SCHEDULE 14A
Rule (14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant X
Filed by a party other than the registrant
Check the appropriate box:
Preliminary proxy statement
X Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
NS Group, Inc.
(Name of Registrant as Specified in Its Charter)
NS Group, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
(6)(i)(2).
$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
1Set forth the amount on which the filing fee is calculated and state how it
was determined.
Ninth & Lowell Streets
Newport, Kentucky 41072
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held February 16, 1995
To the Shareholders of NS GROUP, INC.:
The Annual Meeting of Shareholders of NS Group, Inc., a
Kentucky corporation, will be held at the Metropolitan Club, 50
East RiverCenter Boulevard, Covington, Kentucky, on Thursday,
February 16, 1995, at 10:30 a.m. Eastern Standard Time, for the
following purposes:
1. To elect five directors of the Company;
2. To ratify the Board of Directors' appointment of Arthur
Andersen LLP as the Company's independent public
accountants for its fiscal year ending September 30,
1995; and
3. To transact such other business as may properly be
brought before the meeting, or any adjournment thereof.
The close of business on December 12, 1994 has been fixed as
the record date for determination of shareholders entitled to
notice of and to vote at the Annual Meeting.
By order of the Board of Directors,
RONALD R. NOEL
Secretary
Newport, Kentucky
December 20, 1994
SHAREHOLDERS ARE URGED TO SIGN, DATE AND RETURN THE ENCLOSED
PROXY AS SOON AS POSSIBLE. A POSTAGE PAID, RETURN ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
NS GROUP, INC.
Ninth & Lowell Streets
Newport, Kentucky 41072
PROXY STATEMENT
This Proxy Statement is being first mailed to shareholders
on or about December 20, 1994 in connection with the solicitation
of proxies to be used at the Annual Meeting of Shareholders of NS
Group, Inc., a Kentucky corporation (the "Company"), to be held
on Thursday, February 16, 1995, at 10:30 a.m. Eastern Standard
Time at the Metropolitan Club, 50 East RiverCenter Boulevard,
Covington, Kentucky, for the purposes set forth in the
accompanying Notice of Annual Meeting.
SOLICITATION AND REVOCATION OF PROXIES
THE ACCOMPANYING PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY. The solicitation of proxies will be by
mail, except for incidental personal solicitation made by
officers, directors and employees of the Company. The cost of
preparing, assembling and mailing this Proxy Statement and any
other material furnished to shareholders in connection with such
solicitation, as well as the cost (expected to be nominal) of any
such solicitation and the reasonable expenses of banks, brokers
and other custodians, nominees and fiduciaries, who, at the
request of the Company, shall mail such material to or otherwise
communicate with beneficial owners, will be borne by the Company.
Shares represented by duly executed proxies in the
accompanying form which are received before the Annual Meeting
and not subsequently revoked will be voted as described in
"Voting and Other Matters" herein.
Any shareholder giving a proxy has the power to revoke it in
writing at any time prior to its exercise, but the revocation of
a proxy is not effective until written notice thereof has been
received by the Secretary of the Company.
VOTING SECURITIES
Only holders of the Company's common stock, no par value
(the "Common Stock") of record at the close of business on
December 12, 1994 (the "Record Date") will be entitled to notice
of, and to vote at, the Annual Meeting. As of the Record Date,
there were 13,809,413 shares of Common Stock outstanding.
SECURITIES OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Under rules of the Securities and Exchange Commission, a
beneficial owner of a security includes any person who directly
or indirectly has or shares voting or investment power with
respect to such security. Set forth below is certain information
as of September 24, 1994, with respect to shares of Common Stock
owned beneficially by each Director of the Company (each of whom
is a nominee for Director), each executive officer of the
Company, all Directors and executive officers of the Company as a
group, and each person who, to the knowledge of the Company,
beneficially owned more than 5% of the Common Stock on
September 24, 1994.
Number of Percentage
Name Shares Owned of Class
Directors, Nominees
and Executive Officers
Clifford R. Borland (1) 2,885,200 (2) 20.9
Ronald R. Noel (1) 1,143,452 (2) 8.3
John B. Lally (1) 688,090 (3) 5.0
John R. Parker 176,699 (2)(4) 1.3
Patrick J. B. Donnelly 99,375 (5) .7
R. Glen Mayfield 118,795 .9
All Directors and Executive
Officers as a group
(6 persons) 5,111,611 (2) 36.9
Other 5% Shareholders:
State of Wisconsin Investment
Board (1) 1,315,400 9.5
Pioneering Management
Corporation (1) 934,000 6.8
General Electric Capital
Corporation (1) 772,481 (6) 5.3
PMAC, Ltd. and certain other
parties (7) 1,705,881 11.0
(1) The address of Messrs. Borland and Noel is NS Group, Inc.,
Ninth and Lowell Streets, Newport, Kentucky 41072. The address
of Mr. Lally is 100 South Wacker Drive, Suite 1830, Chicago,
Illinois 60606. The address of the State of Wisconsin Investment
Board is P.O. Box 7842, Madison, Wisconsin 53707. The address of
Pioneering Management Corporation is 60 State Street, Boston,
Massachusetts 02109-1820. The address of General Electric
Capital Corporation ("GECC") is 260 Long Ridge Road, Stamford,
Connecticut 06927.
(2) Includes, where applicable, shares of Common Stock (a) which
may be acquired within 60 days of September 24, 1994 by
Mr. Borland (18,200), Mr. Noel (13,900), Mr. Parker (14,700) and
all Directors and executive officers as a group (46,800) pursuant
to the Company's Non-Qualified Stock Option and Stock
Appreciation Rights Plan of 1988 and (b) owned by Mr. Noel
(1,102), Mr. Parker (1,929) and all Directors and executive
officers as a group (3,031) and held by the trustee of the NS
Group, Inc. Salaried Employees' Flexible Compensation Plan, which
shares are voted as directed by the participants to whose account
they are allocated.
(3) Includes 50,855 shares owned by Mr. Lally's wife. Mr. Lally
disclaims any beneficial interest in these shares.
(4) Includes 80,000 shares owned by Mr. Parker's wife.
Mr. Parker disclaims any beneficial interest in these shares.
(5) Includes 32,850 shares owned by Mr. Donnelly's wife and
33,000 shares held by Mr. Donnelly's wife as custodian for their
children. Mr. Donnelly disclaims any beneficial interest in
these shares.
(6) Represents number of shares purchasable upon exercise of
warrants, which have an exercise price of $8.00 per share.
(7) PMAC, Ltd. ("PMAC") is a Texas limited partnership for which
PM Acquisition Corporation ("PM Corp.") is the general partner.
PMAC, PM Corp. and certain other affiliated persons have filed a
Schedule 13D ("PMAC Schedule 13D") with the Securities and
Exchange Commission indicating on the cover pages thereof the
following ownership numbers and percentages, as updated from
information provided by PMAC (some of which are duplicative as
described below): PMAC (and PM Corp.), 882,352 (6.0%); R.
Alpert, 1,335,293 (8.8%); R. E. Belfer, 370,588 (2.6%); R. A.
Belfer, 370,588 (2.6%). The shares listed in the PMAC Schedule
13D for R. Alpert include the shares listed for PMAC and PM Corp.
(for which shares R. Alpert, PMAC and PM Corp. would share voting
and dispositive power) and an additional 452,941 shares (for
which R. Alpert would have sole voting and dispositive power).
R. E. Belfer and R. A. Belfer, as co-trustees of certain trusts,
would share voting and dispositive power for 92,647 shares; R. E.
Belfer, as sole trustee of certain other trusts, would hold sole
voting and dispositive power for 92,647 shares; and R. A. Belfer,
as sole trustee of a certain other trust, would hold sole voting
and dispositive power for 185,294 shares. The cover pages for
the Belfers in the PMAC Schedule 13D filed (and updated from
information obtained from PMAC) indicates that each one shares
voting and dispositive power for 370,588 shares.
All of the shares listed in the PMAC Schedule 13D represent
shares issuable upon conversion of $29 million in convertible
debentures, convertible at a price of $17 per share ("Convertible
Debentures"), issued to PMAC in connection with the Company's
purchase of the assets comprising Koppel Steel Corporation in
1990 ("Koppel Acquisition"). (Of such Convertible Debentures,
$15 million, which are owned by PMAC (and PM Corp.), are held in
escrow as security for contingent indemnification obligations of
PMAC to the Company in connection with the Koppel Acquisition.)
The Convertible Debentures provide that, after the conversion
into Common Stock of all of the Convertible Debentures, so long
as PMAC or its affiliates own 60% of the shares issued upon
conversion, the Company will take certain actions to provide for
the election as a director of the Company of an individual chosen
by PMAC (and approved by the Company). As of October 4, 1990,
the Company agreed that R. A. Belfer would be acceptable as such
director. The Convertible Debentures also provide that the
holders of such Debentures, or the stock issuable upon conversion
thereof, will vote for the Company's nominees for directors
(including the nominee designated by PMAC). In addition, the
transfer of the Convertible Debentures is subject to a right of
first refusal in favor of the Company; a holder of the shares
issuable upon conversion may not transfer such shares except
subject to a right of first refusal in favor of the Company or
pursuant to Rule 144 under the Securities Act of 1933. Finally,
the holders of the Convertible Debentures and any shares issued
upon conversion thereof are subject to certain "standstill"
provisions, including a prohibition against acquiring, in the
aggregate, more than a 15% interest in the voting securities of
the Company.
The address of PMAC, Ltd. and R. Alpert is 15311 Vantage Parkway
West, Suite 315, Houston, Texas 77032. The address of R. E.
Belfer and R. A. Belfer is 885 Second Avenue, New York, New York
10017.
The information in this footnote and the corresponding
information in the above share ownership table was derived from
the PMAC Schedule 13D, information provided by PMAC and from the
terms of the Convertible Debentures.
I. ELECTION OF DIRECTORS
Nominees for Election as Directors
Five directors will be elected at the 1995 Annual Meeting to
hold office until the next Annual Meeting, and until their
successors are duly elected and qualified.
Set forth in the following table is certain information with
respect to each nominee for director. Each of the five nominees
is currently a director of the Company and was previously elected
by the shareholders.
First Became Principal Occupation
Name And Age Director & Other Directorships
Clifford R. Borland (57) 1981 President and Chief
Executive Officer of
the Company. Director
of The Huntington Bank,
Inc. (Kenton County,
Kentucky) and Kentucky
Electric Steel, Inc.
Patrick J.B. Donnelly (58) 1981 Partner in the law firm
of Niles, Barton and
Wilmer, Baltimore,
Maryland.
John B. Lally (58) 1981 Chairman of the Board
and Chief Executive
Officer of L B
Industries, Inc., a
privately-owned
pipe distributor.
R. Glen Mayfield (53) 1981 President of Mayfield &
Robinson, Inc., an
independent management
and financial
consulting firm.
Director of Suburban
Bancorporation, Inc.
Ronald R. Noel (53) 1981 Vice President,
Secretary and Chief
Administrative Officer
of the Company.
President of Newport.
Each of the nominees has held the same position or other
executive positions with the employers listed above during the
past five years, except that Mr. Noel assumed the position of
Secretary of the Company in November, 1989 and President of
Newport in March, 1994.
The Articles of Incorporation provide at such time as there
are nine or more directors, the Board of Directors may by
resolution divide the Board into three classes with the terms of
office of each class ending in successive years.
Meetings of the Board
The Board of Directors met four times during fiscal 1994
(excluding action taken by written consent). Each Director
attended 100% of the total number of meetings held by the Board
of Directors and the total number of meetings held by each
committee of which he was a member during fiscal 1994.
Committees of the Board
The standing committees of the Board of Directors are the
Executive Committee, Audit Committee, Executive Compensation
Committee, Investment Committee and the Stock Option Committee.
There is no nominating committee of the Board.
During fiscal 1994, the Audit Committee consisted of Messrs.
Donnelly (Chairman), Lally and Mayfield. The Audit Committee
held three meetings during fiscal 1994. The Audit Committee
reviews and approves the Company's annual financial statements
and reviews auditing matters. The Audit Committee is also
responsible for the selection of the Company's independent public
accountants, subject to the approval of the Board, and reviews
with representatives of the independent public accountants the
scope of their examination, their fees, the results of their
examination, and any conditions requiring attention identified by
them regarding internal controls.
During fiscal 1994, the Executive Compensation Committee
consisted of Messrs. Mayfield (Chairman), Donnelly and Lally. The
Executive Compensation Committee held three meetings during
fiscal 1994. The Executive Compensation Committee determines the
compensation of the Company's officers, reviews the officers'
compensation programs, and monitors the grants made under the
Company's various executive benefit plans.
During fiscal 1994, the Stock Option Committee consisted of
Messrs. Lally (Chairman), Donnelly and Mayfield. The Stock
Option Committee held one meeting during fiscal 1994. The Stock
Option Committee administers the option plans of the Company.
During fiscal 1994, the Investment Committee consisted of
Messrs. Borland (Chairman), Mayfield and Noel. The Investment
Committee held one meeting during fiscal 1994. The Investment
Committee reviews and administers the Company's investment
policies.
Director Compensation
Directors who are not employees of the Company are paid an
annual retainer of $16,000 and $1,000 for each meeting of the
Board of Directors attended in excess of four meetings per
fiscal year and expenses for attendance at meetings of the Board
and Committees. In addition, such outside Directors are paid
$750 ($1,000 for Committee Chairmen) for each Committee meeting
attended.
Executive Compensation
The following table presents summary information concerning
compensation for each of the last three fiscal years awarded or
paid to, or earned by, the Chief Executive Officer and each of
the other executive officers for the fiscal year ended September
24, 1994 for services rendered to the Company and its
subsidiaries.
Summary Compensation Table
Annual Compensation
Name and Principal Other Annual
Position Year Salary Bonus Compensation(1)
Year Options/SAR'sCompensation(1)
Clifford R. Borland 1994 $361,692 $0 (2)
President and Chief 1993 315,921 0 (2)
Executive Officer 1992 310,000 0
Ronald R. Noel 1994 $188,951 $0 (2)
Vice President, 1993 181,328 0 (2)
Secretary and Chief 1992 178,000 0
Administrative
Officer; President
of Newport
John R. Parker(4) 1994 $173,863 $0 (2)
Vice President, 1993 166,022 0 (2)
Treasurer and Chief 1992 163,000 0
Financial Officer
Long-Term Compensation
Name and Principal Number of All Other
Position Year
Clifford R. Borland 1994 41,333 (3)
President and Chief 1993 15,000 (3)
Executive Officer 1992 0
Ronald R. Noel 1994 13,420 (3)
Vice President 1993 9,750 (3)
Secretary and Chief 1992 0
Administrative
Officer; President
of Newport
John R. Parker(4) 1994 13,420 (3)
Vice President, 1993 9,750 (3)
Treasurer and Chief 1992 0
Financial Officer
(1) In accordance with the transitional provisions of the rules
on executive officer compensation adopted by the Securities and
Exchange Commission, amounts under "Other Annual Compensation"
and "All Other Compensation" are excluded for the Company's 1992
fiscal year.
(2) The named executive officers received certain perquisites in
fiscal 1994 and 1993, the amount of which did not exceed the
lesser of $50,000 or 10% of any such officer's salary and bonus.
(3) Amounts included as "All Other Compensation" consist of
insurance premiums made pursuant to the Company's salary
continuation program and in connection with certain disability
insurance policies. Under the Company's salary continuation
program, which the Company funds with insurance policies, the
Company will pay certain employees, including the executive
officers, upon retirement at or after age 62 an amount ranging
from 27% to 42% of his current base salary for life, with
payments for a minimum of 10 years either to each participant or
his descendants. During fiscal 1994 and 1993, respectively, the
Company paid aggregate premiums as follows: $18,933 and $4,733
for Mr. Borland; $3,143 and $9,430 for Mr. Noel; and $10,991 and
$2,748 for Mr. Parker. The Company has purchased disability
insurance policies for the benefit of certain employees of the
Company, including the named executive officers. In the event an
insured is disabled for more than 60 days, he will be paid 70% of
his base salary during the term of such disability up to age 65.
During fiscal 1994 and 1993, respectively, the Company paid
aggregate premiums as follows: $12,817 and $11,915 for Mr.
Borland; $5,500 and $5,107 for Mr. Noel; and $4,736 and $4,383
for Mr. Parker.
(4) Mr. Parker is 50 years old and has held the same or similar
positions with the Company for more than five years.
The following tables present certain information concerning
stock options/SARs granted to and exercised by the executive
officers of the Company during fiscal 1994.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Percent
of Total
Options/
SARs
Granted
to
Options/ Employ- Per Market
SARs ees in Share Price on
Granted Fiscal Exercise Date of Expiration
Name (1) Year(2) Price Grant Date
Clifford R.
Borland 41,333 9.7% $7.25 $7.25 12/01/03
Ronald R.
Noel 13,420 3.2 7.25 7.25 12/01/03
John R.
Parker 13,420 3.2 7.25 7.25 12/01/03
Potential Realizable Value at Assumed
Annual Rates of Stock Price
Appreciation for Option Term(3)
Name 5% 10%
Clifford R. Borland $188,457 $477,588
Ronald R. Noel 61,188 155,063
John R. Parker 61,188 155,063
(1) Options/SARs were granted pursuant to the NS Group, Inc. Non-
Qualified Stock Option and Stock Appreciation Rights Plan of 1988 (NSO
Plan). The options become exercisable over a five year period in
increments of 20% per year beginning with the third anniversary of the
date of grant.
(2) The Company granted options representing 424,135 shares to
employees in fiscal 1994 (135,085 under the NSO Plan and 289,050 under
the Company's Employee Incentive Stock Option Plan).
(3) The amounts shown under these columns are the result of
calculations at 5% and 10% rates as required by the Securities and
Exchange Commission and are not intended to forecast future appreciation
of the stock price of the Company's common stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
Total Number Total
of Shares Value of
No. of for which Unexercised,
Shares Unexercised In-the-Money
Acquired Options/ Options/
on SARs held SARs held
Exer- Value at September at September
cise Realized 24, 1994 24, 1994(1)
Exer- Unexer- Exer- Unexer-
Name cisable cisable cisable cisable
Clifford
R. Borland 0 $0 18,200 73,133 $0 $41,250
Ronald
R. Noel 0 0 13,900 36,770 0 26,813
John R.
Parker 0 0 14,700 36,970 0 26,813
(1) In-the-Money Options/SARs are those where the fair market value of
the underlying securities at fiscal year end exceed the exercise
price of the option or SAR.
Report of the Compensation and Stock Option Committees
The Company's executive compensation program (the "Program") is
administered by the Compensation and Stock Option Committees of the
Board of Directors (the "Committees") which are composed of the same
individuals, although with different Chairmen.
The Program has been designed to enable the Company to attract,
motivate and retain senior management by providing a competitive total
compensation opportunity based on performance. The Program is comprised
of three basic elements: base salaries which are competitive within the
industry segments the Company operates and which reflect individual
performance; annual bonus opportunities which are payable in cash for
the achievement of annual financial performance goals established by
management of the Company and approved by the Committees; and long-term
stock-based incentive opportunities. The Committees believe that both
the annual bonus and stock-based incentive opportunities directly
strengthen the mutuality of interests between the Company's executive
officers and its shareholders. In developing and administering the
individual elements of the Program, the Committees strive to balance
short and long-term incentive objectives. No executive officer has an
employment agreement with the Company because their performance is
evaluated annually and long-term incentives are provided pursuant to the
Company's stock option plans.
The Company, under the supervision of the Committees, periodically
obtains competitive survey data from a number of sources in connection
with the Committees administration and review of the Program. A
compensation review was completed in late fiscal 1993 using the services
of an outside compensation consulting firm. This review confirmed the
Committees belief that the Program is both competitive and effective
because it aligns the financial interests of the Company's executive
officers with the Company's financial performance and long-term total
return to the Company's shareholders. Notwithstanding such conclusion,
the Committees continually review the Program and consider modifications
in order to further motivate the Company's executive officers.
A discussion of each of the elements of the Program along with a
description of the significant decisions of the Committees with regard
to fiscal 1994 compensation is set forth below.
Annual Cash Compensation Program
Annual total cash compensation for senior management consists of a
base salary and the potential for an annual bonus under the Company's
Executive Bonus Plan (the "Bonus Plan"). Base salaries are determined
by an assessment of salaries paid by companies within the Company's
industry segments, executive responsibilities and individual
performance. The annual base salaries for the executive officers other
than the chief executive officer are determined through an interactive
review process between the Committees and Mr. Borland using the above
criteria. Mr. Borland's base salary is reviewed and established
annually by the Committees. In addition to the criteria described
above, the Committees also consider the overall performance of the
Company when establishing Mr. Borland's salary. During fiscal 1994, the
Committees increased Mr. Borland's base salary by 16.6% in recognition
of his contributions over the past fiscal year toward changes in the
strategic direction of the Company as well as his overall performance.
Such changes included the sale of a principal subsidiary and the
positioning of the Company's remaining business for growth in the
tubular market segment.
The Company maintains a Bonus Plan in which the executive officers
as well as other key employees are eligible to participate. Under the
Bonus Plan, participants may be awarded annual bonuses if the Company
and/or its operating subsidiaries meet certain financial performance
criteria. Annual bonuses for Mr. Borland and the other executive
officers are based upon Company-wide financial performance criteria.
The financial criteria for which performance is measured against
includes operating margins, return on assets, return on total capital
and sales growth. The bonus percentage for Mr. Borland and the other
executive officers varies from 0% to 100% of annual salary depending on
the levels at which the financial performance criteria are met. Under
the Bonus Plan, no bonus was earned by Mr. Borland or the other
executive officers in fiscal 1992, 1993 or 1994.
Stock Option Programs
Long-term incentive awards provided by the Non-Qualified Stock
Option and Stock Appreciation Rights Plan of 1988 (the "NSO Plan") are
designed to develop and maintain strong management through share
ownership. Although eligible to participate in the Company's broad-
based 1993 Incentive Stock Option Plan (the "ISO Plan"), no options were
granted to executive officers during fiscal 1994 under the ISO Plan.
Each option granted under the NSO Plan must have an exercise price
equal to or greater than 50% of the market price of the Common Stock of
the Company on the date of grant. Options granted vest at the rate of
20% per year beginning on and after the third year following the date of
grant.
The number of options granted to executive officers under the NSO
Plan are based upon current performance, anticipated future contribution
based on that performance, the ability to impact corporate and/or
subsidiary business results and comparative industry practices. The
size and price of previous option grants and the number of options
currently held by an executive are not taken into account in determining
the number and price of options granted. In fiscal 1994, Mr. Borland
recommended stock options grants for the other executive officers, and
the Committees reviewed and approved such awards. With respect to Mr.
Borland, the Committees determined the options to be granted for fiscal
1994.
In addition to granting options under the NSO Plan, the Committees
also granted 289,050 stock options to 231 other Company employees under
the ISO Plan.
The foregoing report has been furnished by:
The Compensation and Stock Option Committees of the Board of Directors
R. Glen Mayfield (Chair of Compensation Committee)
John B. Lally (Chair of Stock Option Committee)
Patrick J.B. Donnelly
Performance Graph
The following graph sets forth a comparison of the Company's
cumulative total stockholder return from September 30, 1989 through
September 30, 1994 with the cumulative total return for the same period
measured by the Standard & Poor's 500 Composite Index and the Standard &
Poor's Steel Index.
1989 1990 1991 1992 1993 1994
NS Group, Inc. 100 98.56 54.41 46.16 81.09 64.87
Standard &
Poor's 500 100 90.76 119.04 132.20 149.39 154.89
Standard & Poor's
Steel Group 100 69.97 90.47 92.17 144.95 186.41
________________________
(1) Assumes $100 invested on September 30, 1989 in the Company's Common
Stock, the Standard & Poor's 500 Composite Index and the Standard &
Poor's Steel Index.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is composed of Messrs. Mayfield, Lally
and Donnelly, none of whom has served as an officer or employee of the
Company or any of its subsidiaries.
John B. Lally owns the controlling interest in L B Industries, Inc.
The Company sells substantially all of its secondary tubular products to
L B Industries, Inc., at prices and on terms substantially equivalent to
those offered to other customers. Sales to L B Industries, Inc.
amounted to approximately $11.0 million in fiscal 1994.
Certain Transactions
On September 27, 1993, the Company repaid an $8 million loan from
PMAC made pursuant to a Loan Agreement, dated as of October 4, 1990.
The Company funded such repayment with the proceeds of an $8 million
capital expenditure loan made to the Company by GECC. Such loan is
payable in 28 quarterly installments of principal, together with
interest at 8 percent.
II. PROPOSAL TO RATIFY APPOINTMENT OF
INDEPENDENT AUDITORS
The firm of Arthur Andersen LLP has examined the financial
statements of the Company since 1981 and the Board of Directors, upon
the recommendation of its Audit Committee, wishes to continue the
services of this firm for the current fiscal year ending September 30,
1995. A resolution will be presented at the Annual Meeting to ratify
the appointment by the Board of Directors of the firm of Arthur Andersen
LLP, as independent auditors, to examine the financial statements of the
Company for the current fiscal year ending September 30, 1995, and to
perform other appropriate accounting services. The Company has been
advised that a representative of Arthur Andersen LLP will be present at
the Annual Meeting with an opportunity to make a statement if he desires
and will be available to respond to questions of the shareholders.
III. SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1996
Annual Meeting must be received by the Company by August 22, 1995, for
inclusion in the Company's Proxy Statement and proxy relating to that
meeting. Upon receipt of any such proposal the Company will determine
whether or not to include such proposal in the Proxy Statement and proxy
in accordance with regulations governing the solicitation of proxies.
In order for a shareholder to nominate a candidate for director,
under the Company's Bylaws timely notice of the nomination must be given
to the Company in advance of the meeting. Ordinarily, such notice must
be given not less than 60 nor more than 90 days before the meeting (but
if the Company gives less than 70 days notice or prior public disclosure
of the meeting, then the shareholder must give such notice within 10
days after notice of the meeting is mailed or other public disclosure of
the meeting is made). The shareholder filing the notice of nomination
must describe various matters regarding the nominee, including matters
such as name, address, occupation and shares held.
In order for a shareholder to bring other business before a
shareholder meeting, timely notice must be given to the Company within
the time limits described above. Such notice must include a description
of the proposed business, the reasons therefor, and other specified
matters. These requirements are separate from and in addition to the
requirements a shareholder must meet to have a proposal included in the
Company's Proxy Statement.
In each case the notice must be given to the Secretary of the
Company, whose address is Ninth and Lowell Streets, Newport, Kentucky
41072. Any shareholder desiring a copy of the Company's Bylaws will be
furnished one without charge upon written request to the Secretary.
IV. VOTING AND OTHER MATTERS
Unless other designation is made, the shares represented by the
proxy herein solicited will be voted for the election of the named
nominees as directors of the Company and for the ratification of the
Board of Directors' appointment of Arthur Andersen LLP as the Company's
independent public accountants for its fiscal year ending September 30,
1995, as set forth in the accompanying Notice of Annual Meeting.
If any of the named nominees for directors should become
unavailable for any reason, it is intended that the persons named as
proxies in the accompanying form will vote for the election of such
other person as the Board of Directors may recommend in place of such
nominee. If cumulative voting rights are exercised by any shareholder,
the proxies may be voted cumulatively for fewer than all of the
Company's nominees in the discretion of the persons voting such proxies.
The Company knows of no other business other than the matters set
forth herein that will be presented to the Annual Meeting. If matters
other than those described herein should properly come before the Annual
Meeting, the proxies solicited hereby will be voted on such matters in
accordance with the judgment of the persons voting such proxies.
A quorum will exist at the Annual Meeting if a majority of the
votes entitled to be cast at the meeting are represented, in person or
by proxy, at the Annual Meeting. In voting on matters other than the
election of Directors, each shareholder has one vote for each share of
stock held. With respect to the election of Directors, shareholders
have cumulative voting rights, which means that each shareholder has the
number of votes equal to the number of shares held, multiplied by the
number of Directors to be elected, and each shareholder may cast the
whole number of such votes, either in person or by proxy, for one
nominee, or distribute them among two or more nominees.
The five persons who have been duly nominated to be directors of
the Company who receive the most votes shall be elected directors of the
Company. Shares represented by proxies which are marked "withhold
authority" with respect to the election of any one or more nominees for
election as directors, and shares not voted on the election of directors
but voted on one or more other matters on proxies returned by brokers,
will therefore not directly affect the number of shares needed to elect
directors.
The ratification of the Board of Directors' appointment of Arthur
Andersen LLP as the Company's independent public accountants for its
fiscal year ending September 30, 1995 requires the affirmative vote of a
majority of the shares represented at the meeting and entitled to so
vote. Shares represented by proxies which are marked "abstain" on such
matter will be counted for the purpose of determining the number of
shares represented by proxy at the Meeting for such matter, and shall
therefore have the same effect as if the shares represented thereby were
voted against such ratification. Shares not voted on the ratification
of Arthur Andersen LLP but voted on one or more other matters on proxies
returned by brokers will be treated as not represented at the Meeting as
to the ratification of the appointment of the Company's accountants for
purposes of determining the number of votes needed for approval.
The approval of any other action properly brought before the Annual
Meeting would require the affirmative vote of a majority of the shares
represented at the meeting and entitled to so vote. Shares represented
by proxies which deny discretionary authority on other matters would be
counted for the purpose of determining the number of shares represented
by proxy at the Meeting for such other matters for purposes of
determining the number of votes needed for approval, and would therefore
have the same effect as if the shares represented thereby were voted
against any such matter.
RONALD R. NOEL
Secretary
Newport, Kentucky
December 20, 1994
NS GROUP, INC.
Ninth and Lowell Streets
Newport, Kentucky 41072
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints C.R. Borland, R.R. Noel, and K.G. Kepley
or any of them, as Proxies (acting by a majority or, if only one be
present, then that one shall have all of the powers hereunder), each
with full power to appoint his substitute, and hereby authorizes them,
or any of them, to represent and to vote as designated below, all the
shares of Common Stock of NS Group, Inc. held of record by the
undersigned on December 12, 1994, at the Annual Meeting of Shareholders
on February 16, 1995, or at any adjournment or adjournments thereof.
The Board of Directors Recommend a Vote "FOR all nominees" in Item 1 and
"FOR" Item 2.
Item 1. Election of the following five (5) nominees as Directors:
Clifford R. Borland; Ronald R. Noel; John B. Lally; Patrick J.B.
Donnelly; R. Glen Mayfield:
FOR all nominees listed. ____
FOR all nominees listed except:
WITHHOLD AUTHORITY to vote for all nominees listed. ____
Item 2. Ratify the appointment of Arthur Andersen LLP as independent
public accountants for fiscal 1995:
FOR ____
AGAINST ____
ABSTAIN ____
Item 3. In their discretion, the proxy holders are authorized to vote
upon such other business as may properly come before the meeting; all as
described in the Notice of Annual Meeting of Shareholders and
accompanying Proxy Statement for such meeting, the receipt of which is
hereby acknowledged.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL NOMINEES LISTED IN ITEM 1
AND "FOR" ITEM 2.
Dated: _________________________
_________________________________
Signature
_________________________________
Signature if held jointly
Please sign exactly as name (or names) appears on this card. When
shares are held by joint tenants, both must 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.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
