DEF 14A
1
h07368def14a.txt
FRIEDMAN INDUSTRIES, INCORPORATED
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
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[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
FRIEDMAN INDUSTRIES, INCORPORATED
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FRIEDMAN INDUSTRIES, INCORPORATED
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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To the Shareholders of Friedman Industries, Incorporated:
The Annual Meeting of Shareholders of Friedman Industries, Incorporated
will be held in the offices of Fulbright & Jaworski L.L.P., 1301 McKinney, Suite
5100, Houston, Texas, on September 10, 2003, at 11:00 a.m. (local time), for the
following purposes:
(1) To elect a board of eight directors for the ensuing year.
(2) To transact such other business as may properly come before the
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on July 18, 2003, as
the record date for the determination of shareholders entitled to receive this
notice and to vote at the meeting.
All shareholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
BEN HARPER
Secretary
July 28, 2003
Houston, Texas
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND MAIL IT IN THE ENCLOSED ENVELOPE TO ASSURE
REPRESENTATION OF YOUR SHARES. IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN
PERSON OR BY YOUR PROXY.
FRIEDMAN INDUSTRIES, INCORPORATED
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PROXY STATEMENT
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FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 10, 2003
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Friedman Industries, Incorporated (the
"Company"), 4001 Homestead Road, Houston, Texas 77028 (telephone number
713-672-9433) to be used at the Annual Meeting of Shareholders to be held at
11:00 a.m. on Wednesday, September 10, 2003 (the "Annual Meeting"), in the
offices of Fulbright & Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston,
Texas, for the purposes set forth in the foregoing notice of the meeting.
Properly executed proxies received in time for the meeting will be voted as
directed therein, unless revoked in the manner provided hereinafter. As to any
matter for which no choice has been specified in a proxy, the shares represented
thereby will be voted by the persons named in the proxy (i) for the election as
director of the nominees listed herein and (ii) in the discretion of such
persons, in connection with any other business that may properly come before the
meeting. If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked by the shareholder at any time before it is exercised
pursuant to either the shareholder's execution and return of a subsequent proxy
or the shareholder's voting in person at the Annual Meeting.
At the close of business on July 18, 2003, there were 7,573,239 shares of
Common Stock, $1.00 par value, of the Company ("Common Stock") outstanding.
Holders of record of the Common Stock on such date will be entitled to one vote
per share on all matters to come before the Annual Meeting.
The holders of a majority of the total shares of Common Stock issued and
outstanding on the record date, whether present in person or represented by
proxy, will constitute a quorum for the transaction of business at the Annual
Meeting. The shares held by each shareholder who signs and returns the enclosed
form of proxy will be counted for purposes of determining the presence of a
quorum at the Annual Meeting.
The Company's Annual Report to Shareholders for the fiscal year ended March
31, 2003, including financial statements, is enclosed with this proxy statement.
The Annual Report to Shareholders does not constitute a part of the proxy
soliciting materials. This proxy statement is being mailed on or about July 28,
2003, to shareholders of record as of July 18, 2003.
1
ELECTION OF DIRECTORS
The persons who are elected directors will hold office until the next
Annual Meeting of Shareholders and until their successors are elected and shall
qualify. The Board of Directors currently consists of eight members.
It is intended that the persons appointed as proxies to act on behalf of
shareholders in the enclosed proxy will vote for the election of the eight
nominees named below. The management of the Company does not contemplate that
any of such nominees will become unavailable to serve as a director. However,
should any nominee be unable to serve as a director or become unavailable for
any reason, proxies which do not withhold authority to vote for that nominee may
be voted for another nominee to be selected by the Nominating Committee of the
Board of Directors.
The enclosed form of proxy provides a means for shareholders to vote for
all of the nominees for director listed therein, to withhold authority to vote
for one or more of such nominees or to withhold authority to vote for all of
such nominees. Each director nominee receiving a plurality of votes cast will be
elected director. The withholding of authority by a shareholder, abstentions and
broker non-votes will be considered as not voted and will have no effect on the
results of the election of those nominees.
The following table sets forth the names of the nominees for election to
the Board of Directors, the principal occupation or employment of each of the
nominees, the period during which each nominee has served as a director of the
Company and the age of each nominee:
PRINCIPAL OCCUPATION AND
BUSINESS EXPERIENCE FOR MORE DIRECTOR
NOMINEE THAN THE LAST FIVE YEARS SINCE AGE
------- ------------------------ ----- ---
Jack Friedman..................... Chairman of the Board and Chief Executive 1965 82
Officer of the Company
Harold Friedman................... Vice Chairman of the Board of the Company 1965 73
since 1995; formerly President and Chief
Operating Officer of the Company since 1975
William E. Crow................... President and Chief Operating Officer of the 1998 56
Company; President of Texas Tubular Products
Division since 1990; formerly Vice President
of the Company since 1981
Charles W. Hall................... Attorney, Fulbright & Jaworski L.L.P. (law 1974 73
firm),
Houston, Texas
Alan M. Rauch..................... President, Ener-Tex International Inc. 1980 68
(oilfield equipment sales), Houston, Texas
Hershel M. Rich................... Private investor and business consultant, 1979 78
Houston, Texas
Kirk K. Weaver.................... Business advisor since 2002; formerly for more 1981 58
than five years, Chairman of the Board and
Chief Executive Officer, LTI Technologies,
Inc. (technical services), Houston, Texas
Joe L. Williams................... Chairman and Chief Executive Officer, 2000 57
Wisenberg Insurance + Risk Management
(insurance and risk management), Houston,
Texas
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the Securities Exchange Act of 1934 (the "Exchange Act"), the
Company's directors, executive officers and 10% shareholders must report to the
Securities and Exchange Commission (the "Commission") certain transactions
involving Common Stock. Based solely on a review of the copies of the reports
required pursuant to Section 16(a) of the Exchange Act that have been furnished
to the Company and written
2
representations that no other reports were required, the Company believes that
these filing requirements have been satisfied for the fiscal year ended March
31, 2003.
DIRECTOR COMPENSATION
With the exception of directors who are employees of the Company, directors
are paid $500 per quarter and receive annually 400 shares of Common Stock
pursuant to the Company's 2000 Non-Employee Director Stock Plan. In addition,
audit committee members receive $500 for each committee meeting attended.
Directors who are employees of the Company receive no compensation for serving
as director.
BOARD OF DIRECTORS AFFILIATIONS
Messrs. Harold Friedman and Jack Friedman are brothers. Mr. Hall is
associated with Fulbright & Jaworski L.L.P., legal counsel for the Company. Mr.
Williams is Chairman and Chief Executive Officer of Wisenberg Insurance + Risk
Management which provides various insurance services to the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the compensation and stock option committee of the Board of
Directors of the Company was, during fiscal 2003, an officer or employee of the
Company or its subsidiary, or was formerly an officer of the Company or its
subsidiary, or had any relationships requiring disclosure by the Company under
Item 404 of Regulation S-K.
During fiscal 2003, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive officers served
on the compensation and stock option committee of the Board of Directors, (ii) a
director of another entity, one of whose executive officers served on the
compensation and stock option committee, or (iii) a member of the compensation
committee (or other board committee performing equivalent functions) of another
entity, one of whose executive officers served as a director of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
During fiscal 2003, the Board met five times. Messrs. H. Friedman, Crow,
Hall and Williams attended all of the meetings. Messrs. J. Friedman, Rauch, Rich
and Weaver attended four of the meetings.
The Board of Directors has an audit committee which consists of Messrs.
Hall, Rauch and Weaver. The audit committee discusses with the independent
accountants and management the Company's financial statements and the scope of
the audit examinations, reviews with the independent accountants the audit
budget, receives and reviews the audit report submitted by the independent
accountants, reviews with the independent accountants internal accounting and
control procedures and engages the Company's independent auditors. The audit
committee met four times in fiscal 2003, and Messrs. Hall, Rauch and Weaver
attended all of the meetings.
The Board of Directors has a compensation and stock option committee
composed of Messrs. Rauch, Rich and Williams. The compensation and stock option
committee considers and recommends for approval by the Board of Directors
adjustments to the compensation of the executive officers of the Company and the
implementation of any compensation program. In addition, the compensation and
stock option committee administers any stock option or stock plan of the Company
pursuant to the terms of such plan. The compensation and stock option committee
met one time in fiscal 2003, and Messrs. Rauch and Williams attended the
meeting. Mr. Rich was not present at the meeting.
The Board has a nominating committee comprised of Messrs. Hall, Rauch,
Rich, Weaver and Williams. Board of Directors nominees are proposed by the
nominating committee. The nominating committee will consider nominees for
directors recommended by shareholders of the Company, provided such
recommendations are made in accordance with the procedure set forth on page 10
of this proxy statement and all other legal requirements, including all
applicable provisions of the Company's articles of incorporation and bylaws.
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The nominating committee was formed following the 2002 Annual Meeting of
Shareholders and therefore did not meet in fiscal 2003.
During the fiscal year ended March 31, 2003, no director attended fewer
than 75% of all meetings of the Board of Directors and of any committee of which
such director was a member, except Mr. Rich who attended four out of six
meetings, including a meeting of the compensation and stock option committee.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate amount of cash compensation
paid by the Company for the three fiscal years ended March 31, 2003, 2002, and
2001 to each of the Company's five most highly compensated executive officers,
including the Chief Executive Officer (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL ------------ ALL
COMPENSATION SECURITIES OTHER
------------------- UNDERLYING COMPEN-
NAME AND SALARY BONUS(1) OPTIONS/SARS SATION(2)
PRINCIPAL POSITION YEAR ($) ($) (#) ($)
------------------ -------- -------- -------- ------------ ---------
Jack Friedman 2003 110,000 35,527 2,200
Chairman of the Board and Chief Executive Officer 2002 110,000 41,176 2,200
2001 110,000 74,125 2,100
Harold Friedman 2003 106,700 35,527 2,200
Vice Chairman of the Board 2002 106,700 41,176 16,465(3)
2001 106,700 74,125 16,365(3)
William E. Crow 2003 86,000 50,290 2,200
President and Chief Operating Officer 2002 80,750 58,763 2,200
2001 79,000 108,189 2,100
Ben Harper 2003 77,750 42,908 2,200
Senior Vice President -- Finance and 2002 73,063 49,970 2,200
Secretary/Treasurer 2001 71,500 91,156 2,100
Thomas Thompson 2003 77,750 42,908 2,200
Senior Vice President -- Sales and Marketing 2002 73,063 49,970 2,200
2001 71,500 91,156 2,100
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(1) Includes performance and Christmas bonuses both of which are paid at the
discretion of the Board of Directors.
(2) Reflects approximate payments made to the Company's profit sharing plan for
the benefit of each Named Executive Officer.
(3) Includes $14,265 paid in each of 2002 and 2001 as premiums under a life
insurance policy covering the life of Harold Friedman. Under the terms of
the policy, in the event of his death, the Company will receive the cash
surrender value of the policy and the remaining proceeds will be paid to the
beneficiaries designated by Harold Friedman.
4
The following chart sets forth the aggregate option grants to the Named
Executive Officers during the fiscal year ended March 31, 2003:
OPTION/SAR GRANTS IN FISCAL 2003
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT
------------------------------------------------------- ASSUMED ANNUAL RATES OF
SHARES OF PERCENT OF STOCK PRICE APPRECIATION
COMMON STOCK TOTAL OPTIONS EXERCISE FOR OPTION TERM
UNDERLYING GRANTED TO PRICE PER ---------------------------
NAME OPTIONS(#)(1) EMPLOYEES SHARE($) EXPIRATION 5%($) 10%($)
---- ------------- ------------- --------- ----------- ---------- ---------
Jack Friedman -- -- -- -- -- --
Harold Friedman -- -- -- -- -- --
William E. Crow 66,700 25.17 2.33 11/20/12 97,737 247,685
Ben Harper 88,400 33.36 2.33 11/20/12 129,535 328,266
Thomas Thompson 88,400 33.36 2.33 11/20/12 129,535 328,266
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(1) Represents options granted under the 1996 Stock Option Plan which became
fully exercisable on May 20, 2003.
The following chart summarizes certain information relating to options
exercised by the Named Executive Officers during the fiscal year ended March 31,
2003 as well as the value of options held by the Named Executive Officers at
March 31, 2003.
AGGREGATED OPTION/SAR EXERCISE IN FISCAL 2003 AND VALUE TABLE AT
MARCH 31, 2003
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS/SARS AT OPTIONS/SARS
ON REALIZED MARCH 31, 2003 AT MARCH 31, 2003
NAME EXERCISE ($) EXERCISABLE EXERCISABLE(1)
---- -------- -------- ---------------------- ---------------------
Jack Friedman -- -- -- --
Harold Friedman -- -- -- --
William E. Crow -- -- 57,637 --
Ben Harper -- -- 18,890 --
Thomas Thompson -- -- 34,842 --
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(1) Based on the closing price of the Common Stock on March 31, 2003, as
reported by the American Stock Exchange, Inc., the options outstanding had
no in-the-money value.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE OF THE BOARD OF DIRECTORS
WITH RESPECT TO COMPENSATION OF EXECUTIVE OFFICERS
Historically, the profits of the Company have been a principal factor in
determining the compensation of the Company's executive officers. The Committee
believes that the Company's net profit constitutes a significant measure of the
performance of the Company and should have a significant effect on executive
officer compensation. Accordingly, each of the Company's executive officers,
including the Chief Executive Officer, receives a base salary that the Committee
believes is modest in comparison to salaries received by persons holding similar
offices with other publicly held companies, plus a quarterly cash bonus based on
a percentage of the Company's quarterly net income. During fiscal 2003, no
increases in the executive officers' base salaries or bonus percentages were
made.
The Committee also believes that it is important for the Company's senior
executive officers to have a significant equity interest in the Company in order
to further align their interests with those of the Company's shareholders and,
therefore, compensation in the form of equity securities is appropriate.
Accordingly, the Company maintains various stock option plans in which its
executive officers, other than the Chief Executive Officer and Vice Chairman of
the Board, and other key employees participate. Because the Chief Executive
Officer and Vice Chairman already have significant equity interests in the
Company, the Committee believes
5
that their interests are already aligned with those of the Company's
shareholders, and, therefore, compensation solely in the form of cash, rather
than cash and equity securities, is appropriate.
Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a
limitation on deductions that can be taken by a publicly held corporation for
compensation paid to certain of its executive officers. Under Section 162(m), a
deduction is denied for compensation paid in a tax year beginning on or after
January 1, 1994, to the Company's executive officers to the extent that such
compensation exceeds $1 million per individual. Stock option grants pursuant to
the Company's employee benefit plans may be exempt from the deduction limit if
certain requirements are met.
The Committee has considered the effect of Section 162(m) on the Company's
existing compensation program. Although certain grants of stock options to the
Company's executive officers may not be exempt from the Section 162(m) deduction
limitation, the Committee believes that for the foreseeable future, the
compensation received by its covered executives will be within the limits of
deductibility.
Alan M. Rauch
Hershel M. Rich
Joe L. Williams
AUDIT COMMITTEE REPORT
The Board of Directors has adopted an Audit Committee charter. All members
of the Audit Committee of the Board of Directors are "independent" as currently
defined in Section 121(A) of the American Stock Exchange Constitution & Rules.
The Committee has reviewed and discussed with the Company's management and
Ernst & Young LLP ("E&Y"), the Company's independent auditors, the audited
financial statements of the Company contained in the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 2003. The Committee has also
discussed with the Company's independent auditors the matters required to be
discussed pursuant to SAS 61 (Codification of Statements on Auditing Standards,
Communication with Audit Committees), and SAS 90.
The Committee has discussed the written disclosures and the letter from E&Y
required by Independence Standards Board Standard No. 1 (titled, "Independence
Discussions with Audit Committee"), and has discussed with E&Y its independence
in connection with its audit of the Company's most recent financial statements.
The Committee has also considered whether the provision of non-audit services to
the Company by E&Y is compatible with maintaining that firm's independence.
Based on the review and discussions referred to above, the Committee
approved, ratified and confirmed the inclusion of the audited financial
statements in the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2003.
The information in the foregoing four paragraphs shall not be deemed to be
soliciting material, or be filed with the Securities and Exchange Commission or
subject to Regulation 14A or 14C under the Exchange Act or to liabilities under
Section 18 of the Exchange Act nor shall it be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the Company specifically incorporates these paragraphs
by reference.
Kirk K. Weaver
Charles W. Hall
Alan M. Rauch
6
PERFORMANCE GRAPH
The following graph compares the percentage change in the Company's
cumulative total shareholder return on the Common Stock with the total
cumulative return on the American Stock Exchange Composite Index ("ACI") and the
Steel & Iron Index per Microsoft Network ("SSI") for each fiscal year indicated.
The graph is based on the assumption that $100 is invested in the Common Stock
of the Company, the ACI and the SSI in March 1998 and that all dividends are
reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
(PERFORMANCE GRAPH)
1998 1999 2000 2001 2002 2003
------- ------- ------- ------- ------- -------
Friedman Industries, Incorporated................. 100.00 60.00 70.80 54.37 54.86 51.57
American Stock Exchange Composite Index........... 100.00 95.78 135.52 118.26 122.77 111.55
Steel & Iron Index per Microsoft Network.......... 100.00 65.17 72.32 49.29 63.83 40.64
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Commission or subject to
Regulations 14A or 14C under the Exchange Act or to the liabilities of Section
18 under such Act.
7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information concerning the
beneficial ownership of Common Stock by each director, nominee for director,
Named Executive Officer and officers and directors as a group and persons who
owned of record more than 5% of the Common Stock as of June 30, 2003:
AMOUNT AND NATURE PERCENTAGE
OF BENEFICIAL OF SHARES
NAME OWNERSHIP(a) OUTSTANDING
---- ----------------- -----------
Jack Friedman.............................................. 1,102,496 14.6%
P.O. Box 21147
Houston, Texas 77226
Harold Friedman............................................ 1,258,413 16.6%
P.O. Box 21147
Houston, Texas 77226
Dimensional Fund Advisors Inc.............................. 557,422(b) 7.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Charles W. Hall............................................ 6,148 *
Alan M. Rauch.............................................. 1,620 *
Hershel M. Rich............................................ 58,557(c) *
Kirk K. Weaver............................................. 6,591 *
Joe L. Williams............................................ 1,300 *
William E. Crow............................................ 163,991(d) 2.1%
Ben Harper................................................. 173,991(d) 2.3%
Thomas Thompson............................................ 148,161(c)(d) 2.0%
Officers and directors as a group (10 persons)............. 2,921,154(c)(d) 36.8%
------------
* Less than 1%.
(a) Based upon information obtained from the officers, directors, director
nominees and beneficial owners. Includes all shares beneficially owned
according to the definition of "beneficial ownership" in the rules
promulgated under the Exchange Act. Except as otherwise indicated, the
indicated person has sole voting and investment power with respect to the
shares. To the Company's knowledge, the only other record owner of Common
Stock having more than 5% of the voting power of such class of security is
Cede & Co. The Company is informed that Cede & Co. is a nominee name for
The Depository Trust Company, a stock clearing corporation. The shares of
Common Stock held by Cede & Co. are believed to be held for the accounts of
various brokerage firms, banks and other institutions, none of which, to
the Company's knowledge, owns beneficially more than 5% of the Common Stock
except as described above.
(b) The following information is based upon information contained in a Schedule
13G dated February 3, 2003, and otherwise received from the listed owner,
Dimensional Fund Advisors Inc. ("Dimensional"). Dimensional is deemed to
have beneficial ownership of 557,422 shares of the Company's Common Stock
as of December 31, 2002. Dimensional, an investment advisor registered
under Section 203 of the Investment Advisors Act of 1940, furnishes
investment advice to four investment companies registered under the
Investment Company Act of 1940, and serves as investment manager to certain
other commingled group trusts and separate accounts (collectively referred
to herein as the "Funds"). In its role as investment advisor or manager,
Dimensional possesses voting and/or investment power over the securities of
the Company that are owned by the Funds and may be deemed to be the
beneficial owner of the shares of the Company held by the Funds. All of the
shares of Common Stock described in the table are owned by the Funds, and
Dimensional disclaims beneficial ownership of such securities.
(c) Does not include 16,896 shares and 4,440 shares beneficially owned and
voted by the spouses of Messrs. Rich and Thompson, respectively, as to
which shares beneficial ownership is disclaimed.
(d) Includes 124,337 shares, 107,290 shares and 123,242 shares for Messrs.
Crow, Harper and Thompson, respectively, all of which are subject to
issuance upon the exercise of stock options within 60 days after June 30,
2003.
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RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
E&Y served as the Company's principal independent public accountants for
fiscal year 2003 and the audit committee has authorized the Company to engage
E&Y to provide the services set forth below during fiscal 2004. The audit
committee typically engages the principal accountant for the audit of the
Company's financial statements during the latter part of the fiscal year to
which such financial statements relate and, therefore, has not yet engaged a
principal public accountant for such services at this time. Representatives of
E&Y are expected to be present at the Annual Meeting, will have the opportunity
to make a statement if they so desire and will be available to respond to
appropriate questions.
During fiscal year 2003 and 2002, the Company retained E&Y to provide
services and paid fees therefor as indicated in the following table:
FISCAL YEAR
-----------------
2003 2002
------- -------
Audit Fees.................................................. $65,500 $62,500
Audit Related Fees(1)....................................... 8,300 22,000
Tax Fees(2)................................................. 16,050 16,780
All Other Fees(3)........................................... 12,140 950
---------------
(1) Includes primarily fees for quarterly reviews regarding quarterly reports on
Form 10-Q as filed with the Commission.
(2) Includes primarily fees for the preparation of the Company's federal and
state tax returns and related tax estimates.
(3) For 2003, includes fees for professional services rendered with regard to
LIFO inventory valuation. For 2002, includes fees for professional services
rendered with regard to a Form 5500 related to the Company's medical plan.
The audit committee has considered whether non-audit services provided by
E&Y to the Company are compatible with maintaining E&Y's independence.
The audit committee has implemented pre-approval policies and procedures
for all audit and non-audit services to be provided by the Company's independent
public accountants to the Company. The audit committee has authorized the
Company, without any further approval on the part of the audit committee, to
engage E&Y to provide the following permissible non-audit services to the
Company during the fiscal year ended March 31, 2004:
(a) Preparation of quarterly estimates of the Company's federal income
tax and quarterly review of the Company's interim financial statements and
quarterly reports on Form 10-Q, provided that the cost of such services not
exceed $20,000 per year.
(b) Preparation of the Company's federal income tax return and state
franchise tax returns, provided that the cost of such services not exceed
$20,000 per year.
(c) Such other occasional inquiries and consultation with respect to
(i) appropriate or recommended accounting, (ii) SEC filings and other
matters related generally to the Company's financial statements and
accounting records and (iii) tax services, as may be necessary from
time-to-time, provided that the cost of such services not exceed $10,000
per year.
Thereafter, with regard to (i) all permissible non-audit services not included
in the preceding sentence and (ii) those services described in the preceding
sentence which exceed the annual threshold amounts stated therein, to be
provided to the Company during the fiscal year ended March 31, 2004, the audit
committee has designated the Chairman of the audit committee to approve in
advance the provision by the independent public accountants of such services.
The audit committee was not required to pre-approve services in 2002 as the new
requirements were not effective until May 6, 2003.
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PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be included in the Company's proxy
statement and form of proxy for the 2004 Annual Meeting of Shareholders must be
received at the Company's principal executive offices at 4001 Homestead Road,
Houston, Texas 77028 on or before March 30, 2004.
GENERAL
Management knows of no other matter to be presented at the meeting. If any
other matter should be presented upon which a vote may properly be taken, it is
intended that shares represented by the proxies in the accompanying form will be
voted with respect thereto in accordance with the best judgment of the person or
persons voting such shares.
The cost of solicitation of proxies in the accompanying form will be paid
by the Company. In addition to solicitation by use of the mails, certain
directors, officers and regular employees of the Company may solicit the return
of proxies by telephone, facsimile or personal interviews.
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FRIEDMAN INDUSTRIES, INCORPORATED
PROXY - ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 10, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Friedman Industries, Incorporated (the
"Company") hereby appoints Jack Friedman and Harold Friedman, and each of them,
proxies of the undersigned, with full power of substitution, to vote at the
Annual Meeting of Shareholders of the Company to be held in the offices of
Fulbright & Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston, Texas, on
September 10, 2003, at 11:00 a.m. (local time), and at any adjournment thereof,
the number of votes which the undersigned would be entitled to cast if
personally present.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
ANNUAL MEETING OF SHAREHOLDERS
FRIEDMAN INDUSTRIES, INCORPORATED
SEPTEMBER 10, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
-- Please detach along perforated line and mail in the envelope provided --
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
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1. Election of Directors 2. In their discretion the proxies are
authorized to vote on such other matters as
NOMINEES: may properly come before the meeting or any
[ ] FOR ALL NOMINEES ( ) J. Friedman adjournment thereof.
( ) H. Friedman
[ ] WITHHOLD AUTHORITY ( ) W. Crow FOR ADDITIONAL DISCLOSURE, PLEASE SEE THE NOTICE
FOR ALL NOMINEES ( ) C. Hall OF ANNUAL MEETING OF SHAREHOLDERS AND THE PROXY
( ) A. Rauch STATEMENT DATED JULY 28, 2003 RELATING TO SUCH
[ ] FOR ALL EXCEPT ( ) H. Rich MEETING, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED.
(See instructions below) ( ) K. Weaver
( ) J. Williams UNLESS OTHERWISE DIRECTED BY THE SHAREHOLDER, THIS
PROXY WILL BE VOTED FOR THE DIRECTOR NOMINEES
LISTED ABOVE. ANY PROXY OR PROXIES HERETOFORE
GIVEN BY THE UNDERSIGNED ARE HEREBY REVOKED.
PLEASE SIGN BELOW AND RETURN IN THE ENCLOSED ENVELOPE.
INSTRUCTIONS: To withhold authority to vote for
any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the
circle next to each nominee you wish
to withhold, as shown here (X)
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To change the address on your account, please
check the box at right and indicate your new
address in the address space above. Please note
that changes to the registered name(s) on the
account may not be submitted via this method. [ ]
Signature of Stockholder Date:
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Signature of Stockholder Date:
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Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.