-----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, AzeA0subRrR2ioxJygPIi8YeiopoEZSjm/rJFtSDPhmUGxfQJxULWA+mmOMHpVG5 ZExnXRBbBAwg86yNh9hfkA== 0000950144-99-009331.txt : 19990730 0000950144-99-009331.hdr.sgml : 19990730 ACCESSION NUMBER: 0000950144-99-009331 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19990729 GROUP MEMBERS: JAMES A TODD JR GROUP MEMBERS: JAMES W MCGLOTHLIN GROUP MEMBERS: JOHN D CORRENTI GROUP MEMBERS: LOIS A CLARKE GROUP MEMBERS: MARK A TODD GROUP MEMBERS: NICHOLAS D STREET GROUP MEMBERS: PAUL EKBERG GROUP MEMBERS: THE SUMMIT FUND LLC GROUP MEMBERS: UC INVESTMENT TRUST GROUP MEMBERS: UNITED CO GROUP MEMBERS: UNITED MANAGEMENT COMPANY LLC GROUP MEMBERS: UNITED OPPORTUNITIES FUND LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BIRMINGHAM STEEL CORP CENTRAL INDEX KEY: 0000779334 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 133213634 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-37332 FILM NUMBER: 99673182 BUSINESS ADDRESS: STREET 1: 1000 URBAN CENTER PARKWAY STREET 2: SUITE 300 CITY: BIRMINGHAM STATE: AL ZIP: 35242 BUSINESS PHONE: 2059701200 MAIL ADDRESS: STREET 1: P.O. BOX 1208 CITY: BIRMINGHAM STATE: AL ZIP: 35201-1208 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: UNITED CO CENTRAL INDEX KEY: 0000101108 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: VA FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1005 GLENWAY CENTER CITY: BRISTOL STATE: VA ZIP: 24203 BUSINESS PHONE: 5404663322 MAIL ADDRESS: STREET 1: 1005 GLENWAY AVE CITY: BRISTOL STATE: VA ZIP: 24203 SC 13D 1 BIRMINGHAM STEEL CORPORATION 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )* BIRMINGHAM STEEL CORPORATION (Name of Issuer) Common Stock, par value $.01 per share (Title of Class of Securities) 091250100 (CUSIP Number) Gene T. Price, Esq. Burr & Forman LLP Suite 3100 SouthTrust Tower 420 North Twentieth Street Birmingham, AL 35203 (205) 251-3000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 19, 1999 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. 2 The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 CUSIP No. 091250100 1. Name of Reporting Person: The United Company IRS Identification No. 54-1120913 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: AF 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: Virginia Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 0 8. Shared Voting Power: 1,819,400 9. Sole Dispositive Power: 0 10. Shared Dispositive Power: 1,819,400 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,819,400 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 6.1% 14. Type of Reporting Person: HC 4 CUSIP No. 091250100 1. Name of Reporting Person: United Management Company LLC IRS Identification No. 54-1884068 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: AF 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: Delaware Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 0 8. Shared Voting Power: 1,949,200 9. Sole Dispositive Power: 0 10. Shared Dispositive Power: 1,949,200 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,949,200 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 6.6% 14. Type of Reporting Person: OO 5 CUSIP No. 091250100 1. Name of Reporting Person: United Opportunities Fund, LLC IRS Identification No. 54-1886995 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: OO 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: Delaware Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 0 8. Shared Voting Power: 1,629,300 9. Sole Dispositive Power: 0 10. Shared Dispositive Power: 1,629,300 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,629,300 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 5.5% 14. Type of Reporting Person: OO 6 CUSIP No. 091250100 1. Name of Reporting Person: The Summit Fund, LLC IRS Identification No. 54-1897775 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: OO 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: Delaware Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 0 8. Shared Voting Power: 190,100 9. Sole Dispositive Power: 0 10. Shared Dispositive Power: 190,100 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 190,100 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 0.6% 14. Type of Reporting Person: OO 7 CUSIP No. 091250100 1. Name of Reporting Person: UC Investment Trust IRS Identification No. 54-1901936 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: OO 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: Ohio Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 0 8. Shared Voting Power: 90,800 9. Sole Dispositive Power: 0 10. Shared Dispositive Power: 90,800 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 90,800 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 0.3% 14. Type of Reporting Person: OO 8 CUSIP No. 091250100 1. Name of Reporting Person: Nicholas D. Street 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: PF; AF 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: United States Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 10,000 8. Shared Voting Power: 1,953,200 9. Sole Dispositive Power: 10,000 10. Shared Dispositive Power: 1,953,200 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,963,200 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 6.6% 14. Type of Reporting Person: IN 9 CUSIP No. 091250100 1. Name of Reporting Person: James W. McGlothlin 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: AF 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: United States Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 0 8. Shared Voting Power: 1,974,200 9. Sole Dispositive Power: 0 10. Shared Dispositive Power: 1,974,200 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,974,200 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 6.7% 14. Type of Reporting Person: IN 10 CUSIP No. 091250100 1. Name of Reporting Person: Lois A. Clarke 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: PF; AF 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: United States Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 3,600 8. Shared Voting Power: 0 9. Sole Dispositive Power: 3,600 10. Shared Dispositive Power: 0 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 3,600 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): less than 0.1 % 14. Type of Reporting Person: IN 11 CUSIP No. 091250100 1. Name of Reporting Person: James A. Todd, Jr. 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: PF; OO 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: United States Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 119,054 8. Shared Voting Power: 74,549 9. Sole Dispositive Power: 119,054 10. Shared Dispositive Power: 74,549 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 193,603 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 0.7% 14. Type of Reporting Person: IN 12 CUSIP No. 091250100 1. Name of Reporting Person: Mark A. Todd 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: PF; OO 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: United States Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 12,529 8. Shared Voting Power: 94,220 9. Sole Dispositive Power: 12,529 10. Shared Dispositive Power: 94,220 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 106,749 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 0.4% 14. Type of Reporting Person: IN 13 CUSIP No. 091250100 1. Name of Reporting Person: John D. Correnti 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: United States Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 0 8. Shared Voting Power: 0 9. Sole Dispositive Power: 0 10. Shared Dispositive Power: 0 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 100,000 Note: Based on an Agreement in Principle between The United Company and Correnti, The United Company has agreed to grant Correnti an option on 100,000 Shares owned by The United Company. 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): 0.3% 14. Type of Reporting Person: IN 14 CUSIP No. 091250100 1. Name of Reporting Person: Paul Ekberg 2. Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] 3. SEC Use Only 4. Source of Funds: PF 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization: United States Number of Shares Beneficially Owned by Each Reporting Person With: 7. Sole Voting Power: 2,151 8. Shared Voting Power: 9,000 9. Sole Dispositive Power: 2,151 10. Shared Dispositive Power: 9,000 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 11,151 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11): less than .01% 14. Type of Reporting Person: IN 15 ITEM 1. SECURITY AND ISSUER This statement relates to shares of Common Stock, par value $.01 per share (the "Shares"), of Birmingham Steel Corporation (the "Issuer"). The address of the principal executive offices of the Issuer is 1000 Urban Center Parkway, Suite 300, Birmingham, Alabama 35242. ITEM 2. IDENTITY AND BACKGROUND (a)-(c) and (f). The persons filing this statement are as follows:
Principal Business/Residence Name Address ---- ------- 1. The United Company, 1005 Glenway Avenue a Virginia corporation Bristol, Virginia 24203 2. United Management Company, LLC, 1005 Glenway Avenue a Delaware limited liability company Bristol, Virginia 24203 3. United Opportunities Fund, LLC, 1005 Glenway Avenue a Delaware limited liability company Bristol, Virginia 24203 4. The Summit Fund, LLC, 1005 Glenway Avenue a Delaware limited liability company Bristol, Virginia 24203 5. UC Investment Trust, 1005 Glenway Avenue an Ohio business trust Bristol, Virginia 24203 6. Nicholas D. Street, 1005 Glenway Avenue a citizen of the United States Bristol, Virginia 24203 7. James W. McGlothlin, 1005 Glenway Avenue a citizen of the United States Bristol, Virginia 24203 8. Lois A. Clarke, 1005 Glenway Avenue a citizen of the United States Bristol, Virginia 24203 9. James A. Todd, Jr., 2005 Garden Place a citizen of the United States Birmingham, Alabama 35223 10. Mark A. Todd, 1445 Ross Avenue, Suite 3200 a citizen of the United States Dallas, Texas 75202 11. John D. Correnti, 6833 Aronomink Drive a citizen of the United States Charlotte, North Carolina 28210 12. Paul Ekberg, 3349 Hermitage Road a citizen of the United States Birmingham, Alabama 35223
16 The above-named persons are sometimes collectively referred to herein as the "Reporting Persons". The Reporting Persons may be deemed to be a "group" within the meaning of Rule 13d-5 promulgated under the Securities and Exchange Act of 1934, as amended (the "Act"). United Group - ------------ Nicholas D. Street ("Street") and James W. McGlothlin ("McGlothlin") directly or indirectly control the following entities (collectively, the "United Group"): 1. The United Company Street and McGlothlin wholly own The United Company ("United Company") with each of them owning fifty percent (50%) of the outstanding common stock of United Company. United Company is primarily engaged in the business of financial services and also invests in or has operations in oil and gas, real estate and golf development, cogeneration, and industrial, mine, and construction supply and distribution. Street is vice president, secretary, and a director of United Company. McGlothlin is president, chief executive officer, treasurer, and chairman of the board of directors of United Company. Lois A. Clarke ("Clarke") is executive vice president and chief financial officer of United Company. Wayne L. Bell ("Bell) is executive vice president and general counsel and Ted G. Wood ("Wood") is president of operations. 2. United Management Company, LLC Street and McGlothlin are the controlling owners of United Management Company, LLC ("Management Company") with each of them owning a forty-seven and one-half percent (47.5%) ownership interest in Management Company. Management Company's principal business is investing in securities and managing investments for third parties. Management Company is managed by a Board of Managers consisting of Street, McGlothlin, Clarke, Bell, and Wood. Executive officers of Management Company are as follows: (a) Clarke - president, (b) Street - secretary and treasurer, (c) Jimmy D. Viers ("Viers") - executive vice president, (d) Ronald E. Oliver ("Oliver") - executive vice president and assistant treasurer, and (e) Steven Layfield ("Layfield") - vice president and secretary. Bell, Wood, Viers, Oliver, and Layfield are citizens of the United States principally employed by Management Company and/or United Company in the above stated capacities at the principal office addresses shown in Item 2 for such entities. Bell, Wood, Viers, Oliver, and Layfield are not individual Reporting Persons nor members of the Group (as defined in Item 4). 3. United Opportunities Fund, LLC and The Summit Fund, LLC Street and McGlothlin indirectly control the United Opportunities Fund, LLC ("UO Fund") and The Summit Fund, LLC ("Summit Fund") by virtue of their direct control of United Company, the principal owner of the UO Fund and Summit Fund, and by their direct control of Management Company, the managing member of both UO Fund and Summit Fund. UO Fund and Summit Fund are privately held investment funds. United Company owns approximately seventy-six percent (76%) of UO Fund and ninety-nine percent (99%) of Summit Fund. Management Company owns one percent (1%) of both UO Fund and Summit Fund in its managing member capacity. 17 4. UC Investment Trust UC Investment Trust ("UCI Trust") operates the UC Investment Fund, a publicly traded mutual fund ("UCI Fund"). Street and McGlothlin indirectly control the investment decisions of UCI Fund and consequently, UCI Trust, by virtue of their direct ownership control of Management Company, the investment manager of UCI Fund. McGlothlin and Clarke serve on the Board of Trustees of the UCI Trust. Other members of the Board of Trustees of the UCI Trust, their residence or business address and their occupations are set forth on Exhibit A hereto, which is incorporated herein by reference. McGlothlin and Clarke also serve as Chairman and President of the UCI Trust, respectively. Individual Reporting Persons - ---------------------------- McGlothlin, Street, and Clarke are principally employed by United Company and its affiliates in the capacities listed above. James A. Todd, Jr., ("JA Todd") is not presently employed. JA Todd was the chief executive officer and chairman of the board of directors of the Issuer from 1991 until January 1996. He served as an employee and director of the Issuer from January 1996 until August 1996 and as a consultant to the chairman of the board from August 1996 until retiring in December of 1996. JA Todd is currently receiving retirement benefits from the Issuer. JA Todd received approximately $236,440 in retirement benefits in 1998 and for the current calendar year has received approximately $122,599 through July 18, 1999. Mark A. Todd ("MA Todd") is principally employed as a shareholder in the law firm of Jenkens & Gilchrist, P.C. John D. Correnti ("Correnti") is self employed as a consultant. Correnti served in various capacities at Nucor Corporation from 1980 until June 1999, including most recently as president and chief executive officer. Ekberg is not presently employed. Ekberg served in various capacities at the Issuer from July 1991 to July 1996, including the positions of president, chief operating officer, vice chairman of the board of directors, and director. (d) and (e). Neither the Reporting Persons nor any executive officer, director, or manager of the Reporting Persons has, during the past five years, (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or a finding of any violation with respect to such laws. 18 ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The Shares beneficially owned by the Reporting Persons were purchased for an aggregate price of $14,601,504. UO Fund and Summit Fund used approximately $11,075,173 and $2,201,085, respectively, of funds available for investment to purchase their Shares. UCI Trust used approximately $523,162 of funds available for investment in order to purchase Shares held by the UCI Fund. Management Company used approximately $257,398 of funds available for investment in discretionary investment accounts of its clients in order to purchase Shares for such clients. Street, Clarke, JA Todd, and Ekberg used approximately $70,403, $46,895, $295,632, and $60,000, respectively, of personal funds to purchase the Shares they own directly. MA Todd received 11,066 of the Shares he owns directly by gift from a trust established by JA Todd and his wife, Mary Margaret Todd. MA Todd used approximately $11,776 of personal funds to purchase the remaining 1,463 Shares he owns directly. ITEM 4. PURPOSE OF TRANSACTION The purpose of this filing is to report that on July 19, 1999 the Reporting Persons acquired more than five percent beneficial ownership in the Shares of the Issuer. The Reporting Persons constitute a group (the "Group") who intend to vote their Shares and solicit proxies in support of a slate of directors, nominated by the Group, for election at the 1999 annual stockholders meeting of the Issuer in opposition to management's nominees. Pursuant to an Agreement in Principle dated July 16, 1999, (the "Agreement in Principle"), Correnti has been slated as one of the Group's director nominees in addition to McGlothlin and JA Todd. McGlothlin, JA Todd, and Correnti will serve as a nominating committee to select the Group's remaining nominees for director. Correnti has also been slated by the Group to be chairman of the board and chief executive officer. Other members of the Group may serve as officers and/or consultants to the Issuer and report to Correnti. The Group intends to request a list of shareholders from Issuer pursuant to applicable state and federal laws in order to communicate with other shareholders of the Issuer via a proxy solicitation. JA Todd retired in August 1996 under the provisions of the Issuer's Management Security Plan providing for annual retirement payments for twenty years and a split dollar life insurance policy. Subsequent to JA Todd's retirement, the Issuer amended and restated the Management Security Plan to constitute the Issuer's Executive Retirement and Compensation Deferral Plan (as amended and restated, the "Security Plan"). The Security Plan provides that upon a change of control in Issuer (including, under certain circumstances, a majority change in the board of directors), all vested benefits payable under the Security Plan will be accelerated and distributed to participants in the Security Plan. The Group also anticipates purchasing additional Shares in the open market or in private transactions. However, the Group intends not to purchase more than ten percent (10%) of the total outstanding Shares in order to avoid activating the poison pill take-over defense provision of the Issuer's by-laws. The Group also plans to remove the poison pill provision from the Issuer's by-laws. Except as specified in this Item 4, the Group has no present plans or proposals that relate to or that would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Act. 19 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) and (b). As of the close of business on July 28, 1999, the Reporting Persons beneficially owned in the aggregate 2,303,303 Shares, constituting approximately 7.8% of the total outstanding Shares of the Issuer (based upon the number of Shares reported to be outstanding in the Issuer's Form 10Q for the fiscal quarter ended March 31, 1999). In aggregate, Street may be deemed the beneficial owner of 1,963,200 Shares, constituting approximately 6.6% of the total outstanding Shares. In aggregate, McGlothlin may be deemed the beneficial owner of 1,974,200 Shares, constituting approximately 6.7% of the total outstanding Shares. The basis upon which beneficial ownership for Street and McGlothlin is calculated is set forth as follows: (1) Street and McGlothlin, by reason of their control of the United Group, share with each other voting and disposition powers of the Shares owned by the following members of the United Group and may be deemed beneficial owners of such Shares:
% of Total Entity Number of Shares Shares Outstanding ------ ---------------- ------------------ UO Fund 1,629,300 5.5% Summit Fund 190,100 0.6% UCI Trust 90,800 0.3%
Because of their record ownership, each of the United Group members listed in the above table may be deemed to share beneficial ownership of the Shares with Street and McGlothlin. (2) Management Company is the beneficial owner of 39,000 Shares which are held in certain individual discretionary investment accounts managed by Management Company. Management Company has sole voting and disposition power over the Shares held in these discretionary investment accounts. By virtue of their control of Management Company, Street and McGlothlin share with each other voting and disposition powers over these 39,000 Shares and may be deemed beneficial owners of such Shares, which constitute 0.1% of the total Shares outstanding. (3) Street is the direct beneficial owner of 10,000 Shares. Street has sole voting and disposition power for these 10,000 Shares. Street may be deemed to beneficially own 2,000 Shares owned directly by his wife, Fay H. Street ("FH Street"), and 2,000 Shares owned directly by his minor daughter, Lauren Street ("L. Street"). Such Shares together constitute less than one tenth of one percent of the outstanding Shares. FH Street and L. Street are citizens of the United States and are not presently employed. The residence address for both FH Street and L. Street is 101 Lick Branch Road, Bristol, Tennessee 37620. FH Street and L. Street are not members of the Group. McGlothlin may be deemed the beneficial owner of 25,000 Shares owned directly by his wife, Frances McGlothlin ("F. McGlothlin"), which constitute less than one tenth of one percent of the total Shares outstanding. F. McGlothlin is a citizen of the United States and employed as an executive assistant with United Company at its principal office address. F. McGlothlin is not a member of the Group. 20 Clarke is either the direct or indirect beneficial owner of 3,600 Shares, which constitute less than one tenth of one percent of the outstanding Shares. Clarke has the sole power to vote and dispose of these Shares. JA Todd may be deemed the beneficial owner of 193,603 Shares, which constitute 0.7% of the outstanding Shares. JA Todd directly owns 119,054 Shares and has sole voting and disposition power over these Shares. JA Todd may be deemed to beneficially own and share voting and disposition power as to 74,549 Shares owned directly by his wife, Mary Margaret Todd ("MM Todd"). MM Todd is a citizen of the United States and is not presently employed. MM Todd's address is 2005 Garden Place, Birmingham, Alabama 35223. MM Todd is not a member of the Group. MA Todd is the beneficial owner of 106,749 Shares, which constitutes 0.4% of the outstanding Shares. MA Todd has sole voting and disposition power as to 12,529 Shares. As a trustee of certain trusts benefitting the Todd family (the "Todd Trusts"), MA Todd shares voting and disposition power as to 93,475 Shares with Jennifer Todd Reed ("Reed"), the joint trustee of the Todd Trusts. Reed is a United States citizen and not presently employed. Her residence address is 3509 Canterbury Road, Birmingham, Alabama 35223. Reed beneficially owns other Shares, but is not a member of the Group. MA Todd's beneficial ownership also includes 745 Shares owned by his three minor children, Courtney C. Todd, Hunter B. Todd, and Hayley A. Todd. Correnti may be deemed the beneficial owner of 100,000 Shares. Under the Agreement in Principle, United Company has agreed to grant Correnti an option to purchase from United Company 100,000 of the Shares owned by United Company at an exercise price of $4.88. Ekberg may be deemed the beneficial owner of 11,151 Shares, which constitutes less than one tenth of one percent of the total Shares outstanding. Ekberg directly owns 2,151 Shares and has sole voting and disposition power over these Shares. Ekberg may be deemed to beneficially own and share voting and disposition power as to 9,000 Shares owned directly by his wife, Nancy Ekberg ("N. Ekberg"). N. Ekberg is a citizen of the United States and is not presently employed. N. Ekberg's address is 3349 Hermitage Road, Birmingham, Alabama 35233. N. Ekberg is not a member of the Group. (c) The following table sets forth all transactions with respect to the Issuer's Shares effected during the past sixty days by each of the Reporting Persons. Each transaction set forth below reflects a purchase or sale effected by means of open market transactions on the New York Stock Exchange.
REPORTING TRADE DATE TYPE OF # OF SHARES PRICE PER PERSON TRANSACTION SHARE ($) UO Fund 06/07/99 Purchase 10,000 5.454 UO Fund 06/08/99 Purchase 48,500 5.748
21 UO Fund 06/08/99 Purchase 10,000 5.695 Management Company (1) 06/09/99 Purchase 4,000 5.885 Management Company (1) 06/09/99 Purchase 3,500 5.863 Management Company (1) 06/10/99 Purchase 5,000 5.785 Management Company (1) 06/10/99 Purchase 5,000 5.785 UO Fund 06/10/99 Purchase 93,900 5.705 Management Company (1) 06/11/99 Purchase 5,000 5.571 UCI Trust 06/14/99 Purchase 55,000 5.818 UCI Trust 06/16/99 Purchase 35,800 5.523 UO Fund 07/19/99 Purchase 5,000 6.008 UO Fund 07/19/99 Purchase 25,000 6.050 UO Fund 07/19/99 Purchase 15,000 6.060 UO Fund 07/19/99 Purchase 17,000 5.935 UO Fund 07/19/99 Purchase 35,000 5.942 McGlothlin 07/19/99 Purchase 25,000 (2) 5.878 UO Fund 07/20/99 Purchase 15,000 5.966 UO Fund 07/20/99 Purchase 26,000 5.975 UO Fund 07/20/99 Sale 1,000 5.875 UO Fund 07/21/99 Purchase 66,500 6.318 UO Fund 07/21/99 Purchase 5,000 6.353 UO Fund 07/21/99 Purchase 10,000 6.353 UO Fund 07/21/99 Purchase 5,000 5.978 UO Fund 07/21/99 Purchase 5,000 6.040 UO Fund 07/21/99 Purchase 5,000 6.290 Ekberg 07/21/99 Purchase 10,000 (3) 6.187 UO Fund 07/22/99 Purchase 83,600 6.725 UO Fund 07/22/99 Purchase 14,000 6.540 UO Fund 07/22/99 Purchase 5,000 6.728
22 UO Fund 07/23/99 Purchase 95,000 6.731 UO Fund 07/26/99 Purchase 99,000 6.773 Management Company (1) 07/26/99 Purchase 2,000 6.262 UO Fund 07/27/99 Purchase 167,500 6.962 UO Fund 07/28/99 Purchase 117,800 7.074 Management Company(1) 07/28/99 Purchase 6,000 6.989
(1) Represents Shares purchased by Management Company on behalf of discretionary account clients. (2) Represents 25,000 Shares purchased by McGlothlin's wife, Frances McGlothlin. McGlothlin may be deemed to beneficially own the 25,000 purchased by his wife. (3) Includes 9,000 Shares purchased by Ekberg's wife, Nancy Ekberg. Ekberg may be deemed to beneficially own the 9,000 Shares purchased by his wife. (d) Management Company does not have any economic or pecuniary interest in the Shares held in discretionary accounts on behalf of its clients. The clients are the actual owners of the Shares and have the sole right to receive and the sole power to direct the receipt of dividends from, or the proceeds from the sale of Shares in such accounts. UCI Trust and Management Company have no economic or pecuniary interest in the Shares held by the UCI Fund. The mutual fund shareholders are the actual owners of the Shares and have the sole right to receive and sole power to direct the receipt of dividends from, or the proceeds from the sale of the Shares. (e) Not Applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER As discussed in Item 5, United Company, pursuant to the Agreement in Principle, has agreed to grant Correnti an option to purchase from United Company 100,000 Shares owned by United Company at an exercise price of $4.88. The powers of disposition and voting of Management Company with respect to Shares owned beneficially by it on behalf of its discretionary account clients are held pursuant to written Investment Management Agreements (the "Discretionary Account Agreements") with such clients. Under the terms of the Discretionary Account Agreements, Management Company is granted the sole power to vote and actively trade securities held in the discretionary investment accounts. The disposition power of Management Company, with respect to Shares owned beneficially by it through its management of the UCI Fund, is held pursuant to a written Advisory Agreement (the "UCI Advisory Agreement") between Management Company and UCI Trust. 23 Under the terms of the UCI Advisory Agreement, Management Company has the sole power to trade securities held by the UCI Fund. The UCI Advisory Agreement was originally executed by United Investment Corporation ("UI Corporation"). UI Corporation was reorganized into Management Company in 1998 and Management Company succeeded to the rights and obligations of UI Corporation under the UCI Advisory Agreement. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit A: Board of Trustees of UCI Trust Exhibit B: Agreement in Principle Exhibit C: Management Company's Standard Investment Management Agreement with Discretionary Investment Account Clients Exhibit D: Advisory Agreement between Management Company and UCI Trust 24 SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: July 29, 1999 THE UNITED COMPANY By: /s/ James W. McGlothlin -------------------------------------------- James W. McGlothlin President UNITED MANAGEMENT COMPANY, LLC By: /s/ Lois A. Clarke -------------------------------------------- Lois A. Clarke President and Managing Director UNITED OPPORTUNITIES FUND, LLC By: United Management Company, LLC Its Managing Member By: /s/ Lois A. Clarke ----------------------------------- Lois A. Clarke President and Managing THE SUMMIT FUND, LLC By: United Management Company, LLC Its Managing Member By: /s/ Lois A. Clarke ----------------------------------- Lois A. Clarke President and Managing Director UC INVESTMENT TRUST By: /s/ Lois A. Clarke -------------------------------------------- Lois A. Clarke President 25 /s/ Nicholas D. Street -------------------------------------------- Nicholas D. Street /s/ James W. McGlothlin -------------------------------------------- James W. McGlothlin /s/ Lois A. Clarke -------------------------------------------- Lois A. Clarke /s/ James A. Todd, Jr. -------------------------------------------- James A. Todd, Jr. /s/ Mark A. Todd -------------------------------------------- Mark A. Todd /s/ John D. Correnti -------------------------------------------- John D. Correnti /s/ Paul Ekberg -------------------------------------------- Paul Ekberg EX-99.(A) 2 UCI BOARD OF TRUSTEES 1 Exhibit A UCI Board of Trustees
Name Present Occupation Residence or Business ---- ------------------ --------------------- Address -------- Robert J. Bartel Professor 1350 King College Road King College Bristol, Tennessee 37620 Aldo Albert Modena Retired 4 Windsor Circle Drive Bluefield, VA 24605 Robert Henkel Spilman Retired P. O. Box 880 Bassett, VA 24055 Timothy Jackson Sullivan President, College of William Office of the President and Mary, Williamsburg, VA College of William and Mary Williamsburg, VA 23185 Charles W. Sydnor, Jr., Ph.D. President & CEO, Central Central Virginia Educational Virginia Educational Telecommunications, Inc. Telecommunications, Inc. 23 Sesame Street Richmond, VA 23235
EX-99.(B) 3 AGREEMENT IN PRINCIPLE 1 EXHIBIT B CONFIDENTIAL AGREEMENT IN PRINCIPLE BETWEEN JOHN D. CORRENTI AND THE UNITED COMPANY REGARDING EMPLOYMENT BY BIRMINGHAM STEEL CORPORATION AND RELATED MATTERS -------------------------------- This Agreement in Principle states the principal terms under which John D. Correnti ("Executive") will agree (i) to be employed as a temporary consultant by a shareholder group ("Shareholder Group"), or by The United Company as lead shareholder of the Shareholder Group ("Lead Shareholder"), which intends to undertake a proxy solicitation for the election of directors constituting at least a majority of directors of Birmingham Steel Corporation (the "Company"), and (ii) Executive will agree to serve as Chairman and Chief Executive Officer of the Company if the proxy solicitation is successful. This Agreement in Principle is not a complete statement of all relevant terms of the contemplated agreements and is not binding on any party, except for the provision below regarding confidentiality. Executive will not be bound to the consulting agreement except upon the negotiation and execution of a complete and definitive Consulting Agreement, which will be undertaken promptly. The parties contemplate, however, that the Consulting Agreement will contain a form of employment agreement that Executive will agree to accept if approved by the directors of the Company after the successful proxy contest. The employment agreement will be negotiated by Executive and the Shareholder Group, and presented to the board of the Company for adoption after the next election of directors of Company. INTERIM CONSULTING AGREEMENT Until the Company's annual shareholder meeting, Executive (through International Steel Associates, Inc., an Arkansas corporation) will be employed as a consultant to Shareholder Group on the following terms: - Term: Maximum term through December 31, 1999, unless extended by agreement, with earlier termination on the first to occur of (i) notice to Executive of abandonment of proxy action referred to below or (ii) the execution of an employment agreement between Executive and Company. 2 - Rate: $ 50,000 per calendar month (or portion thereof, paid by Lead Shareholder monthly. - Payment of monthly fee is guaranteed, regardless of number of consulting hours requested. - Services on request. - Reimbursement by Lead Shareholder for out-of-pocket expenses (travel, etc.). - Non-exclusive; Executive may engage in other consulting work but (i) such other work must not interfere with reasonable demands for services under Consulting Agreement, (ii) must not involve any transaction, activity or group competing with Shareholder Group proxy action, and (iii) must not be conducted for any company that produces steel products in the United States that are competitive with products currently sold by Company. - Executive to be reimbursed for legal fees related to negotiation of Consulting and Employment Agreements, federal and state governmental filings, proxy action, related consultation, etc. - All fees and expense reimbursements will be paid or guaranteed by Lead Shareholder. - Lead Shareholder will grant Executive options to buy 100,000 shares of Company common stock owned by Lead Shareholder. The options will be exerciseable in whole or in part from time to time, at an exercise price equal to the NYSE closing price for Company common stock on the day before this Agreement in Principle is signed by both parties. The exercise term will be agreed upon, but will extend until the earlier to occur of (i) six months after the annual meeting of Company shareholders for which the contemplated proxy solicitation will be made or (ii) June 30, 2000. Lead Shareholder will finance the exercise (interest free until the Company shareholder's meeting, and at a favorable rate thereafter, and for a repayment term to be agreed). The option agreement will be negotiated and executed in connection with the Consulting Agreement. -2- 3 CONSULTING AGREEMENT TERMINATION - The Consulting Agreement may be terminated by Lead Shareholder at any time if the proposed proxy action is announced but abandoned prior to the Company's 1999 shareholder meeting. - The Consulting Agreement will terminate automatically if the Shareholder Group's director nominees numbering at least a majority of the new Company board are not elected at the next annual meeting. - Executive may terminate Consulting Agreement, and be relieved of further obligation, if the Company Employment Agreement is not adopted by the new Company board by December 31, 1999. CONSULTING AGREEMENT PROXY MATTERS - Director: Executive will be included in Shareholders' proposed director slate. - Composition of Director State: Director slate will include Executive, James Todd and James McGlothlin (designees of the Shareholder Group), and these three individuals will serve as a nominating committee for the remainder of the nominees. All other director nominees will be selected from a list of candidates developed by such nominating committee, and each nominee must be approved by all members of the nominating committee. Upon the failure of the nominating committee to reach unanimous agreement on the director slate, each of Executive and Shareholder Group may declare the Consulting Agreement terminated, and all parties shall have no further obligations or liability under it, under this Agreement in Principle or otherwise. - Lead Shareholder will indemnify Executive from liability resulting from proxy matters (other than from information given by Executive for inclusion in proxy statement). Executive has the right to review and consent to the form of proxy statement and related materials, at least to the extent they describe Executive, Executive's proposed Employment Agreement, and -3- 4 other matters reasonably related to Executive's interest or potential liability. - Executive's prior consent is necessary for all public communications regarding Executive's participation or regarding the Consulting Agreement and Employment Agreement. Except and until disclosed as required by law, including the Executive's and the Shareholder Group's good faith determination of disclosure obligations under federal and state securities laws and other applicable laws, the terms of this Agreement in Principle, the Consulting Agreement and form of proposed Employment Agreement will be held in confidence by Shareholder Group and Executive, and neither will make any public announcement about the subject matter except by mutual consent. EMPLOYMENT AGREEMENT TERMS POSITION - If proxy action is successful as contemplated herein, Executive agrees to become Chairman of the Board and Chief Executive Officer of Company under terms of Employment Agreement. TERM - Five year term, subject to annual renewal unless terminated by either party. INDUCEMENT STOCK GRANT - 100,000 shares of Company common stock, with full tax gross-up cash payment(s); subject to forfeiture if Executive's employment terminates before 3rd anniversary (except termination without cause by Company, termination by Executive for good reason, or after change of control, or death/disability, other equitable reasons to be set forth in employment agreement). Forfeiture restrictions lapse as to 1/3 of total at each annual anniversary. ANNUAL BASE COMPENSATION - $600,000 per year ($50,000/month) - Subject to annual increase consistent with senior executive management increases ANNUAL CASH BONUS - 1% of EBITDA -4- 5 - Extraordinary charges, goodwill write-offs, other unusual write-offs disregarded INDUCEMENT PHANTOM STOCK RIGHTS Phantom Stock Options for a total of 1 million shares, vesting over 5 years (200,000 shares per year). Agreement would allow Executive to receive a cash compensation payment with respect to any vested phantom shares at any time prior to the expiration of the phantom option equal to the number of phantom shares he desires to exercise times the difference between the strike price (closing price last trading day before Agreement in Principle is confirmed; adjusted for splits, etc.) and the market price of the stock of the Company on the date of the exercise (or value received by common shareholders in any tender offer or other transaction involving exchange or conversion of common stock). Exercise would be limited by Company's insider trading restrictions (as applicable to directors and executive officers generally) as if the phantom shares were real shares and the exercise were the exercise of real options and the sale of the shares received upon exercise. Shareholder Group director designees will support Company Board's approval of a final employment agreement by which Executive receives actual stock options in lieu of phantom options. - The options would expire ten years after the date of grant. All unvested options would vest upon termination of employment other than termination for cause. Vested options will be exercisable at any time through 120 days after termination of employment. PARTICIPATION IN SENIOR MANAGEMENT PROGRAMS - Stock Accumulation Plan - Executive Retirement and Compensation Deferral Plan - 401 (K) - Life Insurance Plan - Health, etc. - Other Company Incentive and Fringe Benefit Programs as adopted by Board for senior management -5- 6 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON OR UPON CHANGE OF CONTROL - Executive receives all compensation earned to date, an incentive bonus based on last fiscal year, pro rated, and all previously deferred compensation - Executive receives severance payment equal to 3 times (i) currently effective annual base compensation plus (ii) average of aggregate of last 3 years incentive compensation; parachute excise tax indemnity - Insurance benefits continued for up to one year - Vesting of all unvested options is accelerated; all are exercisable - No forfeiture of restricted/forfeitable stock or options TERMINATION WITH CAUSE - Executive receives accrued and unpaid base compensation for current year; no current year incentive compensation is payable - All exercisable options may be exercised; forfeitable/unvested restricted stock or unvested incentive options are forfeited TERMINATION ON DEATH OR DISABILITY - Accrued compensation paid (incentive pro rated based on last year) - All unvested options accelerate and may be exercised - No restricted stock is forfeited; forfeiture restrictions lapse RELOCATION EXPENSES - Moving expense reimbursement - Brokers' fees (Arkansas residence sale, Birmingham residence purchase) - Moving expenses (Charlotte to Arkansas or Birmingham; and Arkansas to Birmingham) - Relocation expenses covered for any time during term -6- 7 - Special Relocation Expenses - Price protection on sale of Arkansas residence if Executive relocates, based on appraisals (appraisals to be paid by Company); protection of up to 100% of cost - Reimbursement of Birmingham city living expenses for up to 2 years (apartment, furniture, utilities, meals) MISCELLANEOUS COMPENSATION - Automobile Allowance in accordance with Company policy - Club Reimbursement - Country Club initiation/equity and monthly dues. Equity vests in Executive after 3 years - City Club initiation/equity and monthly dues. Equity vests in Executive after 3 years - Reimbursement of reasonable business expenses, in accordance with Company policies MISCELLANEOUS - May continue other permitted consulting agreements through December 31, 1999 or, if earlier, date of hire by Company - May serve on boards of other companies, with the approval of the Company's Nominations Committee of the board (not to be withheld unreasonably); may participate in trade organizations, speeches, etc. - Maintenance of adequate D&O insurance - Indemnification provisions acceptable to Executive -7- 8 The foregoing Agreement in Principle is confirmed, effective when signed by each party, below. /s/ John P. Correnti - ----------------------- Executive Date: 7/16/99 ------------------ Lead Shareholder The United Company By: /s/ Wayne L. Bell -------------------- Wayne L. Bell Its: Executive Vice President and General Counsel ----------------------------------------------- Date: 7-16-99 ------------------ -8- EX-99.(C) 4 MANAGEMENT COMPANYS STANDARD INVESTMENT AGREEMENT 1 EXHIBIT C INVESTMENT MANAGEMENT AGREEMENT THIS INVESTMENT MANAGEMENT AGREEMENT dated as of ________ 1999 between ________ (the "Client") and UNITED MANAGEMENT COMPANY, LLC, a Virginia corporation ("UMC"). Recitals A. WHEREAS, the Client has determined to engage the services of UMC to manage certain of its assets. B. WHEREAS, UMC is an investment adviser registered under the Investment Advisers Act of 1940. C. WHEREAS, UMC desires to manage the Client's assets subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth in this Agreement, and upon the basis of the representations and warranties contained herein, the parties hereto hereby agree as follows: 1. Appointment and Authority of Investment Manager. (a) The Client hereby appoints UMC, as an investment manager of approximately ________________________ and 00/100 Dollars ($______________ to be deposited in Account Number ______________ at _______________. (b) UMC, as an investment manager, shall have the power and duty to manage, acquire and dispose of the Managed Assets with the objective of maximizing the value thereof in a manner consistent with the investment guidelines set forth on Exhibit A and subject to any investment restrictions, if any, set forth on Exhibit A. In that regard, UMC shall have full discretion to make all investment decisions concerning the timing, frequency and method of execution of the purchase, sale, retention, exchange or conversion of the 2 Managed Assets including what investments shall be bought, sold, retained or exchanged and to direct without the consent or knowledge of the Client, the execution of investment transactions including the timing, frequency and method of execution thereof. (c) Except as otherwise directed by the Client in writing, the Client agrees to establish an account with any broker or dealer designated by UMC to effect investment transactions in respect of the Managed Assets so long as the use of such broker or dealer is consistent with UMC's duties under the Investment Adviser's Act of 1940. UMC shall select such brokers or dealers in its own discretion and shall not be responsible for any acts or omissions of any such brokers or dealers provided UMC is not negligent in the selection of such brokers or dealers. No commissions or fees shall be incurred which are substantially greater than those chargeable by other brokers or dealers in the community for like or comparable services, provided, however, the Client authorizes UMC, consistent with the foregoing, to select brokers and dealers on the basis of their having furnished statistical, research and other services to UMC. (d) Subject to the foregoing paragraph (c), UMC may utilize the services of third party advisers and counsel as it deems prudent. (e) Notwithstanding the discretion of UMC with respect to the Managed Assets, UMC shall not at any time have any right to custody of any of the Managed Assets. (f) The Client acknowledges that UMC, from time to time, may be acting as an investment manager for other institutional and individual clients including affiliates of UMC and that investments and reinvestments of the Managed Assets may differ from those made or recommended with respect to other accounts and clients even though the investment objectives may be the same or similar. 2. Fees and Expenses of Investment Manager. (a) For services rendered, the Client agrees to pay UMC a management fee of _____________ of one percent (____________%) per annum of the net asset value 2 3 of the Managed Assets or such other fee as the Client and UMC shall agree to in writing from time to time. Net asset value shall be calculated based on the closing market value of the Managed Assets (net of commissions) as of the last business day of each month. All management fees due shall be paid to UMC within thirty (30) days of the end of each calendar quarter. In the event this Agreement is terminated prior to the end of any calendar quarter, the management fee shall be prorated to take into account partial months. (b) In computing the market value of any investment of the Managed Assets for the purpose of this Agreement, each security listed on any national securities exchange shall be valued at the last sale price on the valuation date. Any unlisted stock regularly traded in the over-the-counter market, shall be valued at the latest available bid price quotation. (c) For purposes of determining UMC's management fee, there shall be added to the value of the Managed Assets (i) interest accrued but not collected on any interest bearing obligation and (ii) dividends declared but not collected on stock which, if sold, would be sold ex-dividend. (d) Except as otherwise expressly provided in this Agreement, UMC shall be responsible for all of its costs and expenses in connection with its performance of investment management services pursuant to this Agreement. (e) UMC shall not be responsible for, and the Client shall cause to be paid on its own behalf interest charges, taxes, fees and commissions of every kind, and expenses pertaining to transactions involving the Managed Assets not directly related to the performance by UMC of investment management services. 3. Representations and Warranties. (a) UMC represents and warrants to the Client that: (i) UMC is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia, and has all necessary power and authority to execute, deliver and perform its obligations under this Agreement. 3 4 (ii) UMC is a registered investment adviser under the Investment Advisers Act of 1940 (the "Advisers Act"). (iii) This Agreement has been duly authorized, executed and delivered by UMC and constitutes the valid and binding obligation of UMC. (iv) Neither the execution and delivery of this Agreement by UMC nor the performance of its obligations hereunder, will violate any provision of law applicable to or affecting UMC, or conflict with, or constitute a default under, any of the terms of its Articles of Incorporation or Bylaws or any provision of any agreement or instrument to which it is a party or by which it may be bound. (v) UMC has furnished the Client with a written disclosure statement as contemplated by Rule 204-3 promulgated under the Advisers Act. (b) The Client represents and warrants to UMC that: (i) This Agreement has been duly executed and delivered by the Client and constitutes the valid and binding obligation of the Client. (ii) Neither the execution and delivery of this Agreement by the Client, nor the performance of its obligations hereunder, will violate any provision of law applicable to or affecting the Client or conflict with, or constitute a default under, any provision of any agreement or instrument to which the Client is a party or by which the Client may be bound. 4. Covenants. (a) UMC shall furnish to the Client, on a quarterly basis, written reports relating to the transactions effected in connection with the Managed Assets and the results of its investment decisions. It is understood, however, that UMC in the maintenance of its records does not assume any responsibility for the accuracy of information furnished by the Client. (b) UMC shall not be liable for any mistake of judgement as a result of its investment decisions or any loss or diminution of the Managed Assets, except due to its 4 5 own negligence, bad faith, fraud or willful misconduct. The federal securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights which the undersigned may have under any federal securities laws. (c) UMC shall not assign this Agreement without the express written consent of the Client. 5. Termination of Agreement. The Client and UMC shall each have the right, upon 30 days prior written notice to the other, to terminate this Agreement. 6. Miscellaneous provisions. (a) Nothing contained in this Agreement is intended to create third party beneficiaries of or under this Agreement. Without limiting the generality of the foregoing, no person other than the Client or UMC shall have any rights or claims against the Client, UMC or any other person based upon or otherwise in respect of this Agreement. (b) This Agreement sets forth the entire understanding of the parties hereto and supersedes all prior agreements, letters of intent, covenants, arrangements, communications, representations and warranties, whether oral or written, by either party. (c) This Agreement may be amended only by a writing signed by each of the parties hereto. (d) The captions set forth in this Agreement are for convenience of reference only and shall not be considered as part of this Agreement or as in any way limiting or amplifying the terms and provisions hereof. In the event that any provision of this Agreement is finally determined to be unlawful, such provision shall be deemed to be severed from this Agreement, but every other provision of this Agreement shall remain in full force and effect. (e) Any notice or communication given pursuant hereto by either of the parties shall be in writing and delivered by registered or certified mail, postage prepaid, as 5 6 follows: If to the Client, to: If to UMC, to: Mrs. Lois A. Clarke President and Managing Director United Management Company, LLC P. 0. Box 1280 Glenway Avenue Bristol, VA 24203-1280 (f) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, except to the extent that they are preempted by the laws of the United States. (g) This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which shall constitute one agreement. IN WITNESS WHEREOF, the parties have executed this Investment Management Agreement as of the date first above written. -------------------------------- UNITED MANAGEMENT COMPANY, LLC LOIS A. CLARKE PRESIDENT AND MANAGING DIRECTOR 6 7 EXHIBIT A Statement of Investment Guidelines and Objectives: The primary objective is long term capital appreciation. Investment Restrictions: Set forth restrictions, if any, on types of investments UMC may make. If none, state none. None. 7 EX-99.(D) 5 ADVISORY AGREEMENT 1 EXHIBIT D ADVISORY AGREEMENT UC Investment Trust (the "Trust") is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "Act"), and subject to the rules and regulations promulgated thereunder. The Trust currently offers one series of shares to investors, the UC Investment Fund (the "Fund"). Each share of the Fund represents an undivided interest in the assets, subject to the liabilities, of the Fund. 1. Appointment as Adviser. The Trust being duly authorized hereby appoints and employs United Investment Corporation (the "Adviser") as discretionary portfolio manager on the terms and conditions set forth herein of the Fund. 2. Acceptance of Appointment; Standard of Performance. The Adviser accepts the appointment as discretionary portfolio manager and agrees to use its best professional judgement to make timely investment decisions for the Fund in accordance with the provisions of this Agreement. 3. Portfolio Management Services of the Adviser. The Adviser is hereby employed and authorized to select portfolio securities for investment by the Trust on behalf of the Fund, to purchase and sell securities of the Fund, and, upon making any purchase or sale decision, to place orders for the execution of such portfolio transactions in accordance with paragraphs 5 and 6 hereof. In providing portfolio management services to the Fund, the Adviser shall be subject to such investment restrictions as are set forth in the Act and the rules thereunder, the Internal 2 Revenue Code of 1986, applicable state securities laws, the supervision and control of the Trustees of the Trust, such specific instructions as the Trustees may adopt and communicate to the Adviser and the investment objectives, policies and restrictions of the Trust applicable to the Fund furnished pursuant to paragraph 4. The Adviser is not authorized by the Trust to take any action, including the purchase or sale of securities for the Fund, in contravention of any restriction, limitation, objective, policy or instruction described in the previous sentence. Within the framework of the investment objectives, policies and restrictions of the Trust, the Adviser shall have the sole and exclusive responsibility, subject to the oversight of the Trust, for portfolio management and the making and execution of all investment decisions of the Fund. The Adviser shall maintain on behalf of the Trust the records listed in Schedule A hereto (as amended from time to time). The Adviser hereby acknowledges that all such records are the property of the Trust, and in the event of a transfer of portfolio management services to a person other than the Adviser, the Adviser shall promptly, and at its own cost, take all steps necessary to segregate such records and deliver them to the Trust. At the Trust's reasonable request, the Adviser will consult with the Trust with respect to any decision made by it with respect to the investments of the Fund. 4. Investment Objectives, Policies and Restrictions. The Trust will provide the Adviser with the statement of investment - 2 - 3 objectives, policies and restrictions applicable to the Fund as contained in the Trust's registration statement under the Act and the Securities Act of 1933, and any instructions adopted by the Trustees supplemental thereto. The Trust will provide the Adviser with such further information concerning the investment objectives, policies and restrictions applicable thereto as the Adviser may from time to time reasonably request. The Trust retains the right, on written notice to the Adviser from the Trust, to modify any such objectives, policies or restrictions in any manner at any time. 5. Transaction Procedures. All transactions will be consummated by payment to or delivery by Fifth Third Bank or any successor custodian (the "Custodian"), or such depositories or agents as may be designated by the Custodian in writing, as custodian for the Trust, of all cash and/or securities due to or from the Fund, and the Adviser shall not have possession or custody thereof. The Adviser shall advise the Custodian and confirm in writing to the Trust and to Countrywide Fund Services, Inc. or any other designated agent of the Trust, all investment orders for the Fund placed by it with brokers and dealers. The Adviser shall issue to the Custodian such instructions as may be appropriate in connection with the settlement of any transaction initiated by the Adviser. 6. Allocation of Brokerage. The Adviser shall have authority and discretion to select brokers and dealers to execute portfolio transactions initiated by the Adviser and to select the markets on or in which the transactions will be executed. - 3 - 4 In doing so, the Adviser will give primary consideration to securing the best price and execution. Consistent with this policy, the Adviser may consider the financial responsibility, research and investment information and other services provided by brokers or dealers who may effect or be a party to any such transaction or other transactions to which other clients of the Adviser may be a party. It is understood that neither the Trust nor the Adviser has adopted a formula for allocation of the Fund's investment transaction business. It is also understood that it is desirable for the Trust that the Adviser have access to supplemental investment and market research and security and economic analyses provided by certain brokers who may execute brokerage transactions at a higher commission to the Fund than may result when allocating brokerage to other brokers on the basis of seeking the lowest commission. Therefore, the Adviser is authorized to place orders for the purchase and sale of securities for the Fund with such certain brokers, subject to review by the Trust's Trustees from time to time with respect to the extent and continuation of this practice. It is understood that the services provided by such brokers may be useful to the Adviser in connection with its services to other clients. On occasions when the Adviser deems the purchase or sale of a security to be in the best interest of the Fund as well as other clients, the Adviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities to be sold or purchased in order to - 4 - 5 obtain the most favorable price or lower brokerage commissions and efficient execution. In such event, allocation of the securities so purchased or sold, as well as expenses incurred in the transaction, will be made by the Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients. For each fiscal quarter of the Trust, the Adviser shall prepare and render reports to the Trust's Trustees of the total brokerage business placed and the manner in which the allocation has been accomplished. Such reports shall set forth at a minimum the information required to be maintained by Rule 3la-l(b)(9) under the Act. 7. Proxies. The Trust will vote all proxies solicited by or with respect to the issuers of securities in which assets of the Fund may be invested from time to time. At the request of the Trust, the Adviser shall provide the Trust with its recommendations as to the voting of such proxies. 8. Reports to the Adviser. The Trust will provide the Adviser with such periodic reports concerning the status of the Fund as the Adviser may reasonably request. 9. Fees for Services. For all of the services to be rendered and payments made as provided in this Agreement, the Fund will pay the Adviser a fee, computed and accrued daily and paid monthly, at the annual rate of 1.00% of its average daily net assets. 10. Allocation of Charges and Expenses. The Adviser shall employ or provide and compensate the executive, administrative, - 5 - 6 secretarial and clerical personnel necessary to provide the services set forth herein, and shall bear the expense thereof. The Adviser shall compensate all Trustees, officers and employees of the Trust who are also employees of the Adviser. The Adviser will pay all expenses incurred in connection with the sale or distribution of the Fund's shares to the extent such expenses are not assumed by the Fund under the Trust's Distribution Expense Plan. The Fund will be responsible for the payment of all operating expenses of the Fund, including fees and expenses incurred by the Fund in connection with membership in investment company organizations, brokerage fees and commissions, legal, auditing and accounting expenses, expenses of registering shares under federal and state securities laws, insurance expenses, taxes or governmental fees, fees and expenses of the custodian, the transfer, shareholder service and dividend disbursing agent and the accounting and pricing agent of the Fund, expenses including clerical expenses of the issue, sale, redemption or repurchase of shares of the Fund, the fees and expenses of Trustees of the Trust who are not interested persons of the Trust, the cost of preparing, printing and distributing prospectuses, statements, reports and other documents to shareholders, expenses of shareholders' meetings and proxy solicitations, and such extraordinary or non-recurring expenses as may arise, including litigation to which the Trust may be a party and indemnification of the Trust's officers and Trustees - 6 - 7 with respect thereto, or any other expense not specifically described above incurred in the performance of the Trust's obligations. All other expenses not expressly assumed by the Adviser herein incurred in connection with the organization, registration of shares and operations of the Fund will be borne by the Fund. 11. Other Investment Activities of the Adviser. The Trust acknowledges that the Adviser or one or more of its affiliates may have investment responsibilities or render investment advice to or perform other investment advisory services for other individuals or entities and that the Adviser, its affiliates or any of its or their directors, officers, agents or employees may buy, sell or trade in any securities for its or their respective accounts ("Affiliated Accounts"); provided, however, that performance by the Adviser of such other services shall not impair or interfere with the Adviser's obligations under this Agreement. Subject to the provisions of paragraph 2 hereof, the Trust agrees that the Adviser or its affiliates may give advice or exercise investment responsibility and take such other action with respect to other Affiliated Accounts which may differ from the advice given or the timing or nature of action taken with respect to the Fund, provided that the Adviser acts in good faith, and provided further, that it is the Adviser's policy to allocate, within its reasonable discretion, investment opportunities to the Fund over a period of time on a fair and equitable basis relative to the Affiliated Accounts, taking into account the investment objectives and policies of the Fund and - 7 - 8 any specific investment restrictions applicable thereto. The Trust acknowledges that one or more of the Affiliated Accounts may at any time hold, acquire, increase, decrease, dispose of or otherwise deal with positions in investments in which the Fund may have an interest from time to time, whether in transactions which involve the Fund or otherwise. The Adviser shall have no obligation to acquire for the Fund a position in any investment which any Affiliated Account may acquire, and the Trust shall have no first refusal, co-investment or other rights in respect of any such investment, either for the Fund or otherwise. 12. Certificate of Authority. The Trust and the Adviser shall furnish to each other from time to time certified copies of the resolutions of their Trustees or Board of Directors or executive committees, as the case may be, evidencing the authority of officers and employees who are authorized to act on behalf of the Trust, the Fund and/or the Adviser. 13. Limitation of Liability. The Adviser shall not be liable for any action taken, omitted or suffered to be taken by it in its reasonable judgment, in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement, or in accordance with (or in the absence of) specific directions or instructions from the Trust, provided, however, that such acts or omissions shall not have resulted from the Adviser's willful misfeasance, bad faith or negligence, a violation of the standard of care established by and applicable to the Adviser in its actions under this Agreement or breach of its duty or of its obligations hereunder. - 8 - 9 Nothing in this paragraph 13 shall be construed in a manner inconsistent with Sections 17(h) and (i) of the Act. 14. Confidentiality. Subject to the duty of the Adviser and the Trust to comply with applicable law, including any demand of any regulatory or taxing authority having jurisdiction, the parties hereto shall treat as confidential all information pertaining to the Fund and the actions of the Adviser and the Trust in respect thereof. 15. Assignment. No assignment of this Agreement shall be made by the Adviser, and this Agreement shall terminate automatically in the event of such assignment. The Adviser shall notify the Trust in writing sufficiently in advance of any proposed change of control, as defined in Section 2(a)(9) of the Act, as will enable the Trust to consider whether an assignment will occur, and to take the steps necessary to enter into a new contract with the Adviser. 16. Representation, Warranties and Agreements of the Trust. The Trust represents, warrants and agrees that: A. The Adviser has been duly appointed by the Trustees of the Trust to provide investment advisory services to the Fund as contemplated hereby. B. The Trust will deliver to the Adviser true and complete copies of its then current prospectus and statement of additional information as effective from time to time and such other documents or instruments governing the investments of the Fund and such other information as is necessary for the Adviser to carry out its obligations under this Agreement. - 9 - 10 C. The Trust is currently in compliance and shall at all times comply with the requirements imposed upon the Trust by applicable law and regulations. 17. Representations, Warranties and Agreements of the Adviser. The Adviser represents, warrants and agrees that: A. The Adviser is registered as an investment adviser under the Investment Advisers Act of 1940. B. The Adviser will maintain, keep current and preserve on behalf of the Trust, in the manner and for the time periods required or permitted by the Act, the records identified in Schedule A. The Adviser agrees that such records (unless otherwise indicated on Schedule A) are the property of the Trust, and will be surrendered to the Trust promptly upon request. C. The Adviser will complete such reports concerning purchases or sales of securities on behalf of the Fund as the Trust may from time to time require to ensure compliance with the Act, the Internal Revenue Code of 1986 and applicable state securities laws. D. The Adviser has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the Act and will provide the Trust with a copy of the code of ethics and evidence of its adoption. Within forty-five (45) days of the end of the last calendar quarter of each year while this Agreement is in effect, an executive officer of the Adviser shall certify to the Trust that the Adviser has complied with the requirements of Rule 17j-1 during the previous year and that there has been no -10 - 11 violation of the Adviser's code of ethics or, if such a violation has occurred, that appropriate action was taken in response to such violation. Upon the written request of the Trust, the Adviser shall permit the Trust, its employees or its agents to examine the reports required to be made to the Adviser by Rule 17j-l(c)(1). E. The Adviser will, promptly after filing with the Securities and Exchange Commission an amendment to its Form ADV, furnish a copy of such amendment to the Trust. F. Upon request of the Trust, the Adviser will provide assistance to the Custodian in the collection of income due or payable to the Fund. G. The Adviser will immediately notify the Trust of the occurrence of any event which would disqualify the Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the Act or otherwise. 18. Amendment. This Agreement may be amended at any time, but only by written agreement between the Adviser and the Trust, which amendment, other than amendments to Schedule A, is subject to the approval of the Trustees and the shareholders of the Fund in the manner required by the Act and the rules thereunder, subject to any applicable exemptive order of the Securities and Exchange Commission modifying the provisions of the Act with respect to approval of amendments to this Agreement. 19. Effective Date; Term. This Agreement shall become effective on the date of its execution and shall remain in force - 11 - 12 for a period of two (2) years from such date, and from year to year thereafter but only so long as such continuance is specifically approved at least annually by the vote of a majority of the Trustees who are not interested persons of the Trust or the Adviser, cast in person at a meeting called for the purpose of voting on such approval, and by a vote of the Board of Trustees or of a majority of the outstanding voting securities of the Fund. The aforesaid requirement that this Agreement may be continued "annually" shall be construed in a manner consistent with the Act and the rules and regulations thereunder. 20. Termination. This Agreement may be terminated by either party hereto, without the payment of any penalty, immediately upon written notice to the other in the event of a breach of any provision thereof by the party so notified, or otherwise upon sixty (60) days' written notice to the other, but any such termination shall not affect the status, obligations or liabilities of any party hereto to the other. This Agreement may be terminated by the Trust at any time without the payment of any penalty in the event that it is established by a court of competent jurisdiction that the Adviser or any officer or director thereof has taken an action which results in a breach of the covenants of the Adviser set forth in this Agreement. 21. Obligations of the Trust. It is expressly agreed that the obligations of the Trust hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents or employees of the Trust, personally, but bind only the trust property of the Trust. The execution and delivery of this - 12 - 13 Agreement have been authorized by the Trustees of the Trust and signed by an officer of the Trust, acting as such, and neither such authorization by such trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the trust property of the Trust. 22. Definitions. As used in paragraphs 15 and 19 of this Agreement, the terms "assignment," "interested person" and "vote of a majority of the outstanding voting securities" shall have the meanings set forth in the Act and the rules and regulations hereunder. 23. Applicable Law. To the extent that state law is not preempted by the provisions of any law of the United States heretofore or hereafter enacted, as the same may be amended from time to time, this Agreement shall be administered, construed and enforced according to the laws of the State of Virginia. 24. Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 25. Notice. Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party at such address as such other party may designate for the receipt of such notice. -13- 14 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year written below. UC INVESTMENT TRUST By: Lois A. Clarke ---------------------------- Title: President ------------------------- Date: June 16 1998 --------------------, UNITED INVESTMENT CORPORATION By: Ronald E. Oliver ---------------------------- Title: Vice-President ------------------------- Date: June 16 1998 --------------------, - 14 - 15 SCHEDULE A RECORDS TO BE MAINTAINED BY THE ADVISER 1. (Rule 3la-l(b)(5) and (6)) A record of each brokerage order, and all other portfolio purchases or sales, given by the Adviser on behalf of the Fund for, or in connection with, the purchase or sale of securities, whether executed or unexecuted. Such records shall include: A. The name of the broker; B. The terms and conditions of the order and of any modification or cancellation thereof; C. The time of entry or cancellation; D. The price at which executed; E. The time of receipt of a report of execution; and F. The name of the person who placed the order on behalf of the Trust. 2. (Rule 3la-l(b)(9)) A record for each fiscal quarter, completed within ten (10) days after the end of the quarter, showing specifically the basis or bases upon which the allocation of orders for the purchase and sale of portfolio securities to named brokers or dealers was effected, and the division of brokerage commissions or other compensation on such purchase and sale orders. Such record: A. Shall include the consideration given to: (i) The sale of shares of the Fund by brokers or dealers. (ii) The supplying of services or benefits by brokers or dealers to: (a) The Trust; (b) The Adviser; and, (c) Any person affiliated with the foregoing persons. (iii) Any other consideration other than the technical qualifications of the brokers and dealers as such. B. Shall show the nature of the services or benefits made available. - 15 - 16 C. Shall describe in detail the application of any general or specific formula or other determinant used in arriving at such allocation of purchase and sale orders and such division of brokerage commissions or other compensation. D. The name of the person responsible for making the determination of such allocation and such division of brokerage commissions or other compensation. 3. (Rule 3la-l(b)(10)) A record in the form of an appropriate memorandum identifying the person or persons, committees or groups authorizing the purchase or sale of portfolio securities. Where an authorization is made by a committee or group, a record shall be kept of the names of its members who participate in the authorization. There shall be retained as part of this record any memorandum, recommendation or instruction supporting or authorizing the purchase or sale of portfolio securities and such other information as is appropriate to support the authorization.* 4. (Rule 3la-l(f)) Such accounts, books and other documents as are required to be maintained by registered investment advisers by rule adopted under Section 204 of the Investment Advisers Act of 1940, to the extent such records are necessary or appropriate to record the Adviser's transactions with respect to the Fund. - --------------------------- * Such information might include: the current Form 10-K, annual and quarterly reports, press releases, reports by analysts and from brokerage firms (including their recommendation; i.e., buy, sell, hold) or any internal reports or portfolio adviser reviews. - 16 - -----END PRIVACY-ENHANCED MESSAGE-----