SEC Filings

RELIANCE STEEL & ALUMINUM CO filed this Form PRE 14A on 04/06/2001
Entire Document
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     The estimated present value of annual benefits payable by the SERP, net of
amounts received under other Company sponsored retirement plans, at the normal
retirement age of 65 for each of the executive officers named above is as

                                                         ESTIMATED ANNUAL BENEFITS
                         NAME                             PAYABLE UPON RETIREMENT
                         ----                            -------------------------
<S>                                                      <C>
David H. Hannah........................................          $284,388
Gregg J. Mollins.......................................          $219,600
Karla R. McDowell......................................          $ 94,764
James P. MacBeth.......................................          $106,860
William K. Sales, Jr. .................................          $117,228

     The Company has maintained a Key-Man Incentive Plan for division managers
and officers since 1965, with subsequent amendments. The Key-Man Incentive Plan
was most recently modified in January 1999, to reflect the conditions of the
Company and the industry, and to allocate the incentive bonus pool in accordance
with the contributions of the eligible personnel. The initial incentive bonus
pool is calculated to equal 20% of the amount by which the Company's net income
for that year exceeds the rate of return on a one-year Treasury bill multiplied
by the Company's net worth at the beginning of the year. That pool is then
adjusted by additional calculations, including the accrual of the calculated
incentives. The Company's officers and division managers are eligible to
participate in the pool and are ranked according to certain criteria, and
awarded points based on their rankings. The incentive compensation bonus is
payable 75% in cash and 25% in the Company's Common Stock, except that the
Company's Corporate officers have the option of having this bonus paid 100% in
cash. Officers of the subsidiaries are not currently eligible to participate
under the Key-Man Incentive Plan. See "Compensation and Stock Option Committee
     The Company also maintains a bonus plan for division managers that allows
them to participate in pre-tax income from their respective divisions if that
income exceeds an amount equal to a 15% return on division assets. This bonus
plan has been in effect for many years. In 2000, all 24 division managers
received bonuses under this plan. In addition, most divisions have informal
incentive compensation arrangements for other employees, which are proposed by
division managers and approved from time to time by executive officers of the
Company. The Company's subsidiaries have separate incentive bonus plans
structured in the same manner to provide bonuses to certain of the officers and
managers of these subsidiaries, based upon the earnings of the respective
subsidiary. These subsidiary bonus plans are also reviewed periodically by the
executive officers of the Company.
     In 1974, the Company adopted an Employee Stock Ownership Plan ("ESOP") that
was approved by the Internal Revenue Service as a qualified plan and that allows
eligible employees to acquire stock in the Company. Bank of America was the
trustee of the ESOP until March 1, 1999, when Union Bank of California was
appointed the ESOP trustee. All non-union employees, including officers, are
eligible to participate in the ESOP as of January 1 after one and one-half years
of service with the Company. An employee who is eligible to participate is fully
vested in the shares of the Company's Common Stock allocated to his/her ESOP
account. Allocation is based on the participant's compensation each year,
including bonuses, as compared to the total compensation of all participants,
subject to the maximum amounts established by the Internal Revenue Service. Each
year, the Company contributes to the ESOP an amount determined by the Board of
Directors, but no less than that amount necessary to cover the obligations of
the ESOP, including any trustee's fees. The Company's cash contributions were
$800,000 in each of 2000, 1999 and 1998. The cash contributions are then used to
purchase shares of the Company's Common Stock on the open market. The shares are
retained by the ESOP until a participant retires or otherwise terminates his/her
employment with the Company. Employees of the subsidiaries, except for RSAC
Management Corp., are not eligible to participate under the Company's ESOP.