Third
Quarter
2007
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended
September
29, 2007
Commission
file number
1-4119
NUCOR
CORPORATION
|
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
|
13-1860817
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(I.R.S.
Employer
Identification
No.)
|
1915
Rexford Road, Charlotte, North Carolina
|
|
28211
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
(704)
366-7000
|
(Registrant's
telephone number, including area
code)
|
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 (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for
the past 90 days.
Yes
x
No
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
x
Accelerated
filer
o
Non-accelerated
filer
o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes
o
No
x
287,926,784
shares of common stock were outstanding at September 29,
2007.
Nucor
Corporation
Form
10-Q
September
29, 2007
INDEX
|
|
|
Page
|
Part
I
|
Financial
Information
|
|
|
|
|
|
|
Item
1
|
Financial
Statements
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Earnings - Nine Months (39 Weeks) and
Three
Months (13 Weeks) Ended September 29, 2007 and September 30,
2006
|
3
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets - September 29, 2007 and December 31,
2006
|
4
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows - Nine Months (39 Weeks) Ended
September 29, 2007 and September 30, 2006
|
5
|
|
|
|
|
|
|
Notes
to Condensed Consolidated Financial Statements
|
6
|
|
|
|
|
|
Item
2
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
16
|
|
|
|
|
|
Item
3
|
Quantitative
and Qualitative Disclosures About Market Risk
|
20
|
|
|
|
|
|
Item
4
|
Controls
and Procedures
|
20
|
|
|
|
|
Part
II
|
Other
Information
|
|
|
|
|
|
|
Item
1A
|
Risk
Factors
|
21
|
|
|
|
|
|
Item
2
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
21
|
|
|
|
|
|
Item
6
|
Exhibits
|
22
|
|
|
|
|
Signatures
|
22
|
|
|
|
|
List
of Exhibits to Form 10-Q
|
23
|
PART
I. FINANCIAL INFORMATION
Item
1. Financial Statements
Nucor
Corporation Condensed Consolidated Statements of Earnings
(Unaudited)
(In
thousands, except per share amounts)
|
|
Nine Months (39 Weeks) Ended
|
|
Three Months (13 Weeks) Ended
|
|
|
|
Sept.
29, 2007
|
|
Sept.
30, 2006
As
Adjusted
(Note
1)
|
|
Sept.
29, 2007
|
|
Sept.
30, 2006
As
Adjusted
(Note
1)
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
12,196,216
|
|
$
|
11,282,680
|
|
$
|
4,259,221
|
|
$
|
3,931,233
|
|
Costs,
expenses and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of products sold
|
|
|
9,844,763
|
|
|
8,628,748
|
|
|
3,449,260
|
|
|
2,920,782
|
|
Marketing,
administrative and other expenses
|
|
|
430,605
|
|
|
450,266
|
|
|
145,470
|
|
|
160,464
|
|
Interest
(income) expense, net
|
|
|
(607
|
)
|
|
(25,753
|
)
|
|
3,576
|
|
|
(10,433
|
)
|
Minority
interests
|
|
|
214,653
|
|
|
147,568
|
|
|
76,494
|
|
|
58,660
|
|
|
|
|
10,489,414
|
|
|
9,200,829
|
|
|
3,674,800
|
|
|
3,129,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
before income taxes
|
|
|
1,706,802
|
|
|
2,081,851
|
|
|
584,421
|
|
|
801,760
|
|
Provision
for income taxes
|
|
|
599,701
|
|
|
730,173
|
|
|
203,199
|
|
|
280,124
|
|
Net
earnings
|
|
$
|
1,107,101
|
|
$
|
1,351,678
|
|
$
|
381,222
|
|
$
|
521,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
3.71
|
|
$
|
4.38
|
|
$
|
1.30
|
|
$
|
1.71
|
|
Diluted
|
|
$
|
3.68
|
|
$
|
4.34
|
|
$
|
1.29
|
|
$
|
1.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
298,468
|
|
|
308,569
|
|
|
293,096
|
|
|
304,835
|
|
Diluted
|
|
|
300,600
|
|
|
311,420
|
|
|
295,019
|
|
|
307,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per share
|
|
$
|
1.83
|
|
$
|
1.55
|
|
$
|
0.61
|
|
$
|
0.60
|
|
See
notes to condensed consolidated financial statements.
Nucor
Corporation Condensed Consolidated Balance Sheets
(Unaudited)
(In
thousands)
|
|
Sept.
29, 2007
|
|
Dec.
31, 2006
As
Adjusted
(Note
1)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
272,256
|
|
$
|
785,651
|
|
Short-term
investments
|
|
|
-
|
|
|
1,410,633
|
|
Accounts
receivable, net
|
|
|
1,629,682
|
|
|
1,067,322
|
|
Inventories
|
|
|
1,604,580
|
|
|
1,141,194
|
|
Other
current assets
|
|
|
256,905
|
|
|
278,265
|
|
Total
current assets
|
|
|
3,763,423
|
|
|
4,683,065
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
3,101,981
|
|
|
2,856,415
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
812,220
|
|
|
143,265
|
|
|
|
|
|
|
|
|
|
Other
intangible assets, net
|
|
|
471,944
|
|
|
5,015
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
|
150,675
|
|
|
205,258
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
8,300,243
|
|
$
|
7,893,018
|
|
|
|
|
|
|
|
|
|
Liabilities
and stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$
|
22,265
|
|
$
|
-
|
|
Accounts
payable
|
|
|
784,329
|
|
|
516,640
|
|
Salaries,
wages and related accruals
|
|
|
419,096
|
|
|
455,051
|
|
Accrued
expenses and other current liabilities
|
|
|
442,218
|
|
|
450,226
|
|
Total
current liabilities
|
|
|
1,667,908
|
|
|
1,421,917
|
|
|
|
|
|
|
|
|
|
Long-term
debt due after one year
|
|
|
922,300
|
|
|
922,300
|
|
|
|
|
|
|
|
|
|
Deferred
credits and other liabilities
|
|
|
591,173
|
|
|
448,084
|
|
|
|
|
|
|
|
|
|
Minority
interests
|
|
|
230,278
|
|
|
243,366
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common
stock
|
|
|
149,277
|
|
|
149,006
|
|
Additional
paid-in capital
|
|
|
244,249
|
|
|
195,543
|
|
Retained
earnings
|
|
|
6,433,374
|
|
|
5,840,067
|
|
Accumulated
other comprehensive income
|
|
|
139,599
|
|
|
4,470
|
|
|
|
|
6,966,499
|
|
|
6,189,086
|
|
|
|
|
|
|
|
|
|
Treasury
stock
|
|
|
(2,077,915
|
)
|
|
(1,331,735
|
)
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
|
4,888,584
|
|
|
4,857,351
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
8,300,243
|
|
$
|
7,893,018
|
|
See
notes to condensed consolidated financial statements.
Nucor
Corporation Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In
thousands)
|
|
Nine Months (39 Weeks) Ended
|
|
|
|
Sept.
29, 2007
|
|
Sept.
30, 2006
As
Adjusted
(Note
1)
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
1,107,101
|
|
$
|
1,351,678
|
|
Adjustments:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
298,280
|
|
|
273,678
|
|
Amortization
|
|
|
15,437
|
|
|
998
|
|
Stock-based
compensation
|
|
|
33,875
|
|
|
30,200
|
|
Deferred
income taxes
|
|
|
(91,191
|
)
|
|
(43,038
|
)
|
Minority
interests
|
|
|
214,651
|
|
|
147,554
|
|
Settlement
of natural gas hedges
|
|
|
(13,207
|
)
|
|
(3,668
|
)
|
Changes
in assets and liabilities (exclusive of
acquisitions):
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(239,401
|
)
|
|
(214,474
|
)
|
Inventories
|
|
|
(128,436
|
)
|
|
(181,482
|
)
|
Accounts
payable
|
|
|
167,549
|
|
|
157,668
|
|
Federal
income taxes
|
|
|
71,598
|
|
|
106,955
|
|
Salaries,
wages and related accruals
|
|
|
(54,430
|
)
|
|
57,869
|
|
Other
|
|
|
8,857
|
|
|
6,484
|
|
|
|
|
|
|
|
|
|
Cash
provided by operating activities
|
|
|
1,390,683
|
|
|
1,690,422
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(330,586
|
)
|
|
(240,175
|
)
|
Sale
of interest in affiliates
|
|
|
29,500
|
|
|
-
|
|
Investment
in affiliates
|
|
|
(27,913
|
)
|
|
(34,241
|
)
|
Disposition
of plant and equipment
|
|
|
804
|
|
|
1,978
|
|
Acquisitions
(net of cash acquired)
|
|
|
(1,410,677
|
)
|
|
(43,879
|
)
|
Purchases
of short-term investments
|
|
|
(276,945
|
)
|
|
(803,253
|
)
|
Proceeds
from the sale of short-term investments
|
|
|
1,687,578
|
|
|
271,675
|
|
Proceeds
from currency derivative contracts
|
|
|
517,241
|
|
|
-
|
|
Settlement
of currency derivative contracts
|
|
|
(511,394
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
Cash
used in investing activities
|
|
|
(322,392
|
)
|
|
(847,895
|
)
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Net
change in short-term debt
|
|
|
(66,461
|
)
|
|
-
|
|
Repayment
of long-term debt
|
|
|
-
|
|
|
(1,250
|
)
|
Issuance
of common stock
|
|
|
10,430
|
|
|
46,373
|
|
Excess
tax benefits from stock-based compensation
|
|
|
9,500
|
|
|
12,200
|
|
Distributions
to minority interests
|
|
|
(231,520
|
)
|
|
(151,411
|
)
|
Cash
dividends
|
|
|
(549,606
|
)
|
|
(395,793
|
)
|
Acquisition
of treasury stock
|
|
|
(754,029
|
)
|
|
(500,199
|
)
|
|
|
|
|
|
|
|
|
Cash
used in financing activities
|
|
|
(1,581,686
|
)
|
|
(990,080
|
)
|
|
|
|
|
|
|
|
|
Decrease
in cash and cash equivalents
|
|
|
(513,395
|
)
|
|
(147,553
|
)
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - beginning of year
|
|
|
785,651
|
|
|
980,150
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - end of nine months
|
|
$
|
272,256
|
|
$
|
832,597
|
|
See
notes to condensed consolidated financial statements.
Nucor
Corporation
–
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1.
|
BASIS
OF INTERIM PRESENTATION: The information furnished in Item I reflects
all
adjustments which are, in the opinion of management, necessary to
a fair
statement of the results for the interim periods and are of a normal
and
recurring nature. The information furnished has not been audited;
however,
the December 31, 2006 condensed consolidated balance sheet data was
derived from audited financial statements but does not include all
disclosures required by accounting principles generally accepted
in the
United States of America. The condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements
and the notes thereto included in Nucor’s annual report for the fiscal
year ended December 31, 2006. Certain amounts for the prior year
have been
reclassified to conform to the 2007
presentation.
|
Effective
January 1, 2007, Nucor adopted the Financial Accounting Standards Board (“FASB”)
Staff Position AUG AIR-1, “Accounting for Planned Major Maintenance Activities.”
This position statement eliminates Nucor’s previous policy to accrue in advance
for planned major maintenance activities. In accordance with this position
statement, Nucor now uses the deferral method of accounting for planned
maintenance activities and has adjusted prior period financial statements to
retrospectively apply this position statement. The effects of this adjustment
on
our 2006 financial statements are as follows (in thousands, except per share
amounts):
|
|
Consolidated
Balance Sheet
|
|
|
|
As
of December 31, 2006
|
|
|
|
As
Previously
Reported
|
|
Adjustments
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
Other
current assets
|
|
$
|
270,236
|
|
$
|
8,029
|
|
$
|
278,265
|
|
Accrued
expenses and other current liabilities
|
|
|
478,337
|
|
|
(28,111
|
)
|
|
450,226
|
|
Minority
interests
|
|
|
238,588
|
|
|
4,778
|
|
|
243,366
|
|
Retained
earnings
|
|
|
5,808,705
|
|
|
31,362
|
|
|
5,840,067
|
|
|
|
Consolidated Statements of Earnings
|
|
|
|
Nine
Months (39 Weeks)
Ended
September 30, 2006
|
|
Three
Months (13 Weeks)
Ended
September 30, 2006
|
|
|
|
As
Previously
Reported
|
|
Adjustments
|
|
As
Adjusted
|
|
As
Previously
Reported
|
|
Adjustments
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of products sold
|
|
$
|
8,631,598
|
|
$
|
(2,850
|
)
|
$
|
8,628,748
|
|
$
|
2,926,581
|
|
$
|
(5,799
|
)
|
$
|
2,920,782
|
|
Minority
interests
|
|
|
148,036
|
|
|
(468
|
)
|
|
147,568
|
|
|
59,104
|
|
|
(444
|
)
|
|
58,660
|
|
Earnings
before income taxes
|
|
|
2,078,533
|
|
|
3,318
|
|
|
2,081,851
|
|
|
795,517
|
|
|
6,243
|
|
|
801,760
|
|
Provision
for income taxes
|
|
|
729,011
|
|
|
1,162
|
|
|
730,173
|
|
|
277,939
|
|
|
2,185
|
|
|
280,124
|
|
Net
earnings
|
|
|
1,349,522
|
|
|
2,156
|
|
|
1,351,678
|
|
|
517,578
|
|
|
4,058
|
|
|
521,636
|
|
Net
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
4.37
|
|
|
0.01
|
|
|
4.38
|
|
|
1.70
|
|
|
0.01
|
|
|
1.71
|
|
Diluted
|
|
|
4.33
|
|
|
0.01
|
|
|
4.34
|
|
|
1.68
|
|
|
0.01
|
|
|
1.70
|
|
The
effect of the adjustment on the consolidated statement of cash flows was not
significant.
Also
effective January 1, 2007, Nucor adopted FASB Interpretation No. 48 (“FIN 48”),
“Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement
No. 109,” which clarifies the accounting of uncertainty in income taxes
recognized in financial statements in accordance with FASB Statement No. 109,
“Accounting for Income Taxes” (see Note 14). FIN 48 prescribes a recognition
threshold and measurement attribute for the financial statement recognition
and
measurement of a tax position taken or expected to be taken in a tax
return.
Nucor
Corporation
–
Notes to Condensed Consolidated Financial Statements
(Unaudited)
,
continued
2.
|
ACQUISITIONS:
Since 2004, Nucor has owned a one-half interest in the rebar fabricator
Harris Steel Inc., the remaining one-half interest of which was owned
by
Harris Steel Group Inc. (“Harris Steel”).
In
March 2007,
a
wholly owned subsidiary of Nucor acquired all the issued and outstanding
shares of Harris Steel for a cash purchase price of Cdn$46.25 per
Harris
Steel share.
The
purchase price includes approximately $1.06 billion paid in cash
and $68.4
million of short-term debt assumed related to the net assets acquired.
Nucor also consolidated an additional $18.2 million of short-term
debt
related to its previous 50% ownership in Harris Steel Inc. As a result
of
the acquisition, Nucor has consolidated Harris Steel Inc. which was
previously accounted for under the equity method. Harris Steel, which
now
operates as a subsidiary of Nucor, manufactures industrial products
principally in the U.S. and Canada. Harris Steel also participates
in
steel trading on a worldwide basis and distributes reinforcing steel
and
related products to U.S. customers.
|
We
have obtained preliminary independent appraisals for the purpose of allocating
the purchase price to the individual assets acquired and liabilities assumed.
These valuations are subject to adjustment as additional information is
obtained; however, these adjustments are not expected to be material. The
following table summarizes the estimated fair values of the assets acquired
and
liabilities assumed of Harris Steel as of the date of acquisition (in
thousands):
Current
assets
|
|
$
|
460,037
|
|
Property,
plant and equipment
|
|
|
122,187
|
|
Goodwill
|
|
|
478,337
|
|
Other
intangible assets
|
|
|
305,217
|
|
Other
assets
|
|
|
565
|
|
Total
assets acquired
|
|
|
1,366,343
|
|
|
|
|
|
|
Short-term
debt
|
|
|
(68,365
|
)
|
Other
current liabilities
|
|
|
(108,906
|
)
|
Deferred
credits and other liabilities
|
|
|
(126,098
|
)
|
Minority
interests
|
|
|
(3,522
|
)
|
Total
liabilities assumed
|
|
|
(306,891
|
)
|
|
|
|
|
|
Net
assets acquired
|
|
$
|
1,059,452
|
|
The
preliminary purchase price allocation to the identifiable intangible assets
is
as follows (in thousands, except years):
|
|
|
|
Weighted
Average
Life
|
|
Customer
relationships
|
|
$
|
271,462
|
|
|
22
years
|
|
Trade
names
|
|
|
33,755
|
|
|
20
years
|
|
|
|
$
|
305,217
|
|
|
22
years
|
|
The
majority of the goodwill has been preliminarily allocated to the steel products
segment (see Note 6).
Nucor
Corporation – Notes to Condensed Consolidated Financial Statements
(Unaudited)
,
continued
The
results of Harris Steel have been included in the consolidated financial
statements from the date of acquisition. Unaudited pro forma operating results
for Nucor, assuming the acquisition of Harris Steel occurred at the beginning
of
each period are as follows (in thousands, except per share
data):
|
|
Nine
Months (39 Weeks) Ended
|
|
Three
Months (13 Weeks) Ended
|
|
|
|
September 29, 2007
|
|
September 30, 2006
|
|
September 29, 2007
|
|
September 30, 2006
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
12,372,841
|
|
$
|
12,143,084
|
|
$
|
4,259,221
|
|
$
|
4,248,248
|
|
Net
earnings
|
|
|
1,115,751
|
|
|
1,399,443
|
|
|
381,222
|
|
|
551,616
|
|
Net
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
3.74
|
|
$
|
4.54
|
|
$
|
1.30
|
|
$
|
1.81
|
|
Diluted
|
|
$
|
3.71
|
|
$
|
4.49
|
|
$
|
1.29
|
|
$
|
1.79
|
|
In
June 2007, Harris Steel Inc. purchased the stock of South Pacific Steel Corp.,
a
rebar fabricator and installer, for a cash purchase price of approximately
$24.9
million. In addition, in August 2007, Harris Steel acquired Consolidated Rebar,
Inc. for a cash purchase price of approximately $23.3 million. Consolidated
has
two rebar fabrication facilities in Arizona.
In
August 2007, Nucor purchased substantially all the assets of LMP Steel &
Wire Company (“LMP”) for a cash purchase price of approximately $27.2 million.
Located in Maryville, Missouri, LMP is a producer of cold finished bar.
Also
in August 2007, a wholly owned subsidiary of Nucor merged with Magnatrax
Corporation ("Magnatrax"), a leading provider of custom-engineered metal
building systems with seven fabricating plants located across the United States.
The cash purchase price of $275.2 million includes approximately $158.7 million
of goodwill that has been allocated to the steel products segment. The cash
purchase price also includes $116.2 million of identifiable intangibles,
primarily related to customer relationships which are being amortized over
21
years.
In
May 2006, Nucor’s wholly owned subsidiary, Nucor Steel Connecticut, Inc.,
purchased substantially all of the assets of Connecticut Steel Corporation
for a
cash purchase price of approximately $43.9 million. This facility produces
wire
rod, rebar, wire mesh and structural mesh.
3.
|
SHORT-TERM
INVESTMENTS: As of December 31, 2006, short-term investments consisted
entirely of variable rate demand notes (“VRDN’s”), which are variable rate
bonds tied to short-term interest rates with maturities on the face
of the
securities in excess of 90 days. All VRDN’s were liquidated during the
third quarter of 2007. All of the VRDN’s in which Nucor invests are
secured by a direct-pay letter of credit issued by a high-credit
quality
financial institution. Nucor is able to receive the principal invested
and
interest accrued thereon no later than seven days after notifying
the
financial institution that Nucor has elected to tender the VRDN’s. Since
VRDN’s trade at par value, no realized or unrealized gains or losses were
incurred.
|
Nucor
Corporation – Notes to Condensed Consolidated Financial Statements (Unaudited),
continued
4.
|
INVENTORIES:
Inventories consist of approximately 43% raw materials and supplies
and
57% finished and semi-finished products at September 29, 2007 (48%
and 52%
respectively, at December 31, 2006). Nucor’s manufacturing process
consists of a continuous, vertically integrated process from which
products are sold to customers at various stages. Since most steel
products can be classified as either finished or semi-finished products,
these two categories of inventory are combined.
|
Inventories
valued using the last-in, first-out (LIFO) method of accounting represent
approximately 51% of total inventories as of September 29, 2007 (63% of total
inventories as of December 31, 2006). If the first-in, first-out (FIFO) method
of accounting had been used, inventories would have been $489.2
million
higher
at September 29, 2007 ($387.2 million higher at December 31, 2006).
5.
|
PROPERTY,
PLANT AND EQUIPMENT:
Property, plant and equipment is recorded net of accumulated depreciation
of $3.83 billion at September 29, 2007 ($3.54 billion at December
31,
2006).
|
6.
|
GOODWILL
AND OTHER INTANGIBLE ASSETS: The change in the net carrying amount
of
goodwill for the nine months ended September 29, 2007 by segment
is as
follows (in thousands):
|
|
|
Steel
Mills
|
|
Steel Products
|
|
Total
|
|
Balance
at December 31, 2006
|
|
$
|
2,007
|
|
$
|
141,258
|
|
$
|
143,265
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
-
|
|
|
639,133
|
|
|
639,133
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
price adjustments
|
|
|
-
|
|
|
(15,740
|
)
|
|
(15,740
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Translation
|
|
|
-
|
|
|
45,562
|
|
|
45,562
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 29, 2007
|
|
$
|
2,007
|
|
$
|
810,213
|
|
$
|
812,220
|
|
Goodwill
resulting from the acquisition of Harris Steel and Magnatrax accounts for almost
all of the increase in goodwill in the first nine months of 2007 and is
presented based upon Nucor’s preliminary purchase price allocation. The majority
of goodwill is not tax deductible.
Intangible
assets with estimated lives of five to 22 years are amortized on a straight-line
or accelerated basis and are comprised of the following (in
thousands):
|
|
September
29, 2007
|
|
December
31, 2006
|
|
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Customer
relationships
|
|
$
|
414,320
|
|
$
|
12,658
|
|
$
|
-
|
|
$
|
-
|
|
Trademarks
and trade names
|
|
|
52,686
|
|
|
1,051
|
|
|
|
|
|
|
|
Other
|
|
|
24,102
|
|
|
5,455
|
|
|
8,742
|
|
|
3,727
|
|
|
|
$
|
491,108
|
|
$
|
19,164
|
|
$
|
8,742
|
|
$
|
3,727
|
|
Intangible
asset amortization expense was $15.4 million and $1.0 million in the first
nine
months of 2007 and 2006, respectively, and was $8.3 million and $0.3 million
in
the third quarter of 2007 and 2006, respectively. Annual amortization expense
is
estimated to be $23.6 million in 2007; $40.8 million in 2008; $38.2 million
in
2009; $35.8 million in 2010; and $32.8 million in
2011.
Nucor
Corporation – Notes to Condensed Consolidated Financial Statements (Unaudited),
continued
7.
|
CURRENT
LIABILITIES: Drafts payable and book overdrafts, included in accounts
payable in the balance sheet, were $85.3 million at September 29,
2007
($74.7 million at December 31,
2006).
|
Dividends
payable, included in accrued expenses and other current liabilities in the
balance sheet, was $176.5 million at September 29, 2007 ($181.2 million at
December 31, 2006).
8.
|
DEBT
AND OTHER FINANCING ARRANGEMENTS: In addition to Nucor’s $700 million
five-year unsecured revolving credit facility maturing in June 2010,
Harris Steel has credit facilities with a Canadian bank totaling
approximately $55.0 million. No borrowings were outstanding at September
29, 2007 under either facility.
|
In
addition, the business of Novosteel, of which Harris Steel owns 75%, is financed
by trade credit arrangements totaling approximately $197.5 million with a number
of Swiss-based banking institutions. These arrangements, principally letters
of
credit under trade finance facilities, are non-recourse to Nucor and its other
subsidiaries. As of September 29, 2007, there were outstanding borrowings of
$22.3 million and outstanding letters of credit of $15.2 million under the
Swiss
trade credit arrangements for commitments to purchase inventories, which had
not
yet been received.
9.
|
STOCK-BASED
COMPENSATION:
Stock
Options
-
Nucor’s stock option plans provide that common stock options may be
granted to key employees, officers and non-employee directors with
exercise prices at 100% of the market price on the date of the grant.
Outstanding options are exercisable six months after the grant date
and
have a term of seven years. Nucor did not grant any options during
2006 or
during the nine months ended September 29, 2007 and does not expect
to
grant options to its employees, officers or non-employee directors
in
future periods. A summary of activity under Nucor’s stock option plans for
the nine months ended September 29, 2007 is as follows (in thousands,
except year and per share
amounts):
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaing
Contractual Life
|
|
Aggregate
Intrinsic
Value
|
|
Number
of shares under option:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at beginning of year
|
|
|
2,461
|
|
$
|
20.21
|
|
|
|
|
|
|
|
Exercised
|
|
|
(547
|
)
|
|
19.28
|
|
|
|
|
$
|
24,556
|
|
Canceled
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
Outstanding
at September 29, 2007
|
|
|
1,914
|
|
$
|
20.47
|
|
|
3.5 years
|
|
$
|
74,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
exercisable at September 29, 2007
|
|
|
1,914
|
|
$
|
20.47
|
|
|
3.5 years
|
|
$
|
74,656
|
|
As
of March 1, 2006 all outstanding options were vested; therefore, no compensation
expense related to stock options was recorded in the first nine months of 2007
($2.5 million in the first nine months of 2006 and none in the third quarter
of
2006). The amount of cash received from the exercise of stock options totaled
$10.4 million and $0.5 million in the first nine months and third quarter of
2007, respectively.
Restricted
Stock Awards
- Nucor’s Senior Officers Annual Incentive Plan (the “AIP”) and Long-Term
Incentive Plan (the “LTIP”) authorize the award of shares of common stock to
officers subject to certain conditions and restrictions. The LTIP provides
for
the award of shares of restricted common stock at the end of each LTIP
performance measurement period at no cost to officers if certain financial
performance goals are met during the period. One-third of the LTIP restricted
stock award
vests
upon each of the first three anniversaries of the award date or, if earlier,
upon the officer’s attainment of age fifty-five while employed by Nucor.
Although participants are entitled to cash dividends and may vote such awarded
shares, the sale or transfer of such shares is limited during the restricted
period.
Nucor
Corporation
–
Notes to Condensed Consolidated Financial Statements (Unaudited),
continued
The
AIP provides for the payment of annual cash incentive awards. An AIP participant
may elect, however, to defer payment of up to one-half of an annual incentive
award. In such event, the deferred AIP award is converted into common stock
units and credited with a deferral incentive, in the form of additional common
stock units, equal to 25% of the number of common stock units attributable
to
the deferred AIP award. Common stock units attributable to deferred AIP awards
are fully vested. Common stock units credited as a deferral incentive vest
upon
the AIP participant’s attainment of age fifty-five while employed by Nucor.
Vested common stock units are paid to AIP participants in the form of shares
of
common stock following their termination of employment with
Nucor.
A
summary of Nucor’s restricted stock activity under the AIP and LTIP for the
first nine months of 2007 is as follows (shares in
thousands):
|
|
Shares
|
|
Weighted
Average
Price
|
|
Restricted
stock awards and units:
|
|
|
|
|
|
|
|
Unvested
at beginning of year
|
|
|
553
|
|
$
|
39.14
|
|
Granted
|
|
|
464
|
|
|
64.26
|
|
Vested
|
|
|
(488
|
)
|
|
49.24
|
|
Canceled
|
|
|
-
|
|
|
-
|
|
Unvested
at September 29, 2007
|
|
|
529
|
|
$
|
51.87
|
|
|
|
|
|
|
|
|
|
Shares
reserved for future grants
|
|
|
2,267
|
|
|
|
|
Compensation
expense for common stock and common stock units awarded under the AIP and LTIP
is recorded over the performance measurement and vesting periods based on the
anticipated number and market value of shares of common stock and common stock
units to be awarded. Compensation expense for anticipated awards based upon
Nucor’s financial performance, exclusive of amounts payable in cash, was $13.8
million and $16.0 million in the first nine months of 2007 and 2006,
respectively, and was $4.8 million and $4.2 million in the third quarter of
2007
and 2006, respectively. At September 29, 2007, unrecognized compensation expense
related to unvested restricted stock was $6.7 million, which is expected to
be
recognized over a weighted-average period of 1.8 years.
Restricted
Stock Units
:
In June 2006, Nucor granted restricted stock units (“RSU’s”) to key employees,
officers and non-employee directors for the first time. The RSU’s typically vest
and are converted to common stock in three equal installments on each of the
first three anniversaries of the grant date. A portion of the RSU’s awarded to
senior officers vest upon the officer’s retirement. Retirement, for purposes of
vesting in these units only, means termination of employment with approval
of
the Compensation and Executive Development Committee after satisfying age and
years of service requirements. RSU’s granted to non-employee directors are fully
vested on the grant date and are payable to the non-employee director in the
form of common stock after the termination of the director’s service on the
board of directors.
Nucor
Corporation - Notes to Condensed Consolidated Financial Statements (Unaudited),
continued
RSU’s
granted to employees who are eligible for retirement on the date of grant or
will become retirement-eligible prior to the end of the vesting term are
expensed over the period through which
the
employee will become retirement-eligible since the awards vest upon retirement
from the Company. Compensation expense for RSU’s granted to employees who are
not retirement-eligible is recognized on a straight-line basis over the vesting
period. Cash dividend equivalents are paid to participants each quarter.
Dividend equivalents paid on units expected to vest are recognized as a
reduction in retained earnings.
The
fair value of the RSU’s is determined based on the closing stock price of
Nucor’s common stock on the day before the grant. A summary of Nucor’s
restricted stock unit activity for the first
nine
months of 2007 is as follows (shares in thousands):
|
|
Shares
|
|
Weighted
Average
Price
|
|
Restricted
stock awards and units:
|
|
|
|
|
|
|
|
Unvested
at beginning of year
|
|
|
597
|
|
$
|
52.64
|
|
Granted
|
|
|
637
|
|
|
67.54
|
|
Vested
|
|
|
(294
|
)
|
|
58.89
|
|
Canceled
|
|
|
(5
|
)
|
|
57.38
|
|
Unvested
at September 29, 2007
|
|
|
935
|
|
$
|
60.79
|
|
|
|
|
|
|
|
|
|
Shares
reserved for future grants
|
|
|
17,682
|
|
|
|
|
Compensation
expense for RSU’s was
$20.1
million and $11.7 million in the first nine months of 2007 and 2006,
respectively, and was $5.7 million and $6.5 million in the third quarter of
2007
and 2006, respectively. As of September 29, 2007, there was $46.1 million of
total unrecognized compensation cost related to nonvested RSU’s, which is
expected to be recognized over a weighted-average period of 2.0 years.
10.
DERIVATIVES:
Nucor utilizes forward foreign exchange contracts to hedge cash flows associated
with certain assets and liabilities, firm commitments and anticipated
transactions. These instruments are measured at their fair value with any
foreign exchange gain/loss recorded in the same line as the underlying
transactions (cost of products sold or marketing, administrative and other
expenses) if they do not meet hedge accounting criteria. Derivatives meeting
hedging requirements are also measured at fair value; however, any unrealized
gains or losses are recorded as accumulated other comprehensive income until
final settlement, at which time the gains/losses are recorded in the same line
as the underlying transactions.
In
January 2007, the Company entered into forward foreign currency contracts in
order to mitigate the risk of currency fluctuation on the fixed purchase price
for the acquisition of Harris Steel, which closed in March 2007. These contracts
had a notional value of Cdn$600 million and settled in March 2007 resulting
in a
recognized gain of $5.8 million included in marketing, administrative and other
expenses in the first quarter.
11.
CONTINGENCIES:
Nucor is subject to environmental laws and regulations established by federal,
state and local authorities and makes provision for the estimated costs related
to compliance. Of the undiscounted total of $20.4 million of accrued
environmental costs at September 29, 2007 ($23.0 million at December 31, 2006),
$17.1 million was classified in accrued expenses and other current liabilities
($19.7 million at December 31, 2006) and $3.3 million was classified in deferred
credits and other liabilities ($3.3 million at December 31, 2006).
Nucor
Corporation – Notes to Condensed Consolidated Financial Statements
(Unaudited), continued
Other
contingent liabilities with respect to product warranties, legal proceedings
and
other matters arise in the normal course of business. In the opinion of
management, no such matters exist which would have a material effect on the
consolidated financial statements.
12.
EMPLOYEE BENEFIT PLAN: Nucor has a Profit Sharing and Retirement Savings Plan
for qualified employees. Nucor’s expense for these benefits was $175.9 million
and $213.0 million in the first nine months of 2007 and 2006, respectively,
and
was $58.9 million and $80.2 million in the third quarter of 2007 and 2006,
respectively.
13.
INTEREST (INCOME) EXPENSE: The components of net interest (income) expense
are
as follows (in thousands):
|
|
Nine Months (39 Weeks) Ended
|
|
Three Months (13 Weeks) Ended
|
|
|
|
Sept. 29, 2007
|
|
Sept. 30, 2006
|
|
Sept. 29, 2007
|
|
Sept. 30, 2006
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
(37,302
|
)
|
$
|
(55,849
|
)
|
$
|
(6,876
|
)
|
$
|
(20,599
|
)
|
Interest
expense
|
|
|
36,695
|
|
|
30,096
|
|
|
10,452
|
|
|
10,166
|
|
Interest
(income) expense, net
|
|
$
|
(607
|
)
|
$
|
(25,753
|
)
|
$
|
3,576
|
|
$
|
(10,433
|
)
|
14.
INCOME TAXES: Nucor adopted the provisions of FIN 48 on January 1, 2007. As
a
result of the implementation of FIN 48, Nucor recognized a $31.1 million
decrease to reserves for uncertain tax positions. At the adoption date, Nucor
had approximately $92.4 million of unrecognized tax benefits, of which $90.2
million would affect Nucor’s effective tax rate, if recognized. At September 29,
2007, Nucor had approximately $89.4 million of unrecognized tax benefits. It
is
expected that the amount of unrecognized tax benefits will change in the next
12
months. However, we do not expect the change to have a significant impact on
our
results of operations or financial position.
Nucor
recognizes interest and penalties accrued related to unrecognized tax benefits
as a component of income before taxes, which is consistent with the recognition
of these items in prior reporting periods. As of September 29, 2007, Nucor
had
approximately $33.3 million of accrued interest and penalties related to
uncertain tax positions.
The
Internal Revenue Service (“IRS”) is currently examining Nucor’s 2005 federal
income tax returns. Management believes that the Company has adequately provided
for any adjustments that may arise from this audit. Nucor has substantially
concluded U.S. federal income tax matters for years through 2004. The 2006
tax
year is open to examination by the IRS. The tax years 2003 through 2006 remain
open to examination by other major taxing jurisdictions to which Nucor is
subject.
15.
COMPREHENSIVE INCOME: Total comprehensive income is composed primarily of net
earnings, net unrealized gains and losses on cash flow hedges and foreign
currency translation adjustments. Total comprehensive income was $1.24 billion
and $1.31 billion in the first nine months of 2007 and 2006, respectively
($473.9 million and $503.5 million in the third quarter of 2007 and 2006,
respectively).
16.
|
SEGMENTS:
Nucor reports its results in the following segments: steel mills
and steel
products. The steel mills segment includes carbon and alloy steel
in
sheet, bars, structural and plate. The steel products segment includes
steel joists and joist girders, steel deck, fabricated concrete
reinforcing steel, cold finished steel, steel fasteners, metal building
systems, light gauge steel framing, steel grating and expanded metal,
and
wire and wire mesh. The segments are consistent with the way Nucor
manages
its business, which is primarily based upon the similarity of the
types of
products produced and sold by each
segment.
|
Nucor
Corporation – Notes to Condensed Consolidated Financial Statements (Unaudited),
continued
Interest
expense, minority interests, other income, profit sharing expense and changes
in
the LIFO reserve and environmental accruals are shown under
Corporate/eliminations/other. Net sales to external customers of Novosteel
S.A.,
a steel trading business of which Nucor owns 75%, are also included in
Corporate/eliminations/other. Corporate assets primarily include cash and
cash-equivalents, short-term investments, deferred income tax assets and
investments in affiliates.
|
|
Nine Months (39 Weeks) Ended
|
|
Three Months (13 Weeks) Ended
|
|
|
|
Sept. 29, 2007
|
|
Sept. 30, 2006
As Adjusted
|
|
Sept. 29, 2007
|
|
Sept. 30, 2006
As Adjusted
|
|
Net
sales to external customers:
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
$
|
9,953,526
|
|
$
|
10,006,937
|
|
$
|
3,344,116
|
|
$
|
3,469,443
|
|
Steel
products
|
|
|
2,086,286
|
|
|
1,275,743
|
|
|
853,495
|
|
|
461,790
|
|
Corporate/eliminations/other
|
|
|
156,404
|
|
|
-
|
|
|
61,610
|
|
|
-
|
|
|
|
$
|
12,196,216
|
|
$
|
11,282,680
|
|
$
|
4,259,221
|
|
$
|
3,931,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
$
|
922,343
|
|
$
|
781,303
|
|
$
|
346,577
|
|
$
|
272,833
|
|
Steel
products
|
|
|
251,336
|
|
|
16,358
|
|
|
97,380
|
|
|
5,664
|
|
Corporate/eliminations/other
|
|
|
(1,173,679
|
)
|
|
(797,661
|
)
|
|
(443,957
|
)
|
|
(278,497
|
)
|
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
$
|
2,147,304
|
|
$
|
2,477,264
|
|
$
|
744,510
|
|
$
|
911,838
|
|
Steel
products
|
|
|
207,599
|
|
|
142,473
|
|
|
86,872
|
|
|
53,003
|
|
Corporate/eliminations/other
|
|
|
(648,101
|
)
|
|
(537,886
|
)
|
|
(246,961
|
)
|
|
(163,081
|
)
|
|
|
$
|
1,706,802
|
|
$
|
2,081,851
|
|
$
|
584,421
|
|
$
|
801,760
|
|
|
|
Sept. 29, 2007
|
|
Dec. 31, 2006
As
Adjusted
|
|
Segment
assets:
|
|
|
|
|
|
Steel
mills
|
|
$
|
4,973,939
|
|
$
|
4,717,734
|
|
Steel
products
|
|
|
2,878,904
|
|
|
751,858
|
|
Corporate/eliminations/other
|
|
|
447,400
|
|
|
2,423,426
|
|
|
|
$
|
8,300,243
|
|
$
|
7,893,018
|
|
Geographic
information is as follows (in thousands):
|
|
Sept. 29, 2007
|
|
Dec. 31, 2006
|
|
Property,
plant and equipment, net
|
|
|
|
|
|
United
States
|
|
$
|
2,753,158
|
|
$
|
2,624,231
|
|
Other
|
|
|
348,823
|
|
|
232,184
|
|
|
|
$
|
3,101,981
|
|
$
|
2,856,415
|
|
Nucor
Corporation – Notes to Condensed Consolidated Financial Statements (Unaudited),
continued
17.
EARNINGS
PER SHARE: The computations of basic and diluted net earnings per share
are as
follows (in thousands, except per share
amounts):
|
|
Nine Months (39 Weeks) Ended
|
|
Three Months (13 Weeks) Ended
|
|
|
|
Sept. 29, 2007
|
|
Sept. 30, 2006
|
|
Sept. 29, 2007
|
|
Sept. 30, 2006
|
|
Basic
net earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
net earnings
|
|
$
|
1,107,101
|
|
$
|
1,351,678
|
|
$
|
381,222
|
|
$
|
521,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
shares outstanding
|
|
|
298,468
|
|
|
308,569
|
|
|
293,096
|
|
|
304,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
net earnings per share
|
|
$
|
3.71
|
|
$
|
4.38
|
|
$
|
1.30
|
|
$
|
1.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
net earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
net earnings
|
|
$
|
1,107,101
|
|
$
|
1,351,678
|
|
$
|
381,222
|
|
$
|
521,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
shares outstanding
|
|
|
298,468
|
|
|
308,569
|
|
|
293,096
|
|
|
304,835
|
|
Dilutive
effect of stock options and other
|
|
|
2,132
|
|
|
2,851
|
|
|
1,923
|
|
|
2,718
|
|
|
|
|
300,600
|
|
|
311,420
|
|
|
295,019
|
|
|
307,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
net earnings per share
|
|
$
|
3.68
|
|
$
|
4.34
|
|
$
|
1.29
|
|
$
|
1.70
|
|
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Certain
statements made in this quarterly report are forward-looking statements that
involve risks and uncertainties. These forward-looking statements reflect the
Company’s best judgment based on current information, and although we base these
statements on circumstances that we believe to be reasonable when made, there
can be no assurance that future events will not affect the accuracy of such
forward-looking information. As such, the forward-looking statements are not
guarantees of future performance, and actual results may vary materially from
the results and expectations discussed in this report. Factors that might cause
the Company’s actual results to differ materially from those anticipated in
forward-looking statements include, but are not limited to: (1) the sensitivity
of the results of our operations to prevailing steel prices and the changes
in
the supply and cost of raw materials, including scrap steel; (2) availability
and cost of electricity and natural gas; (3) market demand for steel products;
(4) competitive pressure on sales and pricing, including pressure from imports
and substitute materials; (5) uncertainties surrounding the global economy,
including excess world capacity for steel production and fluctuations in
international conversion rates; (6) U.S. and foreign trade policy affecting
steel imports or exports; (7) significant changes in government regulations
affecting environmental compliance; (8) the cyclical nature of the steel
industry; (9) capital investments and their impact on our performance; and
(10)
our safety performance.
The
following discussion should be read in conjunction with the unaudited condensed
consolidated financial statements included elsewhere in this report, as well
as
the audited consolidated financial statements and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” contained in Nucor’s
Annual Report on Form 10-K for the year ended December 31,
2006.
Overview
Nucor
and affiliates are manufacturers of steel products, with operating facilities
primarily in the U.S. and Canada.
Products
produced include: carbon and alloy steel - in bars, beams, sheet and plate;
steel joists and joist girders; steel deck; fabricated concrete reinforcing
steel; cold finished steel; steel fasteners; metal building systems; light
gauge
steel framing; steel grating and expanded metal; and wire and wire mesh. Nucor
is the nation's largest recycler.
In
March 2007, a wholly owned subsidiary of Nucor acquired all the issued and
outstanding shares of Harris Steel Group Inc. ("Harris Steel") for a cash
purchase price of approximately $1.06 billion and $68.4 million of assumed
short-term debt.
Harris
Steel has several business units: Harris Rebar, which is involved in the
fabrication and placing of concrete reinforcing steel and the design and
installation of concrete post-tensioning systems; Laurel Steel, which is a
manufacturer and distributor of wire and wire products, welded wire mesh and
cold finished bar; and Fisher & Ludlow, which is a manufacturer and
distributor of heavy industrial steel grating, aluminum grating and expanded
metal. These operations serve customers throughout Canada and the United States.
Harris Steel also participates in steel trading on a worldwide basis through
Novosteel (owned 75% by Harris Steel), and distributes reinforcing steel and
related products to customers in the United States through Harris Supply
Solutions. Harris Steel employs approximately 3,000 people throughout its
organization. The results of Harris Steel are included in the Company’s results
of operations as of the date of acquisition.
During
the second and third quarters of 2007, Nucor acquired four downstream companies
for a combined cash purchase price of approximately $350.6 million: Magnatrax
Corporation, LMP Steel & Wire, South Pacific Steel Corp. and Consolidated
Rebar, Inc. These acquisitions enhance Nucor’s product diversification and are
part of the execution of Nucor’s strategy for profitable downstream
growth.
Operations
Net
sales for the first nine months of 2007
increased
8% to $12.20 billion, compared with $11.28 billion in last year’s first nine
months. Average sales price per ton increased 8% from $662 in the first
nine
months of 2006 to $716 in the first nine months of 2007, while total tons
shipped to outside customers remained flat compared to the first nine months
of
2006. Net sales for the third quarter of 2007 increased 8% to $4.26 billion,
compared with $3.93 billion in the third quarter of 2006. The increase was
due
to a 5% increase in average sales price per ton from $702 in the third quarter
of 2006 to $738 in the third quarter of 2007, accompanied by a 3% increase
in
total tons shipped to outside customers. Average sales price per ton decreased
1% from the second quarter of 2007 to the third quarter of 2007, while total
tons shipped to outside customers increased 3%.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations,
continued
Steel
production was 16,503,000 tons in the first nine months of 2007, compared with
17,318,000 tons produced in the first nine months of 2006, a decrease of 5%.
Total steel shipments
decreased
4% to 16,663,000
tons in the first nine months of 2007, compared with
17,286,000
tons in last year’s first nine months. Steel sales to outside customers
decreased 5% to 15,157,000 tons in the first nine months of 2007, compared
with
15,936,000 tons in last year’s first nine months. In the steel products segment,
steel joist production during the first nine months was 409,000 tons, compared
with 433,000 tons in the first nine months of 2006, a decrease of 6%. Steel
deck
sales increased to 355,000 tons in the first nine months of 2007, compared
with
284,000 tons in last year's first nine months. Cold finished steel sales
increased 23% to 322,000 tons in the first nine months of 2007 compared with
261,000 tons in the first nine months of 2006. With the acquisition of Harris
Steel at the end of the first quarter, sales of fabricated concrete reinforcing
steel were 385,000 tons in the first nine months of 2007. The average estimated
utilization rates of all operating facilities in the steel mills and steel
products segments were approximately 87% and 78%, respectively, in the first
nine months of 2007, compared with 92% and 80%, respectively, in the first
nine
months of 2006.
The
major component of cost of products sold is raw material costs. The average
price of raw materials increased approximately 11% from the first nine months
of
2006 to the first nine months of 2007, and increased approximately 9% from
the
third quarter of 2006 to the third quarter of 2007
.
In
the steel mills segment, the average prices of raw materials used increased
approximately 12% from the first nine months of 2006, and increased
approximately 10% from the third quarter of 2006. The average scrap and scrap
substitute cost per ton used in our steel mills segment was $275 in the first
nine months of 2007, an increase of 11% from $247 in the first nine months
of
2006, and was $277 in the third quarter of 2007, an increase of 8% from
$257
in
the third quarter of 2006. Nucor incurred a charge to value inventories using
the last-in, first-out (LIFO) method of accounting of $102.0 million in the
first nine months of 2007, compared with a charge of $45.0 million in the first
nine months of 2006. In the third quarter of 2007, the LIFO charge was $11.0
million, compared with a charge of $20.5 million in last year’s third quarter.
The LIFO charges (credits) for these interim periods are based on management’s
estimates of both inventory prices and quantities at year-end. These estimates
will likely differ from actual amounts, and such differences may be significant.
In
the steel products segment, the average price of raw materials used increased
approximately 6% from the first nine months of 2006 to the first nine months
of
2007, and increased approximately 8% from the third quarter of 2006 to the
third
quarter of 2007.
Total
energy costs increased approximately $1 per ton from the first nine months
of
2006 to the first nine months of 2007 and increased approximately $1 per ton
from the third quarter of 2006 to the third quarter of 2007.
Pre-operating
and start-up costs increased to $39.1 million in the first nine months of 2007,
compared with $30.0 million in the first nine months of 2006. Pre-operating
and
start-up costs of new facilities were $14.1 million in the third quarter of
2007, compared with $14.9 million in the third quarter of 2006. In 2007, these
costs primarily related to the HIsmelt project in Kwinana, Western Australia,
the start-up of the SBQ mill in Memphis, Tennessee, and the building systems
facility in Utah. In 2006, these costs primarily related to the HIsmelt project
and the refurbishment of our direct reduced iron facility in
Trinidad.
Gross
margins were approximately 19% for the first nine months and third quarter
of
2007, respectively, compared with approximately 24% and 26% for the first nine
months and the third quarter of
2006,
respectively. In addition to the factors discussed above, gross margins
decreased due to a change in product mix.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations,
continued
The
major components of marketing, administrative and other expenses are freight
and
profit sharing costs. Unit freight costs increased approximately 1% from the
first nine months of 2006 to the first nine
months
of 2007 and approximately 4% from the third quarter of 2006 to the third quarter
of 2007, primarily
due
to higher fuel costs. Profit sharing costs, which are based upon and generally
fluctuate with pre-tax earnings, decreased approximately 24% in the first nine
months of 2007 compared with the first nine months of 2006, and decreased
approximately 30% from the third quarter of 2006 to the third quarter of 2007.
Profit sharing costs also fluctuate based on Nucor’s achievement of certain
financial performance goals, including comparisons of Nucor’s financial
performance to peers in the steel industry and to other high performing
companies.
Net
interest income decreased from $25.8 million in the first nine months of 2006
to
$0.6 million in the first nine months of 2007. Average investments decreased
43%
primarily due to the cash payment of $1.4 billion for acquisitions and $754.0
million for repurchases of common stock. This decrease was partially offset
by
an increase in the average interest rate earned on investments. An increase
in
the average interest rate on debt and the addition of short-term debt assumed
with the acquisition of Harris Steel also contributed to the decrease in net
interest income.
In
the third quarter of 2007, Nucor had net interest expense of $3.6 million
compared with net interest income of $10.4 million in the third quarter of
the
prior year, primarily due to a 71% decrease in average
investments.
Minority
interests represent the income attributable to the minority owners of
Nucor-Yamato Steel Company (“NYS”) and Novosteel S.A., of which Nucor owns 51%
and 75%, respectively. Nucor obtained the investment in Novosteel in March
2007
with the acquisition of Harris Steel. Under the NYS limited partnership
agreement, the minimum amount of cash to be distributed each year to the
partners is the amount needed by each partner to pay applicable U.S. federal
and
state income taxes.
In
the first nine months of 2007 and 2006, the amount of cash distributed to
minority interest holders exceeded amounts allocated to minority interests
based
on mutual agreement of the general partners; however, the cumulative amount
of
cash distributed to partners was less than the cumulative net earnings of the
limited partnership.
Nucor
had an effective tax rate of 35.1% in the first nine months of 2007 and in
the
first nine months of 2006. Nucor had an effective tax rate of 34.8% in the
third
quarter of 2007, compared with 34.9% in the third quarter of 2006. The Internal
Revenue Service is currently examining Nucor’s 2005 federal income tax returns.
Management believes that the Company has adequately provided for any adjustments
that may arise from this audit.
Net
earnings and earnings per share in the first nine months of 2007 decreased
18%
and 15%, respectively, to $1.11 billion and $3.68 per diluted share, compared
with $1.35 billion and $4.34 per diluted share in the first nine months of
2006.
Net earnings and earnings per share in the third quarter of 2007 decreased
27%
and 24%, respectively, to $381.2 million and $1.29 per diluted share, compared
with $521.6 million and $1.70 per diluted share in the third quarter 2006.
The
effect of decreased earnings on earnings per share was partially offset by
the
repurchase of 22.0 million shares of Nucor’s common stock since the second
quarter of 2006.
Net
earnings as a percentage of net sales were 9% and 12%, respectively, in the
first nine months of 2007 and 2006, and were 9% and 13%, respectively, in the
third quarter of 2007 and 2006. Return on average stockholders’ equity was
approximately 30.5% and 40.3% in the first nine months of 2007 and 2006,
respectively.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations,
continued
We
expect continued strength in bar, beam, plate and many of our downstream
businesses. Market conditions for sheet are slowly improving with more balance
between customer inventories and
demand.
We are also finally seeing a significant drop in imports, which has helped
bring
these inventories back into balance. Fourth quarter shipments will be impacted
by the usual seasonal and
holiday
factors, including scheduled shut-downs at many of our facilities for regular
maintenance. The biggest risks to our outlook for the fourth quarter and 2008
remain any further weakening in the economy and any significant reversal of
the
recent decreases in import levels.
Liquidity
and capital resources
The
current ratio was 2.3 at the end of the first nine months of 2007 and 3.3 at
year-end 2006. The percentage of long-term debt to total capital was 15% at
the
end of the first nine months of 2007 and at year-end 2006.
Capital
expenditures, excluding acquisitions, increased approximately 38% in the first
nine months of 2007 compared with the first nine months of 2006. Capital
expenditures, excluding acquisitions, are projected to be approximately $600
million for all of 2007.
In
September 2007, Nucor’s board of directors declared a supplemental dividend of
$0.50 per share in addition to the $0.11 per share base dividend. The total
dividend of $0.61 per share is payable on November 9, 2007 to stockholders
of
record on September 28, 2007.
Nucor
repurchased approximately 14.1 million shares of its common stock at a cost
of
approximately $754.0 million during the first nine months of 2007, and
repurchased approximately 11.6 million shares at a cost of about $599.8 million
during the third quarter of 2007. Nucor repurchased approximately 10.1 million
shares at a cost of about $515.0 million during the first nine months of 2006,
and repurchased approximately 6.3 million shares at a cost of about $318.3
million during the third quarter of 2006. In September 2007, the board of
directors approved the repurchase of up to an additional 30 million shares
of
common stock, all of which remain available for repurchase.
In
the first quarter of 2007, Nucor sold its interest in Ferro Gusa Carajás S. A.
(“FGC”), a pig iron joint
venture
in northern Brazil, to its partner, Companhia Vale do Rio Doce (“CVRD”). Nucor
has entered into an off-take agreement with CVRD for the production of this
facility.
Nucor
funded the $1.06 billion cash portion of the purchase price of Harris Steel
paid
in March 2007 from its cash and cash equivalents and liquidation of short-term
investments. Nucor also paid for the acquisition of Magnatrax and other
companies during the year with existing funds. Funds provided from operations,
existing credit facilities and new borrowings are expected to be adequate to
meet future capital expenditure and working capital requirements for existing
operations for at least the next 24 months. Nucor believes it has the financial
ability to borrow significant additional funds to finance major acquisitions
and
still maintain its financial strength.
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
In
the ordinary course of business, Nucor is exposed to a variety of market risks.
We continually monitor these risks and develop appropriate strategies to manage
them.
Interest
Rate Risk –
Nucor manages interest rate risk by using a combination of variable-rate and
fixed-rate debt. Nucor also makes use of interest rate swaps to manage net
exposure to interest rate changes. Management believes that Nucor’s exposure to
interest rate market risk has not significantly changed since December 31,
2006.
Commodity
Price Risk –
In the ordinary course of business, Nucor is exposed to market risk for price
fluctuations of raw materials and energy, principally scrap steel and natural
gas. We attempt to negotiate the best prices for our raw materials and energy
requirement and to obtain prices for our steel products that match market price
movements in response to supply and demand. Since the first quarter of 2004,
Nucor has used a raw material surcharge to pass through the increased cost
of
scrap steel and other raw materials. Our surcharge mechanism has worked
effectively to reduce the normal time lag in passing through higher raw material
costs so we can maintain our gross margins.
Nucor
also uses derivative financial instruments to hedge a portion of our exposure
to
price risk related to natural gas purchases used in the production process
when
management believes it is prudent to do so. Gains and losses from the use of
these instruments are deferred in accumulated other comprehensive income (loss)
on the condensed consolidated balance sheets and recognized into cost of
products sold in the same period as the underlying physical transaction. At
September 29, 2007, accumulated other comprehensive income (loss) includes
$2.7
million in unrealized net-of-tax losses for the fair value of these derivative
instruments. A sensitivity analysis of changes in the price of hedged natural
gas purchases indicates that declines of 10% and 25% in natural gas prices
would
reduce the fair value of our natural gas hedge position by $33.0 million and
$82.5 million, respectively. Any resulting changes in fair value would be
recorded as adjustments to other comprehensive income (loss), net of tax.
Because these instruments are structured and used as hedges, these hypothetical
losses would be offset by the benefit of lower prices paid for the natural
gas
used in the normal production cycle.
Foreign
Currency Risk –
Prior to the acquisition of Harris Steel, Nucor was principally a domestic
manufacturer of steel and steel products with customers located primarily in
the
U.S. Nucor was exposed to currency fluctuations, however, due to its joint
ventures in Brazil and Australia and the direct reduced iron facility in
Trinidad. When the Company entered into the agreement to acquire Harris
Steel in January 2007, Nucor became exposed to Canadian currency fluctuations
and hedged a portion of the exposure associated with the closing of the
transaction in March 2007. Nucor has not hedged any other foreign currency
exposure. The Company continues to be exposed to foreign currency risk through
its operations in Canada.
Item
4. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures –
As of the end of the period covered by this report, the Company carried out
an
evaluation, under the supervision and with the participation of the Company’s
management, including the Company’s Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company’s
disclosure controls and procedures are effective. During the quarter ended
March
31, 2007, Nucor acquired Harris Steel. Nucor is in the process of incorporating
these operations as part of our internal controls. Nucor has extended its
Section 404 compliance program under the Sarbanes-Oxley Act of 2002 and the
applicable rules and regulations under such Act to include Harris Steel. Nucor
will report on its assessment of its combined operations within the time period
provided by the Act and the applicable SEC rules and regulations concerning
business combinations.
Changes
in Internal Control Over Financial Reporting –
There were no changes in our internal control over financial reporting during
the quarter ended September 29, 2007 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
PART
II. OTHER INFORMATION
Item
1A. Risk Factors
There
have been no material changes in Nucor’s risk factors from those included in
Nucor’s annual report on Form 10-K.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
Our
share repurchase program activity for each of the three months and the quarter
ended September 29, 2007 was as follows (in thousands, except per share
amounts):
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share
(1)
|
|
Total Number
of Shares
Purchased
as
Part of Publicly
Announced
Plans or
Programs (2)
|
|
Maximum
Number of
Shares
that May Yet Be
Purchased
Under the
Plans or
Programs
(2)
|
|
|
|
|
|
|
|
|
|
|
|
July 1, 2007 - July 28, 2007
|
|
|
1,498
|
|
$
|
61.22
|
|
|
1,498
|
|
|
10,120
|
|
July 29, 2007 - August 25, 2007
|
|
|
10,120
|
|
|
50.21
|
|
|
10,120
|
|
|
-
|
|
August 26, 2007 - September 29, 2007
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended September 29, 2007
|
|
|
11,618
|
|
$
|
51.63
|
|
|
11,618
|
|
|
30,000
|
|
|
(1)
|
Includes
commissions of $0.02 per
share.
|
|
(2)
|
On
September 5, 2000, the board of directors approved a stock repurchase
program under which the Company is authorized to repurchase up to
5.0
million shares of the Company’s common stock. On September 8, 2004, the
board of directors resolved that the number of shares of common stock
authorized for repurchase would increase 100% as a result of the
2-for-1
stock split on the record date of September 30, 2004. At that time,
the
number of remaining shares authorized for repurchase increased from
4.2
million shares to 8.5 million shares. On April 21, 2005, the Company
publicly announced the reactivation of this stock repurchase program.
On
December 6, 2005, the board of directors authorized the repurchase
of up
to an additional 10.0 million shares of the Company’s common stock once
the current repurchase authorization is completed. On May 11, 2006,
the
board of directors resolved that the number of shares of common stock
authorized for repurchase would increase 100% as a result of a 2-for-1
stock split on the record date of May 19, 2006. At that time, the
number
of remaining shares authorized for repurchase increased from 12.5
million
shares to 24.9 million shares. On September 6, 2007, the board of
directors approved the repurchase of up to an additional 30 million
shares
of common stock.
|
Item
6. Exhibits
Exhibit No.
|
|
Description
of Exhibit
|
|
|
|
10
|
|
Employment
Agreement of Ladd R. Hall (1)
|
|
|
|
10.1
|
|
Employment
Agreement of R. Joseph Stratman (1)
|
|
|
|
10.2
|
|
2005
Stock Option and Award Plan, Amendment No. 1
(1)
|
|
|
|
10.3
|
|
Senior
Officers Annual Incentive Plan, Amendment No. 1
(1)
|
|
|
|
10.4
|
|
Senior
Officers Long-Term Incentive Plan, Amendment No. 2
(1)
|
|
|
|
10.5
|
|
Severance
Plan for Senior Officers and General Managers
(1)
|
|
|
|
31
|
|
Certification
of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a),
as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
|
|
31.1
|
|
Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a),
as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
|
|
32
|
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350,
as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
|
32.1
|
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350,
as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
(1)
Indicates a management contract or compensatory plan or
arrangement.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, Nucor Corporation
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
NUCOR
CORPORATION
|
|
|
By:
|
/s/
Terry S. Lisenby
|
|
Terry
S. Lisenby
|
|
Chief Financial Officer, Treasurer
|
|
and Executive Vice President
|
Dated: November
6, 2007
NUCOR
CORPORATION
List
of Exhibits to Form 10-Q – September 29, 2007
Exhibit
No.
|
|
Description
of Exhibit
|
|
|
|
10
|
|
Employment
Agreement of Ladd R. Hall (1)
|
|
|
|
10.1
|
|
Employment
Agreement of R. Joseph Stratman (1)
|
|
|
|
10.2
|
|
2005
Stock Option and Award Plan, Amendment No. 1
(1)
|
|
|
|
10.3
|
|
Senior
Officers Annual Incentive Plan, Amendment No. 1
(1)
|
|
|
|
10.4
|
|
Senior
Officers Long-Term Incentive Plan, Amendment No. 2
(1)
|
|
|
|
10.5
|
|
Severance
Plan for Senior Officers and General Managers
(1)
|
|
|
|
31
|
|
Certification
of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a),
as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
|
|
31.1
|
|
Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a),
as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
|
|
32
|
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350,
as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
|
32.1
|
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350,
as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Exhibit
10
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT
(this
“
Agreement
”)
is
made and entered into between Nucor Corporation, a Delaware corporation, on
behalf of itself and its affiliates (collectively “
Nucor
”),
and
LADD R. HALL (“
Executive
”).
WHEREAS,
Executive has heretofore been employed as an at-will employee of Nucor without
the benefit of a written employment agreement; and
WHEREAS,
Nucor has offered Executive a promotion to the position of Executive Vice
President effective September 30, 2007, and Executive has accepted the
promotion; and
WHEREAS,
Nucor’s promotion of Executive entitles Executive to receive substantial
compensation and benefits that Executive did not have prior to his promotion;
and
WHEREAS,
Executive agrees and acknowledges that in his new position he will acquire
greater access to and knowledge of Nucor’s trade secrets and confidential
information which Executive did not have prior to his promotion,
and
WHEREAS,
Nucor agrees to continue to employ Executive as an at-will employee in
consideration for Executive’s agreement to the various restrictions set forth
herein; and
NOW,
THEREFORE, in consideration for the promises and mutual agreements contained
herein, the parties agree as follows:
1
.
Employment
.
Nucor
agrees to employ Executive in the position of Executive Vice President, and
Executive agrees to accept continued employment in this position, subject to
the
terms and conditions set forth in this Agreement, including the confidentiality
and non-competition provisions which Executive acknowledges were discussed
in
detail prior to and made an express condition of his promotion to Executive
Vice
President.
2
.
Compensation
and Benefits During Employment
.
Nucor
will provide the following compensation and benefits to Executive:
(
a
)
Nucor
will pay Executive a base salary of $350,600 per year, paid not less frequently
than monthly in accordance with Nucor’s normal payroll practices, subject to
withholding by Nucor and other deductions as required by law. Executive’s base
salary is subject to adjustment up or down by Nucor’s Board of Directors at its
sole discretion and without notice to Executive.
(
b
)
Executive
will be eligible for bonuses based on the senior officer annual and long term
incentive compensation plans, as modified from time to time by, and in the
sole
discretion of, the Board of Directors of Nucor.
(
c
)
Executive
will be eligible for those employee benefits that are generally made available
by Nucor to its employees.
(
d
)
Executive
shall be eligible to participate in the senior officer equity incentive
compensation plans, as modified from time to time by, and in the sole discretion
of, the Board of Directors.
3
.
Compensation
Following Termination
.
(
a
)
From
the
date of Executive’s termination, whether by Executive or Nucor for any or no
reason, Nucor will pay Executive a monthly amount for twenty-four (24) months
following Executive’s termination. The monthly amount will be computed using the
following formula: the amount of Executive’s highest base salary level during
the prior twelve (12) months multiplied by 3.36 and the product divided by
twelve (12). The payments shall be made at the end of each month following
Executive’s termination on Nucor’s regular monthly payroll date.
(
b
)
In
exchange for Nucor’s promises in this Section 3 and other good and valuable
consideration, Executive agrees to strictly abide by the terms of Sections
8
through 13 of this Agreement. If Executive fails to strictly abide by the terms
of Sections 8 through 13 of this Agreement, Nucor may, at its option, do any
or
all of the following: (
i
)
pursue
any legal remedies available to it (including but not limited to injunctive
relief, damages, and specific performance), and (
ii
)
declare
the monthly payments forfeited with respect to any month during which Executive
is in breach of this Agreement. Nucor may declare the monthly payments forfeited
if Executive is in breach of this Agreement for any portion of the month at
issue, and Executive will not be entitled to a payment for that
month.
(
c
)
If
Executive is employed by Nucor at the time of Executive’s death, Nucor’s
obligations to make any monthly payments under this Agreement will automatically
terminate and Executive’s estate and executors will have no rights to payments
under this Agreement. If Executive dies during the first twelve months following
Executive’s termination from employment with Nucor, then Nucor will pay
Executive’s estate the monthly payments due under this Section through the end
of the twelfth (12
th
)
month
following Executive’s termination. If Executive dies twelve or more months after
termination of Executive’s employment with Nucor, then Nucor’s obligations to
make monthly payments under this Section will automatically terminate without
the necessity of Nucor providing written notice.
4
.
Duties
and Responsibilities; Best Efforts
.
While
employed by Nucor, Executive shall perform such duties for and on behalf of
Nucor as may be determined and assigned to Executive from time to time by
members of Nucor’s Board of Directors. Executive shall devote his full time and
best efforts to the business and affairs of Nucor. During the term of
Executive’s employment with Nucor, Executive will not undertake other paid
employment or engage in any other business activity without prior written
consent of Nucor.
5
.
Employment
at Will
.
The
parties acknowledge and agree that this Agreement does not create employment
for
a definite term and that Executive’s employment with Nucor is terminable by
Nucor or Executive at any time, with or without cause and with or without
notice, unless otherwise expressly set forth in a separate written agreement
executed by Executive and Nucor after the date of this Agreement.
6
.
Change
in Executive’s Position
.
In the
event that Nucor transfers, demotes, promotes, or otherwise changes Executive’s
compensation or position with Nucor, the restrictions and post-termination
obligations of this Agreement shall remain in full force and effect on both
parties.
7
.
Recognition
of Nucor’s Legitimate Interests
.
Executive understands and acknowledges that Nucor and its affiliates compete
in
North America in the research, manufacture, marketing, sale and distribution
of
steel and steel products, including but not limited to flat-rolled steel, steel
shapes, structural steel, light gauge steel framing, steel plate, steel joists
and girders, steel deck, steel fasteners, metal building systems, fabricated
concrete reinforcing steel, cold finished steel, steel grating, wire and wire
mesh. As part of Executive’s employment with Nucor, Executive acknowledges he
will have access to and gain knowledge of significant secret, confidential
and
proprietary information of the full range of operations of Nucor, its
subsidiaries and affiliates. In addition, Executive will have access to training
opportunities, contact with customers and prospective customers of Nucor, it
subsidiaries and affiliates, in which capacity he is expected to develop good
relationships with such customers, and will gain intimate knowledge regarding
the products and services of Nucor, its subsidiaries and affiliates. Executive
recognizes and agrees that Nucor and its subsidiaries and affiliates have spent
and will continue to spend substantial effort, time and money in developing
relationships with their customers, that many customers are long term customers
of Nucor, and that all customers and accounts that Executive may deal with
during his employment with Nucor, including any customers and accounts acquired
for Nucor by Executive, are the customers and accounts of Nucor. Executive
acknowledges that Nucor’s competitors would obtain an unfair advantage if
Executive disclosed Nucor’s Secret Information or Confidential Information as
defined in Sections 8 and 9 to a competitor, used it on a competitor’s behalf,
or if he were able to exploit the relationships he develops as an employee
of
Nucor to solicit business on behalf of a competitor.
8
.
Covenant
Regarding Nucor’s Secret Information
.
Executive recognizes and agrees that he will have continued access to certain
sensitive and confidential information of Nucor, its subsidiaries and affiliates
(
a
)
that is
not generally known in the steel business, which would be difficult for others
to acquire or duplicate without improper means, (
b
)
that
Nucor strives to keep secret, and (
c
)
from
which Nucor derives substantial commercial benefit because of the fact that
it
is not generally known (the “
Secret
Information
”).
As
used in this Agreement, Nucor’s Secret Information includes, without
limitation:
(
i
)
Nucor’s
process of developing and producing raw material, and designing and
manufacturing steel and iron products; (
ii
)
Nucor’s
process for treating, processing or fabricating steel and iron products;
(
iii
)
Nucor’s
non-public financial data, strategic business plans, competitor analysis, sales
and marketing data, and proprietary margin, pricing, and cost data; and
(
iv
)
any
other information or data which meets the definition of “trade secrets” under
applicable law. Executive agrees that unless he is expressly authorized by Nucor
in writing, Executive will not use or disclose or allow to be used or disclosed
Nucor’s Secret Information. This covenant shall survive until the Secret
Information is generally known in the industry through no act or omission of
the
Executive or until Nucor knowingly authorizes the disclosure of or discloses
the
Secret Information, without any limitations on use or confidentiality. Executive
acknowledges that he did not have knowledge of Nucor’s Secret Information prior
to his employment with Nucor and that the Secret Information does not include
Executive’s general skills and know-how.
9
.
Agreement
to Maintain Confidentiality
..
(
a
)
As
used
in this Agreement, “
Confidential
Information
”
shall
include, without limitation, financial and budgetary information and strategies;
plant design, specifications, and layouts; equipment design, specifications,
and
layouts; product design and specifications; manufacturing processes, procedures,
and specifications; data processing or other computer programs; research and
development projects; marketing information and strategies; customer lists;
vendor lists; information about customer preferences and buying patterns;
information about prospective customers, vendors, or business opportunities;
information about Nucor’s costs and the pricing structure used in sales to
customers; information about Nucor’s overall corporate business strategy; and
technological innovations used in Nucor’s business, to the extent that such
information does not fall within the definition of Secret Information. For
purposes of this Agreement, information shall not be deemed to be Confidential
Information to the extent that the information
(
i
)
is in
the public domain, or hereafter becomes generally known or available through
no
action or omission on the part of Executive; (
ii
)
is
furnished by Nucor to any person other than a subsidiary or affiliate of Nucor,
without restriction on disclosure; (
iii
)
becomes
known to the Executive from a source other than Nucor, its subsidiaries or
affiliates, without a breach of this Agreement or any other agreement with
Nucor
and without any restriction on disclosure; or (
iv
)
is the
general knowledge or skill of the Executive acquired prior to his employment
with Nucor.
(
b
)
Except
as
otherwise provided in this Agreement, during Executive’s employment with Nucor
and at all times after the termination of Executive’s employment, Executive
covenants and agrees to treat as confidential and not to negligently or
intentionally disclose, and to use only for the advancement of the interests
of
Nucor, all Confidential Information submitted to Executive or received,
compiled, developed, designed, produced, accessed, or otherwise discovered
by
the Executive from time to time while employed by Nucor. Executive will not
disclose or divulge the Confidential Information to any person, entity, firm
or
company whatsoever or use the Confidential Information for Executive’s own
benefit or for the benefit of any person, entity, firm or company other than
Nucor. This restriction will apply throughout the world;
provided
,
however
,
that if
the restrictions of this Paragraph when applied to any specific piece of
Confidential Information would prevent the Executive from using his general
knowledge or skills in competition with Nucor or would otherwise substantially
restrict the Executive’s ability to fairly compete with Nucor, then as to that
piece of Confidential Information only, the scope of this restriction will
apply
only for the time and only within the Restricted Territory set forth in Section
10 of this Agreement.
(
c
)
Executive
specifically acknowledges that the Confidential Information, whether reduced
to
writing or maintained in the mind or memory of Executive, and whether compiled
or created by Executive, Nucor, or any of its affiliates or customers, derives
independent economic value from not being readily known to or ascertainable
by
proper means by others who could obtain economic value from the disclosure
or
use of the Confidential Information. Executive also acknowledges that reasonable
efforts have been put forth by Nucor to maintain the secrecy of the Confidential
Information, that the Confidential Information is and will remain the sole
property of Nucor or any of its affiliates or customers, as the case may be,
and
that any retention and/or use of Confidential Information during or after the
termination of Executive’s employment with Nucor (except in the regular course
of performing his duties hereunder) will constitute a misappropriation of the
Confidential Information belonging to Nucor.
10
.
Noncompetition
.
(
a
)
Executive
hereby agrees that for the duration of Executive’s employment with Nucor, and
for a period of twenty-four (24) months thereafter, Executive will NOT, within
the Restricted Territory, do any of the following:
(
i
)
Engage
directly or indirectly (either as an owner, employee, consultant, or in any
similar capacity) in the research, development, manufacture, marketing, sale,
or
distribution of steel or steel products which are the same as or similar to
those in development, manufactured, and/or sold by Nucor on the date of
Executive’s termination; or
(
ii
)
Engage
in
work, other than during his employment with and as authorized by Nucor, that
would inherently call on him in the fulfillment of his duties and
responsibilities to reveal, or otherwise use the Confidential Information or
Secret Information of Nucor.
(
b
)
As
used
in this provision, “
Restricted
Territory
”
As
used
in this Agreement, the term “Restricted Territory” means the geographic area for
which Executive is responsible and includes, but is not limited to, the
following:
(
i
)
All
countries in which Nucor sells its steel and steel products (as defined in
Section 6) or in which Nucor plans within twenty-four (24) months of Executive’s
termination of employment to sell such products but if such area is deemed
overbroad by a court of law, then;
(
ii
)
North
America, but if such area is deemed overbroad by a court of law, then;
(
iii
)
The
United States, Canada, Mexico, but if such area is deemed overbroad by a court
of law, then;
(
iv
)
The
contiguous United States, but if such area is deemed overbroad by a court of
law, then;
(
v
)
The
states in the United States in which Nucor sells its steel and steel products
(as defined in Section 6), but if such area is deemed overbroad by a court
of
law, then;
(
vi
)
Any
state
in the United States located within a six hundred mile radius of a Nucor plant
or facility, but if such area is deemed overbroad by a court of law, then;
(
vii
)
Any
country in which Nucor has a plant or facility, but if such area is deemed
overbroad by a court of law, then;
(
viii
)
The
states in the United States in which Nucor has a plant or facility, but if
such
area is deemed overbroad by a court of law, then;
(
ix
)
Any
state
in the United States located within a six hundred mile radius of the locations
in which the Customers and Prospective Customers (as defined in subsections
10(e)(i) and (ii) below) are located, but if such area is deemed overbroad
by a
court of law, then;
(
x
)
Any
state
in the United States where a Customer or Prospective Customer is located with
whom the Executive had contact or for whom Executive had responsibility for
during the six month period immediately preceding the Executive’s separation of
employment from Nucor.
(
c
)
Executive
specifically agrees that the post-termination restrictions in this Section
will
apply to Executive regardless of whether termination of employment is initiated
by Nucor or Executive and regardless of the reason for termination of
Executive’s employment. Further, Executive acknowledges and agrees that Nucor’ s
payment of the compensation described in Section 3 is intended to compensate
Executive for the limitations on Executive’s competitive activities described in
this Section 10 for the two-year period following Executive’s employment with
Nucor regardless of the reason for termination. Thus, for example, in the event
that Nucor terminates Executive’s employment without cause, Executive expressly
agrees that the restrictions in this Section 10 will apply to Executive
notwithstanding the reasons or motivations of Nucor in terminating Executive’s
employment.
11
.
Nonsolicitation
.
Executive hereby agrees for the period of twenty-four (24) months after
termination of his employment, Executive will not, directly or indirectly,
within the Restricted Territory, do any of the following:
(
a
)
Solicit,
contact, or attempt to influence any Customer to limit, curtail, cancel, or
terminate any business it transacts with, or products it receives from Nucor,
its subsidiaries or affiliates;
(
b
)
Solicit,
contact, or attempt to influence any Prospective Customer to terminate any
business negotiations it is having with Nucor, its subsidiaries or affiliates,
or to otherwise not do business with Nucor, its subsidiaries or
affiliates;
(
c
)
Solicit,
contact, or attempt to influence any Customer to purchase products or services
from an entity other than Nucor, its subsidiaries or affiliates, which are
the
same or substantially similar to those offered to the Customer by Nucor, its
subsidiaries or affiliates; or
(
d
)
Solicit,
contact, or attempt to influence any Prospective Customer to purchase products
or services from an entity other than Nucor, its subsidiaries or affiliates,
which are the same or substantially similar to those offered to the Prospective
Customer by Nucor, its subsidiaries or affiliates.
(
e
)
For
purposes of Section 10 of this Agreement and this Section 11, and
understanding that Executive has had and will have substantial contact with
customers of Nucor, its affiliates and subsidiaries, during his employment
with
Nucor, its affiliates and subsidiaries, the following definitions shall
apply:
(
i
)
The
term
“
Customer
”
shall
mean any and all customers of Nucor, its subsidiaries and affiliates, with
whom
Nucor, its subsidiaries and affiliates, is doing business at the time of or
within the two (2) years preceding Executive’s separation from Nucor’s
employ.
(
ii
)
If
the
definition in subsection (e)(i) is found to be unreasonable with respect to
any
restriction in this Agreement to which the definition of Customer applies,
then
with regard to that restriction, the term “Customer” shall mean:
(
A
)
Any
customer of Nucor with whom Executive had significant contact or with whom
Executive directly dealt on behalf of Nucor during the six (6) month
period
preceding
Executive’s termination; or
(
B
)
Any
customer of Nucor with whom the direct reports of Executive had significant
contact or with whom the direct reports of Executive dealt during the six (6)
month period preceding Executive’s termination; or
(
C
)
Any
customer of Nucor, its subsidiaries or affiliates, about whom the Executive
has
obtained Secret Information or Confidential Information by virtue of his
employment with Nucor;
Provided
,
however
,
that
the term “Customer” shall not include any business or entity that no longer does
business with Nucor without any direct or indirect interference by Executive
or
violation of this Agreement by Executive, and that ceased doing business with
Nucor prior to any direct or indirect communication or contact by
Executive.
(
iii
)
The
term
“
Prospective
Customer
”
shall
mean any person or entity who has not yet purchased the products or services
of
Nucor, but who has been targeted or identified by Nucor as a potential user
of
the products or services of Nucor, and whom Executive or his direct reports
participated in the solicitation of or on behalf of Nucor during the six (6)
months preceding his termination.
(
iv
)
The
term
“
Nucor
”
shall
mean Nucor Corporation and its subsidiaries and affiliates in existence or
planned during the course of Executive’s employment.
(
v
)
The
term
“
solicit
”
shall
have the following meaning: to initiate contact for the purpose of promoting,
marketing, or selling products or services similar to those Nucor offered during
the tenure of Executive’s employment with Nucor or to accept business from
Nucor’s Customers or Prospective Customers.
12.
Assignment
of Intellectual Property Rights
.
(
a
)
Executive
hereby assigns to Nucor Executive’s entire right, title and interest, including
copyrights and patents, in any idea, invention, design of a useful article
(whether the design is ornamental or otherwise), and any other work of
authorship (collectively the “
Developments
”),
made
or conceived during Executive’s employment by Nucor solely or jointly by
Executive, or created wholly or in part by Executive, whether or not such
Developments are patentable, copyrightable or susceptible to other forms of
protection, where the Developments: (
i
)
were
developed, invented, or conceived within the scope of Executive’s employment
with Nucor; (
ii
)
relate
to Nucor’s actual or demonstrably anticipated research or development; or
(
iii
)
result
from any work performed by Executive on Nucor’s behalf.
(
b
)
The
assignment requirement in subsection (a) of this Section 12 shall not apply
to
an invention that Executive developed entirely on his own time without using
Nucor’s equipment, supplies, facilities or Secret Information or Confidential
Information except for those inventions that (i) relate to Nucor’s business or
actual or demonstrably anticipated research or development, or (ii) result
from
any work performed by Executive for Nucor.
(
c
)
In
connection with any of the Developments assigned in subsection (a) above:
(
i
)
Executive will promptly disclose them to Nucor’s management; and (
ii
)
Executive will, on Nucor's request, promptly execute a specific assignment
of
title to Nucor or its designee, and do anything else reasonably necessary to
enable Nucor or its designee to secure a patent, copyright, or other form of
protection therefore in the United States and in any other applicable
country.
(
d
)
Nothing
in this Section 12 is intended to waive, or shall be construed as waiving,
any
assignment of any Developments to Nucor implied by law.
13
.
Antipiracy
.
Executive agrees for a period of twenty-four (24) months after termination
of
his employment, Executive will not, directly or indirectly, encourage, contact,
or attempt to induce any employees of Nucor, its subsidiaries or affiliates
(a)
with whom Executive had direct contact during the last twelve (12) months of
Executive’s employment with Nucor, and (b) who are employed by Nucor, its
subsidiaries or affiliates at the time of the encouragement, contact or
attempted inducement, to end their employment relationship with Nucor, its
subsidiaries or affiliates.
14
.
Severability
.
It is
the intention of the parties to restrict the activities of Executive only to
the
extent reasonably necessary for the protection of Nucor’s legitimate interests.
The parties specifically covenant and agree that should any of the provisions
in
this Agreement be deemed by a court of competent jurisdiction too broad for
the
protection of Nucor’s legitimate interests, the parties authorize the court to
narrow, limit or modify the restrictions herein to the extent reasonably
necessary to accomplish such purpose. In the event such limiting construction
is
impossible, such invalid or unenforceable provision shall be deemed severed
from
this Agreement and every other provision of this Agreement shall remain in
full
force and effect.
15
.
Enforcement
.
Executive understands and agrees that any breach or threatened breach by
Executive of the provisions of Sections 8 through 13 of this Agreement shall
be
considered a material breach of this Agreement, and in the event of such a
breach or threatened breath of this Agreement, Nucor shall be entitled to pursue
any and all of its remedies under law or in equity arising out of such breach.
If Nucor pursues either a temporary restraining order or temporary injunctive
relief, then Executive waives any requirement that Nucor post a bond. Executive
further agrees that in the event of his breach of any of the provisions of
Sections 7 through 12 of this Agreement, unless otherwise prohibited by
law:
(
a
)
Nucor
shall be (
i
)
released from any obligation to make any further payments to Executive (or
his
estate) under Section 3, (
ii
)
entitled to cancel any unexercised stock options granted under the Company’s
equity incentive plan from and after the date of this Agreement (the
“
Post-Agreement
Date Option Grants
”),
and
(
iii
)
entitled to seek other appropriate relief, including, without limitation,
repayment by the Executive of the amounts already paid under Section 3 of this
Agreement; and
(
b
)
Executive
shall (
i
)
forfeit
any unexercised Post-Agreement Date Option Grants and (
ii
)
forfeit
and immediately return upon demand by Nucor any profit realized by Executive
from the exercise of any Post-Agreement Date Option Grants during the six (6)
month period preceding Executive’s breach of any of the provisions of Sections 8
through 13 of this Agreement.
Executive
agrees that any breach or threatened breach of Sections 8 through 13 will cause
Nucor irreparable harm which cannot be remedied through monetary damages and
the
alternative relief set forth in Section 15(a) shall not be considered an
adequate remedy for the harm Nucor would incur. Executive further agrees that
such remedies in Section 15(a) will not preclude injunctive relief.
If
Executive breaches or threatens to breach any of the provisions of Sections
10,
11 or 13 of this Agreement and Nucor obtains an injunction, preliminary or
otherwise, ordering the Executive to adhere to the restrictive period required
by the applicable section, then the applicable restrictive period will be
extended by the number of days that have elapsed from the date of Executive’s
termination until the time the injunction is granted.
Executive
further agrees, unless otherwise prohibited by law, to pay Nucor’s attorneys’
fees and costs incurred in successfully enforcing its rights under this Section,
or in defending against any action brought by Executive or on Executive’s behalf
in violation of or under this Section in which Nucor prevails. Executive agrees
that Nucor’s actions pursuant to this Section, including, without limitation,
filing a legal action, are permissible and are not and will not be considered
by
Executive to be retaliatory. Executive further represents and acknowledges
that
in the event of the termination of Executive’s employment for any reason,
Executive’s experience and capabilities are such that Executive can obtain
employment and that enforcement of this Agreement by way of injunction will
not
prevent Executive from earning a livelihood.
16
.
Reasonableness
of Restrictions
.
Executive has carefully considered the nature and extent of the restrictions
upon him and the rights and remedies conferred upon Nucor under Sections 10,
11,
12, 13 and 15 and hereby acknowledges and agrees that the same are reasonable
in
time and territory, are designed to eliminate competition which would otherwise
be unfair to Nucor, do not interfere with Executive’s exercise of his inherent
skill and experience, are reasonably required to protect the legitimate
interests of Nucor, and do not confer a benefit upon Nucor disproportionate
to
the detriment to Executive. Executive certifies that he has had the opportunity
to discuss this Agreement with such legal advisors as he chooses and that he
understands its provisions and has entered into this Agreement freely and
voluntarily.
17
.
Applicable
Law
.
This
Agreement shall be interpreted, construed and governed according to the laws
of
the State of North Carolina, regardless of choice of law principles to the
contrary. Each party, for themselves and their successors and assigns, hereby
irrevocably (
a
)
consents to the exclusive jurisdictions of the State and Federal courts located
in the State of North Carolina; and (
b
)
waives
any objection to any such action based on venue or forum
non
conveniens
.
This
Agreement is intended, among other things, to supplement the provisions of
the
North Carolina Trade Secrets Protection Act, as amended from time to time,
and
the duties Executive owes to Nucor under the common law, including, but not
limited to, the duty of loyalty.
18
.
Executive
to Return Property
.
Executive agrees that upon (
a
)
the
termination of Executive’s employment with Nucor, whether by Executive or Nucor
for any reason (with or without cause), or (
b
)
the
written request of Nucor, Executive (or in the event of the death or disability
of Executive, Executive’s heirs, successors, assigns and legal representatives)
shall return to Nucor any and all property of Nucor, including but not limited
to all Secret Information, Confidential Information, notes, data, tapes,
computers, lists, reference items, phones, documents, sketches, drawings,
software, product samples, rolodex cards, forms, manuals, and equipment, without
retaining any copies or summaries of such property. Executive further agrees
that to the extent Secret Information or Confidential Information are in
electronic format and in Executive’s possession, custody or control; Executive
will provide all such copies to Nucor and will not keep copies in such format
but, upon Nucor’s request, will confirm the permanent deletion
thereof.
19
.
Entire
Agreement; Amendments
.
This
Agreement discharges and cancels all previous agreements and constitutes the
entire agreement between the parties with regard to the subject matter hereof.
No agreements, representations, or statements of any party not contained herein
shall be binding on either party. Further, no amendment or variation of the
terms or conditions of this Agreement shall be valid unless in writing and
signed by both parties.
20
.
Assignability
.
This
Agreement and the rights and duties created hereunder shall not be assignable
or
delegable by Executive. Nucor may, at its option and without consent of
Executive, assign its rights and duties hereunder to any successor entity or
transferee of Nucor’s assets.
21
.
Binding
Effect
.
This
Agreement shall be binding upon and inure to the benefit of Nucor and Executive
and their respective successors, assigns, heirs and legal
representatives.
22
.
No
Waiver
.
No
failure or delay by any party to this Agreement to enforce any right specified
in this Agreement will operate as a waiver of such right, nor will any single
or
partial exercise of a right preclude any further or later enforcement of the
right within the period of the applicable statute of limitations.
23
.
Compliance
with Code Section 409A
.
Notwithstanding anything in this Agreement to the contrary, if any amount or
benefit that Nucor determines would constitute non-exempt “deferred
compensation” for purposes of Section 409A of the Internal Revenue Code of 1986
(the “
Code
”)
would
otherwise be payable or distributable under this Agreement by reason of the
Executive’s separation from service, then to the extent necessary to comply with
Code Section 409A: (
i
)
if the
payment or distribution is payable in a lump sum, the Executive’s right to
receive payment or distribution of such non-exempt deferred compensation will
be
delayed until the earlier of the Executive’s death or the first day of the
seventh month following the Executive’s separation from service, and
(
ii
)
if the
payment, distribution or benefit is payable or provided over time, the amount
of
such non-exempt deferred compensation or benefit that would otherwise be payable
or provided during the six-month period immediately following the Executive’s
separation from service will be accumulated, and the Executive’s right to
receive payment or distribution of such accumulated amount or benefit will
be
delayed until the earlier of the Executive’s death or the first day of the
seventh month following the Executive’s separation from service and paid or
provided on the earlier of such dates, without interest, and the normal payment
or distribution schedule for any remaining payments, distributions or benefits
will commence. For purposes of this Agreement, the term “separation from
service” shall be defined as provided in Code Section 409A and applicable
regulations.
IN
WITNESS WHEREOF, the parties have executed this Agreement on the dates specified
below.
|
/s/
Ladd R. Hall
|
|
|
Date:
|
September
28, 2007
|
|
|
|
|
|
|
NUCOR
CORPORATION
|
|
|
|
|
|
By:
|
/s/
John J. Ferriola
|
|
|
Its:
|
Chief
Operating Officer of Steelmaking Operations
|
|
|
Date:
|
September
28, 2007
|
|
Exhibit
10.1
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT
(this
“
Agreement
”)
is
made and entered into between Nucor Corporation, a Delaware corporation, on
behalf of itself and its affiliates (collectively “
Nucor
”),
and
R. JOSEPH STRATMAN (“
Executive
”).
WHEREAS,
Executive has heretofore been employed as an at-will employee of Nucor without
the benefit of a written employment agreement; and
WHEREAS,
Nucor has offered Executive a promotion to the position of Executive Vice
President effective September 30, 2007, and Executive has accepted the
promotion; and
WHEREAS,
Nucor’s promotion of Executive entitles Executive to receive substantial
compensation and benefits that Executive did not have prior to his promotion;
and
WHEREAS,
Executive agrees and acknowledges that in his new position he will acquire
greater access to and knowledge of Nucor’s trade secrets and confidential
information which Executive did not have prior to his promotion,
and
WHEREAS,
Nucor agrees to continue to employ Executive as an at-will employee in
consideration for Executive’s agreement to the various restrictions set forth
herein; and
NOW,
THEREFORE, in consideration for the promises and mutual agreements contained
herein, the parties agree as follows:
1
.
Employment
.
Nucor
agrees to employ Executive in the position of Executive Vice President, and
Executive agrees to accept continued employment in this position, subject to
the
terms and conditions set forth in this Agreement, including the confidentiality
and non-competition provisions which Executive acknowledges were discussed
in
detail prior to and made an express condition of his promotion to Executive
Vice
President.
2
.
Compensation
and Benefits During Employment
.
Nucor
will provide the following compensation and benefits to Executive:
(
a
)
Nucor
will pay Executive a base salary of $350,600 per year, paid not less frequently
than monthly in accordance with Nucor’s normal payroll practices, subject to
withholding by Nucor and other deductions as required by law. Executive’s base
salary is subject to adjustment up or down by Nucor’s Board of Directors at its
sole discretion and without notice to Executive.
(
b
)
Executive
will be eligible for bonuses based on the senior officer annual and long term
incentive compensation plans, as modified from time to time by, and in the
sole
discretion of, the Board of Directors of Nucor.
(
c
)
Executive
will be eligible for those employee benefits that are generally made available
by Nucor to its employees.
(
d
)
Executive
shall be eligible to participate in the senior officer equity incentive
compensation plans, as modified from time to time by, and in the sole discretion
of, the Board of Directors.
3
.
Compensation
Following Termination
.
(
a
)
From
the
date of Executive’s termination, whether by Executive or Nucor for any or no
reason, Nucor will pay Executive a monthly amount for twenty-four (24) months
following Executive’s termination. The monthly amount will be computed using the
following formula: the amount of Executive’s highest base salary level during
the prior twelve (12) months multiplied by 3.36 and the product divided by
twelve (12). The payments shall be made at the end of each month following
Executive’s termination on Nucor’s regular monthly payroll date.
(
b
)
In
exchange for Nucor’s promises in this Section 3 and other good and valuable
consideration, Executive agrees to strictly abide by the terms of Sections
8
through 13 of this Agreement. If Executive fails to strictly abide by the terms
of Sections 8 through 13 of this Agreement, Nucor may, at its option, do any
or
all of the following: (
i
)
pursue
any legal remedies available to it (including but not limited to injunctive
relief, damages, and specific performance), and (
ii
)
declare
the monthly payments forfeited with respect to any month during which Executive
is in breach of this Agreement. Nucor may declare the monthly payments forfeited
if Executive is in breach of this Agreement for any portion of the month at
issue, and Executive will not be entitled to a payment for that
month.
(
c
)
If
Executive is employed by Nucor at the time of Executive’s death, Nucor’s
obligations to make any monthly payments under this Agreement will automatically
terminate and Executive’s estate and executors will have no rights to payments
under this Agreement. If Executive dies during the first twelve months following
Executive’s termination from employment with Nucor, then Nucor will pay
Executive’s estate the monthly payments due under this Section through the end
of the twelfth (12
th
)
month
following Executive’s termination. If Executive dies twelve or more months after
termination of Executive’s employment with Nucor, then Nucor’s obligations to
make monthly payments under this Section will automatically terminate without
the necessity of Nucor providing written notice.
4
.
Duties
and Responsibilities; Best Efforts
.
While
employed by Nucor, Executive shall perform such duties for and on behalf of
Nucor as may be determined and assigned to Executive from time to time by
members of Nucor’s Board of Directors. Executive shall devote his full time and
best efforts to the business and affairs of Nucor. During the term of
Executive’s employment with Nucor, Executive will not undertake other paid
employment or engage in any other business activity without prior written
consent of Nucor.
5
.
Employment
at Will
.
The
parties acknowledge and agree that this Agreement does not create employment
for
a definite term and that Executive’s employment with Nucor is terminable by
Nucor or Executive at any time, with or without cause and with or without
notice, unless otherwise expressly set forth in a separate written agreement
executed by Executive and Nucor after the date of this Agreement.
6
.
Change
in Executive’s Position
.
In the
event that Nucor transfers, demotes, promotes, or otherwise changes Executive’s
compensation or position with Nucor, the restrictions and post-termination
obligations of this Agreement shall remain in full force and effect on both
parties.
7
.
Recognition
of Nucor’s Legitimate Interests
.
Executive understands and acknowledges that Nucor and its affiliates compete
in
North America in the research, manufacture, marketing, sale and distribution
of
steel and steel products, including but not limited to flat-rolled steel, steel
shapes, structural steel, light gauge steel framing, steel plate, steel joists
and girders, steel deck, steel fasteners, metal building systems, fabricated
concrete reinforcing steel, cold finished steel, steel grating, wire and wire
mesh. As part of Executive’s employment with Nucor, Executive acknowledges he
will have access to and gain knowledge of significant secret, confidential
and
proprietary information of the full range of operations of Nucor, its
subsidiaries and affiliates. In addition, Executive will have access to training
opportunities, contact with customers and prospective customers of Nucor, it
subsidiaries and affiliates, in which capacity he is expected to develop good
relationships with such customers, and will gain intimate knowledge regarding
the products and services of Nucor, its subsidiaries and affiliates. Executive
recognizes and agrees that Nucor and its subsidiaries and affiliates have spent
and will continue to spend substantial effort, time and money in developing
relationships with their customers, that many customers are long term customers
of Nucor, and that all customers and accounts that Executive may deal with
during his employment with Nucor, including any customers and accounts acquired
for Nucor by Executive, are the customers and accounts of Nucor. Executive
acknowledges that Nucor’s competitors would obtain an unfair advantage if
Executive disclosed Nucor’s Secret Information or Confidential Information as
defined in Sections 8 and 9 to a competitor, used it on a competitor’s behalf,
or if he were able to exploit the relationships he develops as an employee
of
Nucor to solicit business on behalf of a competitor.
8
.
Covenant
Regarding Nucor’s Secret Information
.
Executive recognizes and agrees that he will have continued access to certain
sensitive and confidential information of Nucor, its subsidiaries and affiliates
(
a
)
that is
not generally known in the steel business, which would be difficult for others
to acquire or duplicate without improper means, (
b
)
that
Nucor strives to keep secret, and (
c
)
from
which Nucor derives substantial commercial benefit because of the fact that
it
is not generally known (the “
Secret
Information
”).
As
used in this Agreement, Nucor’s Secret Information includes, without
limitation:
(
i
)
Nucor’s
process of developing and producing raw material, and designing and
manufacturing steel and iron products; (
ii
)
Nucor’s
process for treating, processing or fabricating steel and iron products;
(
iii
)
Nucor’s
non-public financial data, strategic business plans, competitor analysis, sales
and marketing data, and proprietary margin, pricing, and cost data; and
(
iv
)
any
other information or data which meets the definition of “trade secrets” under
applicable law. Executive agrees that unless he is expressly authorized by
Nucor
in writing, Executive will not use or disclose or allow to be used or disclosed
Nucor’s Secret Information. This covenant shall survive until the Secret
Information is generally known in the industry through no act or omission of
the
Executive or until Nucor knowingly authorizes the disclosure of or discloses
the
Secret Information, without any limitations on use or confidentiality. Executive
acknowledges that he did not have knowledge of Nucor’s Secret Information prior
to his employment with Nucor and that the Secret Information does not include
Executive’s general skills and know-how.
9
.
Agreement
to Maintain Confidentiality
..
(
a
)
As
used
in this Agreement, “
Confidential
Information
”
shall
include, without limitation, financial and budgetary information and strategies;
plant design, specifications, and layouts; equipment design, specifications,
and
layouts; product design and specifications; manufacturing processes, procedures,
and specifications; data processing or other computer programs; research and
development projects; marketing information and strategies; customer lists;
vendor lists; information about customer preferences and buying patterns;
information about prospective customers, vendors, or business opportunities;
information about Nucor’s costs and the pricing structure used in sales to
customers; information about Nucor’s overall corporate business strategy; and
technological innovations used in Nucor’s business, to the extent that such
information does not fall within the definition of Secret Information. For
purposes of this Agreement, information shall not be deemed to be Confidential
Information to the extent that the information
(
i
)
is in
the public domain, or hereafter becomes generally known or available through
no
action or omission on the part of Executive; (
ii
)
is
furnished by Nucor to any person other than a subsidiary or affiliate of Nucor,
without restriction on disclosure; (
iii
)
becomes
known to the Executive from a source other than Nucor, its subsidiaries or
affiliates, without a breach of this Agreement or any other agreement with
Nucor
and without any restriction on disclosure; or (
iv
)
is the
general knowledge or skill of the Executive acquired prior to his employment
with Nucor.
(
b
)
Except
as
otherwise provided in this Agreement, during Executive’s employment with Nucor
and at all times after the termination of Executive’s employment, Executive
covenants and agrees to treat as confidential and not to negligently or
intentionally disclose, and to use only for the advancement of the interests
of
Nucor, all Confidential Information submitted to Executive or received,
compiled, developed, designed, produced, accessed, or otherwise discovered
by
the Executive from time to time while employed by Nucor. Executive will not
disclose or divulge the Confidential Information to any person, entity, firm
or
company whatsoever or use the Confidential Information for Executive’s own
benefit or for the benefit of any person, entity, firm or company other than
Nucor. This restriction will apply throughout the world;
provided
,
however
,
that if
the restrictions of this Paragraph when applied to any specific piece of
Confidential Information would prevent the Executive from using his general
knowledge or skills in competition with Nucor or would otherwise substantially
restrict the Executive’s ability to fairly compete with Nucor, then as to that
piece of Confidential Information only, the scope of this restriction will
apply
only for the time and only within the Restricted Territory set forth in Section
10 of this Agreement.
(
c
)
Executive
specifically acknowledges that the Confidential Information, whether reduced
to
writing or maintained in the mind or memory of Executive, and whether compiled
or created by Executive, Nucor, or any of its affiliates or customers, derives
independent economic value from not being readily known to or ascertainable
by
proper means by others who could obtain economic value from the disclosure
or
use of the Confidential Information. Executive also acknowledges that reasonable
efforts have been put forth by Nucor to maintain the secrecy of the Confidential
Information, that the Confidential Information is and will remain the sole
property of Nucor or any of its affiliates or customers, as the case may be,
and
that any retention and/or use of Confidential Information during or after the
termination of Executive’s employment with Nucor (except in the regular course
of performing his duties hereunder) will constitute a misappropriation of the
Confidential Information belonging to Nucor.
10
.
Noncompetition
.
(
a
)
Executive
hereby agrees that for the duration of Executive’s employment with Nucor, and
for a period of twenty-four (24) months thereafter, Executive will NOT, within
the Restricted Territory, do any of the following:
(
i
)
Engage
directly or indirectly (either as an owner, employee, consultant, or in any
similar capacity) in the research, development, manufacture, marketing, sale,
or
distribution of steel or steel products which are the same as or similar to
those in development, manufactured, and/or sold by Nucor on the date of
Executive’s termination; or
(
ii
)
Engage
in
work, other than during his employment with and as authorized by Nucor, that
would inherently call on him in the fulfillment of his duties and
responsibilities to reveal, or otherwise use the Confidential Information or
Secret Information of Nucor.
(
b
)
As
used
in this provision, “
Restricted
Territory
”
As
used
in this Agreement, the term “Restricted Territory” means the geographic area for
which Executive is responsible and includes, but is not limited to, the
following:
(
i
)
All
countries in which Nucor sells its steel and steel products (as defined in
Section 6) or in which Nucor plans within twenty-four (24) months of Executive’s
termination of employment to sell such products but if such area is deemed
overbroad by a court of law, then;
(
ii
)
North
America, but if such area is deemed overbroad by a court of law, then;
(
iii
)
The
United States, Canada, Mexico, but if such area is deemed overbroad by a court
of law, then;
(
iv
)
The
contiguous United States, but if such area is deemed overbroad by a court of
law, then;
(
v
)
The
states in the United States in which Nucor sells its steel and steel products
(as defined in Section 6), but if such area is deemed overbroad by a court
of
law, then;
(
vi
)
Any
state
in the United States located within a six hundred mile radius of a Nucor plant
or facility, but if such area is deemed overbroad by a court of law, then;
(
vii
)
Any
country in which Nucor has a plant or facility, but if such area is deemed
overbroad by a court of law, then;
(
viii
)
The
states in the United States in which Nucor has a plant or facility, but if
such
area is deemed overbroad by a court of law, then;
(
ix
)
Any
state
in the United States located within a six hundred mile radius of the locations
in which the Customers and Prospective Customers (as defined in subsections
10(e)(i) and (ii) below) are located, but if such area is deemed overbroad
by a
court of law, then;
(
x
)
Any
state
in the United States where a Customer or Prospective Customer is located with
whom the Executive had contact or for whom Executive had responsibility for
during the six month period immediately preceding the Executive’s separation of
employment from Nucor.
(
c
)
Executive
specifically agrees that the post-termination restrictions in this Section
will
apply to Executive regardless of whether termination of employment is initiated
by Nucor or Executive and regardless of the reason for termination of
Executive’s employment. Further, Executive acknowledges and agrees that Nucor’ s
payment of the compensation described in Section 3 is intended to compensate
Executive for the limitations on Executive’s competitive activities described in
this Section 10 for the two-year period following Executive’s employment with
Nucor regardless of the reason for termination. Thus, for example, in the event
that Nucor terminates Executive’s employment without cause, Executive expressly
agrees that the restrictions in this Section 10 will apply to Executive
notwithstanding the reasons or motivations of Nucor in terminating Executive’s
employment.
11
.
Nonsolicitation
.
Executive hereby agrees for the period of twenty-four (24) months after
termination of his employment, Executive will not, directly or indirectly,
within the Restricted Territory, do any of the following:
(
a
)
Solicit,
contact, or attempt to influence any Customer to limit, curtail, cancel, or
terminate any business it transacts with, or products it receives from Nucor,
its subsidiaries or affiliates;
(
b
)
Solicit,
contact, or attempt to influence any Prospective Customer to terminate any
business negotiations it is having with Nucor, its subsidiaries or affiliates,
or to otherwise not do business with Nucor, its subsidiaries or
affiliates;
(
c
)
Solicit,
contact, or attempt to influence any Customer to purchase products or services
from an entity other than Nucor, its subsidiaries or affiliates, which are
the
same or substantially similar to those offered to the Customer by Nucor, its
subsidiaries or affiliates; or
(
d
)
Solicit,
contact, or attempt to influence any Prospective Customer to purchase products
or services from an entity other than Nucor, its subsidiaries or affiliates,
which are the same or substantially similar to those offered to the Prospective
Customer by Nucor, its subsidiaries or affiliates.
(
e
)
For
purposes of Section 10 of this Agreement and this Section 11, and
understanding that Executive has had and will have substantial contact with
customers of Nucor, its affiliates and subsidiaries, during his employment
with
Nucor, its affiliates and subsidiaries, the following definitions shall
apply:
(
i
)
The
term
“
Customer
”
shall
mean any and all customers of Nucor, its subsidiaries and affiliates, with
whom
Nucor, its subsidiaries and affiliates, is doing business at the time of or
within the two (2) years preceding Executive’s separation from Nucor’s
employ.
(
ii
)
If
the
definition in subsection (e)(i) is found to be unreasonable with respect to
any
restriction in this Agreement to which the definition of Customer applies,
then
with regard to that restriction, the term “Customer” shall mean:
(
A
)
Any
customer of Nucor with whom Executive had significant contact or with whom
Executive directly dealt on behalf of Nucor during the six (6) month
period
preceding
Executive’s termination; or
(
B
)
Any
customer of Nucor with whom the direct reports of Executive had significant
contact or with whom the direct reports of Executive dealt during the six (6)
month period preceding Executive’s termination; or
(
C
)
Any
customer of Nucor, its subsidiaries or affiliates, about whom the Executive
has
obtained Secret Information or Confidential Information by virtue of his
employment with Nucor;
Provided
,
however
,
that
the term “Customer” shall not include any business or entity that no longer does
business with Nucor without any direct or indirect interference by Executive
or
violation of this Agreement by Executive, and that ceased doing business with
Nucor prior to any direct or indirect communication or contact by
Executive.
(
iii
)
The
term
“
Prospective
Customer
”
shall
mean any person or entity who has not yet purchased the products or services
of
Nucor, but who has been targeted or identified by Nucor as a potential user
of
the products or services of Nucor, and whom Executive or his direct reports
participated in the solicitation of or on behalf of Nucor during the six (6)
months preceding his termination.
(
iv
)
The
term
“
Nucor
”
shall
mean Nucor Corporation and its subsidiaries and affiliates in existence or
planned during the course of Executive’s employment.
(
v
)
The
term
“
solicit
”
shall
have the following meaning: to initiate contact for the purpose of promoting,
marketing, or selling products or services similar to those Nucor offered during
the tenure of Executive’s employment with Nucor or to accept business from
Nucor’s Customers or Prospective Customers.
12.
Assignment
of Intellectual Property Rights
.
(
a
)
Executive
hereby assigns to Nucor Executive’s entire right, title and interest, including
copyrights and patents, in any idea, invention, design of a useful article
(whether the design is ornamental or otherwise), and any other work of
authorship (collectively the “
Developments
”),
made
or conceived during Executive’s employment by Nucor solely or jointly by
Executive, or created wholly or in part by Executive, whether or not such
Developments are patentable, copyrightable or susceptible to other forms of
protection, where the Developments: (
i
)
were
developed, invented, or conceived within the scope of Executive’s employment
with Nucor; (
ii
)
relate
to Nucor’s actual or demonstrably anticipated research or development; or
(
iii
)
result
from any work performed by Executive on Nucor’s behalf.
(
b
)
The
assignment requirement in subsection (a) of this Section 12 shall not apply
to
an invention that Executive developed entirely on his own time without using
Nucor’s equipment, supplies, facilities or Secret Information or Confidential
Information except for those inventions that (i) relate to Nucor’s business or
actual or demonstrably anticipated research or development, or (ii) result
from
any work performed by Executive for Nucor.
(
c
)
In
connection with any of the Developments assigned in subsection (a) above:
(
i
)
Executive will promptly disclose them to Nucor’s management; and (
ii
)
Executive will, on Nucor's request, promptly execute a specific assignment
of
title to Nucor or its designee, and do anything else reasonably necessary to
enable Nucor or its designee to secure a patent, copyright, or other form of
protection therefore in the United States and in any other applicable
country.
(
d
)
Nothing
in this Section 12 is intended to waive, or shall be construed as waiving,
any
assignment of any Developments to Nucor implied by law.
13
.
Antipiracy
.
Executive agrees for a period of twenty-four (24) months after termination
of
his employment, Executive will not, directly or indirectly, encourage, contact,
or attempt to induce any employees of Nucor, its subsidiaries or affiliates
(a)
with whom Executive had direct contact during the last twelve (12) months of
Executive’s employment with Nucor, and (b) who are employed by Nucor, its
subsidiaries or affiliates at the time of the encouragement, contact or
attempted inducement, to end their employment relationship with Nucor, its
subsidiaries or affiliates.
14
.
Severability
.
It is
the intention of the parties to restrict the activities of Executive only to
the
extent reasonably necessary for the protection of Nucor’s legitimate interests.
The parties specifically covenant and agree that should any of the provisions
in
this Agreement be deemed by a court of competent jurisdiction too broad for
the
protection of Nucor’s legitimate interests, the parties authorize the court to
narrow, limit or modify the restrictions herein to the extent reasonably
necessary to accomplish such purpose. In the event such limiting construction
is
impossible, such invalid or unenforceable provision shall be deemed severed
from
this Agreement and every other provision of this Agreement shall remain in
full
force and effect.
15
.
Enforcement
.
Executive understands and agrees that any breach or threatened breach by
Executive of the provisions of Sections 8 through 13 of this Agreement shall
be
considered a material breach of this Agreement, and in the event of such a
breach or threatened breath of this Agreement, Nucor shall be entitled to pursue
any and all of its remedies under law or in equity arising out of such breach.
If Nucor pursues either a temporary restraining order or temporary injunctive
relief, then Executive waives any requirement that Nucor post a bond. Executive
further agrees that in the event of his breach of any of the provisions of
Sections 7 through 12 of this Agreement, unless otherwise prohibited by
law:
(
a
)
Nucor
shall be (
i
)
released from any obligation to make any further payments to Executive (or
his
estate) under Section 3, (
ii
)
entitled to cancel any unexercised stock options granted under the Company’s
equity incentive plan from and after the date of this Agreement (the
“
Post-Agreement
Date Option Grants
”),
and
(
iii
)
entitled to seek other appropriate relief, including, without limitation,
repayment by the Executive of the amounts already paid under Section 3 of this
Agreement; and
(
b
)
Executive
shall (
i
)
forfeit
any unexercised Post-Agreement Date Option Grants and (
ii
)
forfeit
and immediately return upon demand by Nucor any profit realized by Executive
from the exercise of any Post-Agreement Date Option Grants during the six (6)
month period preceding Executive’s breach of any of the provisions of Sections 8
through 13 of this Agreement.
Executive
agrees that any breach or threatened breach of Sections 8 through 13 will cause
Nucor irreparable harm which cannot be remedied through monetary damages and
the
alternative relief set forth in Section 15(a) shall not be considered an
adequate remedy for the harm Nucor would incur. Executive further agrees that
such remedies in Section 15(a) will not preclude injunctive
relief.
If
Executive breaches or threatens to breach any of the provisions of Sections
10,
11 or 13 of this Agreement and Nucor obtains an injunction, preliminary or
otherwise, ordering the Executive to adhere to the restrictive period required
by the applicable section, then the applicable restrictive period will be
extended by the number of days that have elapsed from the date of Executive’s
termination until the time the injunction is granted.
Executive
further agrees, unless otherwise prohibited by law, to pay Nucor’s attorneys’
fees and costs incurred in successfully enforcing its rights under this Section,
or in defending against any action brought by Executive or on Executive’s behalf
in violation of or under this Section in which Nucor prevails. Executive agrees
that Nucor’s actions pursuant to this Section, including, without limitation,
filing a legal action, are permissible and are not and will not be considered
by
Executive to be retaliatory. Executive further represents and acknowledges
that
in the event of the termination of Executive’s employment for any reason,
Executive’s experience and capabilities are such that Executive can obtain
employment and that enforcement of this Agreement by way of injunction will
not
prevent Executive from earning a livelihood.
16
.
Reasonableness
of Restrictions
.
Executive has carefully considered the nature and extent of the restrictions
upon him and the rights and remedies conferred upon Nucor under Sections 10,
11,
12, 13 and 15 and hereby acknowledges and agrees that the same are reasonable
in
time and territory, are designed to eliminate competition which would otherwise
be unfair to Nucor, do not interfere with Executive’s exercise of his inherent
skill and experience, are reasonably required to protect the legitimate
interests of Nucor, and do not confer a benefit upon Nucor disproportionate
to
the detriment to Executive. Executive certifies that he has had the opportunity
to discuss this Agreement with such legal advisors as he chooses and that he
understands its provisions and has entered into this Agreement freely and
voluntarily.
17
.
Applicable
Law
.
This
Agreement shall be interpreted, construed and governed according to the laws
of
the State of North Carolina, regardless of choice of law principles to the
contrary. Each party, for themselves and their successors and assigns, hereby
irrevocably (
a
)
consents to the exclusive jurisdictions of the State and Federal courts located
in the State of North Carolina; and (
b
)
waives
any objection to any such action based on venue or forum
non
conveniens
.
This
Agreement is intended, among other things, to supplement the provisions of
the
North Carolina Trade Secrets Protection Act, as amended from time to time,
and
the duties Executive owes to Nucor under the common law, including, but not
limited to, the duty of loyalty.
18
.
Executive
to Return Property
.
Executive agrees that upon (
a
)
the
termination of Executive’s employment with Nucor, whether by Executive or Nucor
for any reason (with or without cause), or (
b
)
the
written request of Nucor, Executive (or in the event of the death or disability
of Executive, Executive’s heirs, successors, assigns and legal representatives)
shall return to Nucor any and all property of Nucor, including but not limited
to all Secret Information, Confidential Information, notes, data, tapes,
computers, lists, reference items, phones, documents, sketches, drawings,
software, product samples, rolodex cards, forms, manuals, and equipment, without
retaining any copies or summaries of such property. Executive further agrees
that to the extent Secret Information or Confidential Information are in
electronic format and in Executive’s possession, custody or control; Executive
will provide all such copies to Nucor and will not keep copies in such format
but, upon Nucor’s request, will confirm the permanent deletion
thereof.
19
.
Entire
Agreement; Amendments
.
This
Agreement discharges and cancels all previous agreements and constitutes the
entire agreement between the parties with regard to the subject matter hereof.
No agreements, representations, or statements of any party not contained herein
shall be binding on either party. Further, no amendment or variation of the
terms or conditions of this Agreement shall be valid unless in writing and
signed by both parties.
20
.
Assignability
.
This
Agreement and the rights and duties created hereunder shall not be assignable
or
delegable by Executive. Nucor may, at its option and without consent of
Executive, assign its rights and duties hereunder to any successor entity or
transferee of Nucor’s assets.
21
.
Binding
Effect
.
This
Agreement shall be binding upon and inure to the benefit of Nucor and Executive
and their respective successors, assigns, heirs and legal
representatives.
22
.
No
Waiver
.
No
failure or delay by any party to this Agreement to enforce any right specified
in this Agreement will operate as a waiver of such right, nor will any single
or
partial exercise of a right preclude any further or later enforcement of the
right within the period of the applicable statute of limitations.
23
.
Compliance
with Code Section 409A
.
Notwithstanding anything in this Agreement to the contrary, if any amount or
benefit that Nucor determines would constitute non-exempt “deferred
compensation” for purposes of Section 409A of the Internal Revenue Code of 1986
(the “
Code
”)
would
otherwise be payable or distributable under this Agreement by reason of the
Executive’s separation from service, then to the extent necessary to comply with
Code Section 409A: (
i
)
if the
payment or distribution is payable in a lump sum, the Executive’s right to
receive payment or distribution of such non-exempt deferred compensation will
be
delayed until the earlier of the Executive’s death or the first day of the
seventh month following the Executive’s separation from service, and
(
ii
)
if the
payment, distribution or benefit is payable or provided over time, the amount
of
such non-exempt deferred compensation or benefit that would otherwise be payable
or provided during the six-month period immediately following the Executive’s
separation from service will be accumulated, and the Executive’s right to
receive payment or distribution of such accumulated amount or benefit will
be
delayed until the earlier of the Executive’s death or the first day of the
seventh month following the Executive’s separation from service and paid or
provided on the earlier of such dates, without interest, and the normal payment
or distribution schedule for any remaining payments, distributions or benefits
will commence. For purposes of this Agreement, the term “separation from
service” shall be defined as provided in Code Section 409A and applicable
regulations.
IN
WITNESS WHEREOF, the parties have executed this Agreement on the dates specified
below.
|
/s/
R. Joseph Stratman
|
|
Date:
|
October
11, 2007
|
|
|
|
|
|
|
|
NUCOR
CORPORATION
|
|
|
|
|
|
|
|
By:
|
/s/
John J. Ferriola
|
|
Its:
|
Chief
Operating Officer of Steelmaking Operations
|
|
Date:
|
October
11,
2007
|
Exhibit
10.2
AMENDMENT
NO. 1
NUCOR
CORPORATION
2005
STOCK OPTION AND AWARD PLAN
THIS
AMENDMENT NO. 1 (this “
Amendment
”)
to the
Nucor Corporation 2005 Stock Option and Award Plan (the “
Plan
”)
is
adopted as of the 5th day of September, 2007, by
NUCOR
CORPORATION,
a
Delaware
corporation
(the “
Company
”).
Statement
of Purpose
The
Company maintains the Plan to provide incentive compensation to senior officers
of the Company. The Company desires to amend the Plan to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986.
NOW,
THEREFORE, the Company does hereby declare that the Plan is hereby amended
effective as of the date hereof as follows:
1
.
Section
4.4(d) of the Plan is amended to read as follows:
“(d)
Unless
an
earlier payment date is specified in the Award Agreement for the Participant’s
Restricted Stock Units, the vested Restricted Stock Units credited to a
Participant’s Restricted Stock Unit Account shall be paid to the Participant, or
in the event of the Participant’s death, to the Participant’s Beneficiary, no
earlier than fifteen (15) days and no later than ninety (90) days after the
date
the Participant terminates service as a member of the Board or separates from
service as an Employee, as applicable;
provided
,
however
,
in no
event will distribution be made to Participant who is a “specified employee”
within the meaning of Code Section 409A(a)(2)(B)(i) and the regulations
thereunder, prior to the date which is six months after such Participant’s
separation from service or, if earlier, such Participant’s death. The form of
payment shall be one share of the Company’s common stock for each Restricted
Stock Unit credited to the vested portion of the Participant’s Restricted Stock
Unit Account and cash for any fractional unit.
If
permitted under the terms of the Award Agreement for the Participant’s
Restricted Stock Units and in accordance with procedures established by the
Committee, but in no event later than the later of (
i
)
December 31, 2007 or (
ii
)
thirty
(30) days after the date an individual initially becomes a Participant under
the
Plan, the Participant may elect a single sum payment of the Participant’s
Restricted Stock Unit Account or payment in installments over a term certain
of
either three (3) or five (5) years. Any such election shall apply to a
Participant’s entire Restricted Stock Unit Account and shall be irrevocable. In
the event a Participant fails to make a valid method of payment election,
distribution of the Participant’s Restricted Stock Unit Account shall be made in
a single sum payment of shares of Company common stock and cash for any
fractional unit credited to the Restricted Stock Unit Account.”
2
.
Section
4.8 of the Plan is amended to read as follows:
“
Section
4.8.
[Intentionally
Deleted.]
3
.
Except
as
expressly or by necessary implication amended hereby, the Plan shall continue
in
full force and effect.
IN
WITNESS WHEREOF, the Company has caused this Amendment No. 1 to be executed
by
its duly authorized officer as of the day and year first above
written.
|
NUCOR
CORPORATION
|
|
|
|
|
|
By:
|
/s/
Terry S. Lisenby
|
|
Name:
|
Terry
S. Lisenby
|
|
Title:
|
Chief
Financial Officer, Treasurer and Executive
|
|
|
Vice
President
|
Exhibit
10.3
AMENDMENT
NO. 1
NUCOR
CORPORATION
SENIOR
OFFICERS ANNUAL INCENTIVE PLAN
THIS
AMENDMENT NO. 1 (this “
Amendment
”)
to the
Nucor Corporation Senior Officers Annual Incentive Plan (the “
Plan
”)
is
adopted as of the 5th day of September, 2007, by
NUCOR
CORPORATION,
a
Delaware
corporation
(the “
Company
”).
Statement
of Purpose
The
Company maintains the Plan to provide incentive compensation to senior officers
of the Company. The Company desires to amend the Plan to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986.
NOW,
THEREFORE, the Company does hereby declare that the Plan is hereby amended
effective as of the date hereof as follows:
1
.
Section
4.2 of the Plan is amended by adding the following new sentence to the end
thereof:
“In
no
event, however, shall payment of a Performance Award be made later than two
and
one-half (2½) months after the end of the Performance Period for the Performance
Award.”
2
.
Section
4.3(e) of the Plan is amended to read as follows:
“
(e)
Payment
of Deferral Accounts
.
The
vested portion of an Eligible Employee’s Deferral Account shall be paid to the
Eligible Employee no earlier than fifteen (15) days and no later than ninety
(90) days after the Eligible Employee’s separation from service. The form of
payment shall be one share of the Company’s common stock for each common stock
unit and cash for any fractional unit credited to the vested portion of the
Deferral Account. Notwithstanding the foregoing, in no event will distribution
be made to an Eligible Employee who is a “specified employee,” within the
meaning of Code Section 409A(a)(2)(B)(i) and the regulations thereunder,
prior
to the date which is six months after such Eligible Employee’s separation from
service or, if earlier, such Eligible Employee’s death.
In
accordance with procedures established by the Committee, but in no event
later
than the later of (
i
)
December 31, 2007 or (
ii
)
thirty
(30) days after the date an individual initially becomes an Eligible Employee
under the Plan, the Eligible Employee may elect a single sum payment of the
Eligible Employee’s Deferral Account or payment in installments over a term
certain of not more than five (5) years. In the event an Eligible Employee
fails
to make a valid method of payment election, distribution of the Eligible
Employee’s Deferral Account shall be made in a single sum payment of shares of
Company common stock and cash for any fractional unit credited to the vested
portion of the Deferral Account.”
3
.
Except
as
expressly or by necessary implication amended hereby, the Plan shall continue
in
full force and effect.
IN
WITNESS WHEREOF, the Company has caused this Amendment No. 1 to be executed
by
its duly authorized officer as of the day and year first above
written.
|
NUCOR
CORPORATION
|
|
|
|
|
|
By:
|
/s/
Terry S. Lisenby
|
|
Name:
|
Terry
S. Lisenby
|
|
Title:
|
Chief
Financial Officer, Treasurer and Executive
|
|
|
Vice
President
|
Exhibit
10.4
AMENDMENT
NO. 2
NUCOR
CORPORATION
SENIOR
OFFICERS LONG-TERM INCENTIVE PLAN
THIS
AMENDMENT NO. 2 (this “
Amendment
”)
to the
Nucor Corporation Senior Officers Long-Term Incentive Plan (the “
Plan
”)
is
adopted as of the 5th day of September, 2007, by
NUCOR
CORPORATION,
a
Delaware
corporation
(the “
Company
”).
Statement
of Purpose
The
Company maintains the Plan to provide incentive compensation to senior officers
of the Company. The Company desires to amend the Plan to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986.
NOW,
THEREFORE, the Company does hereby declare that the Plan is hereby amended
effective as of the date hereof as follows:
1
.
Section
4.2 of the Plan is amended by adding the following new sentence immediately
after the first sentence thereof:
“In
no
event, however, shall payment of a Performance Award be made later than two
and
one-half (2½) months after the end of the Performance Period for the Performance
Award.”
2
.
Section
4.3(e) of the Plan is amended to read as follows:
“
(e)
Payment
of Deferral Accounts
.
The
vested portion of an Eligible Employee’s Deferral Account shall be paid to the
Eligible Employee no earlier than fifteen (15) days and no later than ninety
(90) days after the Eligible Employee’s separation from service. The form of
payment shall be one share of the Company’s common stock for each common stock
unit and cash for any fractional unit credited to the vested portion of the
Deferral Account. Notwithstanding the foregoing, in no event will distribution
be made to an Eligible Employee who is a “specified employee,” within the
meaning of Code Section 409A(a)(2)(B)(i) and the regulations thereunder, prior
to the date which is six months after such Eligible Employee’s separation from
service or, if earlier, such Eligible Employee’s death.
In
accordance with procedures established by the Committee, but in no event later
than the later of (
i
)
December 31, 2007 or (
ii
)
thirty
(30) days after the date an individual initially becomes an Eligible Employee
under the Plan, the Eligible Employee may elect a single sum payment of the
Eligible Employee’s Deferral Account or payment in installments over a term
certain of not more than five (5) years. In the event an Eligible Employee
fails
to make a valid method of payment election, distribution of the Eligible
Employee’s Deferral account shall be made in a single sum payment of shares of
Company common stock and cash for any fractional unit credited to the Deferral
Account.”
3
.
Except
as
expressly or by necessary implication amended hereby, the Plan shall continue
in
full force and effect.
IN
WITNESS WHEREOF, the Company has caused this Amendment No. 2 to be executed
by
its duly authorized officer as of the day and year first above
written.
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NUCOR
CORPORATION
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By:
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/s/
Terry S. Lisenby
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Name:
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Terry
S. Lisenby
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Title:
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Chief
Financial Officer, Treasurer and Executive
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Vice
President
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Exhibit
10.5
NUCOR
CORPORATION
SEVERANCE
PLAN FOR SENIOR OFFICERS AND GENERAL MANAGERS
ARTICLE
I
ESTABLISHMENT
OF PLAN
Effective
April 1, 2002, Nucor Corporation established a severance benefit policy for
senior officers and general managers. The Company desires to adopt and set
forth
in a formal plan document the terms and provisions of the severance policy
to
comply with the requirements of Section 409A of the Code and to meet other
current needs.
Now,
therefore, as of the Effective Date, the Company hereby adopts the Nucor
Corporation Severance Plan for Senior Officers and General Managers, as set
forth in this document.
ARTICLE
II
DEFINITIONS
As
used
herein, the following words and phrases shall have meanings set forth below
unless the context clearly indicates otherwise:
2
.
1
“
Base
Salary
”
shall
mean the amount a Participant is entitled to receive from the Company or a
Subsidiary in cash as wages or salary on an annualized basis in consideration
for his or her services, (
i
)
including any such amounts which have been deferred and (
ii
)
excluding all other elements of compensation such as, without limitation, any
bonuses, commissions, overtime, health benefits, perquisites and incentive
compensation.
2
.
2
“
Board
”
shall
mean the Board of Directors of the Company.
2
.
3
“
Cause
”
shall
mean, with respect to a Participant’s termination of employment, (
i
)
the
willful and
repeated
failure of the Participant to perform substantially the Participant’s duties
with the Company or a Subsidiary (other than any such failure resulting from
incapacity due to physical or mental illness); (
ii
)
the
Participant’s conviction of, or plea of guilty or nolo contendere to, a felony
which is materially and demonstrably injurious to the Company or a Subsidiary;
or (
iii
)
the
Participant’s willful engagement in gross misconduct in violation of Company
policy.
2
.
4
“
Code
”
shall
mean the Internal Revenue Code of 1986, as amended from time to
time.
2
.
5
“
Committee
”
shall
mean the Compensation and Executive Development Committee of the
Board.
2
.
6
“
Company
”
shall
mean Nucor Corporation, a Delaware corporation and any successor
thereto.
2
.
7
“
Compete
”
shall
mean to engage in the design, research, development, manufacture, marketing,
sale or distribution of products that are the same as, or substantially similar
to, products that are being designed, researched, developed, manufactured,
marketed, sold or distributed by the Company or a Subsidiary.
2
.
8
“
Date
of Termination
”
shall
mean the date on which a Participant’s employment with the Company and all
Subsidiaries terminates.
2
.
9
“
Effective
Date
”
shall
mean October 1, 2007.
2
.
10
“
Employee
”
shall
mean any person, including a member of the Board, who is employed by the Company
or a Subsidiary.
2
.
11
“
Month’s
Base Pay
”
shall
mean the Participant’s Base Salary divided by twelve (12).
2
.
12
“
Participant
”
shall
mean an Employee who meets the eligibility requirements of Section
3.1.
2
.
13
“
Plan
”
shall
mean the Nucor Corporation Severance Plan for Senior Officers and General
Managers as set forth herein and as amended from time to time.
2
.
14
“
Severance
Benefits
”
shall
mean the payments and benefits provided in accordance with Section 4.2 of the
Plan.
2
.
15
“
Specified
Employee
”
shall
mean an Employee who, as of the date of the Employee’s termination of
employment, is a key employee of the Company. An Employee shall be a “key
employee” for this purpose during the twelve (12) month period beginning April 1
each year if the Employee met the requirements of Section 416(i)(1)(A)(i),
(ii)
or (iii) of the Code (applied in accordance with the regulations thereunder
and
disregarding Section 416(i)(5) of the Code) at any time during the twelve (12)
month period ending on the immediately preceding December 31.
2
.
16
“
Subsidiary
”
shall
mean any corporation (other than the Company), limited liability company, or
other business organization in an unbroken chain of entities beginning with
the
Company in which each of such entities other than the last one in the unbroken
chain owns stock, units, or other interests possessing fifty percent (50%)
or
more of the total combined voting power of all classes of stock, units, or
other
interests in one of the other entities in that chain.
2
.
17
“
Year
of Service
”
shall
mean each continuous twelve (12) month period of employment (including
fractional portions thereof), including periods of authorized vacation,
authorized leave of absence and short-term disability leave, with the Company
or
a Subsidiary or the predecessors or successors thereof.
ARTICLE
III
ELIGIBILITY
3
.
1
Participation
.
Each
Employee who is determined by the Committee to be a Senior Officer or a General
Manager of the Company or a Subsidiary shall be eligible to be a Participant
in
the Plan.
3
.
2
Duration
of Participation
.
A
Participant shall cease to be a Participant in the Plan when he or she no longer
is an Employee of the Company or a Subsidiary. Notwithstanding the foregoing,
a
Participant who is entitled, as a result of ceasing to be an Employee of the
Company or a Subsidiary, to receive Severance Benefits or any other amounts
under the Plan shall remain a Participant in the Plan until the full amount
of
the Severance Benefits and any other amounts payable under the Plan have been
paid to the Participant.
ARTICLE
IV
SEVERANCE
BENEFITS
4
.
1
Right
to Severance Benefits
.
(
a
)
Terminations
of Employment Which Trigger Severance Benefits
.
A
Participant shall be entitled to receive Severance Benefits from the Company
as
provided in Section 4.2, if (
i
)
the
Participant’s employment with the Company or a Subsidiary is terminated for any
reason, including due to the Participant’s death, voluntary retirement,
termination or resignation, except as provided in Section 4.1(b) and
(
ii
)
the
Participant executes a Non-Competition and Non-Solicitation Agreement and a
Waiver and Release Agreement as provided in Article V.
(
b
)
Terminations
of Employment Which Do Not Trigger Severance Benefits
.
Notwithstanding the provisions of Section 4.1(a), if a Participant’s employment
is terminated by the Company for Cause, the Participant shall not be entitled
to
Severance Benefits under the Plan.
4
.
2
Severance
Benefits
.
(
a
)
General
.
If a
Participant’s employment is terminated in circumstances entitling him or her to
Severance Benefits as provided in Section 4.1(a), the Company shall pay such
Participant Severance Benefits in an amount equal to the greater of
(
i
)
six (6)
Month’s Base Pay or (
ii
)
the
product of (
A
)
one
Month’s Base Pay and (
B
)
the
number of the Participant’s Years of Service through the Date of Termination;
provided
that
,
if the
Participant is under age 55 as of the Date of Termination, the Participant’s
Severance Benefits shall not be less than the sum of the value as of the Date
of
Termination of the Participant’s forfeitable deferred common stock units
credited to the Participant’s deferral accounts under the Company’s Senior
Officers Annual Incentive and Senior Officers Long-Term Incentive Plan and
the
Participant’s forfeitable shares of restricted stock awarded under the Senior
Officers Long-Term Incentive Plan. A Participant’s Severance Benefits shall be
reduced and offset, but not below zero, by (
i
)
any
severance pay or pay in lieu of notice required to be paid to such Employee
under applicable law, including, without limitation, the Workers Adjustment
Retraining Notification Act or any similar state or local law and (
ii
)
any
severance benefits provided to a Participant pursuant to any employment
agreement between the Participant and the Company except to the extent
specifically provided otherwise in such employment agreement. Severance Benefits
shall be paid at the time and in the form described in Section
4.2(b).
(
b
)
Time
and Form of Payment
.
If a
Participant’s employment with the Company is terminated for any reason other
than the Participant’s death, the Participant’s Severance Benefits shall be paid
to the Participant in twenty-four (24) equal monthly installments, without
interest or other increment thereon, commencing on the first day of the month
following the Participant’s termination of employment;
provided
,
however
,
if the
Participant is a Specified Employee as of the date of the Participant’s
termination of employee, the Severance Benefits that would otherwise be payable
during the six (6) month period immediately following the Participant’s
termination of employment shall be accumulated and the Participant’s right to
receive payment of such accumulated amount will be delayed until the first
day
of the seventh month following the Participant’s termination of employment and
paid on such date, without interest, and the normal payment schedule for the
remaining Severance Benefits will commence. If the Participant dies during
the
twenty-four (24) month installment payment period, the remaining payments that
would have been paid to the Participant shall be paid to the Participant’s
estate in a single sum payment as soon as practicable following the
Participant’s death. In the event a Participant dies while employed by the
Company, the Participant’s Severance Benefits shall be paid to the Participant’s
estate in a single sum payment as soon as practicable following the
Participant’s death.
4
.
3
Other
Benefits Payable
.
The
Severance Benefits provided pursuant to Section 4.2 shall be provided in
addition to, and not in lieu of, all other accrued or earned and vested but
deferred compensation, rights, options or other benefits which may be owed
to a
Participant upon or following termination.
ARTICLE
V
NON-COMPETITION
AND NON-SOLICITATION AGREEMENT;
WAIVER
AND RELEASE AGREEMENT
5
.
1
Non-Competition
and Non-Solicitation Agreement
.
As a
condition to the receipt of Severance Benefits, a Participant shall enter into
an agreement in form and content reasonably satisfactory to the Committee
pursuant to which the Participant agrees to refrain, for a reasonable period
of
time following the Participant’s Date of Termination, from (
i
)
competing with the Company, (
ii
)
soliciting or influencing any customer or prospective customer of the Company
to
alter its business with the Company or to do business with another company,
(
iii
)
soliciting or offering employment to any employee of the Company, or
(
iv
)
disclosing any confidential information or trade secrets of the
Company.
5
.
2
Waiver
and Release Agreement
.
As a
condition to the receipt of Severance Benefits, a Participant must submit a
signed Waiver and Release Agreement in form and content reasonably satisfactory
to the Committee on or within forty-five (45) days of the Participant’s Date of
Termination. A Participant may revoke the signed Waiver and Release Agreement
within seven (7) days of signing. Any such revocation must be made in writing
and must be received by the Committee within such seven (7) day period. A
Participant who timely revokes a Waiver and Release Agreement shall not be
eligible to receive Severance Benefits under the Plan.
5
.
3
Effect
of Breach
.
In the
event a Participant breaches any agreement entered into in accordance with
Section 5.1 or fails to sign a Waiver and Release Agreement in accordance with
Section 5.2, the Committee may require the Participant to (
a
)
immediately forfeit any portion of the Severance Benefits that is then
outstanding and (
b
)
return
to the Company all or some of the economic value of the Severance Benefits
that
was realized or obtained by the Participant prior to the breach.
ARTICLE
VI
SUCCESSOR
TO COMPANY
This
Plan
shall bind any successor of the Company, its assets or its businesses (whether
direct or indirect, by purchase, merger, consolidation or otherwise), in the
same manner and to the same extent that the Company would be obligated under
this Plan if no succession had taken place. In the case of any transaction
in
which a successor would not by the foregoing provision or by operation of law
be
bound by this Plan, the Company shall require such successor expressly and
unconditionally to assume and agree to perform the Company’s obligations under
this Plan, in the same manner and to the same extent that the Company would
be
required to perform if no such succession had taken place. The term “Company,”
as used in this Plan, shall mean the Company as hereinbefore defined and any
successor or assignee to the business or assets which by reason hereof becomes
bound by this Plan.
ARTICLE
VII
DURATION,
AMENDMENT AND TERMINATION
7
.
1
Amendment
and Termination
.
The
Plan may be terminated or amended in any respect by resolution adopted by a
majority of the Board.
7
.
2
Form
of Amendment
.
The
form of any amendment or termination of the Plan shall be a written instrument
signed by a duly authorized officer or officers of the Company, certifying
that
the amendment or termination has been approved by the Board. An amendment of
the
Plan in accordance with the terms hereof shall automatically effect a
corresponding amendment to all Participants’ rights hereunder. A termination of
the Plan, in accordance with the terms hereof, shall automatically effect a
termination of all Participants’ rights and benefits hereunder.
ARTICLE
VIII
MISCELLANEOUS
8
.
1
Employment
Status
.
This
Plan does not constitute a contract of employment or impose on the Company
or
any Subsidiary any obligation to retain the Participant as an Employee, to
change the status of the Participant’s employment, or to change the Company’s
policies or those of its subsidiaries’ regarding termination of
employment.
8
.
2
Validity
and Severability
.
The
invalidity or unenforceability of any provision of the Plan shall not affect
the
validity or enforceability of any other provision of the Plan, which shall
remain in full force and effect, and any prohibition or unenforceability in
any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
8
.
3
Governing
Law
.
The
validity, interpretation, construction and performance of the Plan shall in
all
respects be governed by the laws of North Carolina, without reference to
principles of conflict of law.
8
.
4
Named
Fiduciary; Administration
.
The
Company is the named fiduciary of the Plan, with full authority to control
and
manage the operation and administration of the Plan, acting through the
Committee and the Board.
8
.
5
Claims
Procedure
.
If an
Employee or former Employee makes a written request alleging a right to receive
benefits under the Plan or alleging a right to receive an adjustment in benefits
being paid under the Plan, the Company shall treat it as a claim for benefits.
All claims for Severance Benefits under the Plan shall be sent to the Human
Resources Department of the Company and must be received within thirty (30)
days
after the Date of Termination. If the Company determines that any individual
who
has claimed a right to receive Severance Benefits under the Plan is not entitled
to receive all or any part of the benefits claimed, it will inform the claimant
in writing of its determination and the reasons therefor in terms calculated
to
be understood by the claimant. The notice will be sent within thirty (30) days
of the written request, unless the Company determines additional time, not
exceeding forty-five (45) days, is needed. The notice shall make specific
reference to the pertinent Plan provisions on which the denial is based, and
describe any additional material or information that is necessary. Such notice
shall, in addition, inform the claimant what procedure the claimant should
follow to take advantage of the review procedures set forth below in the event
the claimant desires to contest the denial of the claim. The claimant may,
within ninety (90) days thereafter, submit in writing to the Company a notice
that the claimant contests the denial of his or her claim by the Company and
desires a further review. The Company shall, within thirty (30) days thereafter,
review the claim and authorize the claimant to appear personally and review
pertinent documents and submit issues and comments relating to the claim to
the
persons responsible for making the determination on behalf of the Company.
The
Company will render its final decision with specific reasons therefor in writing
and will transmit it to the claimant within thirty (30) days of the written
request for review, unless the Company determines additional time, not exceeding
thirty (30) days, is needed, and so notifies the Participant. If the Company
fails to respond to a claim filed in accordance with the foregoing within thirty
(30) days or any such extended period, the Company shall be deemed to have
denied the claim.
8
.
6
Unfunded
Plan Status
.
This
Plan is intended to be an unfunded plan. All payments pursuant to the Plan
shall
be made from the general funds of the Company and no special or separate fund
shall be established or other segregation of assets made to assure payment.
No
Participant or other person shall have under any circumstances any interest
in
any particular property or assets of the Company as a result of participating
in
the Plan. Notwithstanding the foregoing, the Company may (but shall not be
obligated to) create one or more grantor trusts, the assets of which are subject
to the claims of the Company’s creditors, to assist it in accumulating funds to
pay its obligations under the Plan.
8
.
7
Tax
Withholding
.
Any
payment provided for hereunder shall be paid net of any applicable tax
withholding required under federal, state, local or foreign law.
8
.
8
Nonalienation
of Benefits
.
Except
as otherwise specifically provided herein, amounts payable under the Plan shall
not be subject to any manner of anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of
any
kind, either voluntary or involuntary, including any liability which is for
alimony of other payments for the support of a spouse or former spouse, or
for
any other relative of a Participant, prior to actually being received by the
person entitled to payment under the terms of the Plan. Any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, garnish,
execute or levy upon, otherwise dispose of any right to amounts payable
hereunder, shall be null and void.
8
.
9
Facility
of Payment
.
(
a
)
If
a
Participant is declared an incompetent, and a conservator, guardian, or other
person legally charged with his or her care has been appointed, any Severance
Benefits to which such individual is entitled may be paid or provided to such
conservator, guardian, or other person legally charged with his or her
care;
(
b
)
If
a
Participant is incompetent, the Company may (
i
)
require
the appointment of a conservator or guardian, (
ii
)
distribute amounts to his or her spouse, with respect to a Participant who
is
married, or to such other relative of an unmarried Participant for the benefit
of such Participant, or (
iii
)
distribute such amounts directly to or for the benefit of such Participant;
provided however, that a conservator, guardian, or other person charged with
his
or her care has not been appointed.
8
.
10
Gender
and Number
.
Except
when the context indicates to the contrary, when used herein masculine terms
shall be deemed to include the feminine, and plural the singular.
8
.
11
Headings
.
The
headings of Articles and Sections are included solely for convenience of
reference, and are not to be used in the interpretation of the provisions of
the
Plan.
Exhibit
31
Certification
of Principal Executive Officer
Pursuant
to Rule 13a-14(a)/15d-14(a)
(Section
302 of the Sarbanes-Oxley Act of 2002)
I,
Daniel R. DiMicco, certify that:
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1.
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I
have reviewed this quarterly report on Form 10-Q of Nucor
Corporation;
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2.
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Based
on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to
make the statements made, in light of the circumstances under which
such
statements were made, not misleading with respect to the period covered
by
this report;
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3.
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Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
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4.
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The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
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(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect,
the
registrant’s internal control over financial reporting,
and
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5.
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The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
function):
|
(a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant’s internal control over financial
reporting.
Date:
November 6, 2007
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/s/
Daniel R. DiMicco
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Daniel
R. DiMicco
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Chairman,
President and
Chief
Executive Officer
|
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Exhibit
31.1
Certification
of Principal Financial Officer
Pursuant
to Rule 13a-14(a)/15d-14(a)
(Section
302 of the Sarbanes-Oxley Act of 2002)
I,
Terry S. Lisenby, certify that:
|
1.
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I
have reviewed this quarterly report on Form 10-Q of Nucor
Corporation;
|
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2.
|
Based
on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to
make the statements made, in light of the circumstances under which
such
statements were made, not misleading with respect to the period covered
by
this report;
|
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3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect,
the
registrant’s internal control over financial reporting,
and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
function):
|
(a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant’s internal control over financial
reporting.
Date:
November 6, 2007
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/s/
Terry S. Lisenby
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Terry
S. Lisenby
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Chief
Financial Officer, Treasurer
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|
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and
Executive Vice President
|
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Exhibit
32
Certification
of Principal Executive Officer
Pursuant
to 18 U.S.C. 1350
(Section
906 of the Sarbanes-Oxley Act of 2002)
I,
Daniel R. DiMicco, Chairman, President and Chief Executive Officer (principal
executive officer) of Nucor Corporation (the “Registrant”), certify, to the best
of my knowledge, based upon a review of the Quarterly Report on Form 10-Q for
the period ended September 29, 2007 of the Registrant (the “Report”),
that:
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934, as amended;
and
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Registrant.
|
/s/
Daniel R. DiMicco
|
|
Name:
Daniel
R. DiMicco
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Date: November
6, 2007
|
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Exhibit
32.1
Certification
of Principal Financial Officer
Pursuant
to 18 U.S.C. 1350
(Section
906 of the Sarbanes-Oxley Act of 2002)
I,
Terry S. Lisenby, Chief Financial Officer, Treasurer and Executive Vice
President (principal financial officer) of Nucor Corporation (the “Registrant”),
certify, to the best of my knowledge, based upon a review of the Quarterly
Report on Form 10-Q for the period ended September 29, 2007 of the Registrant
(the “Report”), that:
(1)
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The
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934, as amended;
and
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(2)
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The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Registrant.
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/s/
Terry S. Lisenby
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Date:
November
6, 2007
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