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 (Amendment No. )
X Filed by the Registrant
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 14a-11(c) or
14a-12
NS GROUP, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than
the Registrant)
X No fee required
Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which
transaction applies: _________________________________
(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.:
_______________________________________________________
(3) Filing Party: _______________________________
(4) Date Filed: _________________________________
Ninth & Lowell Streets
Newport, Kentucky 41072
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held February 12, 1998
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 12, 1998, at 10:30 a.m. Eastern
Standard Time, for the following purposes:
1. To elect six 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 26, 1998; 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, 1997 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,
Newport, Kentucky Jack W. Mehalko
December 22, 1997 Secretary
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
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD FEBRUARY 12,
1998
This Proxy Statement is being first mailed to
shareholders on or about December 22, 1997 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 12, 1998, 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 RIGHTS
Only holders of the Company's common stock, no par
value (the "Common Stock") of record at the close of
business on December 12, 1997 (the "Record Date") will be
entitled to notice of, and to vote at, the Annual
Meeting. As of the Record Date, there were 24,138,634
shares of Common Stock outstanding.
SHARE OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information
as of October 24, 1997 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 October 24, 1997.
<TABLE>
<S> <C> <C>
Number of Percentage
Name Shares Owned of Class
Clifford R. Borland (1) 2,987,511(2) 12.4
Ronald R. Noel 1,180,055(2) 4.9
John B. Lally 555,729(3) 2.3
Paul C. Borland, Jr. 91,863(2) *
John R. Parker (4) 89,173(2)(5) *
R. Glen Mayfield 84,730 *
Patrick J. B. Donnelly 26,375(6) *
All Directors and Executive
Officers as a group
(7 persons) 5,015,436(2) 20.7
</TABLE>
* Less than one percent
(1) The address of Mr. C. R. Borland is NS Group, Inc.,
Ninth and Lowell Streets, Newport, Kentucky 41072.
(2) Includes, where applicable, shares of Common Stock
(a) which may be acquired within 60 days of October
24, 1997 by Mr. C. R. Borland (100,011), Mr. Noel
(50,503), Mr. P. C. Borland, Jr. (89,763), Mr.
Parker (51,503), and all Directors and executive
officers as a group (291,780) pursuant to the
Company's non-qualified stock option and stock
appreciation rights plans and (b) owned by Mr. Noel
(1,102) and all Directors and executive officers as
a group (1,102) and held by the trustee of the
Company's 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) Mr. Parker is 53 years old and has held the same or
similar positions with the Company for more than
five years.
(5) Includes 18,800 shares owned by Mr. Parker's wife.
Mr. Parker disclaims any beneficial interest in
these shares.
(6) Includes 12,850 shares owned by Mr. Donnelly's wife.
Mr. Donnelly disclaims any beneficial interest in
these shares.
ELECTION OF DIRECTORS
Nominees for Election as Directors
Six directors will be elected at the 1998 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 six nominees is currently a director of the
Company and was previously elected by the shareholders.
The Board of Directors recommends a vote FOR the election
of the nominees for director of the Company.
First Became Principal Occupation
Name And Age Director & Other Directorships
Clifford R. Borland (60) 1981 Chairman and Chief
Executive Officer of
the Company since
December 4, 1995. Mr.
C. R. Borland held
the position of
President of the
Company from 1981
until December 4,
1995. Director of
Kentucky Electric
Steel, Inc.
Paul C. Borland, Jr. (63) 1996 President and Chief
Operating Officer of
the Company since
December 4, 1995.
Mr. P. C. Borland, Jr.
joined the Company in
1989 as Vice President
and General Manager of
Kentucky Electric
Steel Corporation and
served as President of
Koppel Steel Corporation
("Koppel")
from 1990 until
November 6, 1997. Mr.
P. C. Borland, Jr. is
the brother of Mr. C.
R. Borland.
Patrick J.B. Donnelly (61) 1981 Partner in the law
firm of Niles, Barton
and Wilmer,
Baltimore, Maryland.
John B. Lally (61) 1981 Chairman of the Board
and Chief Executive
Officer of LB
Industries, Inc., a
privately-owned pipe
distributor. Director
and Chairman of the
Board of LB Steel
Plate Company, a
privately-owned steel
plate processor and
distributor.
R. Glen Mayfield (56) 1981 President of Mayfield
& Robinson, Inc., an
independent management
and financial
consulting firm.
Ronald R. Noel (56) 1981 Vice President of the
Company since 1981.
President of Newport
Steel Corporation
("Newport"). Mr. Noel
held the position of
Secretary of the
Company from November
1989 until February
1995 and the position
of President of
Newport since March
1994.
Except as otherwise noted, each of the nominees has
held the same position or other executive positions with
the employers listed above during the past five years.
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.
INFORMATION REGARDING MEETINGS AND COMMITTEES
OF THE BOARD OF DIRECTORS
Meetings of the Board
The Board of Directors met seven times during fiscal
1997 (excluding actions taken by written consent). Each
Director attended in excess of 75% of the aggregate of
(i) the total number of meetings held by the Board of
Directors and (ii) the total number of meetings held by
each committee of which he was a member during fiscal
1997.
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 1997, the Audit Committee consisted of
Messrs. Donnelly (Chairman), Lally and Mayfield. 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. The
Audit Committee held two meetings during fiscal 1997.
During fiscal 1997, the Executive Compensation
Committee consisted of Messrs. Mayfield (Chairman),
Donnelly and Lally. 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. The Executive Compensation Committee held
four meetings during fiscal 1997.
During fiscal 1997, the Stock Option Committee
consisted of Messrs. Lally (Chairman), Donnelly and
Mayfield. The Stock Option Committee administers the
option plans of the Company. The Stock Option Committee
did not meet during fiscal 1997.
During fiscal 1997, the Investment Committee
consisted of Messrs. C.R. Borland (Chairman), Mayfield
and Noel. The Investment Committee reviews and
administers the Company's investment policies. The
Investment Committee did not meet during fiscal 1997.
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
for each of the last three fiscal years concerning
compensation awarded or paid to, or earned by, the Chief
Executive Officer and each of the other officers serving
in an executive officer capacity during fiscal 1997
("named executive officers") for services rendered to the
Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<S> <C> <C> <C> <C>
Name and Principal Other Annual
Position Year Salary Bonus Compensation(1)
Clifford R. Borland 1997 $404,375 $378,916 $ 1,000
Chairman and Chief 1996 395,000 18,750 -
Executive Officer 1995 388,750 0 -
Paul C. Borland, Jr. 1997 $399,375 $378,916 $13,951
President and Chief 1996 356,607 31,348 -
Operating Officer of
the Company;
President of
Koppel (3)
Ronald R. Noel 1997 $209,000 $182,921 $ 1,000
Vice President of the 1996 203,000 4,700 -
Company; President 1995 199,750 0 -
of Newport
John R. Parker 1997 $189,250 $171,775 $ 433
Vice President, 1996 185,000 8,500 -
Treasurer and Chief 1995 182,500 0 -
Financial Officer
Long Term
Compensation
Securities
Name and Principal Underlying All Other
Position Year Options/SARs
Compensation(2)
Clifford R. Borland 1997 - $34,440
Chairman and Chief 1996 - 31,112
Executive Officer 1995 63,400 34,324
Paul C. Borland, Jr. 1997 - $27,952
President and Chief 1996 50,000 27,952
Operating Officer of
the Company;
President of
Koppel (3)
Ronald R. Noel 1997 - $20,363
Vice President of the 1996 - 21,026
Company; President 1995 20,500 19,041
of Newport
John R. Parker 1997 - $17,944
Vice President, 1996 - 19,145
Treasurer and Chief 1995 20,500 16,851
Financial Officer
</TABLE>
(1) Represents amounts reimbursed for the payment of taxes.
The dollar value of perquisites did not in any year exceed
the lesser of $50,000 or 10% of any such officer's annual
salary and bonus.
(2) All Other Compensation includes 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 24% to
38% of his current base salary for life, with payments for a
minimum of 10 years either to each participant or his
descendants. During fiscal 1997, 1996 and 1995,
respectively, the Company paid aggregate premiums as
follows: $18,382, $14,200 and $18,933 for Mr. C.R. Borland;
$12,573, $12,573 and $12,573 for Mr. Noel; and $10,991,
$10,991 and $10,991 for Mr. Parker. The Company paid
aggregate premiums of $16,800 for Mr. P. C. Borland, Jr. for
each of fiscal 1997 and 1996.
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
an amount ranging from 26% to 54% of his current base salary
during the term of such disability up to age 65. During
fiscal 1997, 1996 and 1995, respectively, the Company paid
aggregate premiums as follows: $14,558, $14,558 and
$13,789 for Mr. C.R. Borland; $6,290, $6,290 and $5,937 for
Mr. Noel; and $5,453, $5,453 and $5,132 for Mr. Parker. The
Company paid aggregate premiums of $9,652 for Mr. P. C.
Borland, Jr. for each of fiscal 1997 and 1996.
Subsequent to the end of fiscal 1995, it was determined
that no bonus payments were earned by any executive officer
under the Company's bonus plan for fiscal 1995. All
estimated advance payments under the bonus plan were repaid
to the Company and All Other Compensation for fiscal 1996
and 1995 includes imputed interest on such estimated advance
payments as follows: $854 and $1,602 for Mr. C.R. Borland;
$663 and $531 for Mr. Noel; and $1,202 and $728 for Mr.
Parker.
For fiscal 1997 and 1996, All Other Compensation also
includes Company matching contributions to the Company's
Salaried Employees' Flexible Compensation Plan in the amount
of $1,500 for each of the named executive officers.
(3) Mr. P.C. Borland, Jr. was not an executive officer prior
to December 4, 1995, when he was elected President and Chief
Operating Officer of the Company. He served as President of
Koppel until November 6, 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<S> <C> <C>
No. of Shares
Acquired on Value
Name Exercise Realized
Clifford
R. Borland 0 $0
Paul C.
Borland, Jr. 0 0
Ronald
R. Noel 0 0
John R.
Parker 0 0
</TABLE>
Total Number of Shares Total Value of Unexercised,
for which Unexercised In-the-Money
Options/SARs held Options/SARS held
Name at September 27, 1997 at September 27, 1997(1)
Exercisable Unexercisable Exercisable Unexercisable
<TABLE>
<S> <C> <C> <C> <C>
Clifford
R. Borland 89,945 64,788 $2,137,962 $1,613,908
Paul C.
Borland, Jr. 60,579 50,241 $1,571,735 $1,337,228
Ronald
R. Noel 46,319 24,851 $1,052,235 $ 623,698
John R.
Parker 47,319 24,851 $1,069,555 $ 623,698
</TABLE>
(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 EXECUTIVE COMPENSATION AND STOCK OPTION
COMMITTEES
The Company's executive compensation program (the
"Program") is administered by the Executive 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 certain annual
financial performance criteria; 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. Such survey data confirms the
Committees belief that the Program is currently 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 1997 compensation is set
forth below. The officers serving in executive officer
capacity during fiscal 1997 consisted of Messrs. Clifford R.
Borland, Paul C. Borland, Jr., Ronald R. Noel and John R.
Parker.
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 and the
president are determined through an interactive review
process between the Committees and Mr. C.R. Borland using
the above criteria. Messrs. C.R. Borland's and P.C.
Borland, Jr.'s base salaries are 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. C.R.
Borland's salary. Based upon the criteria described, during
fiscal 1997, the Committees increased Mr. C. R. Borland's
base salary by 4.7%.
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. C.R. Borland and the other
executive officers are based upon Company-wide financial
performance criteria. The financial criteria which
performance is measured against includes operating margins,
return on assets, return on total capital and sales growth.
The bonus percentage for Mr. C.R. 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, Mr. C.R. Borland
and the other executive officers earned bonuses ranging from
87.5% to 94.8% of their salary in fiscal 1997 and from 2.3%
to 8.8% of their salary in fiscal 1996. No bonus was earned
by Mr. C.R. Borland or the other executive officers in
fiscal 1995.
Stock Option Programs
Long-term incentive awards provided by the Company's
stock option plans are designed to develop and maintain
strong management through share ownership. Although
eligible to participate in the Company's broad-based
incentive stock option plan (the "ISO Plan"), no options
have been granted to the executive officers under the ISO
Plan. Executive officers are also eligible to participate
in the Company's non-qualified stock option and stock
appreciation rights plans (the "NSO Plans"). Generally, the
exercise price for options granted cannot be less than 50%
of the market value of the Common Stock of the Company on
the date of grant, and the options become exercisable with
respect to one third of the shares of Common Stock covered
by the options on each of the first three anniversaries of
the date of grant, unless the Committees provide otherwise.
The number of options granted to executive officers 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. Mr.
C.R. Borland recommends stock option grants for the other
executive officers, other than the president, and the
Committees review and approve such awards. With respect to
Mr. C.R. Borland and Mr. P.C. Borland, Jr., the Committees
determine the options to be granted. Reference is made to
the option tables contained herein for information as to
grants and exercises of options and fiscal year-end option
values. No options were granted to Mr. C. R. Borland or the
other executive officers in fiscal 1997.
The foregoing report has been furnished by:
The Executive Compensation and Stock Option Committees of
the Board of Directors
R. Glen Mayfield (Chair of the Executive Compensation
Committee)
John B. Lally (Chair of the 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, 1992 through September 30, 1997 with the cumulative
total return for the same period measured by the Standard &
Poor's 500 Composite Index and the Standard & Poor's Iron &
Steel 500 Index.
Comparison of Five Year Cumulative Total Return (1)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1997
NS Group,
Inc. 100 175.68 140.54 64.86 70.27 700.00
Standard &
Poor's 500 100 113.00 117.17 152.02 182.93 256.92
Standard &
Poor's
Iron &
Steel 500 100 157.26 202.25 143.70 141.74 164.78
</TABLE>
____________________________
(1) Assumes $100 invested on September 30, 1992 in the
Company's Common Stock, the Standard & Poor's 500 Composite
Index and the Standard & Poor's Iron & Steel 500 Index.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive 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 and limited service 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 $15.6 million
in fiscal 1997.
CERTAIN TRANSACTIONS
In September 1997, the Company and certain selling
stockholders sold 8,625,000 shares of Common Stock at a
price of $30.00 per share in a public offering (the
"Offering"). In connection with the Offering, PMAC, Ltd.
and certain of its affiliates ("PMAC") exercised their
Convertible Debentures and sold 1,434,705 shares of Common
Stock pursuant to their registration rights. Also in
connection with the Offering, General Electric Capital
Corporation exercised a portion of its Warrant to Purchase
Common Stock and sold 500,000 shares of Common Stock
pursuant to its registration rights. The Company used
certain proceeds of the Offering to retire debt of the
Company, including approximately $3.5 million to prepay 11%
Subordinated Notes held by PMAC.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
(the "Exchange Act") requires the Company's officers and
directors and persons who own more than 10% of a registered
class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and
Exchange Commission ("SEC") and the New York Stock Exchange.
Such persons are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on the Company's review of the copies of such
reports furnished to the Company or written representation
that no reports were required to be filed, the Company
believes that such persons complied with all Section 16(a)
filing requirements applicable to them with respect to
transactions during fiscal 1997.
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 26, 1998. 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 26, 1998, 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.
The Board of Directors recommends a vote FOR
ratification of the appointment of Arthur Andersen LLP as
the Company's independent public accountants for the fiscal
year ended September 26, 1998.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at
the 1999 Annual Meeting must be received by the Company by
August 24, 1998, 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.
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 26, 1998, 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 six 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 26, 1998
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.
JACK W. MEHALKO
Secretary
Newport, Kentucky
December 22, 1997
Please mark votes as in this example
Revocable Proxy
NS Group, Inc.
Annual Meeting of Stockholders
February 12, 1998
The undersigned hereby appoints C.R. Borland, J.W. Mehalko
and J.J. Crowe or any of them, as Proxies (acting by a
majority or, if one be present, then that one shall have all
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, 1997, at the Annual Meeting of
Shareholders to be held on February 12, 1998, or at any
adjournment, or adjournments thereof.
Item 1. election of the following six (6) nominees as
Directors:
For Withhold For all except
Clifford R. Borland; Paul C. Borland, Jr.; Ronald R. Noel;
John B. Lally; Patrick J.B. Donnelly; R. Glen Mayfield.
Instruction: To withhold authority to vote for any
individual nominee, mark "For All Except" and write that
nominee's name in the space provided below.
Item 2 Ratify the appointment of Arthur Andersen LLP as
independent public accountants for fiscal 1998.
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.
The Board of Directors Recommend a Vote "FOR" all nominees
in Item 1 and "For" Item 2.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please check box if you plan to attend the meeting.
Please be sure to sign and date this Proxy in the box below
Date Stockholder sign above Co-holder (if any) sign
above
Detach above card, sign, date and mail in postage paid
envelope provided.
NS Group, Inc.
This Proxy when properly executed will be voted in the
manner directed herein by the above signed stockholder. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE
ELECTION OF ALL NOMINEES LISTED IN ITEM 1 AND "FOR" ITEM 2.
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.
