<PAGE>
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
LUKENS INC.
(Name of Registrant as Specified In Its Charter)
LUKENS INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] 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:
<PAGE>
[LOGO OF LUKENS INC. APPEARS HERE]
- --------------------------------------------------------------------------------
NOTICE OF
ANNUAL
MEETING March 28, 1994
AND PROXY
STATEMENT TO OUR STOCKHOLDERS:
It is a pleasure for me to invite you to our Annual
Meeting of Stockholders, which will be held on
Wednesday, April 27, 1994, starting at 1:30 P.M. in
the Company's Administrative Resources Center, Modena
Road, South Coatesville, Pennsylvania.
The following pages of this Notice of Annual Meeting
and Proxy Statement describe the matters which will be
discussed and acted upon at the meeting. In addition,
a current report on the Company's business and
activities will be presented.
I hope you will attend; however, whether or not you do
plan to attend, it is important that your shares,
regardless of the number, be represented. Accordingly,
I urge you to complete, sign, date and return your
Proxy in the envelope enclosed for your convenience.
Sincerely yours,
[SIGNATURE OF R. W. VAN SANT APPEARS HERE]
R. W. Van Sant
Chairman, President and
Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING
March 28, 1994
TO THE STOCKHOLDERS OF LUKENS INC.:
This is to notify you that the Annual Meeting of Stockholders of Lukens Inc.
will be held at 1:30 P.M. on Wednesday, April 27, 1994, in the Company's
Administrative Resources Center, Modena Road, South Coatesville, Pennsylvania,
for the following purposes:
1. To elect four persons to the Board of Directors of the Company; and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The record date for determining stockholders entitled to notice of and to vote
at the meeting or any adjournment thereof was March 4, 1994, and only
stockholders of record at the close of business on that date are entitled to
notice of and to vote at the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE ENCLOSED FOR YOUR
CONVENIENCE.
By Order of the Board of
Directors
[SIGNATURE OF WILLIAM D. SPRAGUE
APPEARS HERE]
William D. Sprague
Vice President, General Counsel
and Secretary
<PAGE>
PROXY STATEMENT
March 28, 1994
LUKENS INC.
50 South First Avenue
Coatesville, Pennsylvania 19320
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Lukens Inc. (the "Company") of Proxies for the Annual
Meeting of Stockholders to be held April 27, 1994, or any adjournment thereof.
Copies of this Proxy Statement, the accompanying Proxy and the Company's Annual
Report for 1993 are being mailed to the stockholders on or about March 28,
1994.
Subject to the conditions set forth in the Notice of Annual Meeting
accompanying this Proxy Statement, the shares represented by each executed
Proxy will be voted in accordance with the instructions given. If no
instruction is made on an executed Proxy, the Proxy will be voted FOR all four
of the nominees to the Board. Any stockholder giving a Proxy has the power to
revoke it at any time before its exercise by attending the meeting and voting
in person, by giving notice of revocation to the Secretary of the Company or by
filing a later dated Proxy.
The holders of common stock and preferred stock of record at the close of
business on March 4, 1994 (the "Record Date") will be entitled to vote on all
matters to be voted upon at the Annual Meeting or any adjournment thereof. The
Proxy will also serve as voting instructions to the trustees under the Lukens
Inc. Employees Capital Accumulation Plan, the Lukens Inc. Capital Accumulation
Plan for Hourly Employees (USW, AFL-CIO, Coatesville, PA), the Washington Steel
Corporation Employees Capital Accumulation Plan (Washington, PA) and the
Washington Steel Corporation Employees Capital Accumulation Plan (Massillon,
OH) with respect to shares of common and/or preferred stock registered in a
participant's name on the Record Date and to American Stock Transfer & Trust
Company as the administrator under the Company's Dividend Reinvestment Plan
with respect to shares of common stock held therein on the Record Date.
Generally, each share of common stock is entitled to one vote per matter and
each share of preferred stock is entitled to three votes per matter, with
holders of common stock and holders of preferred stock generally voting
together as a single class. However, record holders are permitted to vote
cumulatively with respect to the election of Directors. In that case such
holders have the right to multiply the number of shares which they are entitled
to vote by the number of Directors to be elected and to cast the resulting
number of votes all for one candidate or to distribute them among any two or
more candidates. In addition,
<PAGE>
the Lukens Inc. Employees Capital Accumulation Plan provides that unallocated
shares of preferred stock, as well as shares of preferred stock that have not
been voted, will be voted by the trustee in the same proportion as the shares
of preferred stock for which signed Proxies are returned by the participants.
Shares of common stock held in the Lukens Inc. Employees Capital Accumulation
Plan, the Washington Steel Corporation Employees Capital Accumulation Plans and
the Dividend Reinvestment Plan for which signed Proxies are not returned will
not be voted. Shares of common stock held in the Lukens Inc. Capital
Accumulation Plan for Hourly Employees (USW, AFL-CIO, Coatesville, PA) that
have not been voted will, if directed by the Employee Benefits Finance
Committee of the Company, be voted by the trustee in the same proportion as the
shares held therein for which signed Proxies are returned by the participants.
Shares held in the Capital Accumulation Plans are subject to confidential
voting procedures.
The Company had approximately 14,536,712 shares of common stock and
approximately 539,695 shares of preferred stock issued and outstanding on the
Record Date. The presence at the meeting in person or by proxy of stockholders
entitled to cast at least a majority of the votes that all stockholders are
entitled to cast will constitute a quorum at the meeting. Abstentions will be
counted for the purpose of establishing a quorum but will not be voted. Broker
non-votes will not be counted for the purpose of establishing a quorum and will
not be voted. Stockholders entitled to vote may do so in person or by proxy.
The Company may require that any votes cast in person be cast by written
ballot.
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes. Directors in
each class are elected to serve for a term of three years. The terms are
staggered so that only approximately one-third of the Board stands for election
each year. At the 1994 Annual Meeting of Stockholders, four persons will be
elected to the Board to serve until the 1997 Annual Meeting or until their
successors are elected and qualified. The four nominees who receive the most
votes at the Annual Meeting will be elected to the Board. Frederick R. Dusto, a
Director whose term expires in 1994, is not standing for reelection at the
Annual Meeting. Pursuant to Company policy Robert L. Seaman will retire in
March 1995. Management of the Company believes that the other Directors listed
below will serve in their positions for the remainder of their terms.
The Company's Board of Directors has nominated T. Kevin Dunnigan, Ronald M.
Gross, W. Paul Tippett and R. W. Van Sant for terms expiring at the 1997 Annual
Meeting of Stockholders. The persons named in the accompanying Proxy intend to
vote for the election of such nominees unless authority to vote for one or more
of such persons is specifically withheld in the Proxy. All of the nominees
except Mr. Dunnigan are currently
2
<PAGE>
Directors of the Company. As far as is presently known, all of the nominees are
willing and able to serve as Directors. If any of them withdraws or otherwise
becomes unavailable for any reason, the persons named in the Proxy will use
their best judgment in selecting and voting for substitute nominees unless the
Board of Directors reduces the number of Directors constituting the entire
Board.
NOMINEES FOR TERMS EXPIRING IN 1997
T. Kevin Dunnigan Mr. Dunnigan, 56, has been the Chief Executive Officer
of Thomas & Betts Corporation, a manufacturer of
electrical equipment, since 1985. He has also been the
Chairman of that corporation since 1992 and has been a
member of its board of directors since 1975.
Ronald M. Gross Mr. Gross, 60, has been President and a director since
1978, Chief Executive Officer since 1981 and Chairman
of the Board since 1983 of Rayonier Inc., a forest
products company, formerly known as ITT Rayonier Inc.
He also served as Chief Operating Officer of that
corporation from 1978 to 1981. Mr. Gross was elected
to the Board of Directors of the Company in July 1991
and is a member of the Finance Committee, the
Executive Development & Compensation Committee, and
the Executive Committee. He is also a director of
Rayonier Forest Resources Company.
W. Paul Tippett Mr. Tippett, 61, has been a Director of the Company
since 1989. He was the President of Springs
Industries, Inc., a manufacturer of finished fabrics,
home furnishings and industrial fabrics from 1985
through 1989. Prior to that time Mr. Tippett was
Chairman and Chief Executive Officer of American
Motors Corporation. Mr. Tippett is a member of the
Committee on the Board, the Audit Committee and the
Executive Development & Compensation Committee. He is
also a director of Stride Rite Corporation and Just
Cynthia, Inc.
R. W. Van Sant Mr. Van Sant, 55, has been Chairman of the Board,
President and Chief Executive Officer of the Company
since December 1991. He held the offices of President
and Chief Operating Officer from October 1991 to
December 1991. Mr. Van Sant served as President and
Chief Executive Officer of Blount, Inc., a company
engaged in construction and manufacturing
3
<PAGE>
operations, from December 1990 to October 1991. He
held the offices of President and Chief Operating
Officer of Blount from 1987 to December 1990. From
1983 until 1987, he was President and Chief Operating
Officer of Cessna Aircraft Company, an aircraft
manufacturer. Mr. Van Sant has been a Director of the
Company since 1988, is Chairman of the Executive
Committee and is a member of both the Committee on the
Board and the Finance Committee. He is also a director
of Amcast Industrial Corporation.
DIRECTORS WITH TERMS EXPIRING IN 1996
Michael O. Alexander Mr. Alexander, 53, has been the President of The
International Forum Inc. since June 1993 and the
Director of the International Forum at the Wharton
School, University of Pennsylvania, since 1988. He
also served as a director and a member of the
Executive Committee of Gordon Capital Corporation, an
investment banking firm, from 1985 to 1989. Mr.
Alexander was elected to the Board of Directors of the
Company in January 1993 and is a member of the Finance
Committee.
Nancy Huston Hansen Mrs. Hansen, 58, has been the Vice President of
Evangelical Affairs for The Huston Foundation since
1984 and the Chief Executive Officer of Hansen
Development Corporation, a company engaged in
construction and land development, since 1988. She
became a Director of the Company in 1985. Mrs. Hansen
is a member of the Audit Committee and the Executive
Development & Compensation Committee. She is also a
director of The Huston Foundation and Hansen
Development Corporation.
Harry C. Stonecipher Mr. Stonecipher, 57, has been Chief Executive Officer
since 1989 and a director since 1987 of Sundstrand
Corporation, an aerospace and industrial equipment
manufacturer. Between 1987 and 1989, he was also the
President and Chief Operating Officer of that
corporation. Mr. Stonecipher was elected to the Board
of Directors of the Company in July 1991 and is a
member of the Committee on the Board, the Executive
Committee and the Executive Development & Compensation
4
<PAGE>
Committee. He is also a director of Precision
Castparts Corporation, Cincinnati Milacron Inc. and
Sentry Insurance--A Mutual Company.
Joab L. Thomas Mr. Thomas, 61, has been the president of The
Pennsylvania State University since 1990. He was a
Professor of Biology at The University of Alabama from
1988 to 1990. Prior to that he served as president of
The University of Alabama and chancellor of North
Carolina State University. Mr. Thomas was elected to
the Board of Directors of the Company in September
1992 and is a member of the Audit Committee. He is
also a director of Blount, Inc., First Alabama Bank in
Tuscaloosa, Alabama and Mellon Bank Corporation.
DIRECTORS WITH TERMS EXPIRING IN 1995
William H. Nelson, III Mr. Nelson, 65, was Executive Vice President and
President of the Natural Resources Division of Scott
Paper Company, primarily a manufacturer of pulp, paper
and forest-related products, from 1985 to 1989. He has
been a Director of the Company since 1972. He is
Chairman of the Audit Committee and a member of the
Executive Committee and the Finance Committee.
Stuart J. Northrop Mr. Northrop, 68, has been Vice Chairman of Huffy
Corporation, a manufacturer of bicycles and other
leisure products, since 1986. He has been a Director
of the Company since 1982. He is Chairman of the
Executive Development & Compensation Committee and is
a member of the Committee on the Board. Mr. Northrop
is also a director of Union Corporation, Power Spectra
Inc., Wolverine World Wide, Inc., Huffy Corporation
and Elbit Systems of America.
Robert L. Seaman Mr. Seaman, 70, was Vice President-Strategic Planning
of Raytheon Company, a diversified multi-national
corporation, for more than five years prior to 1989
and has been an independent consultant since 1989. He
has served as a Director of the Company since 1981. He
is Chairman of the Committee on the Board and a member
of the Audit Committee and the Executive Committee.
5
<PAGE>
DIRECTOR WITH TERM EXPIRING IN 1994
Frederick R. Dusto Mr. Dusto, 65, was President of Harvey Hubbell, Inc.,
a manufacturer of electrical products, from 1980 to
1988 and was that corporation's Chief Executive
Officer from 1983 to 1988. He has been a Director of
the Company since 1983. He is Chairman of the Finance
Committee and a member of the Audit Committee.
During the Company's 1993 fiscal year the Board of Directors held nine
meetings. All members of the Board of Directors attended more than 75% of the
meetings of the Board and of the Committees of which such Directors were
members during the time period in which they served.
MANAGEMENT
The following table sets forth as of March 15, 1994, the approximate number of
shares of common stock and preferred stock of the Company (rounded to the
nearest share) beneficially owned by each Director, by each Director nominee,
by each Executive Officer named in the Summary Compensation Table on page 9 and
by all Directors and Executive Officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENT
OWNED OF CLASS(1)
-----------------------------------------------------
NAME COMMON PREFERRED COMMON PREFERRED
- ---- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C>
R. W. Van Sant 60,841(2) 191 less than 1% less than 1%
Michael O. Alexander 1,200(3) -0- less than 1% none
T. Kevin Dunnigan 400 -0- less than 1% none
Frederick R. Dusto 3,775(4) -0- less than 1% none
Ronald M. Gross 3,000(3) -0- less than 1% none
Nancy Huston Hansen 478,986(5) -0- 3.3% none
Robert E. Heaton 300 -0- less than 1% none
T. Grant John 2,741(6) -0- less than 1% none
William H. Nelson, III 2,800(3) -0- less than 1% none
Stuart J. Northrop 1,975(3) -0- less than 1% none
James J. Norton -0- -0- none none
Dennis M. Oates 39,352(7) 532 less than 1% less than 1%
Robert Schaal 33,391(8) 679 less than 1% less than 1%
Robert L. Seaman 1,521(3) -0- less than 1% none
Harry C. Stonecipher 9,000(3) -0- less than 1% none
Joab L. Thomas 1,600(9) -0- less than 1% none
W. Paul Tippett 2,500(3) -0- less than 1% none
All Directors and Execu-
tive Officers as a Group
(19 Persons) 683,501(10) 2,497 4.7% less than 1%
</TABLE>
6
<PAGE>
- ----------
(1) Rounded to the nearest one-tenth of one percent and based on (i) 14,697,915
shares of common stock, which on March 15, 1994, was the sum of the
approximate number of shares outstanding and the number of shares subject
to options exercisable by such person(s) on or before May 14, 1994, and
(ii) 538,998 shares of preferred stock, which on March 15, 1994, was the
approximate number of shares outstanding.
(2) Includes options to purchase 60,000 shares of common stock that are
currently exercisable.
(3) Includes options to purchase 1,000 shares of common stock that will become
exercisable on May 1, 1994.
(4) Includes 2,775 shares held jointly with his wife and options to purchase
1,000 shares of common stock that will become exercisable on May 1, 1994.
(5) Nancy Huston Hansen has sole voting and investment power with respect to
49,845 shares and options to purchase 1,000 shares that will become
exercisable on May 1, 1994. She has shared voting and investment power with
respect to 5,100 shares owned jointly with her husband, 414,600 shares
owned by The Huston Foundation, 152 shares held in a trust of which she is
the trustee for the benefit of her grandson and 4,500 shares held in a
trust of which she is a trustee for the benefit of one of her children.
Also included are 3,189 shares beneficially owned by her husband and
options to purchase 600 shares of common stock that are held by her husband
and are currently exercisable, as to all of which shares she disclaims
beneficial ownership.
(6) Includes 41 shares held in a retirement plan for the benefit of his wife
and options to purchase 2,700 shares of common stock that are currently
exercisable.
(7) Includes options to purchase 30,850 shares of common stock that are
currently exercisable.
(8) Includes options to purchase 13,350 shares of common stock that are
currently exercisable.
(9) Includes 600 shares held jointly with his wife and options to purchase
1,000 shares of common stock that will become exercisable on May 1, 1994.
(10)Includes options to purchase 151,700 shares of common stock that are
currently exercisable or will become exercisable on May 1, 1994, and
4,089 shares as to which the Director or Executive Officer disclaims
beneficial ownership.
COMMITTEES OF THE BOARD
Among the standing committees of the Board of Directors are the Audit
Committee, the Executive Development & Compensation Committee and the Committee
on the Board.
The Audit Committee is appointed by the Board and consists of six members,
none of whom are members of the Company's management. It is responsible for
overseeing the
7
<PAGE>
Company's internal accounting and auditing methods and procedures and
recommends to the Board a firm of independent public accountants for
appointment by the Board. The Audit Committee meets periodically with the
auditors to review their findings and recommendations. During the Company's
1993 fiscal year this Committee held three meetings.
The Executive Development & Compensation Committee is appointed by the Board
and consists of five members. This Committee is responsible for the
administration of the Company's Target Incentive Compensation Plan, 1985 Stock
Option and Appreciation Plan and the supplemental retirement plans; makes
recommendations to the Board concerning such other executive compensation
arrangements and plans as it deems appropriate; reviews the Company's policies
and plans for the development and succession of executive personnel; and
performs such other duties as the Board may assign. During the Company's 1993
fiscal year the Executive Development & Compensation Committee held seven
meetings.
The Committee on the Board is appointed by the Board and consists of five
members. This Committee is empowered to consult with the Chief Executive
Officer on candidates for nomination to the Board; to recommend to the Board
policies and guidelines for qualification for service as a Director and for
Director compensation; and to monitor performance by individual Directors. This
Committee will consider nominees for Director recommended by stockholders
provided such recommendations are made in writing addressed to the Secretary of
the Company prior to the first of December so that the Committee may review all
recommendations in advance of the January meeting of the Board at which time
the nominees for election at the next Annual Meeting are customarily
considered. During the Company's 1993 fiscal year the Committee on the Board
held six meetings.
To be eligible for election to the Board of Directors, persons nominated other
than by the Committee on the Board must be nominated in accordance with certain
procedures set forth in the By-laws, which require that the Secretary of the
Company receive timely notice of such proposed nomination. Such notice must be
received by the Secretary not less than 50 days nor more than 75 days prior to
the meeting at which the Directors are to be elected (or, if fewer than 65 days
notice or prior public disclosure of the meeting date is given or made to
stockholders, no later than the 15th day following the day on which the notice
of the date of the meeting was mailed or such public disclosure was made). Such
notice must contain certain information about the nominee, including his or her
age, business and residence address and principal occupation, the class and
number of shares of capital stock beneficially owned and such other information
as will be required to be included in a Proxy Statement soliciting proxies for
the election of the proposed nominee, and certain information about the
stockholder proposing to nominate that person. The Company may also require any
proposed nominee to furnish other information reasonably
8
<PAGE>
required by the Company to determine the proposed nominee's eligibility to
serve as a Director.
In addition to the foregoing, the Executive Committee and the Finance
Committee are standing Committees of the Board.
SUMMARY OF EXECUTIVE COMPENSATION
The following information for the fiscal years ended December 28, 1991,
December 26, 1992 and December 25, 1993 is given as to the Chief Executive
Officer, each of the four other most highly compensated Executive Officers of
the Company who were serving as Executive Officers at the end of the 1993
fiscal year and whose base salary and bonus exceeded $100,000 during the 1993
fiscal year, and Robert Schaal (who was one of the four most highly compensated
Executive Officers during 1993 but was not serving as an Executive Officer at
the end of the fiscal year).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------- --------------------
AWARDS
OTHER ----------
ANNUAL SECURITIES ALL OTHER
NAME AND COMPEN- UNDERLYING COMPEN-
PRINCIPAL SATION OPTIONS/ SATION
POSITION(S) YEAR SALARY($)(1) BONUS($)(1) ($)(1) SARS(#)(2) ($)(1)
- ----------- ---- ------------ ----------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
R. W. Van Sant 1993 $536,508 $ 64,381 (3) -0- $18,454(4)
Chairman, 1992 $528,814 $264,407 $424,931 -0- $ 2,380
President and 1991 $107,808(5) $ 25,577 -- 330,000 --
Chief Executive Officer
R. M. Heaton 1993 $270,000 $162,000 (3) -0- $11,700(6)
Senior Vice 1992(7) $180,000 $108,000 (3) -0- -0-
President 1991 -- -- -- -- --
R. Schaal 1993(8) $220,728 $ 56,286 $ 40,491 5,100 $12,905(9)
Senior Vice 1992 $195,269 $ 88,812 (3) 8,250 $ 8,787
President 1991 $159,448 $ 62,493 -- 8,250 --
J. N. Norton 1993 $181,125 $108,675 (3) -0- $ 2,489(10)
Vice President 1992(7) $120,000 $145,800 (3) -0- $ 2,432
1991 -- -- -- -- --
D. M. Oates 1993 $175,920 $ 50,101 (3) 4,100 $ 8,735(11)
Senior Vice 1992 $155,631 $ 73,128 (3) 6,000 $ 7,003
President 1991 $123,092 $ 46,788 -- 5,250 --
T. G. John 1993(12) $158,021 $ 77,810 $ 72,642(13) 2,700 $ 1,431(14)
Vice President 1992 -- -- -- -- --
1991 -- -- -- -- --
</TABLE>
9
<PAGE>
- ----------
(1) Rounded to the nearest dollar.
(2) Adjusted to reflect a 50% stock dividend in September 1992.
(3) Does not exceed the lesser of $50,000 or 10% of the total of such person's
annual salary and bonus.
(4) Includes $10,377 of Company contributions to the Lukens Inc. Employees
Capital Accumulation Plan, adopted pursuant to Section 401(k) of the
Internal Revenue Code of 1986, as amended, and $5,850 of Company-paid
premiums for life insurance coverage above $50,000. Also includes $2,227
of premiums paid by the Company on another term life insurance policy
which covers Mr. Van Sant and is owned by the Company. The Company is the
beneficiary under this policy, but has assigned the right to proceeds
equal to 2 1/2 times Mr. Van Sant's compensation to Mr. Van Sant's
designee.
(5) Includes approximately $40,500 received for services as a non-employee
Director.
(6) Represents $10,377 of Company contributions to the Lukens Inc. Employees
Capital Accumulation Plan and $1,323 of Company-paid premiums for life
insurance coverage above $50,000.
(7) Mr. Heaton and Mr. Norton became employees of the Company in April 1992
and continued to be covered by employment contracts with corporations that
were acquired by the Company in April 1992. Mr. Heaton's employment
contract expired in October 1993 and Mr. Norton's contract will expire in
September 1994. This table reflects compensation paid to them by the
Company since April 1992.
(8) Mr. Schaal ceased to be an Executive Officer in April 1993.
(9) Represents $9,932 of Company contributions to the Lukens Inc. Employees
Capital Accumulation Plan and $2,973 of Company-paid premiums for life
insurance coverage above $50,000.
(10) Represents a subsidiary's contributions to the Mercury Stainless Corp.
Deferred Compensation Plan, adopted pursuant to Section 401(k) of the
Internal Revenue Code of 1986, as amended.
(11) Represents $7,916 of Company contributions to the Lukens Inc. Employees
Capital Accumulation Plan and $819 of Company-paid premiums for life
insurance coverage above $50,000.
(12) Mr. John became an employee of the Company in February 1993. This table
reflects compensation paid to him by the Company since that date.
(13) Includes approximately $47,302 provided by the Company to Mr. John for
relocation expenses and approximately $12,954 to cover Mr. John's
estimated tax liability with respect thereto.
(14) Represents Company-paid premiums for life insurance coverage above
$50,000.
10
<PAGE>
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
The Company has entered into an agreement with Mr. Van Sant which provides for
his employment by the Company until his 65th birthday. The agreement provides
for the following compensation: a minimum base salary of $500,000 per annum, an
annual bonus calculated and paid in accordance with the Lukens Inc. Target
Incentive Compensation Plan at a target amount of 60% of base salary and
certain employee benefits. Pursuant to the agreement and adjusted to reflect a
50% stock dividend, Mr. Van Sant was issued 330,000 options to purchase common
stock of the Company at an exercise price of $23.375 per share, which, as
adjusted, was 85% of the fair market value of such common stock on the date of
the grant. Such options vest at a rate of 30,000 per year. In order to
reimburse Mr. Van Sant for certain compensation to which he would have
otherwise been entitled had he not terminated his employment with Blount, Inc.,
the agreement also provided Mr. Van Sant with 30,476 rights, each of which
entitles him upon exercise to an amount in cash equal to the lesser of (i)
$10.00 and (ii) the excess over $10.125 of the market value of a share of Class
A Common Stock of Blount, Inc. The agreement further provides that if Mr. Van
Sant's employment is terminated by the Company prior to his 65th birthday,
other than for disability or for cause, he will be entitled to continue to
receive his full salary and certain other benefits under the agreement until
the earlier of the third anniversary of his termination or his 65th birthday.
Mr. Norton continues to be employed under an employment contract with a
corporation that was acquired by the Company in April 1992. Mr. Norton's
employment contract was entered into as of October 1, 1988, and will continue
in effect until September 30, 1994. It currently provides for an annual base
salary of $181,250, an annual bonus of up to 60% of his base salary based upon
achievement of certain financial objectives, the continuation of certain
perquisites and participation in certain benefit programs. In the contract, Mr.
Norton also agrees not to compete with his employer for nine months following
his termination of employment and to provide up to 250 hours of consulting
services, at the rate of $400 per hour, during such period (subject to certain
exceptions described below).
Mr. Schaal ceased to be an Executive Officer in April 1993 but is employed
under an employment contract with the Company until December 31, 1994. The
agreement provides for an annual salary of $220,000 and certain employee
benefits.
Messrs. Van Sant, Oates and John, as well as four other Executive Officers and
one other employee, are parties to agreements pursuant to which the Company
agreed to pay such persons a lump sum generally equal to (i) such person's
annual base salary rate in effect in the year of a change in control plus the
average Lukens Inc. Target Incentive Compensation Plan award over the preceding
three years multiplied by (ii) three, in the event of a change in control of
the Company and the termination of any such person's employment at any time
during the two year period thereafter. The Company also generally agreed to
provide
11
<PAGE>
three years additional pension and welfare benefits and to "cash-out" such
person's outstanding options. The total pension benefits and the option "cash-
out" will be payable in lump sums. These agreements provide for the payment of
an amount necessary to pay any excise tax, and any taxes thereon, due on the
payments. The purpose of the agreements is to assure the continued dedication
of such persons to their duties and their unbiased counsel in the event of an
unsolicited tender offer.
In general, a "change in control" would be deemed to have occurred if (i)
during a period of two consecutive years, the individuals who constituted the
Board of Directors at the beginning of such period cease to constitute a
majority of the Board, (ii) any person or group acquires 20% or more of the
combined voting power of the Company's then outstanding securities, (iii) the
Company is acquired by merger or consolidation or (iv) the Company is
liquidated or substantially all of its assets are sold.
The employment contract with Mr. Norton provides for a cash payment to be made
if his employment is terminated by his employer (other than as a result of a
conviction of a crime involving dishonesty or moral turpitude) or if there is a
constructive termination of employment (as defined in the contract). In such
event Mr. Norton will be entitled to an amount equal to the excess, if any, of
(i) the sum of two times his base salary, two times his bonus for the prior
fiscal year and an amount equal to the cost of providing certain specified
perquisites and benefits, including key man life insurance, for two years over
(ii) $350,000. In addition, if Mr. Norton's employment is so terminated, he
will be entitled to receive a cash payment of $250,000 in consideration of his
covenant not to compete and an additional lump-sum payment of $100,000 in full
satisfaction of his agreement to provide consulting services. The payments to
be made to Mr. Norton may be reduced under certain circumstances if the
specified amounts would constitute "parachute payments" under applicable
provisions of the Internal Revenue Code of 1986, as amended.
DIRECTOR COMPENSATION
Effective May 1993, an annual retainer of $24,000 is paid to Directors who are
not employees of the Company and an attendance fee of $900 is paid to such
Directors for each day or part of a day they attend a regular or special
meeting of the Board. A fee is also payable to such Directors for attendance at
Board Committee meetings. The fee is $800 for all Committees, except that
members of the Executive Committee are paid an attendance fee of $900.
Attendance fees are paid for Committee meetings on Board meeting days except
for Committee meetings of an administrative nature. An annual retainer of
$2,500 per Committee is also paid to Directors who serve as Committee Chairmen.
Directors who serve a partial year are paid a pro rata share of the annual
retainer based upon the number of months served. Prior to May 1993, these fees
were as follows:
12
<PAGE>
(i) the annual retainer was $23,000, (ii) the attendance fees for meetings of
the Board and Executive Committee were $750 and (iii) the attendance fees for
other Committee meetings were $500.
Any Director of the Company who is separately compensated for Board services
may elect to defer compensation for distribution at a later date. Deferred
amounts will accrue interest at a rate to be set by the Committee on the Board
and may be paid in a lump sum or in annual installments over a period of 10
years.
Each non-employee Director with five years or more of uninterrupted service on
the Board will receive annual retirement payments at the time of retirement
from the Board. After five years of service, a Director will receive retirement
payments in an amount equal to 50% of the Director's base retainer. The
percentage will increase by 10% for each full year of service thereafter to a
maximum of 100% of the base retainer after 10 years (i.e., 60% after six years,
70% after seven years, etc.). These retirement payments may continue for a
period equal to the lesser of the years of service on the Board or 10 years,
except that all benefits will cease at the death of the Director. In the event
of a change in control this Plan also provides for a lump sum payment of the
present value of the total accrued benefits payable calculated as if the
Director had retired on the date of the change in control.
Pursuant to the Company's Stock Option Plan for Non-Employee Directors, each
Director who is not an employee of the Company or any of its subsidiaries will
receive an annual grant of options to purchase 1,000 shares of the Company's
common stock at an exercise price equal to the fair market value of the
Company's common stock on the date of grant. Options become exercisable one
year after the date of grant and expire ten years after the date of grant,
except that options will terminate three years after a person ceases to be a
Director.
RETIREMENT PLANS
The Lukens Inc. Salaried Employees Retirement Plan provides retirement
benefits to certain salaried employees who retire or otherwise terminate
employment after completing five or more years of service. The Lukens Inc.
Supplemental Retirement Plan for Target Incentive Plan Participants provides
supplemental retirement benefits to participating managerial level employees.
Benefits under this Plan are offset by benefits payable under the Lukens Inc.
Salaried Employees Retirement Plan. In addition, the Lukens Inc. Supplemental
Retirement Plan for Designated Executives provides supplemental retirement
benefits to participating executives. Under this Plan benefits for
participating executives are calculated by crediting the executive with service
in addition to the executive's actual period of service as an employee.
Benefits payable under this Plan are offset by benefits payable under the
Lukens Inc. Salaried Employees Retirement Plan.
13
<PAGE>
Each of the Executive Officers named in the Summary Compensation Table on page
9, other than Mr. Norton, participates in the Lukens Inc. Salaried Employees
Retirement Plan. Messrs. Schaal, Oates and John also participate in the Lukens
Inc. Supplemental Retirement Plan for Target Incentive Plan Participants. Mr.
Van Sant also participates in the Lukens Inc. Supplemental Retirement Plan for
Designated Executives. Benefits under these Plans are payable monthly and are
based upon formulas which consider years of service and compensation (as
defined in the Plans) and age at retirement.
The following table shows the approximate annual retirement benefits that
Messrs. Van Sant, Schaal, Oates and John would receive under the Plans
described above based on credited years of service if they retire at normal
retirement age. Lesser amounts would be payable following a termination of
employment before normal retirement age.
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
REMUNERATION (1) 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ---------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$200,000 $ 34,500 $ 51,700 $ 69,000 $ 86,200 $ 96,200 $106,200
300,000 54,500 81,700 109,000 136,200 151,200 166,200
400,000 74,500 111,700 149,000 186,200 206,200 226,200
500,000 94,500 141,700 189,000 236,200 261,200 286,200
600,000 114,500 171,700 229,000 286,200 316,200 346,200
700,000 134,500 201,700 269,000 336,200 371,200 406,200
800,000 154,500 231,700 309,000 386,200 426,200 466,200
900,000 174,500 261,700 349,000 436,200 481,200 526,200
1,000,000 194,500 291,700 389,000 486,200 536,200 586,200
</TABLE>
- ----------
(1) The estimated benefit calculated is based on salary plus bonus, as
designated in the Summary Compensation Table on page 9. Benefits payable
under the Lukens Inc. Supplemental Retirement Plan for Target Incentive
Plan Participants and the Lukens Inc. Supplemental Retirement Plan for
Designated Executives are computed on a straight life annuity basis and are
subject to offset by any Social Security benefits to which the participant
is entitled.
Messrs. Schaal, Oates and John have credited service of approximately 26, 20
and 1 years, respectively, in the Lukens Inc. Salaried Employees Retirement
Plan and the Lukens Inc. Supplemental Retirement Plan for Target Incentive Plan
Participants. Mr. Van Sant has credited service of approximately 2 years under
the Lukens Inc. Salaried Employees Retirement Plan and 21 years under the
Lukens Inc. Supplemental Retirement Plan for Designated Executives. Each Plan,
with the exception of the Lukens Inc. Salaried Employees Retirement Plan,
contains provisions for a present value lump sum payment payable in the event
of a change in control.
14
<PAGE>
Until June 30, 1993, Mr. Heaton participated in the Washington Steel Corp.
Retirement Plan for Salaried Employees, a defined benefit plan which provided
retirement benefits for certain salaried employees of Washington Steel
Corporation who retire or otherwise terminate employment after completing five
or more years of service. Effective as of July 1, 1993, the Washington Steel
Corp. Retirement Plan for Salaried Employees merged with and into the Lukens
Inc. Salaried Employees Retirement Plan, and Mr. Heaton will participate in the
latter plan for all periods of service beginning on and after July 1, 1993.
Under both of these Plans, the maximum amount of compensation that may be taken
into account for purposes of calculating benefits is $235,840 for years prior
to 1994 and $150,000 (as adjusted annually by the Department of the Treasury
for increases in the cost of living) for 1994 and subsequent years.
Mr. Heaton has credited service of approximately 15 years under the Washington
Steel Corp. Retirement Plan for Salaried Employees. As of December 31, 1993,
Mr. Heaton's monthly retirement benefit was estimated to be $4,953. Mr.
Heaton's benefit as of December 31, 1993 under such Plan will be adjusted as of
the date of his retirement or other termination of employment to reflect
increases in his compensation after that date. For each year (or partial year)
of service after June 30, 1993 under the Lukens Inc. Salaried Employees
Retirement Plan, Mr. Heaton will accrue an additional annual benefit payable at
normal retirement age equal to the sum of (i) 1.2 percent of his earnings for
the year (as defined in that Plan) up to the average Social Security taxable
wage base plus (ii) 1.8 percent of his earnings for the year in excess of the
average Social Security taxable wage base up to the compensation limit for the
year, as described above.
STOCK OPTION DATA
Under the Company's 1985 Stock Option and Appreciation Plan options to
purchase common stock of the Company have been granted on an annual basis to
certain officers and other key employees of the Company and its subsidiaries at
the fair market value of the common stock on the date of grant. The following
table contains information about options granted to each Executive Officer
named in the Summary Compensation Table on page 9 during the 1993 fiscal year.
15
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE OR GRANT DATE
GRANTED(#) IN FISCAL BASE PRICE EXPIRATION PRESENT VALUE
NAME (1) (2) YEAR (3) ($/SH) DATE (4) ($) (5)
- ---- ---------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
R. W. Van Sant -0- -- -- -- --
R. M. Heaton -0- -- -- -- --
R. Schaal 5,100 7.2% $47.25 1/27/2003 $74,491
J. N. Norton -0- -- -- -- --
D. M. Oates 4,100 5.8% $47.25 1/27/2003 $59,885
T. G. John 2,700 3.8% $46.875 2/1/2003 $39,123
</TABLE>
- ----------
(1) Includes options which qualify as incentive stock options under Section 422
of the Internal Revenue Code of 1986, as amended, and options which do not
so qualify.
(2) Outstanding options are generally exercisable one year after the date of
grant. The options granted to Messrs. Schaal and Oates became exercisable
on January 27, 1994; the options granted to Mr. John became exercisable on
February 1, 1994.
(3) Rounded to the nearest one-tenth of one percent.
(4) Outstanding options expire ten years after the date of grant, if not
earlier due to death, disability or termination of employment. The Company
has agreed to "cash-out" outstanding options of certain Executive Officers
upon a "change in control." See "Employment Contracts and Change in Control
Arrangements" on page 11.
(5) Based on the Black-Scholes option pricing model, using the following
assumptions: (a) 7 year option term; (b) 6.6% risk-free interest rate; (c)
30% volatility; and (d) 3.3% dividend yield.
The following table presents information about stock options exercised during
the 1993 fiscal year by the Executive Officers named in the Summary
Compensation Table on page 9 and the amount and value of unexercised options,
distinguishing between options that are vested (i.e., exercisable now) and
unvested (i.e., becoming exercisable in the future), held by such Executive
Officers at fiscal year-end.
16
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
YEAR-END (#) FISCAL YEAR-END($)(2)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. W. Van Sant -0- -0- 60,000 270,000 $645,000 $2,902,500
R. M. Heaton -0- -0- -0- -0- -0- -0-
R. Schaal 17,625 $484,109 20,250 5,100 $144,532 -0-
J. N. Norton -0- -0- -0- -0- -0- -0-
D. M. Oates 1,000 $ 26,896 26,750 4,100 $285,636 -0-
T. G. John -0- -0- -0- 2,700 -0- -0-
</TABLE>
- ----------
(1) Rounded to the nearest dollar. Based on the difference between the closing
price of the Company's common stock on the New York Stock Exchange
Composite Tape on the date of exercise and the exercise price of the
options.
(2) Rounded to the nearest dollar. Based on the difference between the closing
price of the Company's common stock on the New York Stock Exchange
Composite Tape at fiscal year-end and the exercise price of the options.
REPORT OF EXECUTIVE DEVELOPMENT & COMPENSATION COMMITTEE
The members of the Executive Development & Compensation Committee of the
Board, none of whom are employees of the Company, hereby present to the
stockholders of the Company this report concerning the compensation of the
Company's officers and key employees, including the Executive Officers named in
the Summary Compensation Table set forth on page 9. The role of the Committee,
among other things, is to establish the broad compensation policy of the
Company with respect to its officers and key employees and, on an annual basis,
to determine the actual amounts of the salary and bonus components of the
compensation of each such person as well as to approve the performance
standards and award opportunities for the incentive programs.
COMPENSATION POLICY
The goal of the Company's executive compensation program is to attract,
motivate and retain executives of the highest caliber. In the belief that this
goal is most effectively achieved by closely linking executive compensation to
corporate performance and returns to stockholders, the Company has established
an executive compensation plan that
17
<PAGE>
conditions a very substantial portion of such compensation on the Company's
achievement of specified performance goals and on increases in value of the
Company's common stock.
In determining compensation for the Company's officers and key employees, the
Committee relies on compensation guidelines that were established in 1992 with
the assistance of an independent executive compensation consultant. These
guidelines were developed by reference to a group of companies belonging to the
Manufacturers' Alliance for Productivity and Innovation, Inc. ("MAPI") that
were either engaged in heavy manufacturing or part of the Fortune 500 and that
had revenues generally comparable to the Company's. The Committee believes that
this sampling reflects the marketplace in which the Company competes for senior
executives and is large enough to be meaningful.
The guidelines provide that fixed compensation should fall at or near the 50th
percentile of the comparative group, while opportunities for variable "at risk"
compensation should be at or near the 70th percentile of such group. Because
the Company sets its performance targets above the average return on equity for
the comparative group, actual incentive compensation will be paid at or near
the 70th percentile level only in years in which the Company is successful in
meeting those targets.
The Company's executive compensation program has three principal components,
each described more fully below: (i) annual base salaries, (ii) short-term
incentives consisting of annual bonuses awarded under the Lukens Inc. Target
Incentive Compensation Plan or the Washington Steel Division Annual Bonus Plan
for Elected Officers and (iii) long-term incentives consisting of the grant of
stock options under the Company's 1985 Stock Option and Appreciation Plan.
Awards under the short-term incentive plans are based primarily on achievement
of pre-established levels of return on stockholders' equity in the case of the
Lukens Inc. Target Incentive Compensation Plan or on achievement of pre-
established levels of return on average capital employed in the case of the
Washington Steel Division Annual Bonus Plan for Elected Officers, and thus are
directly linked to Company performance. Awards under the long-term incentive
plan indirectly reflect the Company's performance through changes in the market
price of the Company's common stock. Both the short-term and long-term
incentive plans have been designed to align the interests of the Company's
officers and key employees with those of the Company's stockholders. Messrs.
Heaton and Norton do not participate in the long-term incentive plan because
their compensation arrangements are based on the terms of Mr. Heaton's former
employment contract and Mr. Norton's employment contract, both of which were in
place prior to the acquisition of Washington Steel Corporation by the Company.
In setting compensation for Executive Officers, the Committee will, where
appropriate, take into account the $1,000,000 deduction limitation under
Section 162(m) of the Internal Revenue Code.
18
<PAGE>
SPECIFIC COMPONENTS OF COMPENSATION PROGRAM
Salary. Base salaries for officers and key employees are the fixed component
of their total compensation package. In general, base salaries are set and
adjusted based on comparative standards and individual performance. For 1993,
the Committee determined the base salary for each Executive Officer (other than
Messrs. Heaton and Norton, whose base salaries were determined in accordance
with their employment contracts), taking into account Mr. Van Sant's evaluation
of such Executive Officers' performance and his recommendations to the
Committee concerning adjustments to their base salaries.
Bonus. Under the Lukens Inc. Target Incentive Compensation Plan, the Committee
determines the annual awards for the named Executive Officers based on (i) the
performance of the Company, as measured by attained levels of return on
stockholders' equity for the Company and of return on assets for the business
units and (ii) individual performance. The corporate performance and business
unit performance factors combined comprise 80% and the individual performance
factor comprises 20% of each named Executive Officers' award. The specific
threshold, target and maximum levels of return on equity or of return on assets
that are established each year by the Committee for corporate and business unit
performance are based on, among other things, past Company performance and past
industry performance. Based on responsibility undertaken, position with the
Company and MAPI competitive standards, the Committee then establishes a
percentage of salary to be awarded to participating Executive Officers at 100%
achievement of targeted return. Such percentages range from 40% to 60% (for the
Chief Executive Officer). An award pursuant to the individual performance
factor is based on the Committee's assessment of whether the Executive Officer
met or exceeded his individual performance expectations for the year. If the
threshold goals for corporate or business unit performance, as the case may be,
are not met, the Target Incentive Compensation Plan limits an Executive
Officer's bonus to 100% of the individual performance factor.
Because the threshold goal for return on equity for corporate performance was
not achieved in 1993, those Executive Officers who participate in the Lukens
Inc. Target Incentive Compensation Plan did not receive any bonus based on
corporate performance with respect to 1993. Mr. Oates, whose award was based on
business unit performance, did receive an award based on such performance with
respect to 1993 because his business units achieved the applicable thresholds.
Because all of the Executive Officers named in the Summary Compensation Table
either met or exceeded their individual performance goals, they were awarded
bonuses for 1993 based on the individual performance factor.
Under the Washington Steel Division Annual Bonus Plan for Elected Officers
formula awards are granted to the named Executive Officers who are part of the
Washington Steel business unit based on attained levels of return on average
capital employed for such
19
<PAGE>
business unit. The percentage of salary awarded to such Executive Officers
under such Plan ranges from 0% to 60% of base salary depending on the level of
return on average capital achieved. In 1993, the return on average capital
measurement resulted in awards at the 60% level to Messrs. Heaton and Norton
and to Mr. John for that portion of the year during which he participated in
such Plan.
Option Plan. Under the Company's 1985 Stock Option and Appreciation Plan,
options to purchase common stock of the Company are granted on an annual basis
to certain officers and other key employees of the Company and its
subsidiaries, including Executive Officers, at the fair market value of such
common stock on the date of grant. Because the compensation element of options
is dependent on increases in the market value of such common stock, stock
options represent compensation that is tied to the Company's performance for up
to 10 years (the period during which such options may be exercised).
The number of options granted in 1993 was generally determined according to a
formula based on the market price of the Company's common stock, the Executive
Officer's base salary and his position with the Company, without regard to the
number of options already held by the grantee.
1993 COMPENSATION OF CHIEF EXECUTIVE OFFICER
R. W. Van Sant has been Chairman, President and Chief Executive Officer of the
Company since December 1991. Mr. Van Sant's initial base salary of $500,000 was
established pursuant to the employment agreement discussed on page 11 based
upon the scope of his responsibilities for the Company and comparative group
standards. In December 1992 Mr. Van Sant's salary was increased to $535,000.
Because the threshold goal for return on equity for the Company was not
achieved in 1993, Mr. Van Sant's Target Incentive Compensation Plan award for
1993 of $64,381 was based solely on his individual performance, which the
Committee determined exceeded expectations.
Pursuant to his employment agreement, Mr. Van Sant was granted options in 1991
that vest at an adjusted rate of 30,000 for each year of his continued
employment with the Company. Mr. Van Sant is eligible for additional stock
option grants in accordance with the Company's 1985 Stock Option and
Appreciation Plan.
Executive Development & Compensation Committee
Stuart J. Northrop,Chairman
Ronald M. Gross
Nancy Huston Hansen
Harry C. Stonecipher
W. Paul Tippett
20
<PAGE>
PERFORMANCE GRAPH
The following graph illustrates a five year comparison at fiscal year-end from
1988 through 1993 of the yearly percentage change in the Company's cumulative
total stockholder return on common stock, the S&P 500 Stock Index and the S&P
Steel Index (the group of companies in the steel industry that are a part of
the S&P 500 Stock Index in each year). These values assume an investment of
$100 on January 1, 1989, and reinvestment of dividends. The companies included
in the S&P Steel Index for fiscal years 1989 and 1990 were Armco Inc.,
Bethlehem Steel Corp., Inland Steel Industries, Inc., Nucor Corp. and
Worthington Industries Inc. For fiscal years 1991, 1992 and 1993, USX Corp.-
U.S. Steel Group was also a member of the S&P Steel Index.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG LUKENS INC., S&P 500 STOCK INDEX AND S&P STEEL INDEX
<TABLE>
<CAPTION>
S&P 500 S&P
Measurement period LUKENS STOCK STEEL
(Fiscal year covered) INC. Index Index
- --------------------- -------- -------- --------
<S> <C> <C> <C>
Measurement PT -
01/01/89 $ 100.00 $ 100.00 $ 100.00
FYE 12/31/89 $ 147.13 $ 131.69 $ 96.73
FYE 12/31/90 $ 156.73 $ 127.60 $ 81.40
FYE 12/31/91 $ 161.08 $ 166.47 $ 100.02
FYE 12/31/92 $ 260.41 $ 179.16 $ 130.87
FYE 12/31/93 $ 222.33 $ 197.21 $ 172.20
</TABLE>
21
<PAGE>
PRINCIPAL HOLDERS OF STOCK
The following table sets forth as of March 15, 1993, information provided to
the Company by each person who is known by the Company to own beneficially more
than 5% of any class of stock of the Company.
<TABLE>
<CAPTION>
SHARES
TITLE OF BENEFICIALLY PERCENT OF
NAME AND ADDRESS CLASS OWNED CLASS
- ---------------- --------- ------------ ----------
<S> <C> <C> <C>
State Street Bank and Trust Company
Boston, MA Preferred 538,998(1)(2) 100.0%
</TABLE>
- ----------
(1) Rounded to the nearest share.
(2) Held as trustee of the Lukens Inc. Employees Stock Ownership Trust under
the Lukens Inc. Employees Capital Accumulation Plan, as to which State
Street disclaims beneficial ownership. The trustee's duties include
management of the trust and voting the preferred stock held in the trust.
See pages 1-2. Each share of preferred stock is convertible into three
shares of the Company's common stock. If all of the shares of preferred
stock were converted, State Street would hold 1,616,994 shares of common
stock as trustee. These shares, together with the 55,400 shares of common
stock held in separate or commingled funds managed by State Street, would
represent approximately 10.3% of the Company's common stock.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 generally requires
the Company's Directors and Executive Officers and persons who own more than
10% of a registered class of the Company's equity securities ("10% owners") to
file with the Securities and Exchange Commission and the New York Stock
Exchange initial reports of ownership and reports of changes in ownership of
common stock and other equity securities of the Company. Directors, Executive
Officers and 10% owners are required by Securities and Exchange Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on review of copies of such
reports furnished to the Company and written representations that no other
reports were required to be filed during the 1993 fiscal year, all Section
16(a) filing requirements applicable to its Directors, Executive Officers and
10% owners were complied with, except that Mr. John filed one late report
covering one transaction.
INDEPENDENT ACCOUNTANTS
During the 1993 fiscal year Arthur Andersen & Co. of Philadelphia,
Pennsylvania, served as independent accountants to the Company. They have been
appointed as the Company's independent accountants for the 1994 fiscal year by
the Board of Directors. Representatives of Arthur Andersen & Co. are expected
to be present at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so. They will be available to respond to proper
questions regarding the independent accountants' responsibilities.
22
<PAGE>
OTHER MATTERS
Management does not know of any matters other than those referred to in this
Proxy Statement that may come before the Annual Meeting. However, if any other
matters should properly come before the meeting, the persons named in the
accompanying Proxy will have discretionary authority to vote all Proxies with
respect to such matters in accordance with their best judgment.
STOCKHOLDER PROPOSALS
If a stockholder wishes to present a proposal at the 1995 Annual Meeting, the
proposal must comply with the regulations of the Securities and Exchange
Commission and must be received by the Vice President, General Counsel and
Secretary of the Company at 50 South First Avenue, Coatesville, Pennsylvania
19320 no later than November 28, 1994, in order for it to be included in the
Proxy Statement for such meeting.
EXPENSE OF SOLICITATION
The cost of soliciting Proxies will be borne by the Company. Some of the
officers and employees of the Company may solicit Proxies personally and by
telephone. In addition, Corporate Investor Communications Inc. will provide
assistance in soliciting Proxies by mail, telephone, telegraph and personal
interview at an expected cost of $4,000 plus expenses.
FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS PROXY
STATEMENT, UPON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND THE SCHEDULES
THERETO. (IF EXHIBITS ARE REQUESTED, A CHARGE OF 25 CENTS PER PAGE WILL BE
MADE.) SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO THE COMPANY AT 50 SOUTH FIRST
AVENUE, COATESVILLE, PENNSYLVANIA 19320, ATTENTION: VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY.
By Order of the Board of
Directors
[SIGNATURE OF WILLIAM D. SPRAGUE
APPEARS HERE]
William D. Sprague
Vice President, General Counsel
and Secretary
23
<PAGE>
PROXY CONFIDENTIAL VOTING CARD
LUKENS INC.
I, as the undersigned participant in one or more of the following plans:
1. Lukens Inc. Employees Capital Accumulation Plan,
2. Employee Stock Ownership Plan contained in the Lukens Inc. Employees
Capital Accumulation Plan,
3. Lukens Inc. Capital Accumulation Plan for Hourly Employees (USW, AFL-CIO,
Coatesville, PA),
4. Washington Steel Corporation Employees Capital Accumulation Plan
(Washington, PA), and
5. Washington Steel Corporation Employees Capital Accumulation Plan
(Massillon, OH),
do hereby instruct the trustee(s) of such plan(s) to vote all shares of common
stock and/or preferred stock of Lukens Inc. which are held in my account(s) in
such plan(s) in the manner directed herein (with discretionary authority to
cumulate on the vote for the election of Directors) at the Annual Meeting of
Stockholders of Lukens Inc. to be held at the Administrative Resources Center,
Modena Road, South Coatesville, Pennsylvania, on April 27, 1994, at 1:30 P.M.,
EDT, or at any adjournment thereof, as indicated hereon, and in its discretion
upon such other business as may come before the meeting, all as set forth in
the notice of the meeting and in the proxy statement furnished herewith.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. MANAGEMENT RECOMMENDS A
VOTE FOR THE DIRECTORS NOMINATED.
The shares represented hereby will be voted in accordance with the
specifications made on the reverse side or, IF NO SPECIFICATION IS MADE, THEY
WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS NOMINATED.
(PLEASE FILL IN, SIGN AND DATE ON REVERSE SIDE)
(OVER)
<PAGE>
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. Election of FOR WITHHELD NOMINEES: T. KEVIN
Directors [_] [_] DUNNIGAN, RONALD M.
GROSS, W. PAUL TIPPETT
AND R. W. VAN SANT
To cumulate votes for any
nominee(s), write the
For, except vote name(s) and the amount
withheld from the allocated to such
following person(s) in the space
nominee(s): provided below:
- ------------------ --------------------------
SIGNATURE(S) ___________________
DATE ___________________________
NOTE: PLEASE SIGN EXACTLY AS
NAME APPEARS HEREON.
<PAGE>
PROXY
LUKENS INC.
The undersigned hereby appoints Michael O. Alexander, Harry C. Stonecipher
and Joab L. Thomas the proxies of the undersigned (each with power to act alone
and with power of substitution and with discretionary authority to cumulate on
the vote for the election of Directors) to represent and to vote at the Annual
Meeting of Stockholders of Lukens Inc. to be held at the Administrative
Resources Center, Modena Road, South Coatesville, Pennsylvania, on April 27,
1994, at 1:30 P.M., EDT, or at any adjournment thereof, the shares of stock of
the Company which the undersigned would be entitled to vote if then personally
present, as indicated hereon, and in their discretion upon such other business
as may come before the meeting, all as set forth in the notice of the meeting
and in the proxy statement furnished herewith.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. MANAGEMENT RECOMMENDS A
VOTE FOR THE DIRECTORS NOMINATED.
The shares represented hereby will be voted in accordance with the
specifications made on the reverse side or, IF NO SPECIFICATION IS MADE, THEY
WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS NOMINATED.
(PLEASE FILL IN, SIGN AND DATE ON REVERSE SIDE)
(OVER)
<PAGE>
[X] PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE.
NOMINEES: T. KEVIN
DUNNIGAN, RONALD M.
1. Election of FOR WITHHELD GROSS, W. PAUL TIPPETT
Directors [_] [_] AND R. W. VAN SANT
To cumulate votes for any
nominee(s), write the
For, except vote name(s) and the amount
withheld from the allocated to such
following person(s) in the space
nominee(s): provided below:
- ------------------ --------------------------
SIGNATURE(S) ___________________
DATE ___________________________
NOTE: PLEASE SIGN EXACTLY AS
NAME APPEARS HEREON. JOINT
OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS CORPORATE OFFICER,
ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH.
