-----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, Qevk2x9syeOKdNlOvXvzFaL75AijQXRWC2Iro6VWvoMvJwyi4Wr0jb8vX1MEVR6M Al9yI1dD7+bkIkwDMXuqkw== 0000084278-99-000004.txt : 19990318 0000084278-99-000004.hdr.sgml : 19990318 ACCESSION NUMBER: 0000084278-99-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990131 FILED AS OF DATE: 19990317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROANOKE ELECTRIC STEEL CORP CENTRAL INDEX KEY: 0000084278 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 540585263 STATE OF INCORPORATION: VA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-02389 FILM NUMBER: 99566681 BUSINESS ADDRESS: STREET 1: 102 WESTSIDE BLVD N W STREET 2: P O BOX 13948 CITY: ROANOKE STATE: VA ZIP: 24038 BUSINESS PHONE: 5403421831 MAIL ADDRESS: STREET 1: 102 WESTSIDE BLVD N W CITY: ROANOKE STATE: VA ZIP: 24017 10-Q 1 3RD QUARTER 1998 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1999 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission file number 0-2389 ROANOKE ELECTRIC STEEL CORPORATION (Exact name of Registrant as specified in its charter) Virginia 54-0585263 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 102 Westside Blvd., N.W., Roanoke, Virginia 24017 (Address of principal executive offices) (Zip Code) (540) 342-1831 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of January 31, 1999, reflecting a three-for-two stock split, effective March 25, 1998. 11,075,888 Shares outstanding ROANOKE ELECTRIC STEEL CORPORATION FORM 10-Q CONTENTS Page 1. Part I - Financial Information 3 - 13 Item 1. Financial Statements a. Consolidated Balance Sheets 3 b. Consolidated Statements of Earnings 4 c. Consolidated Statements of Cash Flows 5 d. Notes to Consolidated Financial Statements 6 - 8 e. Independent Accountants' Report 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 - 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk 13 2. Part II - Other Information 14 Item 1. Legal Proceedings 14 Item 6. Exhibits and Reports on Form 8-K 14 3. Signatures 15 4. Exhibit Index pursuant to Regulation S-K 16 5. Exhibits a. By Laws, as amended 17 b. Steel of West Virginia Material Contracts 18 c. Financial Data Schedule 19
PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS ROANOKE ELECTRIC STEEL CORPORATION Consolidated Balance Sheets ASSETS (Unaudited) January 31, October 31, 1999 1998 CURRENT ASSETS Cash and cash equivalents $ 17,761,092 $ 16,167,025 Investments 10,419,876 11,727,636 Accounts receivable 50,674,031 42,415,061 Refundable income taxes 300,693 --- Inventories 69,973,178 31,902,900 Prepaid expenses 2,228,285 1,586,357 Deferred income taxes 3,076,304 1,608,938 Total current assets 154,433,459 105,407,917 PROPERTY, PLANT AND EQUIPMENT Land 7,975,371 4,264,165 Buildings 40,322,317 19,621,407 Other property and equipment 179,836,635 123,615,952 Assets under construction 6,999,557 4,656,746 Total 235,133,880 152,158,270 Less--accumulated depreciation 71,546,114 68,522,086 Property, plant and equipment, net 163,587,766 83,636,184 GOODWILL 16,096,395 --- OTHER ASSETS 960,184 166,788 TOTAL ASSETS $ 335,077,804 $ 189,210,889 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $ 15,026,887 $ 4,250,000 Accounts payable 21,798,174 15,273,850 Dividends payable 1,052,210 1,052,210 Employees' taxes withheld 632,516 358,851 Accrued profit sharing contribution 1,516,562 5,335,822 Accrued wages and expenses 8,958,580 2,959,367 Accrued income taxes --- 1,259,939 Total current liabilities 48,984,929 30,490,039 LONG-TERM DEBT Notes payable 150,218,249 28,541,667 Less--current portion 15,026,887 4,250,000 Total long-term debt 135,191,362 24,291,667 POSTRETIREMENT LIABILITIES 1,580,827 1,293,788 DEFERRED INCOME TAXES 27,064,894 13,687,507 STOCKHOLDERS' EQUITY Common stock--no par value--authorized 20,000,000 shares, issued 12,349,002 shares 2,858,128 2,858,128 Retained earnings 120,215,532 117,407,628 Total 123,073,660 120,265,756 Less--treasury stock, 1,273,114 shares -- at cost 817,868 817,868 Total stockholders' equity 122,255,792 119,447,888 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 335,077,804 $ 189,210,889 The accompanying notes to consolidated financial statements are an integral part of this statement.
ROANOKE ELECTRIC STEEL CORPORATION Consolidated Statements of Earnings (Unaudited) Three Months Ended January 31, 1999 1998 SALES $ 73,403,567 $ 71,603,735 COST OF SALES 58,435,125 58,695,984 GROSS EARNINGS 14,968,442 12,907,751 OTHER OPERATING EXPENSES Administrative 5,939,850 4,324,764 Interest, net 1,212,943 284,135 Profit sharing 1,413,514 1,221,961 Total 8,566,307 5,830,860 EARNINGS BEFORE INCOME TAXES 6,402,135 7,076,891 INCOME TAX EXPENSE 2,542,021 2,825,899 NET EARNINGS $ 3,860,114 $ 4,250,992 Weighted average number of common shares outstanding : * Basic 11,075,888 11,211,154 Diluted 11,118,312 11,316,913 Net earnings per share of common stock: Basic $ 0.35 $ 0.38 Diluted $ 0.35 $ 0.38 Cash dividends per share of common stock $ 0.095 $ 0.087 * Adjusted for three-for-two stock split effective March 25, 1998. The accompanying notes to consolidated financial statements are an integral part of this statement.
ROANOKE ELECTRIC STEEL CORPORATION Consolidated Statements of Cash Flows (Unaudited) Three Months Ended January 31, 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 3,860,114 $ 4,250,992 Adjustments to reconcile net earnings to net cash provided by operating activities: Postretirement liabilities 80,112 75,745 Depreciation and amortization 3,164,793 2,293,429 (Gain) loss on sale of investments and property, plant and equipment 2,622 (13,399) Deferred income taxes (66,000) 50,000 Changes in assets and liabilities which provided (used) cash, exclusive of changes shown separately (3,030,465) 1,157,177 Net cash provided by operating activities 4,011,176 7,813,944 CASH FLOWS FROM INVESTING ACTIVITIES Expenditures for property, plant and equipment (3,274,214) (1,507,987) Proceeds from sale of property, plant and equipment 178,814 --- (Purchase) sale of investments 1,304,264 (251,779) Acquisition of Steel of West Virginia, Inc. (67,920,897) --- Other 13,472 --- Net cash used in investing activities (69,698,561) (1,759,766) CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends (1,052,210) (971,821) Increase in dividends payable --- 182 Proceeds from exercise of common stock options --- 14,932 Payment of long-term debt (81,158,771) (1,062,500) Proceeds from long-term debt 150,000,000 --- Loan costs (507,567) --- Net cash provided by (used in) financing activities 67,281,452 (2,019,207) NET INCREASE IN CASH AND CASH EQUIVALENTS 1,594,067 4,034,971 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 16,167,025 8,844,537 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 17,761,092 $ 12,879,508 CHANGES IN ASSETS AND LIABILITIES WHICH PROVIDED (USED) CASH, EXCLUSIVE OF CHANGES SHOWN SEPARATELY (Increase) decrease in accounts receivable $ 6,772,169 $ 767,858 (Increase) decrease in refundable income taxes 2,479,898 --- (Increase) decrease in inventories (2,980,765) 1,064,532 (Increase) decrease in prepaid expenses (260,691) (30,870) Increase (decrease) in accounts payable (2,563,587) 2,434,088 Increase (decrease) in employees' taxes withheld (203,424) 119,137 Increase (decrease) in accrued profit sharing contribution (4,062,690) (3,688,482) Increase (decrease) in accrued wages and expenses (951,436) (1,224,222) Increase (decrease) in accrued income taxes (1,259,939) 1,715,136 Total $ (3,030,465) $ 1,157,177 The accompanying notes to consolidated financial statements are an integral part of this statement.
ROANOKE ELECTRIC STEEL CORPORATION Notes to Consolidated Financial Statements January 31, 1999 Note 1. In the opinion of the Registrant, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position as of January 31, 1999 and the results of operations and cash flows for the three months ended January 31, 1999 and 1998. Note 2. Inventories include the following major classifications: (Unaudited) January 31, October 31, 1999 1998 Scrap steel $ 5,378,170 $ 4,876,856 Melt supplies 3,906,853 2,408,961 Billets 12,719,230 3,499,907 Mill supplies 5,306,190 3,176,619 Work-in-process 6,184,470 --- Finished steel 36,478,265 17,940,557 Total inventories $ 69,973,178 $ 31,902,900 Note 3. In February 1997, the Financial Accounting Standards Board issued SFAS No. 128, "Earnings per Share", which changes the method of calculating earnings per share. SFAS No. 128 requires the presentation of "basic" earnings per share and "diluted" earnings per share on the face of the income statement. Basic earnings per share is computed by dividing the net income available to common shareholders by the weighted average shares of outstanding common stock. The calculation of diluted earnings per share is similar to basic earnings per share except that the denominator includes dilutive common stock equivalents such as stock options and warrants. The statement is effective for financial statements for periods ending after December 15, 1997. Basic earnings per share and diluted earnings per share calculated in accordance with SFAS No. 128 are presented in the consolidated statements of earnings. Note 4. The Registrant declared a three-for-two common stock split payable March 25, 1998, to shareholders of record March 6, 1998. All references to the number of common shares (basic and diluted) and per common share amounts (basic and diluted) have been restated to retroactively reflect the stock split. Note 5. In June 1997, the Financial Accounting Standards Board issued SFAS No. 130, "Comprehensive Income", and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information". SFAS No. 130 establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. The Company adopted SFAS No. 130 during the current quarter, but comprehensive income, and its required disclosure, is the same as that shown in the consolidated statements of earnings. SFAS No. 131 establishes disclosure standards regarding information about operating segments in interim and annual financial statements. The Company will be required to adopt SFAS No. 131 at the close of fiscal year 1999 and, based on current circumstances, does not believe the effect of adoption will be significant. Note 6. On December 16, 1998, the Registrant acquired all of the outstanding common shares of Steel of West Virginia, Inc. ("SWVA"), a Huntington, West Virginia steel manufacturer, upon completion of its cash tender offer. The consideration given was approximately $117.1 million, including the assumption of approximately $52.3 million of indebtedness, which translates into $10.75 net per SWVA share, for approximately 6,028,000 shares on a fully-diluted basis. Upon merger, SWVA became a wholly-owned subsidiary of Roanoke Electric Steel Corporation, and each share of SWVA common stock not purchased in the offer (approximately 3.6% of SWVA's outstanding shares) will be converted, subject to appraisal rights, into the right to receive $10.75 in cash, without interest. Funding for the acquisition was provided by a syndicate of four banks, including First Union National Bank, Agent. SWVA operates a mini-mill in Huntington, West Virginia, and steel fabrication facilities in Huntington and Memphis, Tennessee, while custom designing and manufacturing special steel products principally for use in the construction of truck trailers, industrial lift trucks, off-highway construction equipment (such as bulldozers and graders), manufactured housing, guard rail posts and mining equipment. For its year ended December 31, 1997, SWVA reported net sales, net income and total stockholder's equity of $112,776,000, $5,259,000 and $54,302,000, respectively. The acquisition has been accounted for as a purchase. Accordingly, the acquired assets and liabilities are included in the accompanying January 31, 1999 consolidated balance sheet at values based on a preliminary purchase price allocation. The purchase price allocation will be finalized by October 31, 1999 based upon appraisals and other evaluations currently in process. The preliminary purchase price allocation is summarized below: (Unaudited) December 16, 1998 Accounts and other receivables $ 17,811,730 Inventories 35,089,513 Prepaid expenses and other current assets 1,848,603 Property, plant and equipment 79,913,809 Goodwill 16,197,632 Other assets 304,356 Accounts and other payables (9,596,233) Accrued expenses and other current liabilities (7,194,079) Long-term debt (52,804,120) Other liabilities (13,650,314) $ 50,109,167 Unaudited pro forma consolidated results of operations for the three month periods ended January 31, 1999 and 1998, assuming the SWVA acquisition had occurred at the beginning of each period, are as follows: (Unaudited) Three Months Ended January 31, 1999 1998 Sales $ 85,562,678 $ 101,209,912 Net earnings $ 2,639,322 $ 5,863,934 Net earnings per share of common stock: Basic $ 0.24 $ 0.52 Diluted $ 0.24 $ 0.52 The pro forma consolidated results of operations include adjustments to give effect to amortization of goodwill, interest expense on acquisition debt and certain other adjustments, together with related income tax effects. The unaudited pro forma information is not necessarily indicative of the results of operations that would have occurred had the purchase been made at the beginning of the periods presented or the future results of the combined operations. Note 7. Supplemental cash flow information: (Unaudited) Three Months Ended January 31, 1999 1998 Cash paid during the period for: Interest $ 1,045,230 $ 561,005 Income taxes $ 1,388,062 $ 1,060,764 Detail of acquisition: Fair value of assets acquired $ 151,165,643 Liabilities assumed (83,244,746) Net cash paid for acquisition $ 67,920,897 INDEPENDENT ACCOUNTANTS' REPORT DELOITTE & TOUCHE LLP Suite 1401 Telephone: (336) 721-2300 500 West Fifth Street Facsimile: (336) 721-2301 Winston-Salem, North Carolina 27120 Board of Directors Roanoke Electric Steel Corporation: We have reviewed the accompanying consolidated balance sheet of Roanoke Electric Steel Corporation and subsidiaries as of January 31, 1999, and the related consolidated statements of earnings and cash flows for the three-month periods ended January 31, 1999 and 1998. These financial statements are the responsibility of the Corporation's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Roanoke Electric Steel Corporation and subsidiaries as of October 31, 1998, and the related consolidated statements of earnings, stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated November 18, 1998, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of October 31, 1998 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Deloitte & Touche LLP March 2, 1999 PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Company's earnings during the periods included in the accompanying consolidated statements of earnings. A summary of the period to period changes in the principal items included in the consolidated statements of earnings is shown below: Comparison of Increases (Decreases) Three Months Ended January 31, 1999 and 1998 Amount Percent Sales 1,799,832 2.5 Cost of Sales (260,859) (0.4) Administrative Expenses 1,615,086 37.3 Interest Expense 928,808 326.9 Profit Sharing Expense 191,553 15.7 Earnings before Income Taxes (674,756) (9.5) Income Tax Expense (283,878) (10.0) Net Earnings (390,878) (9.2) On December 16, 1998, the Registrant acquired 100% of the capital stock of Steel of West Virginia, Inc. ("SWVA"), a steel manufacturer; and results for the three months ended January 31, 1999 reflect the operations of SWVA from the date of acquisition. The 1998 financial statements have not been restated to include SWVA because the acquisition was treated as a purchase for accounting purposes. Sales for the periods compared increased primarily due to the inclusion of SWVA's revenues in 1999 consolidated sales, together with improved selling prices for fabricated products. Sales, however, were negatively affected by significant declines in selling prices for both merchant bar products and billets, together with a substantial drop in billet shipments and moderate declines in bar and fabricated product shipments. Bar product selling prices declined due to increased competition from both foreign and domestic producers, prompting industry-wide list price reductions. The increased competition and excess inventories at steel service centers caused the reduction in tons shipped of bar products. A dramatic change in market conditions for billets brought diminished demand and a 42% decline in tons shipped. Billet selling prices declined with sharp reductions in scrap prices which normally trigger changes in billet pricing. Shipments of fabricated products decreased due to construction delays caused by severe winter weather, while fabricated product selling prices improved mainly as a result of less competitive conditions within the commercial construction industry, as business conditions continued strong and backlogs remained high. The effects of the decreased tons shipped for all product classes, along with the drop in the cost of scrap steel, our main raw material, were nearly offset by the impact of SWVA costs, resulting in cost of sales being flat for the period compared. Gross profit as a percentage of sales increased from 18.0% to 20.4% due mainly to the impact of the significantly reduced billet shipments which carry much lower margins. In addition, lower scrap costs and higher selling prices for fabricated products more than offset the lower selling prices for bar products and the effects of reduced production levels on costs. The increase in gross profit for the period was primarily attributable to the inclusion of SWVA's profit margins in 1999 results. Net earnings declined for the quarter as a result of increased administrative, interest and profit sharing expenses. Administrative expenses increased mainly as a result of the inclusion of SWVA's expenses in 1999 results; however, other expenses such as insurance and executive and other compensation increased as well. Administrative expenses, as a percentage of sales, rose from 6.0% in 1998 to 8.1% in 1999. Interest expense increased primarily due to substantially higher average borrowings, related to the SWVA acquisition, and slightly higher interest rates, in spite of increased capitalized interest and interest income. Profit sharing expense is based on earnings before income taxes in accordance with the provisions of various plans. For the quarter, profit sharing expense increased, in spite of reduced pre-tax income, because pre-tax income, for the purposes of calculating profit sharing, was adjusted for the affects of certain SWVA acquisition costs, principally interest expense. The effective income tax rate was relatively constant for both periods compared. Working capital increased $30,530,652 during the period to $105,448,530 resulting both from acquired SWVA working capital and working capital provided from operations exceeding capital expenditures, dividends and debt maturities. The current ratio of 3.2 to 1 and the quick ratio of 1.6 to 1 both indicate very strong liquidity and a healthy financial condition. In addition, cash, cash equivalents and investments total $28,180,968. At December 15, 1998, the Registrant's outstanding bank debt was $27,583,333. On December 16, 1998, the Registrant closed on $180,000,000 of secured credit facilities with a syndicate of four banks. The facilities are comprised of a $150,000,000 seven year term loan and a $30,000,000 five year revolver. The term loan was used to purchase all of the outstanding capital stock of SWVA, and refinance both the existing term debt of the Registrant and most of SWVA's bank debt assumed through the merger. Due to this new credit facility, current debt maturities are now $15,000,000 annually, which will affect working capital and future liquidity. Although, our unused $30,000,000 revolving credit facility combined with the cash and investments mentioned above provide the liquidity and capital resources necessary to fund operations and remain competitive. At January 31, 1999, there were commitments for the purchase of property, plant and equipment approximating $4,500,000, most of which is for new state-of-the-art stacking and bundling equipment, expected to be in operation by mid-1999 with anticipated improvements in rolling mill productivity and efficiency. These commitments will also affect future liquidity and will be financed from internally generated funds and the use of the revolver mentioned above. During the quarter, the ratio of debt to equity rose to 1.7 to 1 due to the new borrowings and other debt associated with the SWVA acquisition. The percentage of long-term debt to total capitalization increased from 16.9% to 52.5% during the period. Long-term debt increased $110,899,695 to $135,191,362, which could limit the capital resources available to the Registrant. Stockholders' equity increased as net earnings of $3,860,114 exceeded dividends of $1,052,210. From time to time, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include economic and industry conditions, availability and prices of supplies, prices of steel products, competition, governmental regulations, interest rates, inflation, labor relations, environmental concerns, the ability of the Company and its customers and vendors to address, effectively, Year 2000 issues, and others. Since 1997, the Company has been diligently involved in converting our computer hardware and software to be Year 2000 compliant. It has been assigned the highest priority within our information systems area utilizing all internal personnel available. External resources have been added to assist in the task and continue ongoing projects. We have identified the systems in our manufacturing facilities and offices that may be affected and have completed conversion on nearly all systems through the end of 1998. To ensure compliance by third-party software vendors, we are requesting in writing from our vendors confirmation of their Year 2000 compliance. We have also purchased analytical tools to check not only our computers for compliance, but also loaded software. The Company has sent compliance questionnaires to its major suppliers to assess their readiness and our needs to seek alternate suppliers. We have not totally assessed the risks of Year 2000 issues, nor have we developed any contingency plans. We plan to utilize the remainder of 1999 for such matters and have established a completion goal of June 30, 1999 for testing our conversions. The estimated costs of Year 2000 issues are approximately $300,000 and are not expected to have a material effect on results of operations, liquidity or capital resources. PART I - ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Quantitative and qualitative information about market risk was addressed in Form 10-K for fiscal year ended October 31, 1998, as previously filed with the commission. There has been no material changes to that information required to be disclosed in this 1st quarter 10-Q filing. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. To the best of Registrant's information and belief no new legal proceedings were instituted against Registrant or any of its wholly-owned subsidiaries, including SWVA, during the period covered by this report and there was no material development in or termination of the legal proceedings reported earlier by both the Registrant on Form 10-K for fiscal year ended October 31, 1998 and by SWVA on Form 10-K for fiscal year ended December 31, 1997 and Forms 10-Q for the quarters ended March 31, 1998, June 30, 1998 and September 30, 1998, all previously filed with the Commission. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a. Exhibits. (3) (b) By Laws, as amended (10) (a)/(f) SWVA Material Contracts (27) Financial Data Schedule b. Reports on Form 8-K. Reports on Forms 8-K, dated November 10, 1998 and December 16, 1998, filed during the quarter for which this report is filed, were related to the acquisition of Steel of West Virginia, Inc. on December 16, 1998. The earlier Form 8-K, under Item 5, announced the execution of the agreement and plan of merger between the Registrant and SWVA, and included the related press release as an exhibit under Item 7. The later Form 8-K, under Item 5, reported the successful completion of the Registrant's cash tender offer for all of the outstanding shares of common stock of SWVA, and included the related press release as an exhibit under Item 7. A subsequent Form 8-K was filed February 4, 1999, reporting details of the acquisition under Item 2 and giving related financial statements, unaudited pro forma financial information and exhibits under Item 7. Items 2, 3, 4 and 5 are omitted because the information required by these items is not applicable. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ROANOKE ELECTRIC STEEL CORPORATION Registrant Date March 16, 1999 Dondald G. Smith Donald G. Smith, Chairman, President, Treasurer and Chief Executive Officer (Principal Financial Officer) Date March 16, 1999 John E. Morris John E. Morris, Vice President-Finance and Assistant Treasurer (Chief Accounting Officer) EXHIBIT INDEX Exhibit No. Exhibit Page (3) (b) By Laws, as amended 17 (10) (a) SWVA Management Bonus Plan 18 Incorporated by Reference (10) (b) SWVA Management Retirement Plan 18 Incorporated by Reference (10) (c) SWVA Collective Bargaining Agreement 18 Incorporated by Reference (10) (d) SWVA Collective Bargaining Unit Bonus Plan 18 Incorporated by Reference (10) (e) SWVA Collective Bargaining Unit Retirement Plan 18 Incorporated by Reference (10) (f) SWVA Employment Agreement with Timothy R. Duke 18 Incorporated by Reference (27) Financial Data Schedule 19 EXHIBIT NO. 3 (b) BY-LAWS, AS AMENDED BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION ARTICLE I Offices The principal office and place of business of the Corporation shall be in the County of Roanoke, State of Virginia, and the post office address of the Corporation shall be in the City of Roanoke, State of Virginia. ARTICLE II Stockholders Section 1 - Annual Meeting - The annual meeting of the Stockholders of the Corporation shall be held on the third Monday in January of each year. Section 2 - Special Meetings - Special meetings of the Stockholders may be called by the President and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing by Stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote. Section 3 - Notice and Place of Meetings - The Secretary shall cause written notice of the time and place of the holding of each annual or special meeting to be mailed, at least ten (10) days prior to such meeting, to each Stockholder entitled to vote, to the post office address of record with the Corporation. Notice of special meetings of the Stockholders shall state the purpose or purposes of such meetings. Meetings shall be held at such place in the City or County of Roanoke as may be designated in the notice. Section 4 - Quorum - At any meeting of the Stockholders, the holders of a majority of the shares of the capital stock of the Corporation, issued and outstanding and entitled to vote, present in person or represented by proxy, shall represent a quorum of the Stockholders for all purposes. If the holders of the amount of stock necessary to constitute a quorum shall fail to attend, in person or by proxy, at the time and place of meeting, the Chairman of the meeting may adjourn such meeting from time to time without notice, other than by announcement at the meeting, until holders of the amount of stock requisite to constitute a quorum shall attend. At any such adjourned meeting, at which a quorum be present, any business may be transacted which might have been transacted at the meeting as originally called. Section 5 - Organization - The President, and in his absence, the Vice-President, shall call all of the meetings of the Stockholders to order and shall act as Chairman of such meetings. In the absence of the President and Vice-President, the Board of Directors shall appoint any stockholder to act as Chairman of such meeting. The Secretary of the Corporation shall act as Secretary of all meetings of the Stockholders, and in the absence of the Secretary, the presiding officer may appoint any person to act in such capacity. Section 6 - Voting - At each meeting of the Stockholders, every Stockholder shall be entitled to vote in person or by proxy appointed by an instrument in writing, subscribed by such Stockholder, or by his duly authorized attorney, and delivered to the Secretary at the meeting, and he shall have one vote for each share of stock entitled to vote and registered in his name at the time of taking the list of Stockholders for such meeting. No share of stock shall be voted at any election which shall have been transferred on the books of the Corporation within twenty (20) days next preceding such election. Upon the demand of any Stockholder, the vote upon any question before the meeting shall be by ballot. It shall be the duty of the Secretary to prepare, at least ten (10) days before every meeting, a complete list of the Stockholders entitled to vote, arranged in alphabetical order and indicating the number of shares held by each. Such list shall be open for inspection by any Stockholder at the principal place of business of the Corporation during business hours for the ten (10) days preceding the meeting. Section 7 - Inspectors - At each meeting of the Stockholders, one (1) or more inspectors of election may be appointed by the presiding officer. It shall be the duty of the inspectors of election to count and certify to the Secretary the results of all votes at such meeting. In the absence of the appointment of such inspector or inspectors, the Secretary shall perform such duties. Section 8 - Order of Business - At meetings of the Stockholders, the order of business shall be: (1) Calling of roll. (2) Proof of due notice of meeting or of waiver of notice. (3) Reading and disposal of unapproved minutes. (4) Reports of officers and committees. (5) Election of Directors. (6) Unfinished business. (7) New business. (8) Adjournment. ARTICLE III Board of Directors Section 1 - Number and Term of Office - The business and property of the Corporation shall be managed and controlled by a Board of not less than five, nor more than nine Directors. The Directors shall be elected by ballot, by a majority of the Stockholders present and voting in person or by proxy, at each annual meeting of the Stockholders, and shall be elected to serve for a term of one (l) year and until their successors shall be elected and shall qualify. Section 2 - Vacancies - In case of any vacancy in the Board of Directors through death, resignation, disqualification or other cause, the remaining Directors, by an affirmative vote of the majority thereof, may elect a successor to hold office for the unexpired portion of the term. Section 3 - Annual Meetings - The annual meeting of the Board of Directors of the Corporation shall be held on the second Tuesday following the annual meeting of the Stockholders of the Corporation. Section 4 - Special Meetings - Special meetings of the Board of Directors shall be held whenever called by the direction of its Chairman or the President, or by one-third in number of the Directors then in office. Section 5 - Time, Place and Notice of Meetings - The Secretary shall cause written notice of the time and place of the holding of each annual or special meeting to be mailed, at least ten (10) days prior to the date of such meeting, to each Director to the post office address of record with the Corporation. Section 6 - Quorum - A majority of the Board of Directors shall constitute a quorum for the transaction of business, but if at any meeting of the Board, there be less than a quorum present, a majority of those present shall adjourn the meeting from time to time. Section 7 - Election and Salaries of Officers - The Directors shall elect the officers of the Corporation and fix their salaries. Section 8 - Order of Business - At meetings of the Board of Directors, the order of business shall be: (1) Calling of roll. (2) Proof of due notice of meeting or of waiver of notice. (3) Reading and disposal of any unapproved minutes. (4) Reports of officers and committees. (5) Election of officers. (6) Unfinished business. (7) New business. (8) Adjournment. ARTICLE IV Section 1 - Officers - The officers of the Corporation shall be a Chairman of the Board of Directors, a President, a Vice-President, a Secretary and a Treasurer. Any two or more of such offices, other than those of President and Secretary, may be held by one person. The Board of Directors may, in its discretion, elect more than one Vice-President, and an Assistant Secretary and Assistant Treasurer. The officers shall be elected at each annual meeting of the Board of Directors and shall be elected to serve for a term of one (1) year or until removed by a majority vote of the entire Board of Directors. Section 2 - Powers and Duties of Officers (a) The Chairman of the Board of Directors shall preside at all meetings of the Board of Directors. (b) President - The President shall be elected from the Board of Directors and shall preside at all meetings of the Stockholders, and, in the absence of the Chairman of the Board of Directors, at all meetings of the Directors. He shall have power to sign certificates of stock, to sign and execute all contracts, deeds, leases and other documents, and to sign checks, drafts, notes and orders for the payment of money, and to appoint, discharge and fix the salaries of agents and employees. He shall have general and active management of the business of the Corporation and shall perform all of the duties incident to the office of President. (c) Vice-President - The Vice-President, or Vice-Presidents, shall have such powers and perform such duties as may be delegated to him or them by the Board of Directors. In the absence or disability of the President, the senior Vice-President may perform the duties and exercise the powers of the President. (d) Treasurer and Assistant Treasurer - The Treasurer shall have custody of all funds and securities of the Corporation and shall keep a full and accurate account of all monies received and paid by him on account of the Corporation. He shall have power to sign all checks, drafts, notes and orders for the payment of money and shall perform all acts incident to the position of Treasurer, subject to the control of the Board of Directors. The Assistant Treasurer shall have such powers and duties as may be delegated to him by the Board of Directors and, in the absence or disability of the Treasurer, may perform the duties and exercise the powers of the Treasurer. (e) Secretary and Assistant Secretary - The Secretary shall keep the minutes of all meetings of the Board of Directors and Stockholders, and shall give and serve all notices. The Secretary shall attest and countersign all contracts, deeds, leases and other documents where necessary, and shall have charge and custody of the seal, and of the stock certificate books, transfer books and stock ledgers of the Corporation, and shall, in general, perform all duties usually incident to the office of Secretary. The Assistant Secretary shall have such powers and duties as may be delegated to him by the Board of Directors and, in the absence or disability of the Secretary, may perform the duties and exercise the powers of the Secretary. ARTICLE V Capital Stock, Dividends and Seal Section 1 - Certificates of Shares - The certificates for the shares of the capital stock of the Corporation shall be in such form as may be approved by the Board of Directors. The certificates shall be signed by the President and the Secretary or Treasurer of the Corporation and shall be consecutively numbered. The name of the person owning the shares represented by each certificate, with the number of such shares and the date of issue, shall be entered on the Corporation's books. The Corporation may treat the holder of record of any share or shares of stock as the holder-in-fact thereof, and shall not be bound to recognize any claim to or interest in any such share on the part of any other person. Section 2 - Transfer of Shares - Shares of the capital stock of the Corporation shall be transferable by the holder thereof in person, or by his duly authorized attorney, upon surrender and cancellation of certificates for a like number of shares properly endorsed. Section 3 - Regulations - The Board of Directors shall have power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration of certificates for the shares of stock of the Corporation. Section 4 - Dividends - The Board of Directors may declare dividends from the surplus of the Corporation or from the net profits from the operation of its business at such times and in such amounts as the Board, in its sole discretion, may determine. Before the payment of any dividend or the distribution of any profits, there may be set aside out of the surplus or net profits arising out of the operation of the business of the Corporation, such sum or sums as the Directors from time to time think proper, either as working capital, a reserve fund to meet contingencies, for the repair and maintenance of the property of the Corporation, or for such other purposes as the Directors shall think conducive to the interests of the Corporation. Section 5 - Corporate Seal - The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization, and the words "Corporate Seal" and "Virginia". Section 6 - Fiscal Year and Financial Statements - The fiscal year of the Corporation shall begin on the first day of November and terminate on the 31st day of October in each year. The Board of Directors shall publish and submit to the Stockholders, along with the notice of the time and place of the annual meeting, an operating statement of the Corporation for the preceding fiscal year and a consolidated balance sheet showing the assets and liabilities of the Corporation at the end of the preceding fiscal year. ARTICLE VI Amendment of By-Laws The By-Laws of the Corporation may be amended at any annual or special meeting of the Corporation by a vote of the holders of a majority of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote, present in person or represented by proxy. John W. Hancock, Jr. President ATTEST: Elizabeth B. Hancock Secretary WAIVER OF NOTICE We, the undersigned, being all of the members of the Board of Directors of Roanoke Electric Steel Corporation, hereby waive notice of the first meeting of the Board of Directors to be held at the offices of Roanoke Iron and Bridge Works in the City of Roanoke, Virginia at 4 p.m. o'clock on the 27th day of April, 1955, and consent to the transaction of all business that may properly come before such meeting. DATED at Roanoke, Virginia this 27th day of April, 1955. John W. Hancock, Jr. O.D. Oakey, Jr. S. Colston Sneed, Jr. B.W. Morris Charles P. Lunsford A. Blair Antrim John M. Donalson ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1 - 3(n), Code of Virginia, 1950, as amended, Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows: (a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment so adopted amends Article VI of the By-Laws to read as follows: "The Corporation shall indemnify each director and officer of the Corporation, his heirs, executors, administrators and personal representatives, against any and all liabilities, judgments, fines, penalties and claims (including amounts paid in settlement) imposed upon or asserted against him by reason of his being or having been an officer or director of the Corporation or of any other corporation in which he served or serves as a director or officer pursuant to the written request of the Corporation (whether or not he continues to be an officer or director at the time of such imposition or assertion), and against all expenses (including counsel fees) reasonably incurred by him in connection therewith, except in respect of matters as to which he shall have been finally adjudged to be liable by reason of having been guilty of negligence or misconduct in the performance of his duty as such director or officer. In the event of any other judgment against such officer or director or in the event of a settlement, the indemnification shall be made only if the Corporation shall be advised (a) by the Board of Directors, in case none of the persons involved shall then be a director of the Corporation, or (b) by independent counsel appointed by the Board of Directors, in case any of the persons involved shall then be a director of the Corporation, that in its or his opinion, as the case may be, such director or officer was not guilty of negligence or misconduct in the performance of his duty, and, in the event of a settlement, that such settlement was, or, if still to be made, would be, in the best interests of the Corporation. If the determination is to be made by the Board of Directors, it may rely, as to all questions of law, upon the advice of independent counsel. The foregoing right of indemnification shall not be exclusive of other rights to which any director or officer may be entitled as a matter of law or otherwise." (c) The meeting of the Board of Directors at which the amendment was found to be in the best interests of the Corporation and directed to be submitted to a vote at a meeting of stockholders was held on the 18th day of October, 1967. Notice was given to each stockholder of record entitled to vote on the 15th day of December, 1967, such notice being given more than twenty-five and less than fifty days before the date of the meeting and was given in the manner provided in this Act, and was accompanied by a copy of the proposed amendment; the date of the adoption of the amendment by the stockholders was the 15th day of January, 1968. (d) The number of shares outstanding and the number of shares entitled to vote on the amendment was 560,000 shares; all shares being common stock of no par value, there was no class entitled to vote thereon as a class. (e) The number of shares present in person or by proxy voted for the amendment was 441,265 shares and none against such amendment. (f) Such amendment does not effect a change in the amount of stated capital. (g) Such amendment does not effect a restatement of the Articles of Incorporation. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 20th day of January, 1968. ROANOKE ELECTRIC STEEL CORPORATION BY William M. Meador President ATTEST: Donald G. Smith Secretary STATE OF VIRGINIA ) ) To-Wit: COUNTY OF ROANOKE ) I, Paul D. Sturgill, a Notary Public in and for the County of Roanoke, State of Virginia, do hereby certify that William M. Meador, and Donald G. Smith, President and Secretary respectively of Roanoke Electric Steel Corporation, have this day personally appeared before me and executed the foregoing Articles of Amendment, and made oath that the matters therein stated are true and correct. Given under my hand this 20th day of January, 1968. My commission expires April 4, 1968. Paul D. Sturgill Notary Public ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1 - 24, Code of Virginia, 1950, as amended, Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows: (a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment so adopted adds a new by-law, which would be new Article VII, to read as follows: "The power to alter, amend or repeal the By-laws or adopt new by-laws shall be vested in the Board of Directors. But by-laws made by the Board of Directors may be repealed or changed, and new by-laws made, by the stockholders and the stockholders may prescribe that any by-law made by them shall not be altered, amended or repealed by the Directors." (c) The meeting of the Board of Directors at which the amendment was found to be in the best interests of the Corporation and directed to be submitted to a vote at a meeting of stockholders was held on the 18th day of October, 1967. Notice was given to each stockholder of record entitled to vote on the 15th day of December, 1967, such notice being given more than twenty-five and less than fifty days before the date of the meeting and was given in the manner provided in this Act, and was accompanied by a copy of the proposed amendment; the date of the adoption of the amendment by the stockholders was the 15th day of January, 1968. (d) The number of shares outstanding and the number of shares entitled to vote on the amendment was 560,000 shares; all shares being common stock of no par value, there was no class entitled to vote thereon as a class. (e) The number of shares present in person or by proxy voted for the amendment was 441,265 shares and none against such amendment. (f) Such amendment does not effect a change in the amount of stated capital. (g) Such amendment does not effect a restatement of the Articles of Incorporation. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 20th day of January, 1968. ROANOKE ELECTRIC STEEL CORPORATION BY William M. Meador President ATTEST: Donald G. Smith Secretary STATE OF VIRGINIA ) ) To-Wit: COUNTY OF ROANOKE ) I, Paul D. Sturgill, a Notary Public in and for the County of Roanoke, State of Virginia, do hereby certify that William M.Meador, and Donald G. Smith, President and Secretary respectively of Roanoke Electric Steel Corporation, have this day personally appeared before me and executed the foregoing Articles of Amendment, and made oath that the matters therein stated are true and correct. Given under my hand this 20th day of January, 1968. My commission expires April 4, 1968. Paul D. Sturgill Notary Public ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-24 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, The Board of Directors of Roanoke Electric Steel Corporation hereby amends the By-Laws of the Corporation as follows: (a) Section 2 of Article V is amended by inserting "(subject to such restrictions as may be placed upon the transfer of shares under the terms of the following section)" between "transferable" and "by". (b) Section 3 of Article V is amended by adding to the end of such section the following sentence: "The Board of Directors may place such restrictions upon the transferability of all or part of the shares of the capital stock of the Corporation as may be necessary in the opinion of the Board to insure that any issue of stock by the Corporation will comply with applicable federal and state securities laws and with the terms of any agreement of merger or other corporate reorganization duly approved by the Board." (c) The meeting of the Board of Directors at which the amendment was found to be in the best interest of the Corporation was held on the 19th day of August, 1975. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 19th day of August, 1975. ROANOKE ELECTRIC STEEL CORPORATION By William M. Meador President ATTEST: Donald G. Smith Secretary ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-24 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows: (a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment so adopted amends Section 1 of Article III to read as follows: "The business and property of the Corporation shall be managed and controlled by a Board of not less than five, nor more than ten Directors. The Directors shall be elected by ballot, by a majority of the Stockholders present and voting in person or by proxy, at each annual meeting of the Stockholders, and shall be elected to serve for a term of one (1) year and until their successors shall be elected and shall qualify." (c) The meeting of the Board of Directors at which the amendment was found to be in the best interest of the Corporation was held on the 16th day of September, 1975. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 16th day of September, 1975. ROANOKE ELECTRIC STEEL CORPORATION By William M. Meador President ATTEST: Donald G. Smith Secretary ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-24 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows: (a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment so adopted amends Section 1 of Article III to read as follows: "The business and property of the Corporation shall be managed and controlled by a Board of not less than five, nor more than eleven Directors. The Directors shall be elected by ballot, by a majority of the Stockholders present and voting in person or by proxy, at each annual meeting of the Stockholders, and shall be elected to serve for a term of one (1) year and until their successors shall be elected and shall qualify." (c) The meeting of the Board of Directors at which the amendment was found to be in the best interest of the Corporation was held on the 17th day of April 1984. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 17th day of April 1984. ROANOKE ELECTRIC STEEL CORPORATION By William M. Meador President ATTEST: Donald G. Smith Secretary ARTICLES OF AMENDMENT TO BYLAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-24 of the Code of Virginia and Article VII of the Bylaws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation hereby executes and approves these Articles of Amendment to its Bylaws as follows: (a) Article III, "Board of Directors", is hereby amended by the addition of Section 9 as follows: Section 9 - Executive Committee and Other Committees The Board of Directors of the Corporation, by resolution adopted by a majority of the Directors in office, may designate an Executive Committee and/or such other committees as from time to time shall be deemed necessary and appropriate. The Executive Committee shall be composed of two or more Directors of the Corporation, appointed by the Board of Directors, and, to the extent provided in such resolution, shall have and exercise all of the authority of the Board of Directors except to approve an amendment of the Articles of Incorporation, a plan of merger or consolidation, a plan of exchange under which the Corporation would be acquired, the sale, lease or exchange, or the mortgage or pledge of for a consideration other than money, of all or substantially all of the property and assets of the Corporation otherwise than in the ordinary and regular course of business, the voluntary dissolution of the Corporation, or revocation of voluntary dissolution proceedings. Other committees consisting of two or more Directors, appointed by the Board of Directors, may be designated by resolution adopted by a majority of the Directors present at a meeting at which a quorum is present. Upon designation of any committee, including the Executive Committee, the Board of Directors shall appoint a chairman thereof. (b) A meeting of the Board of Directors at which this Amendment was found to be in the best interest of the Corporation was held January 29, 1985. A majority of the Board of Directors then in office voted in favor of the Amendment. WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary of, this 29th day of January, 1985. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith Attest: Thomas J. Crawford Secretary ARTICLES OF AMENDMENT TO BYLAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-714 of the Code of Virginia, 1950, as amended, and Article VII of the Bylaws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation hereby executes and approves these Articles of Amendment to its Bylaws as follows: (a) Article IV, Section 1 is hereby amended to read as follows: Section 1 - Officers - The officers of the Corporation shall be a Chairman of the Board of Directors, a President, a Vice President, an Assistant Vice President, a Secretary and a Treasurer. The Board of Directors may, in its discretion, elect more than one Vice President, more than one Assistant Vice President, and an Assistant Secretary and Assistant Treasurer. The same individual may simultaneously hold more than one office in the Corporation. The officers shall be elected at each annual meeting of the Board of Directors for a term of one (1) year or until removed by a majority vote of the entire Board of Directors. (b) Article IV, Section 2 (c) is hereby amended to read as follows: (c) Vice President and Assistant Vice President - The Vice President(s) and Assistant Vice President(s) shall have the powers and perform such duties as may be delegated to him or them by the Board of Directors. In the absence or disability of the President, the senior Vice President may perform the duties and exercise the powers of the President. (c) The meeting of the Board of Directors at which these Amendments were found to be in the best interest of the Corporation was held October 18, 1988. The majority of the Board of Directors then in office voted in favor of the Amendments. The Amendments were ratified by a majority of the Board of Directors at its meeting on November 15, 1988. WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 15th day of November, 1988. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith President ATTEST: Thomas J. Crawford Secretary ARTICLES OF AMENDMENT TO BYLAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-714 of the Code of Virginia, 1950, as amended, and Article VII of the Bylaws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation hereby executes and approves these Articles of Amendment to its Bylaws as follows: (a) Section 1 of Article IV of the Bylaws is hereby amended in its entirety to read as follows: "Section 1 - Officers - The officers of the Corporation shall be a Chairman of the Board of Directors, a President, a Vice President, an Assistant Vice President, a Secretary and a Treasurer and such other officers as the Board may by resolution appoint. The same individual may simultaneously hold more than one office in the Corporation. The Board of Directors may, in its discretion, elect more than one Vice President, more than one Assistant Vice President, and an Assistant Secretary and Assistant Treasurer. The officers shall be elected at each annual meeting of the Board of Directors and shall be elected to serve for a term of one (1) year or until removed by a majority vote of the entire Board of Directors." (b) The meeting of the Board of Directors at which this Amendment was found to be in the best interests of the Corporation was held on November 16, 1993. The majority of the members of the Board of Directors then in office voted in favor of the Amendment. WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 16th day of November, 1993. ROANOKE ELECTRIC STEEL CORPORATION By: Donald G. Smith President ATTEST: Thomas J. Crawford Secretary ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-714 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its By-Laws as follows: (a) The name of the Corporation is Roanoke Electric Steel Corporation. (b) The amendment so adopted (the "Amendment") amends Section 1 of Article II to read as follows: "Section 1 - Annual Meeting - The annual meeting of the Stockholders of the Corporation shall be held on the third Tuesday in February of each year, or on such other date as the Board of Directors may determine." (c) The Amendment also amends Section 3 of Article III to read as follows: "Section 3 - Annual Meeting - The annual meeting of the Board of Directors of the Corporation shall be held immediately following the annual meeting of Stockholders, or at such other time as the Board of Directors may determine." (d) The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 19th day of September, 1995. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 19th day of September, 1995. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith President ATTEST: Thomas J. Crawford Secretary ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-714 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its Bylaws as follows: A. The name of the Corporation is Roanoke Electric Steel Corporation. B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows: "Section 1 - Number and Term of Office. The number of directors of the Corporation shall be nine. The directors shall be divided into three classes (A, B and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election and shall continue to hold office until their respective successors are elected and qualify." C. The Amendment also amends Section 2 of Article III to read as follows: "Section 2 - Vacancies. Newly-created directorships resulting from an increase in the number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office, or other cause shall be filled by the affirmative vote of a majority of the directors then in office, whether or not a quorum. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. A director may be removed from office only for cause." D. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 15 day of October, 1996. WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 15 day of October, 1996. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith President Attest: Thomas J. Crawford Secretary ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-714 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its Bylaws as follows: A. The name of the Corporation is Roanoke Electric Steel Corporation. B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows: "Section 1 - Number and Term of Office. The number of directors of the Corporation shall be ten. The directors shall be divided into three classes (A, B, and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election shall continue to hold office until their respective successors are elected and qualify." C. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 15 day of April, 1997. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 15 day of April, 1997. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith President ATTEST: Thomas J. Crawford Secretary ARTICLES OF AMENDMENT TO BY-LAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-714 of the Code of Virginia and Article VII of the By-Laws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its Bylaws as follows: A. The name of the Corporation is Roanoke Electric Steel Corporation. B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows: "Section 1 - Number and Term of Office. The number of directors of the Corporation shall be eight. The directors shall be divided into three classes (A, B, and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election shall continue to hold office until their respective successors are elected and qualify." C. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 17 day of March, 1998. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 17 day of March, 1998. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith President ATTEST: Thomas J. Crawford Secretary ARTICLES OF AMENDMENT TO BYLAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-714 of the Code of Virginia and Article VII of the Bylaws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its Bylaws as follows: A. The name of the Corporation is Roanoke Electric Steel Corporation. B. The Amendment so adopted (the "Amendment") adds a new Section 9 to Article II of the Bylaws, which reads as follows: "Section 9 - Stockholder Proposals or Nominations. No business shall be transacted at any meeting of stockholders, except such business as shall be (a) specified in the notice of meeting given as provided in Section 3 of this Article II; (b) otherwise brought before the meeting by or at the direction of the Board; or (c) otherwise brought before the meeting by a stockholder of record of the Corporation entitled to vote at the meeting in compliance with the procedure set forth in this Section 9. For business to be brought before a meeting by a stockholder pursuant to (c) above, the stockholder must have given timely notice in writing to the President of the Corporation. To be timely, a stockholder's notice shall be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, in the event that less than seventy (70) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting or such public disclosure was made. Notice shall be deemed to have been given more than seventy (70) days in advance of an annual meeting of stockholders if the annual meeting is called on the date indicated by Section 1 of this Article II (as may be amended from time to time) without regard to when public disclosure thereof is made. Notice of actions to be brought before a meeting pursuant to (c) above shall set forth, as to each matter the stockholder proposes to bring before the meeting: (a) a brief description of the business desired to be brought before the meeting and the reasons for bringing such business before the meeting; (b) if the stockholder intends to nominate a candidate at the meeting for election to the Board, (i) the qualifications and experience of the prospective nominee, including current principal occupation and employment, principal positions held during the last five years and a list of all companies for which the prospective nominee serves as director, (ii) the basis for nomination, (iii) a description of all arrangements or undertakings between the recommending party and each prospective nominee and any other person concerning the recommendation and (iv) confirmation of the proposed nominee's willingness to serve; and (c) as to the stockholder giving the notice, (i) his name and address, as they appear on the Corporation's books, (ii) the classes and number of shares of the Corporation which are owned of record or beneficially by such stockholder, and (iii) any material interest of such stockholder in such business other than his interest as a stockholder of the Corporation. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted on a stockholder proposal or nomination except in accordance with the provisions set forth in this Section 9. The requirements of this Section are in addition to any other requirements established by law and do not impair the effect of the requirements of Sections 2 and 3 of Article II of these Bylaws relating to business permitted to be transacted at special stockholders' meetings. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that any business or nomination was not properly brought before the meeting in accordance with the provisions prescribed by these Bylaws and, if he should so determine, he shall so declare to the meeting, and any such business not so properly brought before the meeting shall not be transacted." C. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 15 day of December, 1998. WITNESS the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 15 day of December, 1998. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith President Attest: Thomas J. Crawford Secretary ARTICLES OF AMENDMENT TO BYLAWS OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-714 of the Code of Virginia and Article VII of the Bylaws of Roanoke Electric Steel Corporation, the Board of Directors of Roanoke Electric Steel Corporation executes Articles of Amendment to its Bylaws as follows: A. The name of the Corporation is Roanoke Electric Steel Corporation. B. The Amendment so adopted (the "Amendment") amends Section 1 of Article III to read as follows: "Section 1 - Number and Term of Office. The number of directors of the Corporation shall be nine. The directors shall be divided into three classes (A, B and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of stockholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of stockholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of stockholders in 1999. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire after their election shall continue to hold office until their respective successors are elected and qualify." C. The meeting of the Board of Directors at which the Amendment was found to be in the best interest of the Corporation was held on the 19 day of January, 1999. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 19 day of January, 1999. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith President ATTEST: Thomas J. Crawford Secretary EXHIBIT NO. 10 (a) SWVA MANAGEMENT BONUS PLAN Incorporated by reference to the previously filed SWVA Form 10-K (Exhibit 10.42) for December 31, 1988 on file in the Commission office. (b) SWVA MANAGEMENT RETIREMENT PLAN Incorporated by reference to the previously filed SWVA Form 10-K (Exhibit 10.49) for December 31, 1989 on file in the Commission office. (c) SWVA COLLECTIVE BARGAINING AGREEMENT Incorporated by reference to the previously filed SWVA Form 8-K, No. 0-016254 (Exhibit 10.25) dated March 26, 1996 on file in the Commission office. (d) SWVA COLLECTIVE BARGAINING UNIT BONUS PLAN Incorporated by reference to the previously filed SWVA Form S-1, No. 33-16845 (Exhibit 10.46) on file in the Commission office. (e) SWVA COLLECTIVE BARGAINING UNIT RETIREMENT PLAN Incorporated by reference to the previously filed SWVA Form S-1, No. 33-55952 (Exhibit 10.46) on file in the Commission office. (f) SWVA EMPLOYMENT AGREEMENT WITH TIMOTHY R. DUKE Incorporated by reference to the previously filed Form SC 14D-1 (Exhibit (c) (4)) dated December 3, 1998 on file in the Commission office. EXHIBIT NO. 27 FINANCIAL DATA SCHEDULE EX-27 2
5 The Schedule contains summary financial information extracted from the 1st Quarter Consolidated Balance Sheets and Statement of Earnings and is qualified in its entirety by reference to such financial statements. 3-MOS OCT-31-1999 JAN-31-1999 17,761,092 10,419,876 50,974,724 0 69,973,178 154,433,459 235,133,880 71,546,114 335,077,804 48,984,929 135,191,362 0 0 2,858,128 119,397,664 335,077,804 73,403,567 73,403,567 58,435,125 58,435,125 7,353,364 0 1,212,943 6,402,135 2,542,021 3,860,114 0 0 0 3,860,114 0.35 0.35
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