SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE
ACT OF 1934
(AMENDMENT NO.)
Filed by the registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
BETHLEHEM STEEL
(Name of Registrant as Specified In Its Charter)
BETHLEHEM STEEL
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
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Bethlehem
Steel
Corporation
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[LOGO OF BETHLEHEM STEEL
CORPORATION APPEARS HERE]
Notice of 1997
Annual Meeting
of Stockholders
and Proxy
Statement
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<PAGE> 3
BETHLEHEM STEEL CORPORATION
1170 Eighth Avenue
Bethlehem, Pennsylvania 18016-7699
[LOGO OF BETHELHEM STEEL APPEARS HERE]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting (the "Meeting") of Stockholders of Bethlehem Steel
Corporation ("Bethlehem") will be held in the Main Ballroom, Radisson Hotel,
4727 Concord Pike, U.S. Route 202, Wilmington, Delaware, on Tuesday, April 29,
1997, at 11 a.m., for the following purposes:
(1) To elect thirteen Directors to serve for terms of one year and
until their successors have been elected and qualified;
(2) To ratify the appointment of Price Waterhouse LLP as the
independent auditors for 1997; and
(3) To transact such other business as may properly come before the
Meeting.
Stockholders of record at the close of business on March 3, 1997, are
entitled to receive notice of and to vote at the Meeting. A complete list of
such stockholders will be open for examination by any stockholder for any
purpose germane to the Meeting at the offices of The Corporation Trust Company
at 1209 Orange Street, Wilmington, Delaware, for a period of ten days prior to
the Meeting.
This Notice, the Proxy Statement and the enclosed form of proxy are
sent to you by order of the Board of Directors.
WILLIAM H. GRAHAM
Secretary
March 14, 1997
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IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE MARK, DATE AND
SIGN THE ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED
RETURN ENVELOPE.
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BETHLEHEM STEEL CORPORATION
BETHLEHEM, PENNSYLVANIA 18016-7699
General Information for Stockholders . . . . . . . . . . . . . .1
Proxy Procedure. . . . . . . . . . . . . . . . . . . . . .1
Stockholder Proposals. . . . . . . . . . . . . . . . . . .2
Election of Directors. . . . . . . . . . . . . . . . . . . . . .2
General Background . . . . . . . . . . . . . . . . . . . .2
Information Concerning Nominees. . . . . . . . . . . . . .3
Amount and Nature of Beneficial Ownership. . . . . . . . .7
Committees of the Board. . . . . . . . . . . . . . . . . .8
Certain Business Relationships. . . . . . . . . . . . . .8
Ratification of the Appointment of Independent Auditors. . . . .8
Executive Compensation . . . . . . . . . . . . . . . . . . . . .9
Compensation Committee Report on Executive Compensation. .9
Summary Compensation Table . . . . . . . . . . . . . . . 12
Stock Option/SAR Grants in 1996. . . . . . . . . . . . . 13
Aggregated Stock Option/SAR Exercises in 1996
and December 31, 1996, Stock Option Values. . . . . . . 13
Pension Plan Table . . . . . . . . . . . . . . . . . . . 13
Comparative Stock Performance. . . . . . . . . . . . . . 14
Additional Information . . . . . . . . . . . . . . . . . . . . 15
Indemnification Assurance Agreements . . . . . . . . . . 15
Stockholders . . . . . . . . . . . . . . . . . . . . . . 15
Other Matters. . . . . . . . . . . . . . . . . . . . . . 16
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PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Bethlehem Steel Corporation ("Bethlehem") of proxies
for use at the Annual Meeting of Stockholders to be held on April 29, 1997, and
any adjournments thereof. This Proxy Statement and the accompanying form of
proxy are being mailed to stockholders on or after March 14, 1997.
GENERAL INFORMATION FOR STOCKHOLDERS
PROXY PROCEDURE
Proxies are solicited by the Board of Directors of Bethlehem in order to
provide every stockholder with an opportunity to vote on all matters that
properly come before the Annual Meeting of Stockholders, whether or not the
stockholder attends in person. When the enclosed form of proxy is properly
signed, dated and returned, the shares represented will be voted by the persons
named as proxies in accordance with the stockholder's directions. If no
direction is indicated, the shares will be voted as recommended by the Board of
Directors.
Bethlehem has adopted a confidential voting policy which provides that
votes of all stockholders of Bethlehem shall be held in confidence from
Bethlehem, its directors, officers and employees except (i) to allow the
independent inspectors of election to certify the results of the vote, (ii) as
necessary to meet applicable legal requirements and to assert or defend claims
for or against Bethlehem, (iii) in case of a contested proxy solicitation or
(iv) in the event a stockholder has made a written comment on the proxy
material. As part of the policy, Bethlehem will continue its current practice
of employing an independent tabulator to receive and tabulate the proxies and
independent inspectors of election.
Any stockholder executing a form of proxy may revoke that proxy or may
submit a revised form of proxy at any time before it is voted. A stockholder
may also vote by ballot at the Annual Meeting, thereby canceling any proxy
previously returned. Stockholders wishing to name as their proxy someone other
than those designated in the form of proxy may do so by crossing out the names
of the proxies appearing thereon and inserting the name(s) of the person(s)
they wish to have act as proxy. In such a case, it will be necessary that the
form of proxy be delivered by the stockholder to the person(s) named and that
the person(s) named be present and vote at the Annual Meeting. Any proxy form
on which alternate proxies have been named should not be mailed directly to
Bethlehem.
If you are a participant in the Bethlehem Steel Corporation Employee Stock
Ownership Plan or the Savings Plan for Salaried Employees of Bethlehem Steel
Corporation and Subsidiary Companies, the enclosed form of proxy will indicate
the shares of ESOP Preference Stock and Common Stock allocated to your ESOP
account and the shares of Common Stock allocated to your Savings Plan account
by State Street Bank and Trust Company, Trustee under both plans, at the close
of business on March 3, 1997 ("Record Date"). When the enclosed form of proxy
is properly signed, dated and returned, it will serve as instructions to the
Trustee to vote the shares allocated to your ESOP and Savings Plan accounts in
accordance with your instructions. The enclosed form of proxy must be received
by Bethlehem's tabulator before the close of business on Friday, April 25,
1997, in order for your voting instructions as to the shares allocated to your
ESOP and Savings Plan accounts to have effect. If the enclosed form of proxy
is properly signed, dated and returned, but you do not otherwise specify
instructions, the shares allocated to your ESOP and Savings Plan accounts will
be voted "For" the two proposals referred to in this Proxy Statement. If you
do not return the enclosed form of proxy by the close of business on April 25,
1997, (i) shares allocated to your ESOP account will be voted by the Trustee in
the same proportion as the shares with respect to which such instructions are
received and (ii) shares allocated to your Savings Plan account will be voted
by the Trustee in accordance with instructions of the Employee Benefits
Administration Committee.
Votes cast at the Annual Meeting will be tabulated by the persons appointed
as the independent inspectors of election for the Annual Meeting. The
inspectors of election will treat shares of Common Stock and of ESOP Preference
Stock represented by a properly signed and returned proxy as present at the
Annual Meeting for purposes of determining a quorum, without regard to whether
the proxy is marked as casting a vote or abstaining. Likewise, the inspectors
of election will treat shares of Common Stock represented by "broker non-votes"
as present for purposes of determining a quorum.
The nominees for election to the Board of Directors receiving the greatest
number of the affirmative votes cast by holders of Common Stock and of ESOP
Preference Stock, up to the number of directors to be
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elected, will be elected as directors. Accordingly, so long as a quorum is
present, abstentions or broker non-votes as to the election of directors will
have no effect on the election of directors.
The affirmative vote of the holders of a majority of the shares of Common
Stock and of ESOP Preference Stock that are present in person or by proxy and
entitled to vote at the Annual Meeting, voting together as a single class, is
required to ratify the appointment of the independent auditors. Therefore,
abstentions and broker non-votes will have the same effect as votes against
this proposal.
STOCKHOLDER PROPOSALS
Stockholders may be asked to consider and take action on proposals
submitted by stockholders who are not members of management or the Board of
Directors. Proposals by stockholders may be included in the Proxy Statement if
the proposals are proper subjects for inclusion, are submitted to Bethlehem on
a timely basis and otherwise comply with Rule 14a-8 under Section 14(a) of the
Securities Exchange Act of 1934 and the laws of the State of Delaware. Each
proposal submitted should include the full and correct registered name and
address of the stockholder(s) making the proposal, the number of shares owned
and the dates of acquisition thereof. If beneficial ownership is claimed,
proof thereof should be submitted with the proposal. In addition, proponents
must appear personally or by proxy at the Annual Meeting to present the
proposal for action. In order for such proposals to be included for the Annual
Meeting of Stockholders to be held in 1998, they must be received by Bethlehem
on or before November 14, 1997.
The Board of Directors carefully considers all proposals and suggestions
submitted by stockholders to determine if they are in the best interests of
Bethlehem and the stockholders generally. When a stockholder presents, as a
formal resolution, a suggestion which is practicable, and in the best interests
of Bethlehem and its stockholders, and which can be implemented by management
and the Board without the necessity of stockholder approval, the suggestion is
usually adopted without stockholder approval and the proponent withdraws the
resolution.
ELECTION OF DIRECTORS
GENERAL BACKGROUND
As provided by the laws of Delaware, Bethlehem's state of incorporation,
the business and affairs of Bethlehem are managed by or under the direction of
the Board of Directors of Bethlehem, which is currently comprised of fifteen
members. The Board of Directors represents the interests of the stockholders
as a whole and has responsibility for the overall performance of Bethlehem.
Stockholders annually elect directors in April of each year to serve for terms
of one year and until their successors have been elected and qualified. This
annual election of directors is one of the important purposes of the Annual
Meeting.
Members of the Board are kept informed of Bethlehem's business by
presentations made at Board meetings and by various reports sent to them by
management. The Board of Directors meets regularly and met 8 times during
1996. Directors also meet in committees of the Board and information
concerning the committees can be found beginning on page 8 of this Proxy
Statement. During 1996, the average attendance of directors at Board meetings
and meetings of committees to which they belonged was approximately 95%.
Of the thirteen directors standing for election, ten are not employees of
Bethlehem. These ten non-employee Board members bring valuable experience to
Bethlehem from a variety of fields. None of them has carried on an occupation
or employment with any subsidiary or other affiliate of Bethlehem.
Each non-employee director receives cash compensation of $22,000 annually
for his or her service as a Bethlehem director. This annual retainer fee
includes compensation for service as a member of the Audit Committee, the
Compensation Committee, the Finance Committee and the Committee on Directors.
In addition, each non-employee director who serves as Chairman of the Audit
Committee, the Committee on Directors or the Compensation Committee receives
additional compensation of $2,500 annually for service as such Committee
Chairman. Each non-employee director also receives an attendance fee of $1,000
for the Annual Meeting of Stockholders, any regular or special board of
directors' meeting, any regular or special committee meeting held on a day
other than a day on which a board meeting is held and any special meeting
attended at the request of the Chairman and held on a day other than a day on
which a board or committee meeting is held. Each non-employee director of
Bethlehem also receives on December 1 of each year an annual award of 500
shares of Bethlehem Common Stock pursuant to the 1994 Non-Employee Directors
Stock Plan, which was approved by stockholders. Non-employee directors are
also reimbursed
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for any expenses which may be incurred by them in connection with the
business and affairs of Bethlehem. None of the directors who are employees of
Bethlehem is compensated separately for service as a member of the Board of
Directors or any committee of the Board.
Under the Post Retirement Retainer Plan, directors who are not and have not
been employees of Bethlehem or its subsidiaries and who retire from the Board
with ten or more years of service, will receive annual payments equal to 100%
of the annual retainer fee payable at retirement. Directors who retire with
between five and ten years of service will receive annual payments starting at
50% of the annual retainer fee payable at retirement for directors with five
years of service and increasing 10% for each year of service up to ten years.
The annual payments will begin at retirement (or at age 65 if retirement is
prior to age 65) and will continue for a period equal to the director's years
of service with the Board. In the event of the death of a director, any unpaid
amount will be paid to the director's designated beneficiary or the director's
estate if there is no designated beneficiary.
The general retirement policy of the Board provides that non-employee
directors shall retire at the end of their term as a director during which they
reach age 70, except that non-employee directors who were elected at the 1991
Annual Meeting of Stockholders (all current non-employee directors except
Messrs. Civiletti, Clark, Kaden and Kamen and Mrs. Peterson) shall retire at
the end of their term as a director during which they reach age 72. Employee
directors shall retire from the Board at the time of their retirement from
Bethlehem. The present retirement age for management employees of Bethlehem is
65.
Pursuant to the terms of a 1993 labor agreement with the United
Steelworkers of America ("USWA"), the USWA has the right to designate a nominee
for consideration by the Committee on Directors and the Board of Directors for
one seat on the Board. The nominee is to be a prominent individual with
experience in public service, labor, education or business. The nominee shall
not be or become, while serving as a director, an officer, employee or director
of the USWA. Subject to complying with the same standards of conduct as every
other Bethlehem director, and subject to annual election by the stockholders,
the USWA nominee will serve as a director during the term of the 1993 labor
agreement, which terminates July 31, 1999. Mr. Kaden was designated by the
USWA for consideration as a director of Bethlehem by the Committee on
Directors. The Committee on Directors recommended Mr. Kaden's election to the
Board, the Board elected Mr. Kaden a director in March 1994 and the
stockholders elected Mr. Kaden a director at the 1994, 1995 and 1996 Annual
Meetings of Stockholders.
The thirteen nominees whose biographies appear on the following pages have
been recommended by the Committee on Directors and proposed by the entire Board
of Directors. They have been recommended on the basis of their demonstrated
broad knowledge, experience and ability in their respective endeavors and, most
importantly, on the basis of their ability to represent the interests of all
stockholders, rather than the special interests of a particular group.
INFORMATION CONCERNING NOMINEES
The persons named in the accompanying form of proxy intend to vote the
shares covered by proxies for the election of the director nominees named
below. Each nominee is presently a director of Bethlehem and has previously
been elected a director by the stockholders. If any nominee shall, prior to
the Annual Meeting, become unavailable for election as a director, which is not
expected, the persons named in the accompanying form of proxy will vote for
such substitute nominee, if any, as may be recommended by the Board of
Directors. Directors elected at the Meeting will hold office until the next
Annual Meeting of Stockholders and until their successors have been elected and
qualified, or until their earlier resignation, retirement or removal.
[PHOTO OF CURTIS H. BARNETTE APPEARS HEAR]
CURTIS H. BARNETTE
Mr. Barnette, age 62, has been a director of Bethlehem since
1986. He was elected Chairman and Chief Executive Officer
effective November 1, 1992. He has been an employee of Bethlehem
since 1967, holding various positions. Prior to his election as
Chairman and Chief Executive Officer, Mr. Barnette had been
Secretary of Bethlehem since 1976, General Counsel since 1977,
Vice President, Law from 1977 to 1985 and Senior Vice President
since 1985. Mr. Barnette is also a director of Metropolitan
Life Insurance Company.
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[PHOTO OF BENJAMIN R. CIVILETTI APPEARS HERE]
BENJAMIN R. CIVILETTI
Mr. Civiletti, age 61, was elected a director of Bethlehem in
1993. He has been Chairman of Venable, Baetjer and Howard, a law
firm, since July 1993 and a partner since 1981. He had been
Managing Partner of that firm from 1987 until 1993. He
previously served as Attorney General of the United States from
1979 to 1981. Mr. Civiletti is also a director of MBNA America
Bank, N.A., MBNA International Bank Limited and Wackenhut
Corrections Corporation.
[PHOTO OF WORLEY H. CLARK APPEARS HERE]
WORLEY H. CLARK
Mr. Clark, age 64, was elected a director of Bethlehem in 1993.
He is President of W "H" Clark Associates, Ltd., a consulting
firm. He retired as Chairman and Chief Executive Officer of
Nalco Chemical Company, a manufacturer of specialty chemicals, in
1994, having held the positions of Chief Executive Officer since
1982 and Chairman since 1984 and having been an employee of that
company since 1960. Mr. Clark is also a director of NICOR Inc.,
USG Corporation, James River Corporation, Ultramar Diamond
Shamrock Corporation, Merrill Lynch & Co., Inc. and Millenium
Chemicals Inc.
[PHOTO OF JOHN B. CURCIO APPEARS HERE]
JOHN B. CURCIO
Mr. Curcio, age 62, was elected a director of Bethlehem in 1988.
He was Chief Executive Officer and a director of Mack Trucks,
Inc., a manufacturer of heavy-duty trucks, from 1983 until 1989
and Chairman of the Board from 1985 until his retirement. Mr.
Curcio is also a director of Minerals Technologies, Inc. and
Integrated Components Systems, Inc. and Vice Chairman of Dallas
& Mavis Specialized Carrier Co. and Jupiter Logistics, de
Mexico, SA de C.V.
[PHOTO OF LEWIS B. KADEN APPEARS HERE]
LEWIS B. KADEN
Mr. Kaden, age 54, was elected a director of Bethlehem
in 1994. He has been a partner of Davis Polk & Wardwell, a
law firm, and an Adjunct Professor of Law at Columbia University
since 1984, where he was a Professor of Law from 1976 to 1984.
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[PHOTO OF HARRY P. KAMEN APPEARS HERE]
HARRY P. KAMEN
Mr. Kamen, age 63, was elected a director of Bethlehem in 1993.
He has been Chairman of the Board and Chief Executive Officer of
Metropolitan Life Insurance Company, a mutual life insurance
company, since April 1993 and assumed the additional title of
President of Metropolitan in December 1995. He has been an
employee of Metropolitan since 1959, holding various positions.
Prior to his election as Chairman of the Board and Chief
Executive Officer, Mr. Kamen had been serving as Senior
Executive Vice President since October 1991, Executive Vice
President from January to September 1991, Executive Vice
President and General Counsel from April 1989 to December 1990
and Senior Vice President and General Counsel from January 1987
to March 1989. Mr. Kamen is also a director of Banco Santander
and Pfizer Inc.
[PHOTO OF ROBERT MCCLEMENTS, JR. APPEARS HERE]
ROBERT MCCLEMENTS, JR.
Mr. McClements, age 68, was elected a director of Bethlehem in
1989. He retired in 1992 as Chairman of the Board and a director
of Sun Company, Inc., a diversified energy company, positions he
held since 1987 and 1979, respectively. Mr. McClements also
served as Chief Executive Officer of that company from 1985 until
1991. Mr. McClements is also a director of Unisys Corporation.
[PHOTO OF GARY L. MILLENBRUCH APPEARS HERE]
GARY L. MILLENBRUCH
Mr. Millenbruch, age 59, was elected a director of Bethlehem in
1991. Mr. Millenbruch was elected Executive Vice President and
Chief Financial Officer effective November 1, 1992, and Treasurer
effective September 1, 1994. He has been an employee of
Bethlehem since 1959, holding various positions. Prior to his
election as Executive Vice President and Chief Financial Officer,
he had been Senior Vice President and Chief Financial Officer
since 1986.
[PHOTO OF ROGER P. PENNY APPEARS HERE]
ROGER P. PENNY
Mr. Penny, age 60, was elected a director of Bethlehem in 1991.
Mr. Penny was elected President and Chief Operating Officer
effective November 1, 1992. He has been an employee of
Bethlehem since 1958, holding various positions. Prior to his
election as President and Chief Operating Officer, Mr. Penny had
been Senior Vice President, Steel Operations since 1987.
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[PHOTO OF SHIRLEY D. PETERSON APPEARS HERE]
SHIRLEY D. PETERSON
Mrs. Peterson, age 55, was elected a director of Bethlehem in
January 1996. She has been President of Hood College since July
1995. She was Commissioner of the Internal Revenue Service from
1992 to 1993, an Assistant Attorney General (Tax Division),
United States Department of Justice, from 1989 to 1992 and a
member of Steptoe & Johnson, a law firm, from 1993 to 1994 and
1969 to 1989. Mrs. Peterson is also an Independent Trustee of
Kemper Mutual Funds.
[PHOTO OF DEAN P. PHYPERS APPEARS HERE]
DEAN P. PHYPERS
Mr. Phypers, age 68, was elected a director of Bethlehem in
1986. He was a Senior Vice President and a director of
International Business Machines Corporation, an information
technology and computer company, from 1979 and 1982,
respectively, until 1987. Mr. Phypers is also a director of
American International Group, Inc., Church & Dwight Co., Inc.
and Cambrex Corp.
[PHOTO OF WILLIAM A. POGUE APPEARS HERE]
WILLIAM A. POGUE
Mr. Pogue, age 69, was elected a director of Bethlehem in 1988.
He retired in 1989 as Chairman of the Board, President and
Chief Executive Officer of CBI Industries, Inc., a manufacturer
of storage tanks and industrial gases, positions he held since
1982, and as a director of that company, a position he held since
1972. Mr. Pogue is also a director of Nalco Chemical Co. and
Amerada Hess Corporation.
[PHOTO OF JOHN F. RUFFLE APPEARS HERE]
JOHN F. RUFFLE
Mr. Ruffle, age 59, was elected a director of Bethlehem in 1990.
He retired in 1993 as Vice Chairman of the Board of J. P.
Morgan & Co. Incorporated, a bank holding company, and Morgan
Guaranty Trust Co. of New York, a commercial bank, positions he
held since 1985. Mr. Ruffle is also a director of Trident
Corporation, American Shared Hospital Services, Inc. and
Wackenhut Corrections Corporation and a Trustee of JPM Series
Trust II.
In addition to the business activities described above, the director
nominees also participate in various other business, professional and
charitable activities.
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AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
The following table shows the shares of Bethlehem Common Stock beneficially
owned, directly or indirectly, by each current director, Messrs. Jordan and
Post and all directors and executive officers as a group on the Record Date:
SHARES OF SHARES SUBJECT
COMMON STOCK TO ACQUISITION
OWNED DIRECTLY WITHIN 60 PERCENT
NAME OR INDIRECTLY(1) DAYS(2) TOTAL OF CLASS(3)
---- -------------- -------------- ----- -----------
Curtis H. Barnette 101,612 184,500 286,112 (4)
Benjamin R. Civiletti 2,700 - 2,700 (4)
Worley H. Clark 3,500 - 3,500 (4)
John B. Curcio 3,000 - 3,000 (4)
Thomas L. Holton (5) 5,700 - 5,700 (4)
Lewis B. Kaden 2,500 - 2,500 (4)
Harry P. Kamen 2,500 - 2,500 (4)
Winthrop Knowlton (5) 2,600 - 2,600 (4)
Robert McClements, Jr. 2,500 - 2,500 (4)
Gary L. Millenbruch 79,184 122,000 201,184 (4)
Roger P. Penny 71,096 138,250 209,346 (4)
Shirley D. Peterson 1,000 - 1,000 (4)
Dean P. Phypers 4,500 - 4,500 (4)
William A. Pogue 3,000 - 3,000 (4)
John F. Ruffle 2,500 - 2,500 (4)
John A. Jordan, Jr. 50,336 38,250 88,586 (4)
David P. Post 29,388 65,450 94,838 (4)
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30 directors and
executive officers as
a group (including
those named above) 619,352 (6) 848,300 1,467,652 (6) 1.31%
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(1) The figures shown include shares allocated on the Record Date to the
accounts of participants under the Savings Plan for Salaried Employees of
Bethlehem Steel Corporation and Subsidiary Companies.
(2) The Securities and Exchange Commission deems a person to have beneficial
ownership of all shares which that person has the right to acquire within
60 days. The shares indicated represent stock options granted under the
1984 Stock Option Plan and the 1988 and 1994 Stock Incentive Plans of
Bethlehem and held by the particular individual or group.
(3) Based upon 111,981,138 total outstanding shares of Common Stock on the
Record Date.
(4) The number of shares deemed to be owned by each director or executive
officer represents less than 1% of the outstanding shares.
(5) Messrs. Holton and Knowlton will retire as directors in April of 1997.
(6) The figures shown include an aggregate of 2,314 shares held by, or for the
benefit of, the immediate families or other relatives of all directors and
executive officers as a group. Directors and executive officers disclaim
beneficial ownership of all of these shares.
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None of the directors or executive officers of Bethlehem own any shares of
Bethlehem's Preferred Stock or ESOP Preference Stock.
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COMMITTEES OF THE BOARD
Bethlehem's Board of Directors has established committees to assist it in
the discharge of its responsibilities. The principal committees, their current
members and the principal responsibilities of each are described below.
The Executive Committee is presently comprised of Messrs. Barnette
(Chairman), Millenbruch and Penny. The Executive Committee serves as a
policy-making and supervisory body for all operations of Bethlehem. It has all
the delegable powers of the Board of Directors between meetings of the Board.
The Committee meets at appropriate times and met 4 times during 1996.
The Finance Committee is presently comprised of Mr. Barnette (Chairman)
and all other directors. The Finance Committee has the authority to advise and
consult with respect to all activities, plans and policies affecting the
financial affairs of Bethlehem, including dividends. The Finance Committee
meets at appropriate times and met 8 times during 1996.
The Audit Committee is presently comprised of Messrs. Holton (Chairman),
Civiletti, Clark, Kaden and Kamen, Mrs. Peterson and Mr. Ruffle. The Audit
Committee is responsible for making recommendations to the Board of Directors
as to the independent auditors of Bethlehem and subsidiaries to be designated
and appointed by the Board of Directors, for reviewing with the independent
auditors the scope of their examination of the financial statements of
Bethlehem, for meeting with representatives of the independent auditors to
review and consider questions relating to their examination and any other
report submitted, for reviewing generally with the independent auditors and
internal auditors the internal accounting controls and auditing procedures of
Bethlehem and for reviewing other professional services performed for Bethlehem
by the independent auditors. From time to time the Audit Committee meets with
the independent auditors and Bethlehem's internal auditors without members of
Bethlehem's management being present. The Audit Committee meets at appropriate
times and met 4 times during 1996.
The Compensation Committee is presently comprised of Messrs. Pogue
(Chairman), Curcio, Knowlton, McClements and Phypers. The Compensation
Committee is responsible for administering Bethlehem's executive compensation
programs and for determining the compensation of Bethlehem's executive
officers. The members of the Committee do not participate in the executive
compensation programs the Committee administers. The Committee's report on
executive compensation can be found beginning on page 9 of this Proxy
Statement. The Compensation Committee meets at appropriate times and met 6
times during 1996.
The Committee on Directors is presently comprised of Mr. Phypers
(Chairman) and all other non-employee directors. The Committee on Directors
has the authority to search for persons qualified to be members of the Board
and to make recommendations with respect thereto to the Board, to review and
evaluate members of the Board, the Committees of the Board, and procedures and
policies of the Board and to review and evaluate the performance of Bethlehem
and the management thereof. The Committee is also responsible for management
evaluation and succession review. If any stockholder wishes to recommend a
nominee for membership on the Board of Directors, he or she should write to the
Secretary of Bethlehem specifying the name of the nominee and the
qualifications of such nominee for membership on the Board of Directors. Each
submission must include the written consent of the person proposed for
nomination indicating that the person is willing and able to serve as a
director of Bethlehem. All such recommendations will be brought to the
attention of the Committee on Directors. The Committee on Directors meets at
appropriate times and met 5 times during 1996.
CERTAIN BUSINESS RELATIONSHIPS
As noted above, Mr. Civiletti is Chairman of Venable, Baetjer and Howard
and Mr. Kaden is a partner of Davis Polk & Wardwell. Both of these law firms
render legal service to Bethlehem in the ordinary course of business.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, on the recommendation of the Audit Committee, has
appointed the firm of Price Waterhouse LLP ("Price Waterhouse") as independent
auditors to examine the financial statements of Bethlehem and its consolidated
subsidiaries for the year 1997.
Price Waterhouse is a member of the SEC Practice Section of the American
Institute of Certified Public Accountants and has submitted a copy of its peer
review results to the Audit Committee. The peer review consists of a review
and evaluation of the quality of a firm's accounting and auditing services by
partners and managers from another CPA firm or from several CPA firms.
- 8 -
<PAGE>
<PAGE> 13
Price Waterhouse states that no partner or professional employee of that
firm has any direct financial interest or any material indirect financial
interest in Bethlehem or in any of its subsidiaries.
Representatives of Price Waterhouse are expected to be present at the
Annual Meeting of Stockholders with an opportunity to make a statement if they
desire to do so and to be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the shares of Common
Stock and of ESOP Preference Stock that are present in person or by proxy and
entitled to vote at the Annual Meeting, voting together as a single class, is
required for ratification of the appointment of the independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF THE INDEPENDENT AUDITORS.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Bethlehem's executive compensation programs are designed to attract, retain
and motivate highly qualified executives to help cause the best possible
performance from them. Compensation for Bethlehem's executives is based both
on individual performance and upon corporate and business unit performance and
consists of the following elements:
bullet Salaries that are determined by individual contribution and
performance and that are competitive in the marketplace.
bullet Incentive compensation bonuses that, if paid, are directly linked to
corporate and business unit profitability and performance.
bullet Long-term stock incentives that are designed to align the interests of
the executives with those of the stockholders and to increase the
long-term retention of key employees.
bullet A broad-based employee benefits program which includes a pension
program, a savings plan, group medical coverage and life insurance.
The Compensation Committee of the Board of Directors is responsible for
administering Bethlehem's executive compensation programs and for determining
the compensation of Bethlehem's executive officers. The Committee has
available to it extensive compensation surveys (primarily with respect to
salaries, annual incentive compensation and stock options), independent
compensation consultants and information about executive compensation within
the steel industry and other industry groups. The Committee is composed of
directors who are not current or retired employees of Bethlehem and who do not
participate in the executive compensation programs which the Committee
administers.
SALARIES. The Committee believes the salary of an executive must be based
primarily on the executive's level of responsibility and performance. In
addition, the Committee believes that salaries should be competitive with
executive salaries provided by other companies in the steel business, including
the peer group of integrated steelmakers shown in the comparative performance
chart on page 14, and by other companies which are appropriate to use for
comparison purposes because of similarities in size or the nature of the
businesses. The Committee reviews both publicly available information about
the salaries paid to executive officers of other steel companies and broad
survey data from over 300 manufacturing, non-utility and non-financial services
companies to determine salary levels that compare to those at companies with
similar business performance, measured by such criteria as revenue, return on
assets and return on equity. Salary levels for Bethlehem's executives are
targeted at the median of such survey data for companies with annual revenues
of between $3 billion and $6 billion. Since duties, responsibilities and
experience of an executive officer may differ from survey norms in both content
and scope, adjustments are made by the Committee in its judgment for those
factors as well as for individual performance. Consequently, some salaries are
lower and some higher than survey medians. The Committee conducts periodic
reviews of executive officer salaries and makes adjustments as warranted. The
increase in the 1996 salaries of the executive officers named in the Summary
Compensation Table was based on individual performance and the continued
improvement in Bethlehem's performance and financial results during 1995. The
1996 salary levels for these officers do not, in the Committee's opinion,
significantly deviate from survey medians described above.
- 9 -
<PAGE>
<PAGE> 14
INCENTIVE COMPENSATION BONUSES. The Committee believes that competitive
salaries should be supplemented by incentive compensation bonus awards which
are directly linked to performance-oriented goals as measured by Bethlehem's
annual business plan. The awards may be granted in cash, stock or a
combination thereof.
Incentive compensation bonus awards for executive officers are paid
pursuant to a profit-sharing plan for essentially all salaried employees.
Under the plan, employees and executive officers have the opportunity to earn a
targeted percentage of base salary which increases with higher position levels,
thereby placing a greater percentage of compensation at risk for those with
greater responsibility. For the chief executive officer and the other four
executive officers named in the Summary Compensation Table, payment of
incentive compensation under this program is based entirely on the achievement
of corporate objectives for return on net assets above a threshold goal and
payments may not exceed 120% of base salary for the chief executive officer and
100% of base salary for the other four executive officers. For other executive
officers, incentive payments are based on the achievement of corporate
profitability and budget goals and, in the case of executives at business
units, in part on the achievement of business unit profitability goals and in
part on the achievement of corporate profitability goals. For 1996, Mr.
Barnette and each of the other four officers named in the Summary Compensation
Table received an incentive compensation bonus award equal to approximately 14%
and 12%, respectively, of base salary based on Bethlehem's 1996 return on net
assets.
LONG-TERM STOCK INCENTIVES. The Committee believes that stock incentives
are an important element of Bethlehem's executive compensation program. They
help align the interests of Bethlehem's executives with those of the
stockholders and increase the long-term retention of key employees. As
discussed below, the Committee has made stock option and restricted stock
awards to executive officers and other key employees under its stock incentive
plans.
Executive officers and other key employees have received annual grants of
stock options under Bethlehem's stock incentive plans. The Committee believes
that stock options provide an incentive that focuses the executive's attention
on managing Bethlehem from the perspective of an owner with an equity stake in
the business. Options are awarded with an exercise price equal to the market
price of Common Stock on the date of grant and have a maximum term of ten
years. Options awarded in 1996 may be exercised for up to one-fourth of the
shares covered by the option each year over a four-year period commencing on
the date of grant and were awarded in tandem with stock appreciation rights.
Executives are encouraged to hold the stock received through the exercise of
options and stock appreciation rights. In determining the number of option
shares to be awarded to an executive officer, the Committee considers the
performance of the individual and the individual's position level. The
Committee, in its judgment, may adjust the number of shares based on a
comparison of option awards (using grant date value) of the survey companies
described under "Salaries". Applying these factors, during 1996 the Committee
awarded 318 key employees, including Mr. Barnette and the other executive
officers named in the table on page 13, options to purchase Bethlehem Common
Stock at a price of $13.75 per share (the fair market value of Bethlehem Common
Stock on the date of the award).
The Committee has also implemented a Key Employee Stock Investment Award
Program under the 1994 Stock Incentive Plan which is designed to help increase
the long-term retention of key employees, encourage their ownership of stock
and align their interests with the interests of the stockholders. Under this
Program, executive officers and other key employees have been awarded
restricted shares of Common Stock which may not be sold, transferred or
assigned while the shares are restricted. Unless otherwise determined by the
Committee, (a) the restrictions on the shares generally expire either (i) at
age 64 or (ii) after five years as to one-half of the shares awarded and at age
64 as to the remaining shares and (b) the shares are forfeited if the employee
voluntarily leaves the employment of Bethlehem (unless, at Bethlehem's request,
the employee enters into a consulting and non-compete agreement) or is
terminated for cause before the restrictions expire. Dividends, if declared,
are payable upon the restricted shares. The size of restricted stock awards
under this Program is determined by the Committee in its judgment based on a
number of factors including level of responsibility, individual performance and
potential to make a contribution to Bethlehem's future success, overall
corporate progress toward achieving sustained profitability and the Committee's
understanding of restricted stock practices at other companies. The Committee
assigns no specific weight to any of these factors when making its
determinations. In order to
- 10 -
<PAGE>
<PAGE> 15
retain and motivate Mr. Barnette and the other named executive officers and
further align their interests with those of the stockholders, the Committee
determined that it was appropriate to award each of them restricted shares of
Common Stock under the Key Employee Stock Investment Award Program in April
1996. Mr. Barnette was awarded 30,000 shares, Mr. Penny, 15,000 shares, Mr.
Millenbruch, 15,000 shares, Mr. Jordan, 10,000 shares and Mr. Post, 10,000
shares. The shares are restricted and may not be sold, transferred or assigned
until age 64, subject to the forfeiture provisions noted above. The size of
the awards was based on the factors discussed above.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. In establishing Mr. Barnette's
salary for 1996, the Committee considered the salaries of chief executive
officers of other steel companies and companies of similar size and complexity.
They also considered Mr. Barnette's performance and the continued improvement
in Bethlehem's financial results in 1995, during which it had net income of
$180 million, an improvement of about $100 million over 1994. During 1995,
Bethlehem implemented its strategy of concentrating on steel, rebuilding its
financial strength and improving continuously. These actions will help
Bethlehem achieve its vision of being the premier steel company and its
objectives of increasing stockholder value, serving customers, partnering among
employees and being a good citizen. Other significant achievements included:
modernization projects that were completed at Burns Harbor including a major
blast furnace reline, a coke oven battery rebuild and installation of coal
injection for the blast furnaces; a new, five-year, $500 million credit
arrangement was entered into; Bethlehem became the first steelmaker to endorse
the CERES environmental principles; and a purchasing and transportation
strategic sourcing initiative was advanced to help improve costs, quality and
management of the $3 billion of materials and services that Bethlehem purchases
annually.
Mr. Barnette received an incentive compensation bonus award for 1996 which
is discussed under Incentive Compensation Bonuses above. Stock option and
restricted stock awards received by Mr. Barnette during 1996 are discussed
under Long-Term Stock Incentives above.
LIMITATION ON DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162(m) of
the Internal Revenue Code denies a publicly held corporation, such as
Bethlehem, a federal income tax deduction for certain compensation in excess of
$1 million per year paid to or accrued for each of its chief executive officer
and four other most highly compensated executive officers. "Performance based"
compensation, such as stock options awarded under Bethlehem's 1994 Stock
Incentive Plan are not subject to the limitation on deductibility.
Based on Bethlehem's substantial net loss carryforwards ($1.9 billion at
December 31, 1996) and the levels and types of compensation of Bethlehem's
affected executive officers, the Committee continues to believe that the
limitation on deductibility of certain compensation is currently not material
to Bethlehem. Nevertheless, the Committee will continue to review the
situation and future events with an objective of achieving deductibility to the
extent appropriate. Restricted stock awards under the Key Employee Stock
Investment Award Program are not exempt from the limitation, but the Committee
feels that such awards are a necessary and appropriate incentive to motivate
executives and align their interests with the interests of stockholders.
Compensation Committee
William A. Pogue, Chairman
John B. Curcio
Winthrop Knowlton
Robert McClements, Jr.
Dean P. Phypers
- 11 -<PAGE>
<PAGE> 16
SUMMARY COMPENSATION TABLE
The following table shows the aggregate compensation awarded or paid to, or
earned by, Bethlehem's chief executive officer and each of Bethlehem's other
four most highly compensated executive officers.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------ ------------------------
<S> <C> <C> <C> <C> <C> <C>
SHARES
OTHER UNDERLYING
ANNUAL RESTRICTED OPTIONS/
COMPEN- STOCK SARs ALL OTHER
SALARY ($) BONUS(1)($) SATION ($) AWARDS(3)($) AWARDS (#)
COMPENSATION(4)($)
------ ------ ------ -------- ------- -------------
Curtis H. Barnette
Chairman and Chief
Executive Officer
1996 $655,000 $ 90,400 $ 0 $412,500 50,000 $70,718
1995 625,000 221,300 0 0 50,000 73,660
1994 550,000 121,000 0 611,250 50,000 66,237
John A. Jordan, Jr.
Senior Vice President
1996 349,250 41,700 0 137,500 25,000 40,458
1995 336,250 101,800 0 0 25,000 43,303
1994 321,667 72,600 0 203,750 20,000 39,259
Gary L. Millenbruch
Executive Vice President
and Treasurer
1996 439,001 51,300 0 206,250 30,000 51,179
1995 420,833 125,400 0 0 30,000 52,707
1994 400,000 88,000 0 305,625 25,000 42,207
Roger P. Penny
President
1996 501,001 58,600 0 206,250 35,000 54,678
1995 480,000 143,100 0 0 35,000 57,845
1994 455,000 100,100 0 305,625 30,000 47,748
David P. Post
Senior Vice President
1996 298,334 35,100 0 137,500 25,000 29,440
1995 282,500 84,100 105,668 (2) 0 25,000 31,181
1994 270,000 59,400 0 203,750 20,000 29,980
(/TABLE)
(1) Each executive named in the table received an annual incentive compensation
bonus award for 1996 equal to a percentage of base salary at year end 1996
based on Bethlehem's 1996 return on net assets as described under Incentive
Compensation Bonuses.
(2) Represents the amount of payments to cover tax liabilities arising from the
purchase of an individually owned annuity to secure a portion of the
unfunded retirement benefits payable to such officer under the Excess
Benefit Plan and Supplemental Benefits Plan.
(3) Fair market value at date of issuance of restricted shares of Common Stock
awarded under the Key Employee Stock Investment Award Program. The shares
are restricted and generally may not be sold, transferred or assigned until
the recipient reaches age 62 for the 1994 awards and age 64 for the 1996
awards. Mr. Barnette's 1996 award will vest on February 1, 1999, and
Mr. Post's 1996 award will vest on February 1, 1998. Dividends, if
declared, are payable upon the restricted stock.
The aggregate number of shares of restricted stock awarded under the Key
Employee Stock Investment Award Program and held by each of the named
individuals at December 31, 1996, and the aggregate value of these shares
based on a market value of $8.875 per share at December 31, 1996, is as
follows: Mr. Barnette, 96,000 restricted shares with a value of $852,000;
Mr. Jordan, 29,250 restricted shares with a value of $259,594;
Mr. Millenbruch, 46,000 restricted shares with a value of $408,250;
Mr. Penny, 46,000 restricted shares with a value of $408,250; and Mr. Post,
15,000 restricted shares with a value of $133,125.
(4) "All Other Compensation" consists of supplemental insurance costs, Matching
Company Contributions to the Savings Plan, cash or single premium annuities
purchased to cover the shortfall of Matching Company Contributions to the
Savings Plan due to Internal Revenue Code limitations and the value of
split dollar insurance benefits in the following respective amounts for
1996: Mr. Barnette - $12,671, $6,000, $37,700 and $14,347; Mr. Jordan -
$9,047, $6,000, $14,900 and $10,511; Mr. Millenbruch - $8,394, $6,000,
$21,600 and $15,185; Mr. Penny - $5,901, $6,000, $26,200 and $16,577; and
Mr. Post - $6,106, $6,000, $11,100 and $6,234. Split Dollar Insurance is
in lieu of the Group Term Life Insurance generally provided by Bethlehem to
its salaried employees. Each executive pays his own premium for the term
life portion of the insurance policy. Bethlehem is reimbursed for the
total premium amount advanced out of the proceeds of the insurance policy
if the individual dies while
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<PAGE> 17
the split dollar arrangement is in effect or out of the built-up cash value
of the policy if the arrangement terminates prior to the death of the
individual. As security for repayment, Bethlehem is a collateral assignee
of the policy to the extent of any such unreimbursed premium.
STOCK OPTION/SAR GRANTS IN 1997 (1)
</TABLE>
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER PERCENT OF TOTAL ANNUAL RATES OF STOCK
OF SHARES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED EXERCISE OPTION TERM(2)
OPTIONS/SARS TO EMPLOYEES PRICE EXPIRATION ----------------------
GRANTED (#) IN 1996 (PER SHARE) DATE 5% 10%
------------ ---------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Curtis H. Barnette 50,000 8.06% $13.75 4-24-06 $432,450 $1,095,800
John A. Jordan, Jr. 25,000 4.03 13.75 4-24-06 216,200 547,900
Gary L. Millenbruch 30,000 4.83 13.75 4-24-06 259,470 657,480
Roger P. Penny 35,000 5.64 13.75 4-24-06 302,715 767,060
David P. Post 25,000 4.03 13.75 4-24-06 216,200 547,900
All Optionees (318
executive officers
and key employees) 620,600 100.00 13.75 4-24-06 5,367,569 13,601,070
</TABLE>
- --------
(1) All stock options granted in 1996 were granted in tandem with stock
appreciation rights ("SARs"), have a term of ten years and may be exercised
for up to one-fourth of the shares covered by the option each year over a
four-year period commencing on the date of grant. The exercise price (per
share) of the option is the market price of Common Stock on the date the
option is awarded.
(2) These amounts represent assumed rates of appreciation only. Actual gains,
if any, on stock option exercises and Common Stock holdings are dependent
on the future performance of the Common Stock and overall market
conditions.
AGGREGATED STOCK OPTION/SAR EXERCISES IN 1996 AND DECEMBER 31, 1996,
STOCK OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS at 12/31/96 OPTIONS/SARS at 12/31/96
SHARES ACQUIRED VALUE --------------------------- ---------------------------
ON EXERCISE (#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE
--------------- -------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Curtis H. Barnette 0 0 147,000/125,000 0/0
John A. Jordan, Jr. 0 0 19,500/60,000 0/0
Gary L. Millenbruch 0 0 99,500/72,500 0/0
Roger P. Penny 0 0 112,000/85,000 0/0
David P. Post 0 0 46,700/60,000 0/0
</TABLE>
PENSION PLAN TABLE
ESTIMATED ANNUAL RETIREMENT BENEFIT
-------------------------------------------------
25 30 35 40
COVERED YEARS OF YEARS OF YEARS OF YEARS OF
COMPENSATION SERVICE SERVICE SERVICE SERVICE
- ------------ -------- --------- --------- --------
$100,000 $ 37,500 $ 45,000 $ 52,500 $ 60,000
200,000 75,000 90,000 105,000 120,000
300,000 112,500 135,000 157,500 180,000
400,000 150,000 180,000 210,000 240,000
500,000 187,500 225,000 262,500 300,000
600,000 225,000 270,000 315,000 360,000
700,000 262,500 315,000 367,500 420,000
The table above shows the estimated annual retirement benefit (before any
deductions, including social security benefits) payable in the aggregate to
Bethlehem's named executive officers under its qualified defined benefit
pension plan, its Excess Benefit Plan and its Supplemental Benefits Plan. The
benefit levels in the table assume retirement at age 62, the years of service
shown and payment in the form of a single life annuity. Individually owned
annuities were purchased in 1993 to secure a portion of the unfunded benefits
payable to the named executive officers under the Excess Benefit Plan and the
Supplemental Benefits Plan. A second annuity was also purchased for Mr. Post
in 1995. The amount of the benefits which were funded by the purchase of the
annuities was based on the funded level of Bethlehem's
- 13 -
<PAGE>
<PAGE> 18
defined benefit pension plan at June 30, 1993 (December 31, 1994, in the
case of the 1995 annuity purchased for Mr. Post).
Covered compensation for purposes of determining retirement benefits for
the named executive officers generally consists of salary and incentive
compensation reported in the "Bonus" column in the Summary Compensation Table.
The monthly retirement benefit payable is generally determined by multiplying
average monthly covered compensation (for salary, the highest consecutive 60
months in the last 120 months of continuous service and for incentive
compensation, the 5 highest 12-month periods, whether or not consecutive, in
the last 120 months of continuous service) times 1.5% times the number of
credited years of service. The incentive compensation portion of the benefit
is subject to adjustment to the extent it results in the monthly retirement
benefit exceeding 55% of average monthly covered compensation. Benefits are
also subject to a deduction for social security benefits as well as certain
other adjustments.
As of December 31, 1996, the credited years of service under the Pension
Plan or Supplemental Benefits Plan for Messrs. Barnette, Jordan, Millenbruch,
Penny and Post were 34 years, 39 years, 37 years, 38 years and 40 years,
respectively.
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total stockholder return on
Bethlehem Common Stock for the last five years with the cumulative total return
for the same period of the Standard & Poor's 500 Stock Index ("S&P 500") and a
peer group of publicly-traded integrated steelmakers described below. The
graph assumes the investment of $100 in Bethlehem Common Stock, the S&P 500 and
the peer group on December 31, 1991, and reinvestment of all dividends. The
total return for the peer group has been weighted for market capitalization at
the beginning of each period.
The peer group consists of Armco Inc., Inland Steel Industries, LTV
Corporation, National Steel Corporation and the U.S. Steel Group of USX
Corporation. Information has only been included for (1) LTV common stock at
December 31, 1993-1996, and (2) National Steel Corporation at December 31,
1993-1996, since public trading did not commence in those stocks until 1993.
Information has only been included for Armco common stock at December 31,
1991-1994, since Armco transferred its carbon steel business during 1994 to a
separately traded public company making continuing comparison inappropriate.
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Bethlehem Steel Corporation $100.00 $114.29 $145.54 $128.57 $99.11 $63.39
S&P 500 $100.00 $107.62 $118.46 $120.03 $165.13 $203.05
Peer Group $100.00 $120.67 $146.62 $142.02 $120.70 $112.30
</TABLE>
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<PAGE>
<PAGE> 19
ADDITIONAL INFORMATION
INDEMNIFICATION ASSURANCE AGREEMENTS
It is and has been Bethlehem's policy to indemnify its officers and
directors against any costs, expenses and other liabilities to which they may
become subject by reason of their service to Bethlehem, and to insure its
directors and officers against such liabilities, as and to the extent permitted
by applicable law and in accordance with the principles of good corporate
governance. In this regard, Article IX of Bethlehem's By-laws requires
Bethlehem to indemnify its directors and officers to the maximum extent
permitted by the General Corporation Law of the State of Delaware.
Pursuant to this policy, Bethlehem has entered into individual
Indemnification Assurance Agreements with each of its directors and executive
officers pursuant to which Bethlehem has agreed to indemnify each of its
directors and executive officers to the full extent provided by applicable law
and the By-laws of Bethlehem as currently in effect. In addition, Bethlehem
has established in connection with its indemnification policy an irrevocable
letter of credit in an aggregate amount of $5 million to assure payment to each
director and executive officer of any amounts to which they may become entitled
as indemnification pursuant to the By-laws in the event that, for any reason,
Bethlehem shall not pay to them any such indemnification.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
permits a Delaware corporation to include in its certificate of incorporation a
provision eliminating the potential monetary liability of a director to the
corporation or its stockholders for breach of fiduciary duty as a director,
provided that such provision shall not eliminate the liability of a director
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for improper
payment of dividends or (iv) for any transaction from which the director
receives an improper personal benefit. Bethlehem's Second Restated Certificate
of Incorporation, as amended, includes such a provision in Article Ninth
thereof.
STOCKHOLDERS
Holders of record of Bethlehem's Common Stock and ESOP Preference Stock on
the Record Date are entitled to notice of the Annual Meeting and to vote at the
Meeting the shares held on that date. Each share of Common Stock and ESOP
Preference Stock is entitled to one vote. On the Record Date, a total of
111,981,138 shares of Common Stock of Bethlehem, owned of record by
approximately 36,700 stockholders, were outstanding and a total of 2,470,279
shares of ESOP Preference Stock of Bethlehem, owned of record by a trustee
under a qualified plan for approximately 14,400 participants, were outstanding.
Set forth below is the only entity which, to the knowledge of the Board of
Directors, was the beneficial owner of 5% or more of Bethlehem's Common Stock
on the Record Date:
NAME AND ADDRESS OF NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES CLASS
------------------- --------- ----------
Wellington Management Company, LLP(1)
75 State Street
Boston, Massachusetts 02109 9,652,992 8.49%
- -------------
(1) Bethlehem received copies of Schedule 13Gs filed with the Securities and
Exchange Commission by Wellington Management Company, LLP and
Vanguard/Windsor Fund, Inc., indicating that, at December 31, 1996,
Wellington Management Company, LLP had shared dispositive power of
9,652,992 shares of Bethlehem Common Stock, including 7,595,800 shares of
Bethlehem Common Stock as to which Vanguard/Windsor Fund, Inc. had sole
voting and shared dispositive power.
To the knowledge of the Board of Directors, there were no persons who
beneficially owned 5% or more of the ESOP Preference Stock on the Record Date.
- 15 -
<PAGE>
<PAGE> 20
OTHER MATTERS
Management and the Board of Directors do not know of any matters other than
those set forth in the form of proxy that will be presented for consideration
at the 1997 Annual Meeting. However, execution of a proxy, unless otherwise
indicated, confers on the persons named as proxies discretionary authority to
vote the shares represented in accordance with their best judgment on other
business, if any, that may properly come before the Meeting.
The cost of soliciting proxies will be borne by Bethlehem. A number of its
officers and regular employees may solicit proxies personally and by telephone.
Bethlehem has engaged Georgeson & Company, Inc. to assist in soliciting proxies
from brokers, bank nominees and institutional holders for an estimated fee of
$10,000 plus expenses. Arrangements have been made for brokerage houses,
nominees and other custodians and fiduciaries to send proxy material to their
principals, and Bethlehem will reimburse them for their expenses in doing so.
March 14, 1997
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<PAGE> 21
[Front]
BETHLEHEM STEEL CORPORATION
1170 EIGHTH AVENUE
BETHLEHEM, PA 18016-7699
[LOGO OF BETHLEHEM STEEL APPEARS HERE]
March 14, 1997
To All Bethlehem Stockholders:
It is a pleasure to invite you to the Annual Meeting of Stockholders which
will be held in Wilmington, Delaware on Tuesday, April 29, 1997. We will meet
in the Main Ballroom of the Radisson Hotel at 11 a.m. Your continuing interest
in Bethlehem's business is appreciated, and I hope that as many of you as
possible will attend the Meeting in person.
The annual election of directors will take place at the Meeting. Personal
information about each nominee for the Board of Directors as well as
information about the functions of the Board and its committees is contained in
the Proxy Statement. All nominees have previously been elected by the
stockholders.
Thomas L. Holton and Winthrop Knowlton will retire as directors in April
of 1997. We acknowledge and thank them for their many years of outstanding and
loyal service to Bethlehem.
You are also being asked to ratify the appointment of Price Waterhouse LLP
as Bethlehem's independent auditors for 1997.
Please read the formal notice of the Meeting and the Proxy Statement
carefully. For those of you who cannot be present at the Meeting, I urge you
to participate by completing, signing and returning your proxy in the enclosed
envelope. Your vote is important, and the management of Bethlehem appreciates
the cooperation of stockholders in directing proxies to vote at the Meeting.
Sincerely,
/s/ Curtis H. Barnette
Curtis H. Barnette,
Chairman
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BETHLEHEM'S
OBJECTIVES
bullet Increase stockholder value
bullet Serve our customers
bullet Partnership among employees
bullet Be a good citizen
STRATEGY
bullet Concentrate on steel
bullet Rebuild our financial strength --
make the plans
bullet Improve continuously--
safety and total quality
FOCUS ON THE VISION [Logo of Bethlehem
Be the Premier Steel Company Steel appears here]
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<PAGE> 23
[Front]
BETHLEHEM STEEL CORPORATION
1170 Eighth Avenue
Bethlehem, PA 18016-7699
P
R THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
O FOR THE ANNUAL MEETING OF STOCKHOLDERS, APRIL 29, 1997
X
Y
The undersigned hereby appoints Curtis H. Barnette, Roger P. Penny and Gary
L. Millenbruch the proxies (each with power to act alone and with power of
substitution) of the undersigned to represent and vote the shares of stock
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
of Bethlehem Steel Corporation to be held on April 29, 1997, and at any
adjournment or postponement thereof, as hereinafter specified and, in their
discretion, upon such other matters as may properly come before the Meeting.
Election of Directors. Nominees:
C. H. Barnette, B. R. Civiletti, W. H. Clark, J. B. Curcio,
L. B. Kaden, H. P. Kamen, R. McClements, Jr., G. L. Millenbruch,
R. P. Penny, S. D. Peterson, D. P. Phypers, W. A. Pogue, J. F. Ruffle
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOXES ON
THE REVERSE SIDE. ON MATTERS ON WHICH YOU DO NOT SPECIFY A CHOICE, YOUR SHARES
WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF BETHLEHEM'S BOARD OF
DIRECTORS. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
THIS CARD ALSO CONSTITUTES VOTING INSTRUCTIONS FOR ANY SHARES OF STOCK
ALLOCATED TO YOUR ACCOUNT UNDER THE BETHLEHEM STEEL CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN AND UNDER THE SAVINGS PLAN FOR SALARIED EMPLOYEES OF BETHLEHEM
STEEL CORPORATION AND SUBSIDIARY COMPANIES, AS DESCRIBED IN THE NOTICE OF
MEETING AND PROXY STATEMENT DATED MARCH 14, 1997. [SEE REVERSE SIDE]
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[X] Please mark your votes
as in this example.
IF THIS CARD IS PROPERLY EXECUTED, SHARES WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2.
Bethlehem's Board of Directors recommends a vote FOR election of directors and
Proposal 2.
FOR WITHHELD
1. Election of Directors. (see reverse) [ ] [ ]
FOR AGAINST ABSTAIN
2. Ratification of appointment of Independent [ ] [ ] [ ]
Auditors.
For, except vote withheld from
the following nominee(s):
---------------------------------------------------------------
Please sign exactly as name appears above. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
---------------------------------------------------------------
---------------------------------------------------------------
SIGNATURE(S) DATE
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