SCHEDULE 14A INFORMATION
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Ampco Pittsburgh
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(Name of Registrant as Specified In Its Charter)
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Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[LOGO OF AMPCO PITTSBURGH]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, APRIL 24, 2001
To the Shareholders of
Ampco-Pittsburgh Corporation
Notice is hereby given that the Annual Meeting of the Shareholders of Ampco-
Pittsburgh Corporation will be held in The Conference Room, 33rd Floor, 600
Grant Street, Pittsburgh, Pennsylvania, on Tuesday, April 24, 2001 at 10:00
a.m., for the following purposes:
1. To elect a class of three Directors for a term that expires in 2004.
2. To transact such other business, including action on a shareholder
proposal, as may properly come before the meeting and any adjournment thereof.
Shareholders of record on March 6, 2001 are entitled to notice of and to
vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Rose Hoover
Rose Hoover,
Vice President and Secretary
Pittsburgh, Pennsylvania
March 14, 2001
All shareholders are cordially invited to attend the meeting in person. Your
vote is important and, whether or not you expect to attend in person, it is
requested that you PROMPTLY fill in, sign, and return the enclosed proxy card.
[LOGO OF AMPCO PITTSBURGH]
PROXY STATEMENT
March 14, 2001
Annual Meeting of Shareholders April 24, 2001
SOLICITATION OF PROXIES
This Statement is furnished in connection with the solicitation of proxies
to be used at the Annual Meeting of Shareholders of AMPCO-PITTSBURGH
CORPORATION (the "Corporation") to be held on April 24, 2001. The first
mailing of the proxy material to the shareholders is expected to be made on
March 14, 2001.
The accompanying proxy is solicited on behalf of the Board of Directors of
the Corporation. In addition to the solicitation of proxies by use of the
mails, proxies may be solicited by Directors and employees, in person or by
telephone, and brokers and nominees may be requested to send proxy material to
and obtain proxies from their principals. The Corporation will pay the costs
incurred for those solicitations of proxies and will pay Georgeson Shareholder
Communications, Inc., 17 State Street, 10th Floor, New York, New York, a fee
of $6,000, plus reimbursement of reasonable out-of-pocket expenses, for aid in
the solicitation of proxies.
Any shareholder has the power to revoke the proxy at any time prior to the
voting thereof. Revocation of the proxy will not be effective until notice
thereof has been given to the Secretary of the Corporation or until a duly
executed proxy bearing a later date is presented.
VOTING SECURITIES AND RECORD DATE
Only holders of record of Common Stock of the Corporation at the close of
business on March 6, 2001, will be entitled to vote at the meeting. On that
date, there were 9,602,621 shares of Common Stock outstanding. The holders of
those shares are entitled to one vote per share. In the election of Directors,
the shares may be voted cumulatively. Cumulative voting means that the number
of shares owned by each shareholder may be multiplied by the number of
Directors to be elected and that total voted for the nominees in any
proportion. Shares that are not voted cumulatively are voted on a one vote per
share basis for each nominee, except for those nominees, if any, for whom the
shareholder is withholding authority to vote.
REQUIRED VOTE
Under Pennsylvania law and the Corporation's by-laws, the presence of a
quorum is required to transact business at the 2001 Annual Meeting of
Shareholders. A quorum is defined as the presence, either in person or by
proxy, of a majority of the votes that all shareholders are entitled to cast
at the meeting. Abstentions, votes withheld from director nominees, and
broker-dealer non-votes (shares held by a broker or nominee as to which the
broker or nominee does not have the authority to vote on a particular matter)
will be counted for purposes of determining a quorum, but will have no effect
on matters to be voted on. Assuming the presence of a quorum, the three
nominees for director receiving the highest number of votes will be elected
directors and the affirmative vote of a majority of the votes cast at the
meeting is necessary to approve any other proposal.
1
ELECTION OF DIRECTORS
A class of three Directors will be elected for a term of three years to fill
the class of Directors whose term expires in 2001. All three nominees for
election to the Board of Directors are currently Directors. The nominees were
nominated by the Board of Directors at its February 27, 2001 meeting and are
willing to serve as Directors if elected. If at the time of the Annual Meeting
a nominee should be unable or unwilling to stand for election, the proxies
will be voted for the election of such person, if any, as may be selected by
the Board of Directors to replace him.
The Board of Directors has no nominating committee. Under the Corporation's
By-laws, a shareholder may make nominations for Directors, but only in the
period that is not less than sixty (60) or more than ninety (90) days in
advance of the anniversary date of the previous year's annual meeting.
Proxies in the enclosed form will be voted, unless otherwise directed, for
the following nominees:
Nominees for Directors for a Term of Office Expiring in 2004:
Leonard M. Carroll (age 58, Director since 1996). He has been Managing
Director of Seneca Capital Management, Inc. (a private investment company)
since June, 1996. For more than five years before 1996, he was President and
Chief Operating Officer and a director of Integra Financial Corporation (a
bank holding company).
Laurence E. Paul (age 36, Director since 1998). He is a private investor. From
1995 to February 2001 he served in various capacities, including as a Managing
Director, of Donaldson, Lufkin & Jenrette (Investment Banker). The firm was
bought by Credit Suisse First Boston in 2000.
Ernest G. Siddons (age 67, Director since 1981). He has been Executive Vice
President and Chief Operating Officer of the Corporation for more than five
years. From September 1996 to December 1997, he was also President of Union
Electric Steel Corporation, a subsidiary of the Corporation.
Directors Whose Term of Office Expires in 2003:
William D. Eberle (age 77, Director since 1982). He is a private investor and
consultant and is Chairman of Manchester Associates, Ltd. He is also a
director of Mitchell Energy & Development Co., America Service Group, and
Konover Property Trust.
Robert A. Paul (age 63, Director since 1970). He has been President and Chief
Executive Officer of the Corporation for more than five years. He is also an
officer and director of The Louis Berkman Company and a director of National
City Corporation.
Directors Whose Term of Office Expires in 2002:
Louis Berkman (age 92, Director since 1960). He has been Chairman of the Board
and Chairman of the Executive Committee of the Corporation for more than five
years. He is also President and a director of The Louis Berkman Company (steel
products, fabricated metal products, building and industrial supplies).
Carl H. Pforzheimer, III (age 64, Director since 1982). For more than five
years he has been Managing Partner of Carl H. Pforzheimer & Co. (member of the
New York and American Stock Exchanges).
Louis Berkman is the father-in-law of Robert A. Paul and the grandfather of
Laurence A. Paul (son of Robert A. Paul). There are no other family
relationships among the Directors and Officers.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings in 2000. The Executive Committee
of the Board of Directors took action three times by written consent. The
Executive Committee is comprised of four Directors: Louis
2
Berkman, Robert A. Paul, Ernest G. Siddons and Leonard M. Carroll. The Salary
Committee is comprised of William D. Eberle (Chairman), Louis Berkman, Leonard
M. Carroll and Carl H. Pforzheimer, III. The Salary Committee met once in
2000. The Stock Option Committee met twice in 2000 and is comprised of William
D. Eberle, Leonard M. Carroll and Carl H. Pforzheimer, III. In 2000 all of the
Directors attended more than 75% of the applicable meetings. Each Director who
is not employed by the Corporation receives an annual retainer of $6,000
(payable quarterly), $1,000 for each Board meeting attended and $500 for each
committee meeting attended. Attendance can be either in person or by
telephonic connection. Directors do not receive a fee for either Board or
Committee meetings if they do not attend.
The Audit Committee held five meetings in 2000 and is comprised of three
Directors: Carl H. Pforzheimer, III (Chairman), William D. Eberle and Leonard
M. Carroll. None of the Committee members is now, or has within the past five
years been, an employee of the Corporation. The Audit Committee reviews the
Corporation's accounting and reporting practices, including internal control
procedures, and maintains a direct line of communications with the Directors
and the independent accountants.
The Board of Directors has adopted a written charter for the Audit
Committee, a copy of which is included as Appendix A to this proxy statement.
All members of the Audit Committee are independent as that term is defined by
Section 303.01(B)(2)(a) and (3) of the New York Stock Exchange listing
standards as may be modified or supplemented.
Report of the Audit Committee
The Audit Committee has reviewed and discussed the audited financial
statements with management and has discussed with the independent accountants
the matters required to be discussed by SAS 61 (Codification of Statements on
Auditing Standards, AU 380), as may be modified or supplemented.
The Audit Committee has received the written disclosures and the letter from
the independent accountants required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees), and has discussed with
the independent accountant the independent accountant's independence.
Based on the review and discussions referred to in the preceding paragraphs,
the Audit Committee recommended to the Board of Directors that the audited
financial statements be included in the Corporation's Annual Report on Form
10-K for the last fiscal year for filing with the Securities and Exchange
Commission.
Audit Fees
The following fees were billed to the Corporation for the fiscal year ended
December 31, 2000 by Deloitte & Touche, LLP:
Audit Fees: $206,235
Financial Information System Design and Implementation: -0-
All Other Fees: 244,396
--------
Total $450,631
========
The Audit Committee has considered whether the provision of the non-audit
services is compatible with maintaining the principal accountant's
independence.
Carl H. Pforzheimer, III
William D. Eberle
Leonard M. Carroll
3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT INCLUDING
NOMINEES
As of March 6, 2001, Louis Berkman owned directly 215,000 shares of the
Common Stock of the Corporation and had the right to acquire 120,000 shares
pursuant to stock options. As of the same date, The Louis Berkman Company,
P.O. Box 576, Steubenville, Ohio, 43952, owned beneficially and of record
2,354,089 shares of the Common Stock of the Corporation. Louis Berkman, an
officer and director of The Louis Berkman Company, owns directly 61.94% of its
common stock. Robert A. Paul, an officer and director of The Louis Berkman
Company, disclaims beneficial ownership of the 38.06% of its common stock
owned by his wife. Louis Berkman and Robert A. Paul are trustees of The Louis
and Sandra Berkman Foundation and disclaim beneficial ownership of the 1,266
shares of the Corporation's Common Stock held by such Foundation.
In March, 1998, Gabelli Funds, Inc. and affiliates, Corporate Center, Rye,
NY 10580, filed an amendment to its Schedule 13D reporting they owned
1,893,500 shares or 19.77%. In February 2001, Dimensional Fund Advisors Inc.,
1299 Ocean Avenue, Santa Monica, CA 90401 filed a 13G disclosing that as of
December 31, 2000 it had sole voting and dispositive power of 808,600 shares
or 8.42% (all of which shares are held in portfolios of various investment
vehicles).
The following table sets forth as of March 6, 2001 information concerning
the beneficial ownership of the Corporation's Common Stock by the Directors
and Named Executive Officers and all Directors and Executive Officers of the
Corporation as a group:
Name of Amount and nature of Percent
beneficial owner beneficial ownership of class
---------------- -------------------- --------
Louis Berkman 2,691,355(1)(2) 28.03
Robert A. Paul 177,922(2)(3) 1.9
Ernest G. Siddons (N) 101,833(4) 1.1
Robert F. Schultz 30,200(5) .3
Terrence W. Kenny 25,000(6) .3
Carl H. Pforzheimer, III 2,733(7) *
Leonard M. Carroll (N) 1,500 *
Laurence E. Paul (N) 1,000 *
William D. Eberle 200 *
Directors and Executive Officers
as a group (11 persons) 3,050,477(8) 31.77
--------
(N) Nominee for Director
*less than .1%
(1) Includes 215,000 shares owned directly, 120,000 shares which he has the
right to acquire within 60 days pursuant to stock options, 2,354,089
shares owned by The Louis Berkman Company and the following shares in
which he disclaims beneficial ownership: 1,266 shares held by The Louis
and Sandra Berkman Foundation, of which Louis Berkman and Robert A. Paul
are Trustees, and 1,000 shares owned by his wife.
(2) The Louis Berkman Company owns beneficially and of record 2,354,089 shares
of the Corporation's Common Stock. Louis Berkman is an officer and
director of The Louis Berkman Company and owns directly 61.94% of its
common shares. Robert A. Paul, an officer and director of The Louis
Berkman Company, disclaims beneficial ownership of the 38.06% of its
common stock owned by his wife. The number of shares shown in the table
for Robert A. Paul does not include any shares held by The Louis Berkman
Company.
(3) Includes 42,889 shares owned directly, 120,000 shares which he has the
right to acquire within 60 days pursuant to stock options and the
following shares in which he disclaims beneficial ownership: 13,767 shares
owned by his wife and 1,266 shares held by The Louis and Sandra Berkman
Foundation, of which Robert A. Paul and Louis Berkman are Trustees.
4
(4) Includes 1,833 shares owned jointly with his wife and 100,000 shares which
he has the right to acquire within 60 days pursuant to stock options.
(5) Includes 200 shares owned jointly with his wife and 30,000 shares he has
the right to acquire within 60 days pursuant to stock options.
(6) Shares which he has the right to acquire within 60 days pursuant to stock
options.
(7) Includes 1,000 shares owned directly, 800 shares held by a trust of which
he is a trustee and principal beneficiary, and the following shares in
which he disclaims beneficial ownership: 133 shares held by his daughter
and 800 shares held by a trust of which he is a trustee.
(8) Includes 415,000 shares which certain officers have the right to acquire
within 60 days pursuant to stock options and excludes double counting of
shares deemed to be beneficially owned by more than one Director.
Unless otherwise indicated the individuals named have sole investment and
voting power.
EXECUTIVE COMPENSATION
The following table sets forth certain information as to the total
remuneration received for the past three years by the five most highly
compensated executive officers of the Corporation, including the Chief
Executive Officer (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Annual Compensation
---------------------------------------------------------------------------------------
(a) (b) (c) (d) (g) (i)
Securities
Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Options (#)(2) Compensation ($)
--------------------------- ---- ---------- --------- -------------- ----------------
Robert A. Paul 2000 375,000 63,750 60,000(1)
President and Chief 1999 353,250 112,500 60,000(2)
Executive Officer 1998 330,500 66,000
Louis Berkman 2000 375,000 63,750 60,000(1)
Chairman of the Board and 1999 353,250 112,500 60,000(2)
Executive Committee 1998 330,500 66,000
Ernest G. Siddons 2000 336,000 57,120 50,000(1)
Executive Vice President 1999 316,500 100,800 50,000(2)
and Chief Operating
Officer 1998 296,250 59,000 450,000(3)
Robert F. Schultz 2000 147,000 18,000 10,000(1)
Vice President 1999 142,000 20,000 20,000(2)
Industrial Relations 1998 138,250 14,500
and Senior Counsel
Terrence W. Kenny 2000 120,000 30,000 12,500(1)
Group Vice 1999 110,550 25,000 12,500(2)
President 1998 N/A N/A
--------
(1) Options granted on April 25, 2000 and exercisable on June 1, 2000.
(2) Options granted on December 15, 1998 but were not exercisable until May
1999.
(3) In 1998, the Salary Committee approved the payment to Mr. Siddons of an
amount equal to the cash value of a split dollar life insurance policy.
Mr. Siddons has relinquished all rights to the policy and the split dollar
provisions have been terminated.
5
Stock Option Plan
The Corporation's 1997 Stock Option Plan, as amended, permits the grant of
options exercisable for shares of Common Stock to corporate officers and other
key employees of the Corporation and its subsidiaries upon such terms,
including exercise price and conditions and timing of exercise, as may be
determined by the Stock Option Committee. The Stock Option Plan authorizes the
grants of awards up to a maximum of 600,000 shares of the Corporation's Common
Stock, however, the maximum number of Shares with respect to which stock
options may be granted to any one Participant in any fiscal year may not
exceed 150,000.
OPTION GRANTS IN 2000
The following table shows all options to purchase the Corporation's Common
Stock granted to each of the Named Executive Officers in 2000.
Option Grants in Last Fiscal Year
-------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
% of Total
Securities Options
Underlying Granted to Exercise Grant Date
Options Employees or Base Expiration Present
Name Granted (1) in Fiscal Year Price ($/Sh) Date (2) Value (3)
---- ----------- -------------- ------------ ---------- ----------
Louis Berkman
Chairman of the Board 60,000 21.6% $10.8125 04/25/10 $184,800
Robert A. Paul
President
and Chief Executive
Officer 60,000 21.6% $10.8125 04/25/10 $184,800
Ernest G. Siddons
Executive Vice
President
and Chief Operating
Officer 50,000 18.0% $10.8125 04/25/10 $154,000
Terrence W. Kenny
Group Vice President 12,500 4.5% $10.8125 04/25/10 $ 38,500
Robert F. Schultz
Vice President
Industrial Relations
and Senior Counsel 10,000 3.6% $10.8125 04/25/10 $ 30,800
--------
(1) Options granted April 25, 2000 were not exercisable prior to June 1, 2000,
at which time they were exercisable in full.
(2) The expiration date will occur on the sooner of the date noted or (i) 30
days following termination of employment without cause or (ii) the date of
termination of employment by the Corporation for cause or by the Named
Executive Officer for any reason other than retirement.
(3) In accordance with Securities and Exchange Commission rules, the estimated
grant date present values were determined using the Black-Scholes model.
The use of this model is not an endorsement of the model's accuracy in
valuing options. The material assumptions and adjustments incorporated in
the model include: an option life of 5 years, dividend yield of 3.7%,
volatility of 33.93%, and a risk free rate of return of 6.4%. The ultimate
value of the options in this table will depend on the actual performance
of the Corporation's stock and the timing of exercises.
Pension Benefits
The Corporation has a tax qualified retirement plan (the "Plan") applicable
to the Executive Officers, to which the Corporation makes annual
contributions, as required, in amounts determined by the Plan's actuaries. The
Plan does not have an offset for Social Security and is fully paid for by the
Corporation. Under the Plan,
6
employees become fully vested after five years of participation and normal
retirement age under the Plan is age 65 but actuarially reduced benefits may
be available as early as age 55. The benefit formula is 1.1% of the highest
consecutive five year average earnings in the final ten years, times years of
service. Federal law requires that 5% owners start receiving a pension no
later than April 1 following the calendar year in which the age 70 1/2 is
reached. Louis Berkman is currently receiving $5,867 a month pursuant to the
Plan. As an active employee, Mr. Berkman continues to receive credit for
additional service rendered after age 70 1/2.
The Corporation adopted a Supplemental Executive Retirement Plan (SERP) in
1988, amended and restated in 1996, for certain officers and key employees,
covering retirement after completion of ten years of service and attainment of
age 55. All officers listed in the Compensation table are Participants in the
SERP, except Louis Berkman. The combined retirement benefit at age 65 or older
provided by the Plan and the SERP is 50% of the highest consecutive five year
average earnings in the final ten years of service. The participants are
eligible for reduced benefits for early retirement at age 55. A benefit equal
to 50% of the benefit otherwise payable at age 65 is paid to the surviving
spouse of any participant, who has had at least five years of service,
commencing on the later of the month following the participant's death or the
month the participant would have reached age 55. In addition, there is an
offset for pensions from other companies. Certain provisions, applicable if
there is a change of control, are discussed below under Termination of
Employment and Change of Control Arrangement.
The following shows the estimated annual pension under the Plan and SERP, if
applicable, that would be payable, without offset, to the individuals named in
the compensation table assuming continued employment to retirement at age 65
or older and assuming the compensation stated in the table is the final five
year average.
Louis Berkman (1)
Robert A. Paul $219,375
Ernest G. Siddons $196,560
Robert F. Schultz $ 82,500
Terrence W. Kenny $ 75,000
--------
(1) Mr. Berkman is currently receiving a pension pursuant to the Plan as
described above.
Termination of Employment and Change of Control Arrangements
Mr. Berkman, Mr. Paul and Mr. Siddons have two year contracts (which
automatically renew for one year periods unless the Corporation chooses not to
extend) providing for compensation equal to five times their annual
compensation (with a provision to gross up to cover the cost of any federal
excise tax on the benefits) in the event their employment is terminated
(including a voluntary departure for good cause) and the right to equivalent
office space and secretarial help for a period of one year after a change in
control. Mr. Schultz and a certain key employee have two year contracts
providing for three times their annual compensation in the event their
employment is terminated after a change in control (including a voluntary
departure for good cause). In addition, Mr. Kenny and the two remaining Vice
Presidents have two year contracts providing for two times their annual
compensation in the event their employment is terminated after a change in
control (including a voluntary departure for good cause). All of the contracts
provide for the continuation of employee benefits, for three years for the
three senior executives and two years for the others, and the right to
purchase the leased car used by the covered individual at the Corporation's
then book value. The same provisions concerning change in control that apply
to the contracts apply to the SERP and vest the right to that pension
arrangement. A change of control triggers the right to a lump sum payment
equal to the present value of the vested benefit under the SERP if applicable.
Salary Committee Interlocks and Insider Participation in Compensation
Decisions
A Salary Committee is appointed each year by the Board of Directors.
Committee members abstain from voting on matters which involve their own
compensation arrangements. The Salary Committee for the year 2000 was
comprised of four Directors: William D. Eberle (Chairman), Louis Berkman,
Leonard M. Carroll and Carl H. Pforzheimer, III.
7
Louis Berkman is Chairman of the Board of Directors and Chairman of the
Executive Committee. He is also the President and a director of The Louis
Berkman Company. The Corporation's President and Chief Executive Officer,
Robert A. Paul, is also an officer and director of The Louis Berkman Company.
The Louis Berkman Company had certain transactions with the Corporation,
which are more fully described under "Certain Relationships and Related
Transactions."
Salary Committee Report on Executive Compensation
The Salary Committee approves salaries for executive officers within a range
from $150,000 up to $200,000 and increases in the salary of any executive
officers which would result in such officer earning a salary within such
range. Salaries of $200,000 per year and above must be approved by the Board
of Directors after a recommendation by the Salary Committee. Salaries for
executive officers below the level of $150,000 are set by the Chairman,
President and Executive Vice President of the Corporation.
The compensation of the Chief Executive Officer of the Corporation, as well
as the other applicable executive officers, is based on an analysis conducted
by the Salary Committee. The Committee does not specifically link remuneration
solely to quantitative measures of performance because of the cyclical nature
of the industries and markets served by the Corporation. In setting
compensation, the Committee also considers various qualitative factors,
including competitive compensation arrangements of other companies within
relevant industries, individual contributions, leadership ability and an
executive officer's overall performance. In this way, it is believed that the
Corporation will attract and retain quality management, thereby benefiting the
long-term interest of shareholders.
In 2000, the Salary Committee reviewed and approved salary increases and had
previously approved an incentive program for 2000 covering Louis Berkman,
Robert A. Paul and Ernest G. Siddons ("Participants"). Incentive payments were
to be determined by formula, based exclusively on the Corporation's 2000
income from operations performance as compared to the Corporation's business
plan. These payments were to be limited to 30% of base salary of Participants.
In 2000, the Participants earned incentives of $63,750, $63,750 and $57,120,
respectively.
This report of the Salary Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Corporation
specifically incorporates this report and the information contained herein by
reference, and shall not otherwise be deemed filed under such Acts.
Louis Berkman
Leonard M. Carroll
William D. Eberle
Carl H. Pforzheimer, III
8
Comparative Five-Year Total Returns*
Ampco-Pittsburgh Corporation, Standard & Poors 500 and Value Line Steel
(Integrated) Index
(Performance results through 12/31/00)
[LINE GRAPH]
1995 1996 1997 1998 1999 2000
Ampco Pittsburgh Corporation 100 113.13 189.06 107.55 103.5 127.28
Standard & Poors 500 100 123.25 164.38 211.07 253.87 225.81
Steel Integrated 100 103.94 110.09 104.2 233.14 139.22
Assumes $100 invested at the close of trading on the last trading day preceding
January 1, 1996 in Ampco-Pittsburgh common stock, S&P 500, and Peer Group.
*Cumulative total return assumes reinvestment of dividends.
In the above graph, the Corporation has used Value Line's Steel (Integrated)
Industry for its peer comparison. The diversity of products produced by
subsidiaries of the Corporation made it difficult to match to any one product-
based peer group. The Steel Industry was chosen because it is impacted by some
of the same end markets that the Corporation ultimately serves, such as the
automotive, appliance and construction industries.
Historical stock price performance shown on the above graph is not
necessarily indicative of future price performance.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 2000, the Corporation bought industrial supplies from The Louis Berkman
Company in transactions in the ordinary course of business amounting to
approximately $1,600,000. Additionally, The Louis Berkman Company paid the
Corporation $175,000 for certain administrative services. Louis Berkman and
Robert A. Paul are officers and directors, and Louis Berkman is a shareholder,
in that company. These transactions and services were at prices generally
available from outside sources. Transactions between the parties will take
place in 2001.
9
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
On February 27, 2001, the Board of Directors, upon recommendation of the
Audit Committee, selected Deloitte & Touche LLP ("D&T") as the independent
accountants for the year 2001.
Representatives of D&T will be in attendance at the Annual Meeting, will
have the opportunity to make a statement if they wish to do so and will
respond to appropriate questions.
SHAREHOLDER PROPOSAL
THE FOLLOWING PROPOSAL HAS BEEN CAREFULLY CONSIDERED BY THE BOARD OF
DIRECTORS, WHICH CONCLUDED THAT THE ADOPTION OF SAME WOULD NOT BE IN THE BEST
INTEREST OF THE CORPORATION OR ITS SHAREHOLDERS. FOR THE REASONS STATED AFTER
THE PROPOSAL AND ITS SUPPORTING STATEMENT, THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
Mr. William Steiner, 4 Radcliff Drive, Great Neck, New York, claiming
ownership for more than one year of Common Stock of the Company with a market
value of at least $2,000 and representing that he will continue to hold the
same through the date of the Annual Meeting, has submitted the following
resolution for inclusion in this Proxy Statement and presentation at the 2001
Annual Shareholders' meeting. The text of the proposal is as follows:
"Resolved that the shareholders of Ampco-Pittsburgh Corporation urge
the Ampco-Pittsburgh Corporation Board of Directors to arrange for the
prompt sale of Ampco-Pittsburgh Corporation to the highest bidder."
Shareholder's Supporting Statement
"The purpose of the Maximize Value Resolution is to give all Ampco-
Pittsburgh Corporation shareholders the opportunity to send a message
to the Ampco-Pittsburgh Corporation Board that they support the prompt
sale of Ampco-Pittsburgh Corporation to the highest bidder. A strong
and or majority vote by the shareholders would indicate to the board
the displeasure felt by the shareholders of the shareholder returns
over many years and the drastic action that should be taken. Even if it
is approved by the majority of the Ampco-Pittsburgh Corporation shares
represented and entitled to vote at the annual meeting, the Maximize
Value Resolution will not be binding on the Ampco-Pittsburgh
Corporation Board. The proponent however believes that if this
resolution receives substantial support from the shareholders, the
board may choose to carry out the request set forth in the resolution."
"The prompt auction of Ampco-Pittsburgh Corporation should be
accomplished by any appropriate process the board chooses to adopt
including a sale to the highest bidder whether in cash, stock, or a
combination of both. It is expected that the board will uphold its
fiduciary duties to the utmost during the process."
"The proponent further believes that if the resolution is adopted,
the management and the board will interpret such adoption as a message
from the company's stockholders that it is no longer acceptable for the
board to continue with its current management plan and strategies."
"I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION."
Response of the Board of Directors
The Board unanimously believes that implementation of the proposal described
above would not be in the best interest of the shareholders and, contrary to
the title of the proposal, would not "maximize value to the shareholders".
The proponent believes that the maximum potential shareholder value would be
realized through an auction sale. The Board believes there are other
alternatives to achieve maximum shareholder value, including building
10
the Company both internally and through acquisitions. Additionally, an auction
of the Company would not result in an acceptable price because of the low
valuations currently placed by the financial markets on the steel industry,
which is the largest sector served by the Company.
A decision as to whether, when, or how, to sell the Company involves a
complex analysis and incorporates a wide range of options. This analysis
includes consideration of the financial results of a potential sale, as well
as consideration of the long-term value the Company may achieve through the
growth of its business. The Board regularly reviews the Company's prospects
and believes that the greatest value to the shareholders will result from the
Company continuing with its current strategy. That strategy has included the
strengthening of the Forged and Cast Rolls Segment through the expansion of
its product line with the acquisition of a cast roll producer; and in the
other segments an expansion of product offerings and pursuit of strategic
acquisitions. As a result, there has been an increase in operating income of
the non-steel related businesses, compensating for the lower earnings from the
roll business.
Moreover, even though approval of this proposal is not binding on the Board
of Directors, the Board believes that approval of the proposal would cause
uncertainty regarding the future of the Company and adversely affect
relationships with employees, customers and vendors. The potential adverse
impact could lead to a reduction in sales and profits and, in turn,
stockholder value.
The Board of Directors has a fiduciary duty to make decisions such as
whether, when or how to sell the Company, in a manner that it believes in good
faith, after proper investigation, to be in the best interest of the Company
and its shareholders. The Board does not believe that an auction sale of the
Company is the manner in which to achieve that long-term value for the
shareholders.
The Board of Directors unanimously recommends that the shareholders vote
AGAINST the adoption of this shareholder proposal.
SHAREHOLDER PROPOSALS FOR 2002
Any shareholder who wishes to place a proposal before the next Annual
Meeting of Shareholders must submit the proposal to the Corporation's
Secretary, at its executive offices, not less than 120 calendar days in
advance of the anniversary date of the release of this proxy statement to have
it considered for inclusion in the proxy statement for the Annual Meeting in
2002.
OTHER MATTERS
The Board of Directors does not know of any other business that will be
presented for action at the Meeting. Should any other matter come before the
Meeting, however, action may be taken thereon pursuant to proxies in the form
enclosed unless discretionary authority is withheld.
11
Appendix A
Audit Committee Charter
as adopted by the Board of Directors
on April 25, 2000
RESOLVED, that the charter and powers of the Audit Committee of the Board of
Directors (the "Audit Committee" or "Committee") shall be as follows:
The Audit Committee shall consist of three or more members as the Board of
Directors may from time to time determine. Committee members shall be elected
annually by the Board of Directors.
The Audit Committee shall be comprised solely of Directors independent of
management (as defined by the New York Stock Exchange rules for listed
companies) and free from any relationship that, in the opinion of the Board of
Directors, would interfere with the exercise of independent judgment as a
committee member. The Committee shall consist of members who are financially
literate, as such qualification is interpreted by the Board of Directors in
its business judgment, or must become financially literate within a reasonable
period of time after his or her appointment to the Committee. At least one
member will have accounting or related financial management expertise, as that
qualification is interpreted by the Board of Directors in its business
judgment.
The Committee shall hold such regular meetings, in person or by telephonic
connection, as may be necessary and such special meetings as may be called by
the Chairman of the Audit Committee. Minutes of the Audit Committee meetings
shall be taken and retained by the Secretary of the Corporation or such other
person as may be designated by the Audit Committee Chairman.
The Committee shall maintain free and open communication (including private
executive sessions) with the independent accountants and Corporation's
management to discuss any matters that the Committee deems appropriate.
The Audit Committee's responsibilities shall include, but not be limited to,
the following actions:
. Assist the Board of Directors in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and
reporting practices of the Corporation.
. Evaluate and recommend to the Board of Directors the selection, retention
or discharge of the independent accountants that audit the financial
statements of the Corporation. In the process, the Committee will ensure
that the outside accountants submit on a periodic basis to the Committee
a formal written statement delineating all relationships between the
accountants and the Corporation and the Committee will be responsible for
actively engaging in a dialog with the outside accountants with respect
to any disclosed relationships or services that may impact the
objectivity and independence of the outside accountants and for
recommending that the Board of Directors take appropriate action in
response to the outside accountants' report to satisfy itself of the
outside accountants' independence.
. Review the nature and extent of the audit process, review and approve
fees for audit and non-audit services, review and approve the annual
audit plan.
. Review of financial statements, including quarterly reports, with
management and the independent accountants to determine that the
independent accountants are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders. These
discussions may include quality of earnings, review of reserves and
accruals, consideration of the suitability of accounting principles and
any change thereof, review of judgmental areas, audit adjustments
(whether or not recorded), and such other inquiries as may be
appropriate.
. Following completion of the annual audit, the Committee will review
separately with management and the independent accountants any
significant difficulties encountered during the course of the audit, any
restrictions on the scope of work or access to required information, or
any disagreements between management and the independent accountants.
. Review of the Corporation's Annual Report to Shareholders, Annual Report
on Form 10-K and Proxy Statement and provide appropriate recommendations
to the Board of Directors.
12
. Discuss with management and the independent accountants of the quality
and adequacy of the Corporation's internal controls and the related
findings and recommendations of the independent accountants together with
management's responses.
. Review management's monitoring of the Corporation's compliance with
certain policies, including Ethics.
. Report on Audit Committee activities to the Board of Directors.
. Review and reassess the adequacy of the Audit Committee charter annually
and make appropriate recommendations to the Board of Directors.
. Cause to be included in each annual proxy statement relating to an annual
meeting at which directors are elected, a report, followed by the names
of the Audit Committee members, disclosing whether the Committee:
a. reviewed and discussed the audited financial statements with
management;
b. discussed certain matters required to be discussed by Statement on
Auditing Standards No. 61 with the independent accountants;
c. received the written disclosures and the letter from the accountants
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and discussed with the accountants the
accountants' independence.
d. recommended to the Board, based on its review and discussions, that
the audited financial statements be included in the annual report on Form
10-K for the last fiscal year.
. Cause the Audit Committee Charter to be included in the proxy statement
as an appendix at least once every three years.
. Such other duties as may from time to time be determined by the Board of
Directors.
13
[LOGO OF AMPCO PITTSBURGH]
-- PROXY -- -- PROXY --
This Proxy is Solicited on Behalf of the Board of Directors
THE UNDERSIGNED hereby appoints Louis Berkman, Robert A. Paul and Ernest G.
Siddons as proxies with full power of substitution, to vote as specified on the
reverse side the shares of stock which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of AMPCO-PITTSBURGH CORPORATION, to be held
in The Conference Room, 33rd Floor, 600 Grant Street, Pittsburgh, PA, on
Tuesday, April 24, 2001, at 10:00 a.m., and any adjournments thereof and to vote
in their discretion on such other matters as may properly come before the
meeting.
WHEN PROPERLY EXECUTED THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN ITEM 1
(OR, IN THE DISCRETION OF THE PROXIES, THE SHARES MAY BE VOTED CUMULATIVELY) AND
AGAINST THE SHAREHOLDER PROPOSAL IN ITEM 2.
PLEASE SIGN ON REVERSE SIDE and mail in the enclosed, postage prepaid
envelope.
Please mark [ X ]
your votes as
indicated in
this example
1. ELECTION OF DIRECTORS.
FOR all nominees WITHHOLD (Instruction: To withhold authority
listed below AUTHORITY to vote for any individual nominee,
(except as marked to vote for all nominees write that nominee's name on the
to the contrary) listed below line below the names of the
nominees for Directors.)
[ ] [ ]
The election of Leonard M. Carroll,
Laurence E. Paul and Ernest G.
Siddons for a term expiring in
2004.
-----------------------------------
2. Shareholder proposal urging the Board of Directors to authorize the prompt
sale of Ampco-Pittsburgh Corporation to the highest bidder.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
All proxies heretofore given or executed
with respect to the shares of stock
represented by this proxy are by the
filing of this proxy, expressly revoked.
PLEASE DO NOT FOLD, STAPLE OR DAMAGE.
Date:___________________________, 2001
______________________________________
Signature
______________________________________
Signature
NOTE: Signature should conform exactly
to name as stenciled hereon. Executors,
administrators, guardians, trustees,
attorneys and officer signing for a
corporation should give full title.
For joint accounts each owner must
sign.
* FOLD AND DETACH HERE *