<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 [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Lukens Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Lukens Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LUKENS
- --------------------------------------------------------------------------------
NOTICE OF
ANNUAL
MEETING March 27, 1995
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 26, 1995, 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,
/s/ R. W. Van Sant
R. W. VAN SANT
Chairman, President and
Chief Executive Officer
<PAGE>
NOTICE OF
ANNUAL MEETING
March 27, 1995
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 26, 1995, in the Company's
Administrative Resources Center, Modena Road, South Coatesville, Pennsylvania,
for the following purposes:
1. To elect three 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 3, 1995, 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
/s/ William D. Sprague
WILLIAM D. SPRAGUE
Vice President, General Counsel
and Secretary
<PAGE>
PROXY STATEMENT
March 27, 1995
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 26, 1995, or any adjournment thereof.
Copies of this Proxy Statement, the accompanying Proxy and the Company's Annual
Report for 1994 are being mailed to the stockholders on or about March 27,
1995.
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 three
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 3, 1995 (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 from participants to the trustees
under the Lukens Inc. Employees Capital Accumulation Plan, the Lukens Group
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 credited to a
participant's account 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
<PAGE>
all for one candidate or to distribute them among any two or more candidates.
In addition, the Lukens Inc. Employees Capital Accumulation Plan provides that
each participant may direct the trustee how to vote such participant's pro
rata portion of unallocated shares of preferred stock, as well as shares of
preferred stock that have not been voted. Shares of common stock held in the
Lukens Inc. Employees Capital Accumulation Plan, the Lukens Group 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 14,657,204 shares of common stock and
approximately 508,785 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 approximately one-third of the Board stands for election
each year. At the 1995 Annual Meeting of Stockholders, three persons will be
elected to the Board to serve until the 1998 Annual Meeting or until their
successors are elected and qualified. The three nominees who receive the most
votes at the Annual Meeting will be elected to the Board. Pursuant to Company
policy Robert L. Seaman retired 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, with the exception of Stuart J. Northrop,
who will retire in October 1996 pursuant to Company policy.
The Company's Board of Directors has nominated Sandra L. Helton, William H.
Nelson, III and Stuart J. Northrop for terms expiring at the 1998 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.
2
<PAGE>
All of the nominees are currently 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 1998
Sandra L. Helton Ms. Helton, 45, has been Senior Vice President and
Treasurer of Corning Incorporated since July 1994.
Corning Incorporated is an international corporation
focused in four business segments: Specialty
Materials, Communications, Laboratory Services and
Consumer Products. From 1991 to July 1994 she served
as Vice President and Treasurer and from 1986 to 1991
as Assistant Treasurer of that corporation. She was
elected to the Board of Directors in March 1995.
William H. Nelson, III Mr. Nelson, 66, 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 Executive Development
and Compensation Committee.
Stuart J. Northrop Mr. Northrop, 69, was Chief Executive Officer and
Chairman of Huffy Corporation, a manufacturer of
bicycles and other leisure products, from 1986 to
1994. He has been a Director of the Company since
1982. He is Chairman of the Executive Development and
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. and EFW, a subsidiary of
Elbit Systems of America.
DIRECTORS WITH TERMS EXPIRING IN 1997
T. Kevin Dunnigan Mr. Dunnigan, 57, 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.
Mr. Dunnigan was elected to the Board of Directors of
the Company in April 1994 and is a member of the
Finance Committee. He is also a director of Elsag
Bailey N.V. and C.R. Bard Inc.
3
<PAGE>
Ronald M. Gross Mr. Gross, 61, has been President and a director since
1978, Chief Executive Officer since 1981 and Chairman
of the Board since 1984 of Rayonier Inc., a forest
products company, formerly known as ITT Rayonier Inc.
Mr. Gross also serves as President and director of
Rayonier Forest Resources Company. Mr. Gross was
elected to the Board of Directors of the Company in
July 1991 and is Chairman of the Finance Committee and
a member of both the Executive Development and
Compensation Committee and the Executive Committee.
W. Paul Tippett Mr. Tippett, 62, 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 and Compensation Committee. He
is also a director of Stride Rite Corporation.
R. W. Van Sant Mr. Van Sant, 56, 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 operations,
from December 1990 to October 1991. He held the
offices of President and Chief Operating Officer of
Blount from 1987 to December 1990. 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, 54, 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.
4
<PAGE>
Mr. Alexander was elected to the Board of Directors of
the Company in January 1993 and is a member of the
Audit Committee and the Finance Committee.
Nancy Huston Hansen Mrs. Hansen, 59, 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 Finance
Committee. She is also a director of The Huston
Foundation and Hansen Development Corporation.
Joab L. Thomas Mr. Thomas, 62, 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. 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. and Mellon Bank Corporation.
DIRECTOR WITH TERM EXPIRING IN 1995
Robert L. Seaman Mr. Seaman, 71, has been an independent consultant
since 1989. He served as a Director of the Company
from 1981 until March 1995. At the time of his
retirement he was Chairman of the Committee on the
Board and a member of the Audit Committee and the
Executive Committee.
During the Company's 1994 fiscal year the Board of Directors held eight
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.
5
<PAGE>
MANAGEMENT
The following table sets forth as of March 1, 1995, 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 Executive Officer
named in the Summary Compensation Table on page 9 and by all Directors and
Executive Officers of the Company as a group who were serving in such
capacities on that date.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENT
OWNED OF CLASS(1)
---------------------------------------------------
NAME COMMON PREFERRED COMMON PREFERRED
- ---- ---------- --------- --------- ------------
<S> <C> <C> <C> <C>
R. W. Van Sant 90,850(2) 410 less than 1% less than 1%
Michael O. Alexander 2,700(3) -0- less than 1% none
T. Kevin Dunnigan 1,400(4) -0- less than 1% none
Ronald M. Gross 4,000(3) -0- less than 1% none
Nancy Huston Hansen 367,193(5) -0- 2.5% none
Robert E. Heaton 300 115 less than 1% less than 1%
Sandra L. Helton 200 -0- less than 1% none
T. Grant John 15,838(6) 95 less than 1% less than 1%
William H. Nelson, III 3,800(3) -0- less than 1% none
Stuart J. Northrop 2,975(3) -0- less than 1% none
James J. Norton 500 -0- less than 1% none
Dennis M. Oates 48,394(7) 740 less than 1% less than 1%
Robert L. Seaman 2,542(8) -0- less than 1% none
Joab L. Thomas 3,600(9) -0- less than 1% none
W. Paul Tippett 3,500(3) -0- less than 1% none
All Directors and Execu-
tive Officers as a Group
(21 Persons) 645,237(10) 4,674 4.3% less than 1%
</TABLE>
- ----------
(1) Rounded to the nearest one-tenth of one percent and based on (i) 14,903,980
shares of common stock, which on March 1, 1995, 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 1, 1995, and (ii)
508,927 shares of preferred stock, which on March 1, 1995, was the
approximate number of shares outstanding.
(2) Includes options to purchase 90,000 shares of common stock that are
currently exercisable.
(3) Includes options to purchase 2,000 shares of common stock that are
currently exercisable or will become exercisable on May 1, 1995.
(4) Includes options to purchase 1,000 shares of common stock that will become
exercisable on May 1, 1995.
6
<PAGE>
(5) Nancy Huston Hansen has sole voting and investment power with respect to
37,045 shares and options to purchase 2,000 shares that are currently
exercisable or will become exercisable on May 1, 1995. She has shared
voting and investment power with respect to 5,100 shares owned jointly
with her husband, 314,600 shares owned by The Huston Foundation, 159
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 which she disclaims beneficial ownership.
(6) Includes 41 shares held in a retirement plan for the benefit of his wife
and options to purchase 15,700 shares of common stock that are currently
exercisable.
(7) Includes options to purchase 39,350 shares of common stock that are
currently exercisable.
(8) Includes options to purchase 2,000 shares of common stock that are
currently exercisable.
(9) Includes 1,600 shares held jointly with his wife and options to purchase
2,000 shares of common stock that are currently exercisable or will become
exercisable on May 1, 1995.
(10) Includes options to purchase 247,200 shares of common stock that are
currently exercisable or will become exercisable on May 1, 1995, and
3,789 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 and Compensation Committee and the
Committee on the Board.
The Audit Committee is appointed by the Board and currently consists of five
members, none of whom are members of the Company's management. It is
responsible for overseeing the Company's internal accounting and auditing
methods and procedures, and it 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 1994 fiscal year this Committee held three meetings.
The Executive Development and Compensation Committee is appointed by the Board
and currently consists of four 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
7
<PAGE>
succession of executive personnel; and performs such other duties as the Board
may assign. During the Company's 1994 fiscal year the Executive Development and
Compensation Committee held five meetings.
The Committee on the Board is appointed by the Board and currently consists of
three 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 1994 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 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 26, 1992,
December 25, 1993 and December 31, 1994 is given as to the Chief Executive
Officer and each of the four other most highly compensated Executive Officers
of the Company who were serving as Executive Officers at the end of the 1994
fiscal year and whose base salary and bonus exceeded $100,000 during the 1994
fiscal year.
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- ------------
AWARDS
OTHER ------------
ANNUAL SECURITIES ALL OTHER
NAME AND COMPEN- UNDERLYING COMPEN-
PRINCIPAL SATION OPTIONS/ SATION
POSITION(S) YEAR SALARY($)(1) BONUS($)(1) ($)(1) SARS(#) ($)(1)
- ----------- ---- ------------ ----------- -------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
R. W. Van
Sant 1994 $536,508 $104,380 (2) -0- $18,247(3)
Chairman, 1993 $536,508 $ 64,381 (2) -0- $18,454
President
and 1992 $528,814 $264,407 $424,931 -0- $ 2,380
Chief Ex-
ecutive
Officer
R. E. Hea-
ton 1994 $270,000 $108,072 $ 44,379(4) -0- $20,307(5)
Senior
Vice 1993 $270,000 $162,000 (2) -0- $11,700
President 1992(6) $180,000 $108,000 (2) -0- -0-
J. J. Nor-
ton 1994 $181,840 $ 96,703 $ 48,075(7) -0- $ 3,025(8)
Vice Pres-
ident 1993 $181,125 $108,675 (2) -0- $ 2,489
1992(6) $120,000 $145,800 (2) -0- $ 2,432
D. M. Oates 1994 $175,920 $ 31,282 $ 23,500(9) 9,000 $ 8,541(10)
Senior
Vice 1993 $175,920 $ 50,101 (2) 4,100 $ 8,735
President 1992 $155,631 $ 73,128 (2) 6,000(11) $ 7,003
T. G. John 1994 $178,223 $ 50,741 $ 71,461(12) 13,000 $ 9,726(13)
Vice Pres-
ident 1993(14) $158,021 $ 77,810 $ 72,642 2,700 $ 1,431
1992 -- -- -- -- --
</TABLE>
- ---------
(1) Rounded to the nearest dollar.
(2) Does not exceed the lesser of $50,000 or 10% of the total of such
person's annual salary and bonus.
(3) Includes $9,647 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 $2,750
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 his designee.
(4) Includes an automobile allowance provided by the Company of $19,869 and
payment by the Company of country club fees of $13,210.
(5) Represents $9,647 of Company contributions to the Lukens Inc. Employees
Capital Accumulation Plan; $6,880 of Company-paid premiums for life
insurance coverage above $50,000; $2,584 of Company-paid premiums on a
whole life insurance
9
<PAGE>
policy; and $1,196 of premiums paid by the Company on another life
insurance policy which covers Mr. Heaton and is owned by the Company. The
benefit under this last policy is paid to Mr. Heaton's designee, and then
the remainder is payable to the Company under a split-dollar agreement.
(6) 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 expired in
September 1994. This table reflects compensation paid to them by the
Company since April 1992.
(7) Includes payment by the Company of country club fees of $45,000.
(8) Represents $2,560 of 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, and $465 of Company-paid
premiums for life insurance coverage above $50,000.
(9) Includes an automobile allowance provided by the Company of $13,512.
(10) Represents $7,625 of Company contributions to the Lukens Inc. Employees
Capital Accumulation Plan and $916 of Company-paid premiums for life
insurance coverage above $50,000.
(11) Adjusted to reflect a 50% stock dividend in September 1992.
(12) Includes approximately $27,375 provided by the Company to Mr. John for
relocation expenses and approximately $13,688 to cover Mr. John's
estimated tax liability with respect thereto.
(13) Represents $6,968 of Company contributions to the Lukens Inc. Employees
Capital Accumulation Plan and $2,758 of Company-paid premiums for life
insurance coverage above $50,000.
(14) Mr. John became an employee of the Company in February 1993. This table
reflects compensation paid to him by the Company since that date.
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 $535,000 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
10
<PAGE>
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 provides 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.
Until September 30, 1994, Mr. Norton continued to be employed under an
employment contract with a corporation that was acquired by the Company in
April 1992. The contract provided for a minimum annual base salary, 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.
Messrs. Van Sant, Norton, Oates and John, as well as six other Executive
Officers are parties to agreements pursuant to which the Company agreed to pay
such persons a lump sum generally equal to approximately three times 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, 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 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.
DIRECTOR COMPENSATION
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
11
<PAGE>
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.
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 may be invested in mutual funds or interest-bearing accounts 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. These retirement payments
may continue for a period equal to the lesser of the years of service on the
Board or 10 years. In the event of the death of a Director, the benefits which
would have been payable to such Director will be paid to the Director's
designated beneficiary for the remainder of the period. 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
12
<PAGE>
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.
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. 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, 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>
$ 100,000 $ 16,700 $ 25,000 $ 33,300 $ 41,700 $ 43,300 $ 45,600
200,000 34,200 51,400 68,500 85,600 95,600 105,600
300,000 54,200 81,400 108,500 135,600 150,600 165,600
400,000 74,200 111,400 148,500 185,600 205,600 225,600
500,000 94,200 141,400 188,500 235,600 260,600 285,600
600,000 114,200 171,400 228,500 285,600 315,600 345,600
700,000 134,200 201,400 268,500 335,600 370,600 405,600
800,000 154,200 231,400 308,500 385,600 425,600 465,600
900,000 174,200 261,400 348,500 435,600 480,600 525,600
1,000,000 194,200 291,400 388,500 485,600 535,600 585,600
</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.
13
<PAGE>
Messrs. Oates and John have credited service of approximately 21 and 2 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 3 years under
the Lukens Inc. Salaried Employees Retirement Plan and 22 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.
Mr. Heaton has participated in the Lukens Inc. Salaried Employees Retirement
Plan since July 1, 1993. 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 retired or otherwise terminated employment
after completing five or more years of service. Effective July 1, 1993, the
Washington Steel Corp. Retirement Plan for Salaried Employees merged into the
Lukens Inc. Salaried Employees Retirement Plan. The maximum amount of
compensation that may be taken into account for purposes of calculating future
benefit accruals is $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 and approximately 2 years
under the Lukens Inc. Salaried Employees Retirement Plan. As of December 31,
1994, Mr. Heaton's monthly retirement benefit was estimated to be $5,081. Mr.
Heaton's benefit as of December 31, 1994 under such Plan will be adjusted as of
the date of his retirement or other termination of employment to reflect
increases in his compensation after that date. For each year (or partial year)
of service after June 30, 1993 under the Lukens Inc. Salaried Employees
Retirement Plan, Mr. Heaton will accrue an additional annual benefit payable at
normal retirement age equal to the sum of (i) 1.2 percent of his earnings for
the year (as defined in that Plan) up to the average Social Security taxable
wage base plus (ii) 1.8 percent of his earnings for the year in excess of the
average Social Security taxable wage base up to the compensation limit for the
year, as described above.
STOCK OPTION DATA
Under the Company's 1985 Stock Option and Appreciation Plan, options to
purchase common stock of the Company have been granted on an annual basis to
certain officers and other key employees of the Company and its subsidiaries at
the fair market value of the common stock on the date of grant. The following
table contains information about options granted to each Executive Officer
named in the Summary Compensation Table on page 9 during the 1994 fiscal year.
14
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE OR GRANT DATE
GRANTED(#) IN FISCAL BASE PRICE EXPIRATION PRESENT VALUE
NAME (1) (2) YEAR (3) ($/SH) DATE (4) ($) (5)
- ---- ---------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
R. W. Van Sant -0- -- -- -- --
R. E. Heaton -0- -- -- -- --
J. J. Norton -0- -- -- -- --
D. M. Oates 9,000 7.8% $36.375 2/23/2004 $ 90,630
T. G. John 13,000 11.2% $36.375 2/23/2004 $130,910
</TABLE>
- ----------
(1) Includes options which qualify as incentive stock options under Section 422
of the Internal Revenue Code of 1986, as amended, and options which do not
so qualify.
(2) Outstanding options are generally exercisable one year after the date of
grant. The options granted to Messrs. Oates and John became exercisable on
February 23, 1995.
(3) Rounded to the nearest one-tenth of one percent.
(4) Outstanding options expire ten years after the date of grant, if not
earlier due to death, disability or termination of employment. The Company
has agreed to "cash-out" outstanding options of certain Executive Officers
upon a "change in control." See "Employment Contracts and Change in Control
Arrangements" on pages 10- 11.
(5) Based on the Black-Scholes option pricing model, using the following
assumptions: (a) 7 year option term; (b) 6.6% risk-free interest rate; (c)
25.18% volatility; and (d) 3.3% dividend yield.
The following table presents information about stock options exercised during
the 1994 fiscal year by the Executive Officers named in the Summary
Compensation Table on page 9 and the amount and value of unexercised options,
distinguishing between options that are vested (i.e., exercisable now) and
unvested (i.e., becoming exercisable in the future), held by such Executive
Officers at fiscal year-end.
15
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
YEAR-END (#) FISCAL YEAR-END($)(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- 90,000 240,000 $517,500 $1,380,000
R. E. Heaton -0- -0- -0- -0- -0- -0-
J. J. Norton -0- -0- -0- -0- -0- -0-
D. M. Oates 500 $5,604 30,350 9,000 $158,220 -0-
T. G. John -0- -0- 2,700 13,000 -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 AND
COMPENSATION COMMITTEE
The members of the Executive Development and 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 Executive Officers, 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 Executive Officers 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 for Executive
Officers.
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 conditions a substantial portion of such
compensation on the Company's achievement of specified performance goals and
on increases in the value of the Company's common stock.
16
<PAGE>
In determining compensation for the Company's Executive Officers for 1994, the
Committee relied on compensation guidelines established 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 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.
This comparative sampling of companies used by the Committee for compensation
guidelines is different from the S & P Steel Index, which is the group of
companies used for purposes of the performance graph set forth on page 21,
comparing cumulative stockholder return on common stock. Comprised of steel
companies exclusively, this group and the Company operate in similar
environments and thus are similarly affected in terms of regulation,
competition, industry trends and the myriad of other factors that affect a
company's performance. However, in recruiting, the Company looks to a wider
field which includes manufacturing companies, not just steel companies, and so
considers compensation in relation to this wider group.
The compensation 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 has set its performance targets above the
average return on equity for the comparative group, actual incentive
compensation is 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 generally awarded under the Lukens Inc.
Target Incentive Compensation Plan (the "Lukens TIP") and the Washington Steel
Corporation Target Incentive Compensation Plan (the "Washington Steel TIP") 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, 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 Executive Officers with those
of the Company's stockholders.
The Committee has made certain changes in the method of determining incentive
awards for 1995. These changes will condition a greater proportion of incentive
17
<PAGE>
compensation for Executive Officers on the long-term performance of the
Company's common stock and thus will more closely link executive compensation
with the interests of stockholders.
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.
SPECIFIC COMPONENTS OF COMPENSATION PROGRAM
Salary. Base salaries for Executive Officers are the fixed component of their
total compensation package. In general, base salaries are set and adjusted
based on comparative standards and individual performance. In 1994, salaries
for all Executive Officers were held at 1993 levels due to disappointing
financial results in 1993. For 1993, the Committee determined the base salary
for each Executive Officer (with the exception of Messrs. Heaton and Norton as
described below), 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.
Mr. Heaton continued to be compensated in 1994 consistent with the level of
compensation he was receiving pursuant to an employment contract, which expired
in October 1993 and which was in place at the time of the acquisition of
Washington Steel Corporation by the Company. Similarly, Mr. Norton's
compensation for 1994 was determined in accordance with his employment
contract, which expired in September 1994 and which was in place at the time of
such acquisition. Accordingly, the compensation terms of these employment
agreements do not reflect the components of compensation of other Executive
Officers.
Bonus. Under the Lukens TIP and the Washington Steel TIP, the Committee
determines the annual awards for the Executive Officers (including Mr. Van
Sant) 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 Executive Officer's 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 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
18
<PAGE>
subjective assessment of whether the Executive Officer met or exceeded his
individual performance goals for the year. The Committee makes a general
performance assessment which is not based on any specific factors. If the
threshold goals for corporate or business unit performance, as the case may be,
are not met, the Lukens TIP and the Washington Steel TIP limit an Executive
Officer's bonus to 100% of the individual performance factor, which for 1994
was 20% of the total possible bonus award.
Because the threshold goal for return on equity for corporate performance was
not achieved in 1994, those Executive Officers who participate in the Lukens
TIP did not receive any bonus based on corporate performance with respect to
1994. However, such performance did improve on a quarter by quarter basis, and
the Committee believes there were mitigating circumstances during 1994 that
affected such performance. These circumstances were unusually severe weather in
the first quarter and numerous planned outages throughout the year due to
construction of major capital projects which are critical to the Company's
long-term opportunities. Accordingly, the Committee, which may in its
discretion grant special awards from time to time, decided to award an
aggregate of $27,798 in special awards to Executive Officers (other than Mr.
Van Sant, whose compensation is discussed below). Mr. Oates, whose award was
based in part on business unit performance, did receive an award based on such
performance with respect to 1994 because his business unit achieved the
applicable threshold. Because all of the Executive Officers either met or
exceeded their individual performance goals, they were awarded bonuses for 1994
based on the individual performance factor.
Awards under the Washington Steel Division Annual Bonus Plan for Elected
Officers were granted to Mr. Norton for the portion of the year his employment
agreement was in effect and Mr. Heaton for the first five months of the year.
This plan has since been replaced by the Washington Steel TIP. Under this
former plan, awards, which were a percentage of base salary, were granted based
on attained levels of return on average capital employed by the applicable
business unit. In 1994, the return on average capital measurement resulted in
awards of 60% of base salary to Messrs. Heaton and Norton for the portion of
the year they participated in this plan.
Awards under the Washington Steel TIP were awarded to Mr. Norton for the three
months of the year following the expiration of his employment agreement, to Mr.
Heaton for seven months of the year and to Mr. John for the entire year.
Because their respective business units achieved their applicable thresholds,
Messrs. Norton, Heaton and John received awards based on the performance of
their applicable business unit as well as awards based on their individual
performance factor.
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 Executive
19
<PAGE>
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).
For 1994, the Committee set a range of the number of options that could be
granted for each level of Executive Officer. The number of options within the
applicable range granted to each Executive Officer was based on the Committee's
subjective assessment of such Executive Officer's individual performance and
other qualitative factors the Committee considered appropriate.
1994 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 pages 10-11 based
upon the scope of his responsibilities for the Company and comparative group
standards. The Committee believes that the terms of Mr. Van Sant's employment
agreement are consistent with the compensation policies of the Committee. His
salary, which was $535,000 for 1993, was kept at the same level for 1994, as
was the case for other Executive Officers.
Because the threshold goal for return on equity for the Company was not
achieved in 1994, Mr. Van Sant's incentive award under the Lukens TIP for 1994
of $64,380 was based solely on the Committee's determination, using the same
guidelines as for other Executive Officers, that he exceeded his individual
performance goals. In addition, the Committee decided to grant Mr. Van Sant a
special award of $40,000 for the same reasons as are discussed above for the
other Executive Officers.
Pursuant to his employment agreement, Mr. Van Sant was granted options
totaling 330,000 that vest at a 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 and Compensation Committee
Stuart J. Northrop,
Chairman Ronald M. Gross
William H. Nelson, III
W. Paul Tippett
20
<PAGE>
PERFORMANCE GRAPH
The following graph illustrates a five year comparison at fiscal year-end from
1989 through 1994 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, 1990, and reinvestment of dividends. The companies included
in the S&P Steel Index for fiscal year 1990 were Armco Inc., Bethlehem Steel
Corp., Inland Steel Industries, Inc., Nucor Corp. and Worthington Industries
Inc. For fiscal years 1991, 1992, 1993 and 1994, USX Corp.-U.S. Steel Group was
also a member of the S&P Steel Index.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
LUKENS INC. + $100 106.52 109.48 176.99 151.11 133.03
S&P 500 INDEX * $100 96.90 126.42 136.05 149.76 151.74
S&P STEEL INDEX # $100 84.15 103.41 135.29 178.02 173.14
</TABLE>
21
<PAGE>
PRINCIPAL HOLDERS OF STOCK
The following table sets forth 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(1)
- ---------------- --------- ------------ ----------
<S> <C> <C> <C>
State Street Bank and Trust Company
Boston, MA Preferred 510,652(2)(3) 100.0%
American Express Financial Advi-
sors Inc. Minneapolis, MN Common 866,600(4) 5.9%
The Equitable Companies Incorporated
New York, NY Common 985,300(5) 6.7%
Hotchkis and Wiley
Los Angeles, CA Common 768,000(6) 5.2%
Systematic Financial Management, Inc.
Fort Lee, NJ Common 1,042,062(7) 7.1%
</TABLE>
- ----------
(1) Rounded to the nearest one-tenth of one percent and based on the number of
shares of the applicable class outstanding on March 1, 1995.
(2) Rounded to the nearest share.
(3) 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 1,531,956 shares of common
stock as trustee. These shares, together with the 101,125 shares of common
stock held in separate or commingled funds managed by State Street, would
represent approximately 11.1% of the Company's common stock.
(4) American Express Financial Advisors is a subsidiary of American Express
Company, which disclaims beneficial ownership as to these shares. American
Express Financial Advisors has shared dispositive power with respect to
such shares. Includes 800,000 shares beneficially owned by IDS Stock Fund,
which has shared dispositive power and sole voting power with respect to
such shares.
(5) Equitable Companies is a parent holding company, whose subsidiary Alliance
Capital Management L.P. beneficially owns such shares, as to all of which
it has sole dispositive power, as to 775,500 of which it has sole voting
power and as to 22,000 of which it has shared voting power.
(6) Hotchkis and Wiley has sole voting power with respect to such shares.
(7) Systematic Financial has sole dispositive power with respect to all such
shares and shared voting power with respect to 79,685 of such shares.
Kenneth S. Hackel, the President and majority shareholder of both
Systematic Financial and an affiliate, Cash Flow Investors, Inc., disclaims
beneficial ownership as to the shares beneficially owned by Systematic
Financial and as to 17,800 shares beneficially owned by Cash Flow
Investors.
22
<PAGE>
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 1994 fiscal year, all Section
16(a) filing requirements applicable to its Directors, Executive Officers and
10% owners were met.
INDEPENDENT PUBLIC ACCOUNTANTS
During the 1994 fiscal year Arthur Andersen LLP of Philadelphia, Pennsylvania,
served as independent public accountants to the Company. They have been
appointed as the Company's independent public accountants for the 1995 fiscal
year by the Board of Directors. Representatives of Arthur Andersen LLP 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 public accountants'
responsibilities.
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 1996 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 27, 1995, in order for it to be included in the
Proxy Statement for such meeting.
23
<PAGE>
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
/s/ William D. Sprague
WILLIAM D. SPRAGUE
Vice President, General Counsel
and Secretary
24
<PAGE>
PROXY
LUKENS INC.
The undersigned:
(i) as a holder of record of Lukens Inc. common stock hereby appoints
T. Kevin Dunnigan, Nancy Huston Hansen and W. Paul Tippett 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 vote, in the manner directed herein, the shares of
stock of Lukens Inc. which the undersigned would be entitled to vote if
personally present; or
(ii) as a participant in the capital accumulation plan specified on the
reverse side hereby instructs the trustee of such plan to vote all shares of
common stock and/or preferred stock of Lukens Inc. which are credited to the
undersigned's account in such plan 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 26, 1995, at 1:30 P.M., EDT, or at any adjournment thereof, and in the
proxies' or the trustee's discretion, as applicable, 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.
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)
SEE REVERSE
SIDE
<PAGE>
[X] PLEASE MARK YOUR -
VOTES AS IN THIS
EXAMPLE. -
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. MANAGEMENT RECOMMENDS A VOTE
FOR THE DIRECTORS NOMINATED.
FOR WITHHELD
1. ELECTION OF [_] [_] NOMINEES: SANDRA L. HELTON, WILLIAM H.
DIRECTORS NELSON, III AND STUART J. NORTHROP
For, except vote To cumulate votes for any nominee(s), write the
withheld from the name(s) and the amount allocated to such person(s)
following nominee(s): in the space provided below:
- ------------------------- -------------------------
------------------------------------
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.
------------------------------------
Signature
------------------------------------
Signature, if held jointly
DATE _______________________________
