<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
National Steel Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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>
LOGO
March 16, 1995
To All National Steel Corporation Stockholders:
It is a pleasure to invite you to our Annual Meeting of Stockholders which
will be held in Dearborn, Michigan on Wednesday, April 26, 1995. The Annual
Meeting will take place in the Marquis Ballroom of the Hyatt Regency Dearborn
Hotel at 1:00 p.m. Eastern Daylight Time. Your continued interest in our
Company is appreciated, and I hope that as many of you as possible will attend
the Annual Meeting.
The annual election of Directors will take place at the Annual Meeting. In
the Proxy Statement you will find personal information about each nominee as
well as information about the functions of the Board and its committees. In
addition, we are also asking you to ratify the appointment of Ernst & Young LLP
as National Steel's independent auditors for 1995.
Please read the formal notice of the Annual Meeting and the Proxy Statement
carefully. For those of you who cannot attend the Annual Meeting, I urge you to
participate by completing, signing, and returning your proxy in the enclosed
envelope. Your vote is important, and the management of National Steel
appreciates your cooperation in directing proxies to vote at the Annual
Meeting.
Sincerely,
LOGO
V. John Goodwin
President and
Chief Operating Officer
- --------------------------------------------------------------------------------
V. JOHN GOODWIN NATIONAL STEEL
President and Chief Operating Officer CORPORATION
4100 Edison Lakes
Parkway
Mishawaka, IN
46545
Telephone: (219)
273-7855
Facsimile: (219)
273-7868
<PAGE>
LOGO
- --------------------------------------------------------------------------------
NATIONAL STEEL CORPORATION
4100 EDISON LAKES PARKWAY
MISHAWAKA, INDIANA 46545
NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS
The 1995 Annual Meeting of Stockholders of National Steel Corporation (the
"Company") will be held on Wednesday, April 26, 1995. The Annual Meeting will
commence at 1:00 p.m. Eastern Daylight Time at the Hyatt Regency Dearborn
Hotel, Fairlane Town Center, Dearborn, Michigan in the Marquis Ballroom.
The Annual Meeting will be held for the following purposes:
1. To elect nine Directors of the Company;
2. To ratify the appointment of the Company's independent auditors for
the year 1995; and
3. To transact any other business that may properly come before the
meeting.
Stockholders of record of the Company's Class A Common Stock and Class B
Common Stock at the close of business on March 15, 1995 are entitled to receive
notice of and to vote at the Annual Meeting.
A Proxy Statement with respect to the Annual Meeting accompanies and forms a
part of this notice.
By order of the Board of Directors,
LOGO
David A. Pryzbylski
Secretary
March 16, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
MARK, DATE, AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT
PROMPTLY IN THE ENVELOPE WHICH HAS BEEN PROVIDED. YOU MAY REVOKE
YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY WRITTEN NOTICE TO
SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR BY
ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
- --------------------------------------------------------------------------------
<PAGE>
LOGO
PROXY STATEMENT
GENERAL INFORMATION FOR STOCKHOLDERS
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of National Steel Corporation (the "Company") of proxies to
be voted at the Annual Meeting of Stockholders (the "Annual Meeting") to be
held on April 26, 1995 and at any and all adjournments of such Annual Meeting.
This Proxy Statement was initially mailed to stockholders on or about March
22, 1995 in order to provide every stockholder with an opportunity to vote on
all matters that properly come before the Annual Meeting, whether or not the
stockholder attends in person. In addition to solicitation by mail, the
Company will request banks, brokers and other custodian nominees and
fiduciaries to furnish proxy materials to beneficial owners of the Class B
Common Stock of whom they have knowledge and will reimburse them for their
expenses for doing so. Additional solicitation may be made by letter,
telephone or telecopier by officers and employees of the Company.
At the Annual Meeting, stockholders will vote on the election of directors
and the ratification of the appointment of Ernst & Young LLP as the
independent auditors for the Company. All duly executed proxies received by
management prior to the Annual Meeting will be voted in accordance with the
choices specified by stockholders on their proxies. If no choice is specified
by a stockholder, the shares of such stockholder will be voted FOR the
election of the nine nominees for directors listed in this Proxy Statement
that are to be elected by the holders of the Company's Class A Common Stock
and Class B Common Stock, voting together as a single class, and FOR the
ratification of the appointment of Ernst & Young LLP as the independent
auditors of the Company. Stockholders who execute proxies may revoke them at
any time before they are voted by filing with the Company a written notice of
revocation, by delivering a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person.
It is the policy of the Company that proxies that identify the vote of
specific stockholders are kept confidential until the final vote is tabulated,
except in a contested proxy or consent solicitation or to meet applicable
legal requirements.
As of March 15, 1995, there were issued and outstanding 22,100,000 shares of
Class A Common Stock and 21,176,156 shares of Class B Common Stock. Holders of
Class A Common Stock are entitled to two votes per share while holders of
Class B Common Stock are entitled to one vote per share. The Class A Common
Stock and Class B Common Stock are sometimes referred to collectively herein
as the "Common Stock" of the Company. Those persons who were stockholders of
record of either class of Common Stock at the close of business on March 15,
1995 will be entitled to vote at the Annual Meeting.
ELECTION OF DIRECTORS
In accordance with the Company's Bylaws, the Board has set the number of
directors at nine. If elected, all of the nine nominees listed below will
serve as Directors of the Company for terms expiring on the date of the 1996
Annual Meeting of Stockholders and until their successors are duly elected and
qualified, or until their earlier resignation, retirement, or removal. The
Board of Directors meets regularly and met nine times in 1994. A brief
statement of the background of each nominee is given on the following pages.
If any nominee shall be unable to serve, proxies may be voted for another
person designated by the Board of Directors. The Company has no reason to
believe that any nominee will be unable to serve.
1
<PAGE>
INFORMATION CONCERNING NOMINEES FOR DIRECTORS
EDWIN V. CLARKE, JR.
Mr. Clarke, age 69, has been a Director of the Company since November 3,
1993. He currently serves as a Director of Provident Insurance Company and
Trion, Inc., and as a trustee of Warren Wilson College and Pittsburgh
Theological Seminary. He was an employee of Westinghouse Electric Corporation
from 1948 until his retirement in 1985, and held the position of Senior
Executive Vice President, Corporate Resources from 1983 until his retirement.
Mr. Clarke serves as a member of the Audit, Compensation and Nominating
Committees.
V. JOHN GOODWIN
Mr. Goodwin, age 51, joined the Company as President, Chief Operating
Officer and Director on June 1, 1994. Prior to joining the Company, Mr.
Goodwin was employed by U.S. Steel Corporation for twenty-seven years
beginning in 1967. From 1987 until his departure in 1994, he served as the
general manager of U.S. Steel's Gary Works.
MASAYUKI HANMYO
Mr. Hanmyo, age 54, has been a Director of the Company since 1993. He has
been employed by NKK Corporation ("NKK") in various positions since 1963 and
has been a Director of NKK since 1992. Mr. Hanmyo was General Manager,
Production Administration Department of Keihin Works from 1988 to 1991, and
was General Manager, Technology Planning and Coordination Department from 1991
to 1993.
FRANK J. LUCCHINO
Mr. Lucchino, age 55, has been a Director of the Company since January 30,
1995. Since 1980 he has served as Controller of Allegheny County, Pennsylvania
and been a Partner with the law firm of Grogan, Graffam, McGinley & Lucchino,
PC. In 1993, Mr. Lucchino was appointed by the President of the United States
to serve on the U.S. National Commission on Libraries and Information Science.
Mr. Lucchino is also a member of the Board of Trustees of the University of
Pittsburgh, The Carnegie, the Carnegie Science Center, the Carnegie Library of
Pittsburgh, and the Western Pennsylvania Historical Society. He is a member of
the Pennsylvania and Allegheny County Bar Associations. Mr. Lucchino was
nominated to serve on the Board of Directors pursuant to a collective
bargaining agreement with the United Steelworkers of America.
HIROSHI MATSUMOTO
Mr. Matsumoto, age 43, joined the Company as Vice President and Assistant to
the President and Director on June 1, 1994. From 1986 to 1994 he served NKK
America Corporation as Senior Representative in their Washington, D.C. office.
KEISUKE MURAKAMI
Mr. Murakami, age 56, has been a Director of the Company and Vice
President--Administration since 1993. From 1991 to 1993 he served as Vice
President, Administration and Technical & Management Coordination. From 1989
to 1991 he served with NKK as General Manager, Building and Construction
Products Center.
OSAMU SAWARAGI
Mr. Sawaragi, age 66, has been a Director of the Company since June 1990. He
was elected Chairman effective January 1, 1994. He is currently serving NKK as
Senior Management Counsellor. Prior thereto he served NKK as a Director
beginning in 1984, Managing Director in 1986, Senior Managing Director in
1989, and Executive Vice President from 1990 to 1994. Mr. Sawaragi serves as
Chairman of the Compensation Committee and as a member of the Nominating
Committee.
2
<PAGE>
KENICHIRO SEKINO
Mr. Sekino, age 58, has been a Director of the Company since January 1,
1994. He is currently serving with NKK where he has been employed since 1962.
Since 1994, he has served as Senior General Manager, Steel Division. From 1991
to 1994 he served as Senior General Manager, International Business Center,
and from 1989 to 1991 he was President of NKK UK. Mr. Sekino serves as
Chairman of the Nominating Committee.
ROBERT J. SLATER
Mr. Slater, age 57, has been a Director of the Company since April 1991. He
has been President and Director of Jackson Consulting, Inc., and/or its
predecessor companies since 1985. He is also a Director of Southdown, Inc.,
Houston, TX and First Industrial Realty Trust, Inc., Chicago, IL. Mr. Slater
serves as Chairman of the Audit Committee and as a member of the Compensation
and Nominating Committees.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or any of its subsidiaries
receive an annual fee of $24,000 plus a fee of $1,000 for attendance at each
meeting of the Board of Directors and at each meeting of a committee of the
Board of Directors. All Directors are reimbursed for expenses incurred in
attending Board and committee meetings. In addition, each non-employee
Director received, upon his initial election to the Board of Directors, a
stock option grant of 2,500 shares of Class B Common Stock at the then market
price pursuant to the terms of the 1993 National Steel Corporation Nonemployee
Directors Stock Option Plan. An additional stock option grant of 500 shares of
Class B Common Stock is granted to each non-employee Director at each
anniversary of Board service. Each option grant will fully vest on the third
anniversary of the date of grant or upon disability, death or retirement,
whichever is earliest.
COMMITTEES OF THE BOARD OF DIRECTORS
Among the standing committees of the Board of Directors, the Company has an
Audit Committee, a Compensation Committee, and a Nominating Committee.
The Audit Committee has responsibility for recommending to the Board of
Directors a firm of independent certified public accountants to serve as
auditors to be appointed by the Board and submitted to the stockholders for
ratification at the Annual Meeting. In addition, the Audit Committee approves
the scope and fees of the annual audit and reviews the results and
recommendations of the independent auditors upon completion of the annual
audit. The Audit Committee assists the Board in fulfilling its fiduciary
responsibilities relating to accounting and reporting policies, practices and
procedures. The Audit Committee also has the authority to meet and confer with
such officers and employees of the Company as deemed appropriate in connection
with carrying out its responsibilities. The Audit Committee is presently
comprised of Mr. Slater, Chairman, and Mr. Clarke. The Audit Committee held
four meetings in 1994.
The duties of the Compensation Committee are to review and approve a
compensation philosophy and guidelines for the Company's executive officers
and Directors. In addition, the Compensation Committee reviews and recommends
for approval by the Board of Directors salary and benefit arrangements for,
and any employment agreement with, any of the Company's executive officers.
The Compensation Committee is presently comprised of Mr. Sawaragi, Chairman,
and Messrs. Clarke and Slater. The Compensation Committee held seven meetings
during 1994.
The Nominating Committee has the authority to develop candidate
specifications for Board memberships and to make recommendations as to
candidates for election to the Board of Directors. The Nominating Committee
will consider nominees for election to the Board of Directors recommended by
stockholders of the Company. The Nominating Committee is presently comprised
of Mr. Sekino, Chairman, and Messrs. Sawaragi, Clarke and Slater. The
Nominating Committee met once during 1994.
3
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth separately, for the fiscal years indicated,
each component of compensation paid or awarded to, or earned by, the Chief
Executive Officer ("CEO") of the Company, who retired and resigned effective
May 31, 1994, and the Chief Operating Officer ("COO") acting in a similar
capacity to the CEO since his appointment on June 1, 1994, and each of the
four most highly compensated executive officers who were serving as executive
officers at the end of the last fiscal year, other than the CEO and COO
(collectively referred to herein as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------- ---------------------
NUMBER OF
OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
NAME PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(6) OPTIONS COMPENSATION(7)
---- ----------------------- ---- -------- -------- --------------- --------------------- ---------------
<C> <S> <C> <C> <C> <C> <C> <C>
V. John Goodwin President and COO(1) 1994 $175,000 $225,000 $ -- 100,000 $ --
1993 -- -- -- -- --
1992 -- -- -- -- --
Ronald H. Doerr President and CEO(2) 1994 187,500 122,140 -- -- 2,865,333
1993 351,000 25,448 -- 140,000 40,219
1992 303,750 107,055 -- -- 7,594
Robert M. Greer Senior Vice President 1994 157,500 100,000 -- 50,000 --
and 1993 -- -- -- -- --
Chief Financial Offi- 1992 -- -- -- -- --
cer(3)
David A. Chatfield Vice President, Diver- 1994 210,000 107,072 36,952 -- 6,063
sified 1993 209,600 13,828 -- 35,000 6,068
Businesses, Services 1992 165,600 44,298 -- -- 4,140
and
Support(4)
Keisuke Murakami Vice President-Adminis- 1994 210,000 141,488 -- -- --
tration 1993 210,000 14,070 -- 30,000 --
1992 111,600 35,520 -- -- --
William E. Goebel Vice President, Market- 1994 144,000 107,446 -- -- 3,600
ing and Sales(5) 1993 120,568 8,456 -- 25,000 3,263
1992 -- -- -- -- --
</TABLE>
- --------
(1) Mr. Goodwin was hired and appointed to the position of President and COO
effective June 1, 1994. At December 31, 1994, Mr. Goodwin's annual salary
was $300,000.
(2) Mr. Doerr retired and resigned from the Company effective May 31, 1994.
(3) Mr. Greer was hired and appointed to the position of Senior Vice President
and Chief Financial Officer effective June 1, 1994. At December 31, 1994,
Mr. Greer's annual salary was $270,000.
(4) Mr. Chatfield retired from the Company effective March 1, 1995.
(5) Mr. Goebel was promoted and appointed to the position of Vice President,
Marketing and Sales effective November 9, 1993, and was not an executive
officer prior to that time.
(6) Other Annual Compensation was determined to be less than $50,000 or 10% of
such officer's aggregate compensation (salary plus bonus) for the CEO, COO
and all other Named Executive Officers with the exception of Mr.
Chatfield. Mr. Chatfield received a Company automobile in 1994, the value
of which was $36,667 which is reflected in the Other Annual Compensation
column.
(7) All Other Compensation for 1994 includes matching contributions to the
National Steel Retirement Savings Plan for Messrs. Doerr, Chatfield and
Goebel of $4,620, $4,620 and $3,600, respectively, and the Company match
portion of the Executive Deferred Compensation Plan for Mr. Chatfield of
$1,443. Also included in All Other Compensation for Mr. Doerr in 1994 are
non-employee Director fees aggregating $17,000 related to Mr. Doerr's
attendance at Board meetings for the period of time subsequent to his
retirement and resignation as President and CEO on May 31, 1994 until his
resignation from the Board on December 22, 1994. Mr. Doerr received the
following, which is included in All Other Compensation, in connection with
his retirement and resignation in 1994; severance payment $900,000,
Executive Deferred Compensation $137,467, a vacation payment of $43,270
and $1,762,976 representing the present value of non-qualified pension
benefits, as well as the settlement of any other claims.
4
<PAGE>
LONG-TERM INCENTIVE PLAN
The following table contains information relating to stock option grants
made under the Company's Long-Term Incentive Plan in 1994.
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION PRESENT
GRANTED(1) FISCAL YEAR PRICE(2) DATE VALUE(3)
---------- ------------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
V. John Goodwin......... 100,000 32.8% $14.00 6/1/04 $849,800
Robert M. Greer......... 50,000 16.4% 14.00 6/1/04 424,900
Ronald H. Doerr......... 0 0% N/A N/A 0
David A. Chatfield...... 0 0% N/A N/A 0
Keisuke Murakami........ 0 0% N/A N/A 0
William E. Goebel....... 0 0% N/A N/A 0
</TABLE>
- --------
(1) All options granted may be exercised on a ratable basis within three years
but no more than ten years from the date of grant while the optionee is in
the employ of the Company. However, in the event that termination of
employment is by reason of retirement, permanent disability or death, the
options may be exercised in whole or in part within 24 months of the date
of any such occurrences to the extent they have vested as described in the
Long-Term Incentive Plan agreement. If termination of employment is by
reason other than retirement, permanent disability or death, the options
may be exercised in whole or in part within 30 days of the date of any
such occurrences to the extent they have vested as described in the Long-
Term Incentive Plan agreement. In the event of a change in control, as
defined in the Long-Term Incentive Plan, all options become immediately
exercisable unless provided otherwise at the time of grant of such
options.
(2) The exercise price for all option grants was in excess of the fair market
value of the Class B Common Stock on the grant date.
(3) The grant date present value was determined using the Black-Scholes
valuation methodology. The Black-Scholes ratio utilized in the valuation
is an industry average based on the three companies that comprise the
self-constructed peer group used in the peer group performance graph.
<TABLE>
<CAPTION>
ASSUMPTIONS
- -----------
<S> <C>
Expected Volatility.................................................... .328
Expected Dividend Yield................................................ .00%
Expected Risk-free Rate of Return...................................... 7.39%
Expected Timing of Exercise............................................ 10 years
Black-Scholes Ratio.................................................... .607
</TABLE>
The Company does not advocate or necessarily agree that the Black-Scholes
model can properly determine the value of an option. The actual value, if any,
an individual may realize will depend on the excess of the stock price over
the exercise price on the date the option is exercised so that there is no
assurance the value realized by an individual will be at or near the value
estimated by the Black-Scholes model.
The following table sets forth certain information concerning options to
purchase the Company's Class B Common Stock for the CEO, COO and each Named
Executive Officer in the Summary Compensation Table at December 31, 1994.
AGGREGATED 1994 OPTION EXERCISES AND DECEMBER 31, 1994 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF NUMBER OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT OPTIONS AT
EXERCISE REALIZED YEAR END (1) YEAR END (1)
----------- -------- ------------ ------------
<S> <C> <C> <C> <C>
V. John Goodwin.................. 0 $ 0 100,000 $ 75,000
Ronald H. Doerr.................. 2,000 14,000 138,000 103,500
Robert M. Greer.................. 0 0 50,000 37,500
David A. Chatfield............... 0 0 35,000 26,250
Keisuke Murakami................. 0 0 30,000 22,500
William E. Goebel................ 0 0 25,000 18,750
</TABLE>
- --------
(1) All options were unexercisable at December 31, 1994, except for the
138,000 options belonging to Ronald H. Doerr, all of which were
exercisable at December 31, 1994. A pro rata portion of Mr. Chatfield's
options became exercisable upon his retirement effective March 1, 1995.
5
<PAGE>
PENSION PLANS
The following table shows the annual benefits payable under the Company's
qualified defined benefit retirement plan along with the non-qualified
retirement plans, which provide for the payment of retirement benefits in
excess of certain maximum limitations imposed by the Internal Revenue Code, to
eligible employees in various earnings groups and with various periods of
service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
AVERAGE ANNUAL
ELIGIBLE
COMPENSATION YEARS OF SERVICE
PRECEDING -----------------------------------------------------
RETIREMENT 10 15 20 25 30 35
- -------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$100,000............... $ 13,500 $ 20,500 $ 27,000 $ 34,000 $ 40,500 $ 47,500
150,000............... 21,000 31,000 41,500 52,000 62,500 73,000
200,000............... 28,500 42,500 56,500 70,500 85,000 99,000
250,000............... 36,000 53,500 71,500 89,500 107,500 125,500
300,000............... 43,500 65,000 86,500 108,000 130,000 151,500
350,000............... 51,000 76,000 101,500 127,000 152,500 178,000
400,000............... 58,500 87,500 116,500 145,500 175,000 204,000
450,000............... 66,000 98,500 131,500 164,500 197,500 230,500
500,000............... 73,500 110,000 146,500 183,000 220,000 256,500
600,000............... 88,500 132,500 176,500 220,500 265,000 309,000
700,000............... 103,500 155,000 206,500 258,000 310,000 361,500
800,000............... 118,500 177,500 236,500 295,500 355,000 414,000
</TABLE>
Eligible compensation covered by the Company's retirement plans include the
eligible employee's base salary, before reduction for any salary deferral
agreements, and Management Incentive Compensation Plan ("MICP") awards paid
for the five highest consecutive years during the last ten years of
employment. Benefits paid under the Company's plans are not subject to
reduction for social security payments received by the Company's executive
officers.
MICP awards are shown in the bonus column of the Summary Compensation Table
in the year in which they were earned. Eligible compensation under the
retirement plans includes the bonus in the year in which the payment was made,
and as such, MICP awards earned in a particular year are included in the
following year as eligible compensation under the retirement plans. No MICP
awards were earned in 1993.
The years of service and amount of eligible compensation under the
retirement plans for the Named Executive Officers are as follows:
<TABLE>
<CAPTION>
CONTINUOUS ELIGIBLE
NAME OF PERSON SERVICE COMPENSATION
-------------- ---------- ------------
<S> <C> <C>
V. John Goodwin................................... * $175,000
Ronald H. Doerr................................... ** 343,520
Robert M. Greer................................... *** 157,500
David A. Chatfield (1)............................ 29 207,858
Keisuke Murakami.................................. 3 181,459
William E. Goebel................................. 26 133,461
</TABLE>
- --------
Benefits shown are computed at the plan's normal retirement age of 65 based
on a straight life annuity.
* See discussion below under the caption "Employment Agreements".
** Retired and resigned effective May 31, 1994
*** Less than one year of continuous service
(1) Retired effective March 1, 1995
EMPLOYMENT AGREEMENTS
Mr. Goodwin has an employment agreement with the Company which expires on
June 1, 1999. Under the terms of the agreement, as an inducement for
employment, Mr. Goodwin was granted options to purchase up to
6
<PAGE>
100,000 shares of the Company's Class B Common Stock. The agreement provides
for a minimum annual base salary of $300,000 and annual incentive compensation
targeted at 50% of base salary. For purposes of determining his pension
benefit, Mr. Goodwin will receive credit for twenty six years of service with
his previous employer, and his benefits from the Company will be reduced by
his pension benefits from his previous employer.
Mr. Greer has an employment agreement with the Company which expires June 1,
1997. Pursuant to the agreement, Mr. Greer was granted options to purchase up
to 50,000 shares of the Company's Class B Common Stock as an inducement for
employment. The agreement provides for a minimum annual base salary of
$270,000 and annual incentive compensation targeted at 35% of base salary.
Mr. Doerr, following his retirement and resignation as CEO on May 31, 1994,
received amounts totalling $1,086,736 in partial payment of the amounts due
him under his employment agreement with the Company dated October 14, 1993.
The Company and Mr. Doerr subsequently entered into an agreement dated
December 22, 1994 settling Mr. Doerr's remaining claims under his employment
agreement and his other claims arising out of his status as an employee and
officer of the Company. Under the terms of this agreement, the sum of
$1,865,976 was paid to Mr. Doerr, and his remaining option to purchase 138,000
shares of the Company's Class B Common Stock was extended to March 23, 2003.
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth the number of shares of the Company's Class B
Common Stock and the number of shares of common stock of NKK beneficially
owned by each of the Company's Directors COO, former CEO and Named Executive
Officers and by the Company's Directors and executive officers as a group on
March 1, 1995. None of the Company's Directors COO, former CEO or Named
Executive Officers beneficially owned any shares of the Company's Class A
Common Stock. Except as otherwise indicated, each Director, COO, former CEO or
Named Executive Officer had sole voting and investment power with respect to
any shares beneficially owned.
<TABLE>
<CAPTION>
NKK CORPORATION
COMMON STOCK CLASS B COMMON STOCK
-------------------- --------------------
NUMBER OF NUMBER OF
SHARES PERCENT SHARES PERCENT
BENEFICIALLY OF BENEFICIALLY OF
OWNED CLASS OWNED CLASS
------------ ------- ------------ -------
<S> <C> <C> <C> <C>
Osamu Sawaragi(1)................. 83,040 * -- --
V. John Goodwin................... -- -- -- --
David A. Chatfield(2)............. -- -- 20,833 *
Edwin V. Clarke, Jr............... -- -- -- --
Ronald H. Doerr(3)................ -- -- 138,000 *
William E. Goebel................. -- -- 1,900 *
Robert M. Greer................... -- -- -- --
Masayuki Hanmyo(1)................ 20,288 * -- --
Frank Lucchino.................... -- -- 100 *
Hiroshi Matsumoto(1).............. 5,000 * 2,000 *
Keisuke Murakami.................. 27,000 * -- --
Kenichiro Sekino(1)............... 16,400 * -- --
Robert J. Slater.................. -- -- 1,500 *
Directors and executive officers
as a group (22 persons).......... 151,728 * 164,333 *
</TABLE>
- --------
* Less than 1% of the outstanding shares on March 1, 1995.
(1) Mr. Hanmyo has no voting power with respect to 6,208 shares of NKK common
stock beneficially owned.
(2) Represents shares with respect to which Mr. Chatfield has the right to
acquire beneficial ownership upon his retirement effective March 1, 1995,
through the exercise of options received under the Company's Long-Term
Incentive Plan.
(3) Represents shares with respect to which Mr. Doerr has the right to acquire
beneficial ownership through the exercise of options received under the
Company's Long-Term Incentive Plan. Due to Mr. Doerr's retirement and
resignation from the Company effective May 31, 1994, the Company has no
knowledge of beneficial ownership in addition to his 138,000 stock
options.
7
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and Directors and persons who owned greater
than 10% of a class of the Company's equity securities to file with the
Securities and Exchange Commission an initial statement of beneficial
ownership and certain statements of changes in beneficial ownership of equity
securities of the Company. During 1994, the initial statement of beneficial
ownership was filed late for Messrs. Goodwin and Greer. As a result of Mr.
Doerr's retirement and resignation from employment on May 31, 1994 and
resignation from the Board on December 22, 1994, the Company has no knowledge
as to whether Mr. Doerr has filed all reports required pursuant to Section
16(a) for 1994.
ADDITIONAL INFORMATION RELATING TO VOTING SECURITIES
The following table sets forth the only holders known to the Company to
beneficially own more than 5% of Class A Common Stock or Class B Common Stock
as of March 15, 1995, unless otherwise indicated.
<TABLE>
<CAPTION>
NAME AND CLASS PERCENT OF
ADDRESS OF NUMBER OF SHARES OF PERCENT OF TOTAL
BENEFICIAL BENEFICIALLY COMMON CLASS COMMON STOCK
OWNER OWNED STOCK OUTSTANDING OUTSTANDING
---------- ---------------- ------- ----------- ------------
<S> <C> <C> <C> <C>
NKK U.S.A. Corporation.... 22,100,000(1) Class A 100.0% 51.1%
32 Loockerman Square
Dover, Delaware 19901
Donald Smith & Co., Inc... 2,738,500(2) Class B 12.9% 6.3%
15 Essex Road
Paramus, New Jersey 07652
</TABLE>
(1) NKK has sole voting and investment power with respect to all shares of
Class A Common Stock. As reported in a Schedule 13D, dated February 13,
1995, filed with the Securities and Exchange Commission, NKK had sole
voting and investment power with respect to 22,100,000 shares of Class B
Common Stock listed as beneficially owned as a result of its ownership of
Class A Common Stock convertible into an equal number of shares of Class B
Common Stock.
(2) As reported in a Schedule 13G, dated January 27, 1995, filed with the
Securities and Exchange Commission, Donald Smith & Co. had sole voting
power with respect to 1,448,500 shares and sole investment power with
respect to 2,738,500 shares and did not have shared voting power or shared
investment power with respect to any such shares.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company had borrowings outstanding with an NKK affiliate, related to the
rebuild of the No. 5 coke oven battery at the Great Lakes Division, totaling
$330.0 million as of December 31, 1994. The Company paid $13.3 million in
principal and recorded $25.2 million in interest expense related to this loan.
Accrued interest on the loan as of December 31, 1994 was $10.1 million.
Additionally, deferred financing costs related to the loan were $4.2 million
as of December 31, 1994. The Company believes that the terms of the financing
arrangement with respect to the rebuilding of the No. 5 coke oven battery at
the Great Lakes Division are more favorable than would otherwise be available
from third party lenders.
8
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Company's Board of Directors (the
"Committee") reviews and approves the philosophy and guidelines for
compensation programs and develops recommendations for the Company's Board of
Directors regarding compensation levels for the Company's executive officers
and Directors. The Committee is composed exclusively of independent Directors
who are not eligible to participate in any of management's compensation
programs. The Committee presents the following report on compensation for the
Company's executive officers for 1994. Actual awards during 1994 for the CEO,
COO and the Named Executive Officers are shown in the Summary Compensation
Table and the table of Option Grants in 1994.
OVERVIEW AND PHILOSOPHY
In 1993, the Committee adopted a written statement of executive compensation
purposes, guiding principles and objectives which guide its evaluation and
determination of executive compensation programs. This statement was developed
by the Committee and an independent compensation consultant familiar with
compensation policies within the industry and at other major corporations. The
statement provides that the purposes of executive compensation are to:
. attract, motivate and retain outstanding team members;
. align their success with the Company's stockholders; thereby
. motivating them to enhance stockholder value by attaining the Company's
short and long term performance objectives.
The Company and the Committee are studying the impact of Section 162(m) of the
Internal Revenue Code in light of the purposes and guiding principles for the
Company's executive compensation programs. For 1994, the Company was not
materially affected by the million dollar deduction limit.
COMPONENTS OF EXECUTIVE OFFICER COMPENSATION
Individual executive officer compensation includes base salary, annual
incentive bonus and long term incentive compensation components.
BASE SALARY
Salary levels are assigned to positions within competitive standards based
on job responsibilities and a review of salary practices for comparable
positions at other major organizations as disclosed in pay surveys conducted
by independent consulting firms. These major organizations include the five
largest public integrated steel companies that the Company competes with for
business and executive talent, as well as companies in general industry of
comparable size and scope of operations. All of the companies used in the
Company's constructed peer group and many of the companies included in the S&P
500 comparison group participate in surveys used by the Company and the
Committee. The peer group companies included in the performance graph on page
11 are direct business competitors of the Company and were selected based on
similarities in product offerings, customers and markets served and whether
there was sufficient trading history of a company's stock to be included in
the graph.
An increase in base salary for an executive officer is based on individual
performance, business performance and market compensation trends. The
Committee does not rely on any specific formula nor does it assign specific
weights to the factors used in determining base salaries. Strong individual
performance and/or strong business performance generally result in above
average increases. Below market increases or no increases generally occur in
years when business performance and/or individual performance are below
expectations.
For all executive officers, the Committee reviews and approves, and if
necessary, modifies base salary adjustments recommended by the Vice President,
Human Resources and the consultant. Adjustments for all executive officers
base pay are then brought to the Company's full Board for approval. In
general, the Company's executive officers receive base salaries at a median
level of competitiveness.
As President and Chief Operating Officer ("COO"), Mr. Goodwin's annual base
rate of salary in 1994 was $300,000. On January 1, 1995, Mr. Goodwin's salary
was increased to $390,000 to reflect Mr. Goodwin's performance and the
relationship of his base salary to competitive standards. Mr. Goodwin's annual
base salary rate is below the median level of pay targeted by the Committee
and below that of his predecessor, Mr. Doerr.
9
<PAGE>
Mr. Doerr was Chief Executive Officer until May 31, 1994 and had an annual
base salary rate of $450,000 for the year 1994.
ANNUAL INCENTIVES
The Board of Directors approved the 1994 Management Incentive Compensation
Plan ("MICP") and incentive targets for each executive officer by taking into
consideration the responsibilities of each job, the needs of the Company and
the pay practices regarding incentives for comparable positions at other major
corporations.
The 1994 MICP provided for an incentive pool to be created for potential
payouts if the Company achieved its net income target. This pool would then be
modified downward if other important business objectives were not met, and
upward if the Company exceeded its net income target. Actual payouts under the
MICP cannot exceed the pool created and are subject to adjustment by the
Company's Board of Directors. Because the Company exceeded the net income
target for the MICP, the Board approved a target payout of 150%, which is
consistent with the MICP plan's terms. Mr. Goodwin received $225,000 and Mr.
Doerr received $103,000. Actual aggregate payouts for all participants were
less than the 150% level.
Executives of the Company also participate in the Company's broad based
incentive plans known as the National Steel Profit Sharing Plan and the
National Steel Productivity Gain Sharing Plan. Payouts from the profit sharing
plan reduce payouts by an equal amount from the MICP. Therefore, participation
in this plan by executives does not create additional pay opportunities for
executives receiving an MICP award. Executives hired after May 31, 1994 are
not eligible for these programs and, in addition, eligibility for all
executive officers was terminated as of December 31, 1994. As such, Mr.
Goodwin received no payment under the Gain Sharing Plan. Mr. Doerr's payout
under the Gain Sharing Plan was equal to $19,140.
LONG TERM INCENTIVES
The Company's long term incentive compensation awards for executive officers
are designed to link executive compensation to the performance of the
Company's Class B Common Stock share price. These awards also provide a
retention incentive for participants. To date, the Company has only granted
stock options to executive officers and other key employees.
During 1994, the Committee and the Board of Directors granted long term
incentive awards in the form of nonqualified stock option awards under the
Company's Long Term Incentive Plan. At that time, the Committee established
award guidelines for each executive for the stock option award by taking into
consideration the responsibilities of each job and the practices of other
major organizations. These guidelines reflect median levels of competitiveness
and were established based upon recommendations from an independent consultant
who annually conducts a survey of long term incentive practices among major
organizations. Included in the awards for 1994 were awards for the group of
executives that joined the Company on June 1, 1994. Not all executives were
granted awards in 1994. The Company's 1994 grants were consistent with the
guidelines both for the executive officers as a group and for the COO in
particular.
Ten year nonqualified stock options become fully exercisable either on a
pro-rata basis over three years or vest completely after three years from the
date the grants were awarded. These awards reward executives only to the
extent that the Company's Class B Common Stock share price increases over the
market price at the date of the grant. On June 1, 1994, Mr. Goodwin was
granted an award to purchase 100,000 shares at $14.00 per share.
BENEFITS
The Company's executive officers also participate in pension, perquisite,
deferred compensation and other executive benefit programs. These programs are
designed to be within competitive standards as defined by the practices of
other major corporations.
The Compensation Committee believes the executive compensation policies and
programs serve the interests of the stockholders and the Company.
Compensation Committee
Osamu Sawaragi, Chairman
Edwin V. Clarke, Jr.
Robert J. Slater
March 16, 1995
10
<PAGE>
COMPARISON OF TOTAL RETURN
The chart below compares the Company's total stockholder return on its Class
B Common Stock for the period beginning March 23, 1993, date of the initial
public offering of the Class B Common Stock, and ending December 31, 1994 with
the cumulative return of the S&P Composite 500 stock index and a peer group.
These comparisons assume an investment of $100 on March 23, 1993 in Class B
Common Stock of the Company, the S&P Composite 500 stock index and the peer
group.
TOTAL RETURN TO SHAREHOLDERS
NATIONAL STEEL CORPORATION: 3/23/93-12/31/94
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG NATIONAL STEEL CORPORATION, S&P 500 INDEX AND PEER GROUP
<TABLE>
<CAPTION>
NATIONAL
Measurement Period STEEL S&P
(Fiscal Year Covered) CORPORATION 500 INDEX PEER GROUP
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-
3/23/93 $100.00 $100.00 $100.00
FYE 3/31/93 $100.00 $100.65 $ 96.74
FYE 6/30/93 $145.54 $101.14 $105.15
FYE 9/30/93 $ 85.71 $103.75 $ 85.99
FYE 12/31/93 $ 85.71 $106.16 $115.00
FYE 3/31/94 $ 84.82 $102.13 $104.26
FYE 6/30/94 $111.61 $102.56 $101.46
FYE 9/30/94 $137.50 $107.58 $119.36
FYE 12/31/94 $105.36 $107.56 $103.12
</TABLE>
Peer Group: The U.S. Steel Group of USX Corporation, Bethlehem Steel
Corporation, and Inland Steel Industries, Inc.
11
<PAGE>
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP has served as the Company's independent auditors since the
1930's. In accordance with the established policy of Ernst & Young LLP,
partners who work on the Company's account are periodically rotated, thus
giving the Company the benefit of new thinking and approaches in the audit
area.
Representatives of Ernst & Young LLP will be present at the Annual Meeting
and will be given an opportunity to make a statement if they desire to do so.
They will also be available to respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR the appointment of
Ernst & Young LLP as auditors.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders must be received in writing by the Secretary of
the Company no later than November 22, 1995 in order to be considered for
inclusion in the Company's proxy statement and proxy relating to the Annual
Meeting of Stockholders to be held in 1996.
OTHER MATTERS
The cost of preparing, printing and mailing this Proxy Statement, the
accompanying notice and the enclosed proxy, and all other costs in connection
with the solicitation of proxies, will be paid by the Company. The Company has
retained the services of Corporate Investor Communications, Inc. to assist in
the solicitation of proxies for a fee of $2,500 plus reasonable out of pocket
expenses.
The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than those set forth in the Notice of Annual Meeting.
However, if any other matters do come before the Annual Meeting, it is
intended that the holders of proxies will vote thereon in their discretion.
By order of the Board of Directors,
LOGO
David A. Pryzbylski
Secretary
March 16, 1995
Mishawaka, Indiana
12
<PAGE>
PROXY
FIDELITY MANAGEMENT TRUST COMPANY
If I sign and return this proxy to you, you are instructed to cause all National
Steel Corporation Common Stock in my National Steel Retirement Savings Plan or
National Steel Represented Employee Retirement Savings Plan Account to be voted
at the Annual Meeting of Shareholders of National Steel Corporation, to be held
on April 26, 1995, and any adjournment thereof, as follows:
As indicated by me on the reverse side, but, if I make no indication as to a
particular matter, then unless otherwise indicated, as recommended by management
on such matters, and, on such other matters as may properly come before the
meeting. The Trustee will keep the vote completely confidential.
If the Trustee does not receive a properly executed proxy from you by April 21,
1995 the Trustee shall vote the shares represented by this proxy in the same
proportion as it votes those shares for which it does receive a properly
executed proxy.
(OVER)
(Please sign on reverse side)
. FOLD AND DETACH HERE .
<PAGE>
PROXY
NATIONAL STEEL CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints V. John Goodwin and David A. Pryzbylski the
proxies, each with power to act alone and with power of substitution, and hereby
authorizes them to represent and vote, all the shares of Class B Common Stock of
National Steel Corporation which the undersigned is entitled to vote at the
Annual Meeting to be held April 26, 1995 or any adjournment thereof as
designated herein and, in their discretion, upon such other matters as may
properly come before the meeting.
(Continued, and to be marked, dated and signed, on the other side)
. FOLD AND DETACH HERE .
<PAGE>
1. ELECTION OF DIRECTORS:
FOR WITHHOLD NOMINEES: Edwin V. Clarke, Jr., V. John Goodwin,
all nominees AUTHORITY Masayuki Hanmyo, Frank J. Lucchino, Hiroshi
listed to the to vote for Matsumoto, Keisuke Murakami, Osamu Sawaragi,
right (except all nominees Kenichiro Sekino, Robert J. Slater.
as marked listed to the
to the right. (INSTRUCTION: To withhold authority to vote for
contrary). any individual nominee, write that nominee's name
in the space provided below.)
_________________________________________________
2. Ratification of the 3. In their discretion, the Proxies are
appointment of Ernst & authorized to vote upon such other business as
Young LLP as the may properly come before the meeting.
Company's independent
auditors for 1995.
FOR AGAINST ABSTAIN
Please sign exactly as name appears. When shares
are held by joint tenants, both should sign. When
signing as attorney, executor, administrator,
trustee, or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
Dated: __________________________________, 1995
_______________________________________________
(Signature)
_______________________________________________
(Signature if held jointly)
"PLEASE MARK INSIDE BLUE PLEASE, SIGN, DATE, AND RETURN THE PROXY CARD
BOXES SO THAT DATA PROMPTLY USING THE ENCLOSED ENVELOPE.
PROCESSING EQUIPMENT WILL
RECORD YOUR VOTES"
. FOLD AND DETACH HERE .
ADMISSION TICKET
Annual Meeting
of
National Steel Corporation Stockholders
Wednesday, April 26, 1995
1:00 p.m.
Marquis Ballroom
Hyatt Regency Dearborn
Fairlane Town Center
Dearborn, Michigan
Agenda
. Election of Directors
. Ratification of the appointment of independent auditors
. Report on results for the first quarter
. Discussion on matters of current interest
. Question and Answer Session
