charge computed by multiplying Invested Capital for such year by c*, from (ii) Net Operating Profit After Tax for such year, or as follows: SV = Net Operating Profit After Tax - (Invested Capital x c*). 2.24. Target SV "Target SV" means that SV amount, whether positive, negative or zero (0), which, if attained, produces a Performance Factor of one (1.000). For any one Year, Target SV shall equal the sum of (i) the average of prior Year's Target SV, and the prior Year's Actual SV and (ii) the Expected Improvement Factor. 2.25. Target Bonus Amount "Target Bonus Amount" means that dollar amount earned that results from multiplying the Target Bonus Percent for the year by the Participant's Base Salary for the same year. 2.26. Target Bonus Percent "Target Bonus Percent" means Percent of Base Salary earned if actual SV equals Target SV. 2.27. Year "Year" means the fiscal year in respect of which performance is measured under the Plan. 2.28. Administration of the Plan The Executive Compensation Committee shall be the sole administrator of the Plan. The Committee shall have full power to formulate additional details and regulations and make interpretations for carrying out the Plan. The Committee shall also be empowered to make any and all of the determinations not herein specifically authorized which may be necessary or desirable for the effective administration of the Plan. Any decision or interpretation of any provision of this Plan adopted by the Committee shall be final and conclusive. 3. Targets 3.1. Establishment of Target Bonus Percent At the time a Participant commences participation in the Plan, there shall be established for such Participant a Target Bonus Percent. The Target Bonus Percent for such Participant for any future Year(s) may be increased, decreased or left unchanged from the prior Year. Following the end of each Year, the Target Bonus Percent for that Year will be multiplied by the Base Salary of such Participant for that Year to arrive at the Target Bonus Amount for such Participant. The Target Bonus Amount will then be multiplied by the Performance Factor for that Year to arrive at the amount of the Bonus Award, if any, and the amount of the credit or debit to the Participant's Bonus Bank, if any. 4. Calculation of the Performance Factors, Awards, Bonus Banks and Distributions 4.1. Timing of the Calculation The calculations necessary to obtain the Performance Factor for the Year most recently ended shall be made no later than December 15 of the subsequent fiscal year. Such calculation shall be carried out in accordance with this Section. 4.2. Calculation of the Performance Factor The Performance Factor for the Year corresponds with the difference between the Actual SV and Target SV in relation to the leverage factor where such difference is calculated by subtracting (i) the Target SV from (ii) the Actual SV for the Year. The Performance Factor shall be multiplied by the Participant's Target Bonus Amount to arrive at such Participant's Award and Bonus Bank credits or debits, if any, for such Year. 5 4.3. Calculation of Distributions If the Performance Factor for the Year is greater than one, then the Participant's Award Distribution for that Year's performance shall equal the target bonus amount plus one-third of the Bonus Bank balance. In addition, the Participant's Bonus Bank shall be credited with an amount calculated consistent with Section 4.4. If the Performance Factor for the Year is greater than zero (0) but less than or equal to the Participant's Target Bonus Amount, then that Performance Factor shall be multiplied by each Participant's Target Bonus Amount and the result shall be each Participant's Award Distribution for that Year's performance. In addition, if at the beginning of the Year the Participant had a Bonus Bank balance resulting from prior Years' performance of that Participating Unit, an additional Distribution will be made from the Participant's Bonus Bank in an amount which represents the lesser of (i) One-Third of the Participant's Bonus Bank balance at the beginning of the Year or (ii) an amount which when combined with the Award Distribution for that Year's performance equals the Participant's Target Bonus Amount. If the Performance Factor for the Year is zero (0), then the Participant's Award Distribution for that Year's performance shall be zero (0). However, if at the beginning of the Year, the Participant had a Bonus Bank balance resulting from prior Years' performance, a Distribution will be made from the Participant's Bonus Bank in an amount which represents the lesser of (i) One-Third of the Participant's Bonus Bank balance at the beginning of the Year or (ii) an amount which equals the Participant's Target Bonus Amount. If the Performance Factor for the Year is less than zero (0), then the Participant's Award Distribution for that Year's performance shall be zero (0). However, if subsequent to the completion of the calculation described in Section 4.4, the Participant has a Bonus Bank balance resulting from prior Years' performance, a Distribution will be made from the Participant's Bonus Bank in an amount which represents the lesser of (i) One-Third of the Participant's Bonus Bank balance following the debit calculated consistent with Section 4.4 or (ii) an amount which equals the Participant's Target Bonus Amount. In the event the Target Bonus Percent of a Participant who is an active employee is changed to zero (0) and such Participant's Bonus Bank balance is greater than zero (0), then the Target Bonus Amount to be used for Bonus Bank Distributions shall be that Target Bonus Amount of such Participant for the Year immediately prior to the Year of such change. 4.4. Calculation of the Credits and Debits to Participant's Bonus Bank Accounts If the Performance Factor for the Year is greater than one (1) for any respective Participant, then a credit to the Participant's respective Bonus Bank will be made for Two-Thirds of that amount by which the product obtained by multiplying, (i) the Performance Factor for such Year times (ii) the Participant's Target Bonus Amount, exceeds the Participant's Target Bonus Amount. Credits to the Bonus Bank do not qualify as Distributions for the purpose of any deferred compensation plan(s) maintained by the Company. If the Performance Factor for the Year is less than zero (0) for any respective Participation Basis, then a debit to the Participant's respective Bonus Bank will be made in an amount equal to the product obtained by multiplying, (i) the Performance Factor for such Year by (ii) the Participant's Target Bonus Amount; however, in no event shall a Participant's Bonus Bank ever be reduced to less than zero (0). 4.5. Calculation of Award Distributions and Credits and Debits to Participants' Bonus Banks When a Participant Has Multiple Participation Bases In the event a Participant has been assigned multiple Participation Bases for a Year, then Awards, Bonus Banks, Performance Factors and Target Bonus Amounts shall be calculated separately and independently for each Participation Basis of such Participant. Bonus Banks shall be maintained separately for credits and debits from each Participation Basis. Debits from one Participation Basis may not be charged against a Bonus Bank of another Participation Basis. 4.6. Changes in Participation Basis During the Year In the event a Participant experiences a change in Participation Basis during a Year, then Awards, Bonus Banks, Performance Factors and Target Bonus Amounts shall be calculated separately and independently for each 6 Participation Basis of such Participant using those portions of the Participant's Base Salary actually paid for service while included in each separate Participation Basis. Bonus Banks shall be maintained separately for credits and debits from each Participation Basis. Debits from one Participation Basis may not be charged against a Bonus Bank of another Participation Basis. Distribution(s) from the Bonus Bank for an individual who experiences a change in Participation Basis will be the same as such Distribution(s) would have been had there been no change in Base Salary, Target Bonus Amount or Participation Basis, and such Distribution(s) from more than one Participation Basis shall be made by applying Sections 4.3 and 4.4 separately and independently to each such Participation Basis. 4.7. Changes in Target Bonus Percent During the Year In the event a Participant experiences a change in Target Incentive Percent without experiencing a change in Participation Basis during a Year, then Award calculations and Bonus Bank adjustments will be made separately using those portions of the Participant's Base Salary actually paid for service while participating at each separate Target Bonus Percent. Separate Bonus Bank accounts shall not be maintained because of changes in a Participant's Target Bonus Percent. Total Bonus Bank Distributions of such Participant may not exceed such Participant's Target Bonus Amount subsequent to the change. In the event the new Target Bonus Percent is zero (0), then the Target Bonus Amount to be used for Bonus Bank Distributions shall be that Target Bonus Amount of the Year immediately prior to the Year of such change. 4.8. Taxes: Withholding To the extent required by law, the Company shall withhold from all cash Distributions made hereunder any amount required to be withheld by the federal and any state, provincial or local government. 5. Distributions Following Termination 5.1. Eligibility A Participant who terminates prior to September 30 of a Year shall not be eligible for any Distribution for such Year or any future Distributions, unless such termination is by reason of Retirement, death or Disability. 5.2. Distributions for the Year of Retirement, Disability Distributions for a Participant for the Year of such Participant's Retirement, death or Disability shall be on the same basis as for all Other Participants. 5.3. Bonus Bank Distributions the Year Following the Year of Retirement, Death or Disability Bonus Bank Distributions to a Participant in the Year immediately following the Year of such Participant's Retirement, death or Disability shall be calculated in the same way as for all other Participants, except that no adjustments for performance achieved beyond the year of death or Disability shall be allowed in the case of Participants who have experienced a termination by reason of death or Disability. Adjustments to the Bonus Bank for individuals who have experienced a Retirement will be the same as for all other Participants for the Year of Retirement. Bonus Bank adjustments, if any, for the Year immediately subsequent to the Year of Retirement for such Participants may only be negative, and then only if the Actual ROC is such that the Performance Factor for the Year subsequent to Retirement is negative. Such calculations will be based upon the Participant's Target Bonus Amount for the twelve months immediately preceding retirement. Complete Distribution of Bonus Banks of individuals who have experienced a termination by reason of Retirement, death or Disability shall be accomplished no later than the Distribution Date for the Year following the Year of Retirement, death or Disability, even though such Distribution may exceed twice the terminated Participant's Target Incentive Amount. 6. Beneficiary Designation The Participant shall have the right, at any time and from time to time, to designate and/or change or cancel any person/persons or entity as to his Beneficiary (both principal and contingent) to whom Distribution of Award(s) 7 and/or Bonus Bank(s) under this Plan shall be made in the event of such Participant's death prior to a Distribution. Any Beneficiary change or cancellation shall become effective only when filed in writing with the Committee during the Participant's lifetime on a form provided by or otherwise acceptable to the Company. The filing of a new Beneficiary designation form will cancel all Beneficiary designations previously filed. Any finalized divorce of a Participant subsequent to the date of filing of a Beneficiary designation form shall revoke any prior designation of the divorced spouse as a Beneficiary. The spouse of a Participant domiciled in a community property jurisdiction shall be required to join in any designation of Beneficiary other than the spouse in order for the Beneficiary designation to be effective. If a Participant fails to designate a Beneficiary as provided above, or, if such Beneficiary designation is revoked by divorce, or otherwise, without execution of a new designation, or if all designated Beneficiaries predecease the Participant, then the Distribution shall be made to the Participant's estate. 7. Miscellaneous 7.1. Unsecured General Creditor Participants and their beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests, or other claim in any property or assets of the Employer. Any and all assets shall remain general, unpledged, unrestricted assets of the Employer. The Company's obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future, and there shall be no obligation to establish any fund, any security or any otherwise restricted asset, in order to provide for the payment of amounts under the Plan. 7.2. Obligations To The Employer If a Participant becomes entitled to a Distribution under the Plan, and, if, at the time of the Distribution, such Participant has outstanding any debt, obligation or other liability representing an amount owed to the Employer, then the Employer may offset such amounts owing to it or any affiliate against the amount of any Distribution. Such determination shall be made by the Committee. Any election by the Committee not to reduce any Distribution shall not constitute a waiver of any claim for any outstanding debt, obligation, or other liability representing an amount owed to the Employer. 7.3. Nonassignability Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and nontransferable. No part of an Award and/or Bonus Bank, prior to actual Distribution, shall be subject to seizure or sequestration for the payment of any debts, Judgements, alimony or separate maintenance owed by a Participant or any other person, nor shall it be transferable by operation of law in the event of the Participant's or any other persons bankruptcy or insolvency. 7.4. Employment or Future Eligibility to Participate Not Guaranteed Nothing contained in this Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Eligible Employee or any Participant or any former Participant any right to be retained in the employ of the Employer. Designation as an Eligible Employee or as a Participant is on a year-by-year basis and may or may not be renewed for any employment years not yet commenced. 7.5. Gender, Singular and Plural All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular. 7.6. Captions The captions to the articles, sections, and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. 8 7.7. Applicable Law This Plan shall be governed and construed in accordance with the laws of the State of North Carolina. 7.8. Validity In the event any provision of the Plan is held invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Plan. 7.9. Notice Any notice or filing required or permitted to be given to the Committee shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Company, directed to the attention of the President and CEO of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 8. Amendment and Termination of the Plan 8.1. Amendment The Committee may at any time amend the Plan in whole or in part provided, however, that no amendment shall be effective to affect the Participant's right to designate a beneficiary. 8.2. Termination of the Plan a. Employer's Right to Terminate. The Committee may at any time terminate the Plan as to prospective earning of Awards, if it determines in good faith that the continuation of the Plan is not in the best interest of the Company and its shareholders. No such termination of the Plan shall reduce any Distribution already made. b. Payments Upon Termination of the Plan. Upon any termination of the Plan under this Section, Awards for future years shall not be made. With respect to the Year in which such termination takes place, the employer will pay to each Participant the Participant's Award for such Year or partial Year, less any applicable taxes on the 15th day of December in the fiscal year following the year of termination of the Plan. Bonus Bank Distributions shall be made in their entirety to the Participants on the 15th day of December in the fiscal year following the year of termination of the Plan, notwithstanding that such final Distribution may be in excess of twice a Participant's Target Bonus Amount. IN WITNESS WHEREOF, this Insteel Industries, Inc. Return on Capital Incentive Plan has been executed in behalf of the Company effective as of the 1st day of October, 1995. INSTEEL INDUSTRIES, INC. /s/ H.O. Woltz III ---------------------------- H.O. Woltz III President Attest: /s/ Gary D. Kniskern - ------------------------------ Gary D. Kniskern, Secretary 9 INSTEEL INDUSTRIES, INC. 1997 DECLARATION OF AMENDMENT TO INSTEEL INDUSTRIES, INC. RETURN ON CAPITAL INCENTIVE COMPENSATION PLAN FOR KEY MEMBERS OF MANAGEMENT THIS DECLARATION OF AMENDMENT, made this 18th day of November, 1997, by INSTEEL INDUSTRIES, INC., a North Carolina corporation (the "Corporation"), to the Insteel Industries, Inc. Return on Capital Incentive Compensation Plan for Key Members of Management (the "Plan"). R E C I T A L S: WHEREAS, the Corporation has established the Plan, the purposes of which include improving the association between shareholder value of the Corporation and incentive compensation paid to selected members of management of the Corporation; and WHEREAS, to accomplish the Plan's purposes, the Plan currently provides for the distribution of cash payments or deferral amounts, or both, from bonus awards and individual bonus accrual accounts to those Plan participants who qualify for such distributions; and WHEREAS, the Corporation has determined that the purposes of the Plan would be better served if the Plan provided for distributions in the form of cash or shares of the common stock (the "Common Stock") of the Corporation, or both, as determined in accordance with Plan terms by the Executive Compensation Committee (the "Committee") of the Board of Directors of the Corporation; and WHEREAS, the Corporation has reserved 100,000 shares of Common Stock for distribution pursuant to the Plan; and WHEREAS, the Committee has authority to administer and amend the Plan; NOW, THEREFORE, IT IS DECLARED, that, effective as of February 3, 1998, the Plan shall be amended as follows: 1. The Plan is hereby amended to add new Section 2.7.1 immediately following Section 2.7, as follows: "2.7.1. Common Stock. "Common Stock" means the common stock of the Company." 2. Section 2.9 of the Plan shall be deleted in its entirety and the following shall be inserted in lieu thereof: "2.9. Distribution. Distribution means the payment in cash or shares of the Common Stock and/or the deferral amount payable in cash or shares of Common Stock resulting from a Bonus Award or a Bonus Bank or from a combination thereof." 3. The Plan is hereby amended to add a new Section 2.16.1 immediately following Section 2.17, as follows: "2.16.1 Fair Market Value. The "Fair Market Value" per share of the Common Stock shall be determined in good faith by the Committee in accordance with the following provisions: (i) if the shares of Common Stock are listed for trading on the New York Stock Exchange or the American Stock Exchange or included in the Nasdaq National Market, the Fair Market Value shall 10 be the closing sales price of the shares on the New York Stock Exchange or the American Stock Exchange or as reported in the Nasdaq National Market (as applicable) on the date immediately preceding the date as of which the valuation is being made, or if there is no transaction on such date, then on the trading date nearest preceding such date for which closing price information is available and, provided further, if the shares are quoted on the Nasdaq National Market, the Fair Market Value shall be the mean between the high bid and low asked quotations in the Nasdaq stock market on the date immediately preceding the date as of which the valuation is being made; or (ii) if the shares of Common Stock are not listed or reported in any of the foregoing, then Fair Market Value shall be determined by the Committee in accordance with the applicable provisions of Section 20.2031-2 of the Federal Estate Tax Regulations, or in any other manner consistent with the Internal Revenue Code of 1986, as amended, and accompanying regulations." 4. The Plan is hereby amended to add a Section 5.4 immediately following Section 5.3: "5.4 Form of Distributions. (i) The Committee shall have sole discretion to determine whether distributions which are otherwise due and payable shall be paid in cash or shares of Common Stock and to determine whether such distributions shall be paid on a current basis or on a deferred or installment basis (subject to the provisions of Section 4.7 herein). The Committee shall also have sole discretion to determine whether, and to what extent, interest shall accrue on distributions that are paid on a deferred or installment basis. (ii) Distributions that are made in the form of Common Stock shall be valued so that the Fair Market Value of such shares of Common Stock equals that portion of the dollar value of the participant's Bonus Award or Bonus Bank which the Committee has determined shall be paid in Common Stock. Valuation of the Common Stock shall be made on the first trading day in December of each year. Certificates for shares of Common Stock which are due and distributable to a participant shall be issued to the participant (or his beneficiary) as soon as practicable following the date such distributions are due. (iii) The distribution of shares of Common Stock shall be subject to all applicable laws, rules and regulations, and to such approval by any governmental or other agencies, as may be required. No shares of Common Stock shall be issued or distributed under the Plan unless and until all legal requirements applicable to such issuance or distribution have, in the opinion of counsel to the Company, been complied with. In connection with any such issuance, distribution or transfer, the person acquiring shares of Common Stock shall, if requested by the Company, give assurances satisfactory to the Company in respect to such matters as the Company may deem desirable to assure compliance with all applicable legal requirements. (iv) To the extent required pursuant to Rule 16b-3 adopted under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any successor statute or rule, distributions in the form of Common Stock to persons subject to Section 16 of the Exchange Act may not be disposed of for a period of six months from the date of distribution of such shares of Common Stock." 5. The following sentence shall be added to Section 7.1 after the last sentence of such section, with the remainder of Section 7.1 being unchanged: "Notwithstanding the foregoing, the Company may elect to segregate assets in a trust or otherwise for the purpose of making payments under the Plan, but such assets shall remain subject to the claims of creditors of the Company and participants shall have no interest in or claim against such assets as beneficiaries or otherwise." 11 IN WITNESS WHEREOF, this Declaration of Amendment is executed on behalf of Insteel Industries, Inc. as of the day and year first above written. INSTEEL INDUSTRIES, INC. By: /s/ H.O. Woltz III -------------------------------------- H.O. Woltz III President and Chief Executive Officer ATTEST: /s/ Gary D. Kniskern - ---------------------------- Gary D. Kniskern Secretary [Corporate Seal] EX-99.2 7 DIRECTOR COMPENSATION PLAN 1 EXHIBIT 99.2 2 DESCRIPTION OF INSTEEL INDUSTRIES, INC. DIRECTOR COMPENSATION PLAN The Board of Directors has approved, subject, in part, to shareholder approval, that the Insteel Industries, Inc. Director Compensation Plan be adopted, effective February 3, 1998. The plan provides for the remuneration of nonemployee directors for their service on the Board, as summarized below. ANNUAL RETAINER AWARD Under the plan, an annual retainer award will be paid to nonemployee directors for service on the Board of Directors. The amount of the annual retainer award for each director will be determined before (or as soon as practicable following) the start of the retainer year by the Board (subject to certain limitations, discussed below), and the amount of annual retainer awards may vary from year to year. The retainer year will begin on the date of the Annual Meeting of Shareholders at which directors are elected and end on the date of the next following Annual Meeting of Shareholders at which directors are elected. The retainer award may be paid in cash or in shares of Common Stock of the Company, or a combination of cash and Common Stock, as determined by the Board. The designated cash portion of the retainer will be paid in equal quarterly installments on or about March 31, June 30, September 30 and December 31. The designated stock portion of the retainer will be paid at the annual meeting of the Board of Directors following the Annual Meeting of Shareholders at which directors are elected. Each director's annual stock award will equal the number of shares of Common Stock that have a fair market value equal (or as close as possible) to the dollar value of the annual retainer award that has been denominated in Common Stock. The fair market value will be determined as of the close of business on the last trading day of the previous calendar year. Nonemployee directors who are elected or appointed during a retainer year will also be eligible for annual retainer awards as determined in the Board's discretion, subject to plan terms. Unless otherwise provided by the Board in connection with a grant of an award, each annual retainer award granted under the plan shall be fully vested as of the date of grant of the award, except that no director shall be entitled to any cash award quarterly installment payable after the effective date of his or her resignation or removal as a director. The Board has determined that the annual retainer award for each nonemployee director for the retainer year commencing at the 1998 Annual Meeting of Shareholders will be $4,800 and that this amount will be payable in cash only (subject to adjustment by the Board in accordance with the plan). Pursuant to the plan, the Board has authority to increase or otherwise adjust the amount of an annual retainer award, including the amounts of each award payable in cash and in stock, from year to year, subject, however, to the limitation that no more than 50,000 newly issued shares will be available for distribution under the plan. Shares distributed under the plan may be such newly issued shares or shares acquired by open market or private purchases. ADMINISTRATION The plan will be administered by the Board of Directors, or upon its delegation, by the Executive Committee of the Board. The plan may be amended, suspended or terminated at any time by the Board, provided that (i) the consent of a participant is necessary if any such action would adversely affect the director's rights with respect to awards or fees previously earned, and (ii) shareholder approval is required of an amendment only if required by applicable laws, rules or regulations. EFFECT ON DIRECTORS STOCK OPTION PLAN Stock Options will continue to be granted to nonemployee directors as specified in the 1994 Directors Stock Option Plan of Insteel Industries, Inc. Under this plan, non-employee directors annually receive options to purchase 2,000 shares of Common Stock of the Company. 3 RESTRICTED STATUS OF SHARES Resale by the directors of the shares distributed to them under the plan will be subject to Rule 144 under the Securities Act of 1933, as amended. Under that Rule, directors holding shares issued pursuant to the plan may not resell such shares on the open market for a period of one year after issuance, unless the issuance of the shares under the plan is registered by the Company with the Securities and Exchange Commission. After such one-year period, the shares may be sold, as long as the Company is current with its periodic reporting filings with the Commission and the director complies with certain other regulatory matters in connection with the sale. If the issuance of the shares under the plan is registered with the Commission, directors of the Company, as "affiliates" of the Company, will nevertheless be required to comply with Rule 144 in connection with any resale of such shares, except that the one year holding period requirement of the Rule will not apply. SHAREHOLDER APPROVAL FOR STOCK ISSUANCE The rules of the New York Stock Exchange, on which the shares of Common Stock are listed, require shareholder approval of the issuance of Common Stock under the Plan. The Board of Directors believes that stock ownership by directors should be encouraged and that it is in the best interests of the Company to establish director compensation programs that are competitive with other companies in order to attract the most qualified individuals for service on the Board. For these reasons, the Board recommends that shareholders approve this plan. The plan, coupled with the director stock option plans described elsewhere in this Proxy Statement, will increase ownership of the Company's stock by non-employee directors, will enhance their interest in the affairs of the Company and will reward their service with potential increased value. The shares covered by the plan will be listed on the New York Stock Exchange subject to notice of issuance in accordance with the plan. Since the shares will be issued as partial compensation, they will be fully paid when issued. -----END PRIVACY-ENHANCED MESSAGE-----