530 West Ninth Street
Newport, Kentucky 41071
Notice of Annual Meeting of Shareholders
To Be Held Thursday, February 15, 2001
9:00 a.m., Eastern Standard Time
at
The Metropolitan Club
50 East RiverCenter Boulevard
Covington, Kentucky
Dear Shareholder:
You are cordially invited to attend the Annual
Meeting of Shareholders of NS Group, Inc. to:
1. Elect seven directors.
2. Ratify the appointment of Arthur Andersen
LLP as independent public accountants for
fiscal 2001.
3. Conduct other business properly brought before the
meeting.
Shareholders of record at the close of business on
December 19, 2000 may vote at the meeting. Your vote is
important. Whether you plan to attend or not, please sign,
date, and return the enclosed proxy card in the envelope
provided. If you attend the meeting and prefer to vote in
person, you may do so.
Sincerely,
/s/Thomas J. Depenbrock
Thomas J. Depenbrock
Vice President and Secretary
Newport, Kentucky
December 26, 2000
TABLE of CONTENTS
Annual Meeting Information 3
Securities Ownership of Management 6
Securities Ownership of Certain Beneficial Owners 7
The Board of Directors 8
Report of the Audit Committee 10
Compensation of Directors 11
Proposals of the Board 12
Item 1 - Election of Directors 12
Item 2 - Ratification of Appointment of
Independent Public Accountants 14
Item 3 - Other Matters 14
Report of the Executive Compensation Committee 15
Compensation of Executive Officers 18
Performance Graph 23
Certain Relationships and Related Transactions 24
Other Matters 24
Appendix A 25
NS GROUP, INC.
530 West Ninth Street
Newport, Kentucky 41071
PROXY STATEMENT
ANNUAL MEETING INFORMATION
This proxy statement contains information related to the
annual meeting of shareholders of NS Group, Inc. ("NS Group").
The meeting will be held on Thursday, February 15, 2001, beginning
at 9:00 a.m., at the Metropolitan Club, 50 East RiverCenter
Boulevard, Covington, Kentucky, and at any postponements or
adjournments of the meeting. This proxy statement was prepared
under the direction of NS Group's board of directors and has been
sent to ask you to give your proxy (that is, the authority to vote
your shares) to our proxy committee so they may vote your shares
on your behalf at the annual meeting. The members of the proxy
committee are Thomas J. Depenbrock and James J. Crowe. They will
vote your shares as you instruct them on your proxy card. We
first sent the proxy statement, the proxy card, and the 2000
annual report to shareholders on or about December 27, 2000.
Who is entitled to vote?
Shareholders owning our common stock on December 19, 2000,
are entitled to vote at the annual meeting, or any postponement or
adjournment of the meeting.
Each shareholder has one vote per share on all matters to be
voted on. On December 19, 2000, there were 20,947,482 shares of
common stock outstanding.
What am I voting on?
You may vote on:
the election of seven nominees to serve on the board of
directors, and
the ratification of the appointment of Arthur Andersen LLP as
our independent public accountants for the 2001 fiscal year.
The board is not aware of any other matter to be presented
for action at the meeting. If any other matter requiring a vote
of the shareholders should arise, the proxy committee will vote
your shares in accordance with their best judgment.
How does the board recommend I vote on the proposals?
The board recommends a vote FOR each of the nominees and FOR
the ratification of the appointment of Arthur Andersen LLP as NS
Group's independent public accountants for the fiscal year 2001.
How do I vote?
Sign and date each proxy card you receive and return it in
the prepaid envelope. If you sign your proxy, but do not mark
your choices, the proxy committee will vote for the seven persons
nominated for election as directors and for the ratification of
the appointment of Arthur Andersen LLP as independent public
accountants for the fiscal year 2001.
You can revoke your proxy at any time before it is exercised.
To do so, you must give written notice of revocation to the
Corporate Secretary, NS Group, Inc., 530 West Ninth Street,
Newport, Kentucky 41071, submit another properly signed proxy with
a more recent date, or vote in person at the meeting.
What is a quorum?
A "quorum" is the presence at the meeting, in person or by
proxy, of the holders of a majority of the outstanding shares of
common stock. There must be a quorum for the meeting to be
lawfully held.
How are my votes counted?
In voting on matters other than the election of directors,
your shares are counted as one vote for each share of common stock
held. With respect to the election of directors, you have
cumulative voting rights, which means that you have the number of
votes equal to the number of shares you hold multiplied by the
number of directors nominated. You may cast the total number of
your votes for one nominee, or distribute them among two or more
nominees.
How many votes must the proposals receive in order to be adopted?
Directors are elected by a plurality of the votes of the
shares present in person at the meeting or represented by proxy
and entitled to vote; which means, the seven nominees receiving
the most votes are elected, even if each receives less than a
majority of the votes. The appointment of Arthur Andersen LLP is
approved by a majority of the votes of the shares present in
person at the meeting or represented by proxy and entitled to
vote. Abstentions are counted as votes present and entitled to
vote and have the same effect as votes against a proposal. Broker
non-votes are not counted as either votes for or votes against a
proposal. Both abstentions and broker non-votes are counted in
determining that a quorum is present for the meeting.
What are broker non-votes?
The New York Stock Exchange permits brokers to vote their
customers' shares on routine matters when the brokers have not
received voting instructions from their customers. The election
of directors and the ratification of independent public
accountants are examples of routine matters on which brokers may
vote in this way. Brokers may not vote their customers' shares on
non-routine matters unless they have received voting instructions
from their customers. Non-voted shares on non-routine matters are
broker non-votes.
How will voting be conducted on other matters raised at the meeting?
If any matters are presented at the meeting other than the
proposals on the proxy card, the proxy committee will vote on them
using their best judgment. Your signed proxy card gives the proxy
committee the authority to do this. As of the date this proxy
statement was mailed, we had not received notice of any matter to
be presented other than those on the proxy card.
How is this proxy statement solicited?
This proxy is being solicited by the board of directors of NS
Group. The solicitation is done by mail, except for incidental
personal solicitations made by officers, directors, and employees
of NS Group. We reimburse banks, brokerage firms and other
institutions, nominees, custodians and fiduciaries for their
reasonable expenses for sending proxy materials to beneficial owners
and obtaining their voting instructions.
SECURITIES OWNERSHIP OF MANAGEMENT
The following table shows the number of shares of NS
Group common stock beneficially owned by each director, nominee,
and executive officer named in the Summary Compensation Table
contained in this proxy, and by all directors and executive
officers as a group. The table shows ownership as of November 21,
2000.
Shares Beneficially Owned
Name Number Percent
William W. Beible, Jr. (1) 19,476 (3) *
Clifford R. Borland (2) 3,026,483 (3) 14.3
Paul C. Borland, Jr. 80,495 (3) *
David A.B. Brown 2,000 *
Thomas J. Depenbrock (1) 48,426 (3) *
Patrick J.B. Donnelly 30,375 (4) *
Thomas L. Golatzki (1) 64,773 (3) *
George A. Helland, Jr. 3,000 *
Gary L. Kott 2,000 *
Frank J. LaRosa II (1) 129 *
Rene J. Robichaud 160,206 (3) *
11 Directors and
executive officers
as a group 3,437,363 16.0
*Less than 1.0%
(1) The ages of the following executive officers are: Mr.
Beible - 49; Mr. Depenbrock - 44; Mr. Golatzki - 56;
and Mr. LaRosa II - 41.
(2) The address of Mr. C. R. Borland is NS Group, Inc., 530 West
Ninth Street, Newport, KY 41071.
(3) The amounts shown include shares that may be acquired upon
exercising options on or before January 20, 2001, as follows:
Mr. Beible, Jr. - 13,340 shares; Mr. C. R. Borland - 139,733
shares; Mr. P. C. Borland, Jr. - 79,000 shares; Mr.
Depenbrock - 38,589 shares; Mr. Donnelly - 4,000 shares; Mr.
Golatzki - 38,589 shares; Mr. Robichaud - 110,000 shares; and
all directors and executive officers as a group - 423,251
shares. The amount shown for all directors and executive
officers as a group also includes 32,517 shares held by the
trustee in the NS Group, Inc. Salaried Employees Retirement
Savings Plan.
(4) Includes 12,850 shares owned by Mr. Donnelly's wife. Mr.
Donnelly disclaims any beneficial interest is these shares.
Section 16(a) - Beneficial Ownership Reporting Compliance
Based on our records, we believe that during fiscal 2000
our directors and officers complied with all SEC filing requirements
applicable to them.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows information regarding each person
known by us to be the beneficial owner of more than 5% of
NS Group's common stock. The ownership information shown below is
based entirely upon and derived from Schedule 13G filings.
Securities Ownership of Certain Beneficial Owners
Title of Name and Address Amount and Percent
Class of Beneficial Owner Nature of of
Beneficial Class
Ownership
Common Dresdner RCM Global 2,199,700 10.5%
stock Investors LLC shares (1)
Four Embarcadero Center
San Francisco, California
94111
Common Dimensional Fund Advisors 1,353,300
stock 1299 Ocean Avenue, shares (2) 6.5%
11th Floor
Santa Monica, California
90401
(1) In a joint Schedule 13G dated October 10, 2000, Dresdner RCM
Global Investors LLC, a Delaware limited liability company, its
parent Dresdner RCM US Holdings LLC, a Delaware limited liability
company located at Four Embarcadero Center, San Francisco,
California, and its parent Dresdner Bank AG, a German bank located
at Jurgen-Ponto Platz 1, Frankfurt, Germany, reported sole voting
power over 1,614,900 shares, sole investment power over 1,816,900
shares, and shared investment power over 382,800 shares.
(2) In a Schedule 13G dated February 3, 2000, Dimensional Fund
Advisors Inc. reported sole voting and investment power over all
1,353,300 shares.
THE BOARD OF DIRECTORS
Under our by-laws and the laws of the Commonwealth of
Kentucky, NS Group's state of incorporation, the business and
affairs of NS Group are managed under the direction of the board
of directors. The board met nine times in fiscal 2000 and each
director attended in excess of 85% of the board and committee
meetings.
Board Committees and Meeting Attendance
The board has four committees: the Executive, Audit,
Executive Compensation, and Investment/Mergers and Acquisitions
Committees. There is no nominating committee of the board.
Committees report their actions to the full board at its next
regular meeting. A description of the duties of each committee
follows the table below.
Committee Membership and Meetings Held
Investment/
Executive Mergers and
Name Executive Audit Compensation Acquisitions
Clifford R. X* X*
Borland
Paul C. Borland, Jr. X
David A.B. Brown X* X
Patrick J.B. X X* X
Donnelly
George A. X X X
Helland, Jr.
Gary L. Kott X X
Rene J. X X
Robichaud
Number of
Meetings in 3 2 2 1
Fiscal 2000
*Chairman
Executive Committee
Has the full power of the board between meetings of the board, with
specified limitations relating to major corporate matters
Audit Committee
Reviews the Company's accounting policies, internal controls,
and financial reporting and disclosure practices
Reviews the Company's annual financial statements and the
annual and quarterly filings with the Securities and Exchange
Commission prior to filing
Recommends to the board the independent public accountants to
be nominated for election by the shareholders
Reviews the independent accountants' audit scope and results
Approves the independent accountants' audit fee
Executive Compensation Committee
Recommends to the board on matters of executive compensation
policies and programs
Recommends new compensation and benefit plans to the board of
directors
Recommends to the board the compensation of NS Group's officers
Administers the Company's stock and performance-based compensation
plans
Recommends to the board compensation and benefits for non-employee benefits
Investment/Mergers and Acquisitions Committee
Reviews and administers NS Group's investment policies
Oversees and monitors investment activity and results, including acquisition
opportunities
REPORT OF THE AUDIT COMMITTEE
The audit committee oversees the company's financial
reporting process on behalf of the board of directors. Our
committee is composed of three independent directors as defined in
the New York Stock Exchange Manual. Our committee met twice in
fiscal 2000, and operates under a written charter (Appendix A)
adopted by the board of directors. Management has the primary
responsibility for the financial statements and the reporting
process, including the company's systems of internal controls. In
fulfilling our oversight responsibilities, we reviewed the audited
financial statements in the Annual Report on Form 10-K with
management, including a discussion of the quality and the
acceptability of the company's financial reporting and controls.
We reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting
principles, their judgments as to the quality and the
acceptability of the company's financial reporting and such other
matters as are required to be discussed with us under generally
accepted auditing standards. In addition, we have discussed with
the independent auditors the auditors' independence from
management and the company, including the matters in the
auditors' written disclosures required by the Independence
Standards Board.
We also discussed with the company's independent auditors the
overall scope and plans for their respective audits. We meet
periodically with the independent auditors, with and without
management present, to discuss the results of their examinations,
their evaluations of the company's internal controls, and the
overall quality of the company's financial reporting.
In reliance on the reviews and discussions referred to above,
we recommended to the board of directors that the audited
financial statements be included in the Annual Report on Form 10-K
for the fiscal year ended September 30, 2000 for filing with the
Securities and Exchange Commission. We also evaluated and
recommended to the Board the reappointment of the company's
independent auditors for fiscal 2001.
This report has been furnished by:
The Audit Committee of the Board of Directors:
David A.B. Brown (Chairman)
Patrick J.B. Donnelly
George A. Helland, Jr.
COMPENSATION OF DIRECTORS
Our by-laws provide that each non-employee director be paid a
fee for his services in an amount set by the board from time to
time. Directors who are employees of NS Group receive no compensation
for their service on the board or board committees. We pay our
non-employee directors as follows in addition to out-of-pocket expenses:
Annual retainer $24,000
Compensation for board meetings in excess of
four per fiscal year $1,000 per meeting
Compensation for committee meeting attendance $ 750 per meeting
Travel pay (for out-of-town directors) $1,000 per meeting
NS Group entered into a consulting agreement in August 1998 with Mr.
P. C. Borland, Jr. to oversee and direct the operations of Koppel Steel
Corporation on an as needed basis until termination of the agreement.
Under the agreement, Mr. P. C. Borland, Jr. was paid a total of $6,500 in
fiscal 1999 and $6,750 in fiscal 1998. The agreement was terminated in
September 1999.
PROPOSALS OF THE BOARD
The board will present the following proposals at the
meeting:
ITEM 1. - ELECTION OF DIRECTORS
Nominees
Seven directors (the entire board) will be elected at the
annual meeting. Directors will serve until the next annual
meeting or until their earlier resignation or removal. If any
nominee is not available for election, proxies will be voted for
another person nominated by the board or the size of the board
will be reduced. Messrs. C.R. Borland, P.C. Borland, Jr.,
Donnelly, and Robichaud were elected at last year's annual
meeting. Messrs. Brown, Helland and Kott were elected as
directors by the board in April 2000. The nominees are as
follows:
Clifford R. Borland
Director since 1981
Age 63
Mr. C. R. Borland has been Chairman of NS Group since
December 1995. He formerly held the positions of Chief Executive
Officer (1995 to February 2000), President (1981 to 1995 and 1998
to 1999) and Chief Operating Officer (1998 to 1999). Mr. C. R.
Borland is a director of Kentucky Electric Steel, Inc. Mr. C. R.
Borland is the brother of Mr. P.C. Borland, Jr.
Paul C. Borland, Jr.
Director since 1996
Age 66
Mr. P. C. Borland, Jr. retired from NS Group in July 1998. He
formerly held the positions of President and Chief Operating Officer
of NS Group (1995 to 1998); President of Koppel Steel Corporation
(1990 to 1997) and Vice President and General Manager of Kentucky
Electric Steel Corporation (1989 to 1990). He is the brother of
Mr. C. R. Borland.
David A.B. Brown
Director since April 2000
Age 57
Mr. Brown has been President of The Windsor Group, a
consulting firm that focuses on energy related issues facing
oilfield services and engineering companies, since 1984. Mr.
Brown currently serves on the Board of Directors and is Chairman
of the audit committee for BTU International, Inc., EMCOR Group,
Inc. and Marine Drilling Companies, Inc. He is also a Director of
Technical Communications Corporation. He has over 20 years of
energy related experience.
Mr. Brown holds a Bachelor of Commerce and a Licentiate of
Accounting from McGill University, and a MBA, with distinction,
from Harvard University and is a Chartered Accountant.
Patrick J.B. Donnelly
Director since 1981
Age 64
Mr. Donnelly has been a partner in the Baltimore, Maryland
law firm of Niles, Barton & Wilmer LLP since 1972.
George A. Helland, Jr.
Director since April 2000
Age 63
Mr. Helland has been a Senior Associate of CERA (Cambridge
Energy Research Associates), an independent consulting and
research firm providing insight into the energy future since 1997.
Mr. Helland has held senior positions with a number of leading oil
service companies and was Deputy Assistant Secretary U.S.
Department of Energy, in the Bush administration. He is past
Chairman of the Petroleum Equipment Suppliers Association (PESA).
Mr. Helland has over 39 years experience in the energy industry.
Gary L. Kott
Director since April 2000
Age 58
Mr. Kott is an independent businessman. He is a retired
Senior VP-CFO of Global Marine, Inc. and President of Global
Marine Drilling Company. He also serves on the boards of TESCO
Corporation and Friede Goldman Halter, Inc. He has 29 years
experience in the energy industry.
Rene J. Robichaud
Director since July 1999
Age 42
Mr. Robichaud has been Chief Executive Officer of NS Group
since February 2000 and President since he joined NS Group in June
1999. He previously held the position of Chief Operating Officer
from June 1999 to May 2000. Prior to joining NS Group, Mr.
Robichaud worked in investment banking for over 14 years, most recently
as a Managing Director at Salomon Smith Barney.
ITEM 2. - RATIFICATION OF APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP has examined the financial
statements of NS Group since 1981 and the board, upon the
recommendation of its audit committee, wishes to continue the
services of this firm. A resolution will be presented at the
meeting to ratify the appointment by the board of the firm of
Arthur Andersen LLP, as independent auditors, to examine the
financial statements of NS Group for fiscal 2001, and to perform
other appropriate accounting services. We have been advised that
a representative of Arthur Andersen LLP will be present at the
meeting with an opportunity to make a statement if he desires and
will be available to respond to shareholder questions.
ITEM 3. - OTHER MATTERS
The board is not aware of any other matter to be presented
for action at the meeting. If any other matter requiring a vote
of the shareholders should arise, the proxy committee will vote in
accordance with their best judgment.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
Role of the Committee
The executive compensation committee oversees NS Group's
executive compensation policies and programs. We also recommend
to the board base salaries, target bonus levels and long-term
incentive awards to be paid to executive officers. In carrying
out these functions, we believe it is important to align executive
compensation with business objectives and strategies, management
initiatives, financial performance and enhanced shareholder
value.
Our committee is comprised of independent outside directors
and none of us serve as an officer or employee of NS Group.
Executive Compensation Program
The executive compensation program is designed 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 that are competitive within the industry
segments in which NS Group operates and that reflect individual
performance;
annual bonus incentives that are payable in cash for the
achievement of certain annual financial performance criteria;
and long-term, stock-based incentive opportunities.
We believe that both the annual bonus and stock-based
incentive opportunities directly strengthen the mutuality of
interests between the executive officers and its shareholders. In
developing and administering the individual elements of the
executive compensation program, we strive to balance short and
long-term incentive objectives.
Periodically, we obtain competitive survey data from a number
of sources in connection with our administration and review of the
executive compensation program. Such survey data confirms our
belief that the program is currently competitive and effective
because it aligns the financial interests of the executive
officers with NS Group's financial performance and long-term total
return to shareholders. We continually review the program and
consider modifications in order to further motivate the executive
officers.
A discussion of each of the elements of the program along
with a description of our significant decisions with regard to
fiscal 2000 compensation is set forth below. The individuals
serving in an executive officer capacity during fiscal 2000 were
Messrs. Clifford R. Borland, Rene J. Robichaud, William W. Beible,
Jr., Thomas J. Depenbrock, Thomas L. Golatzki, and Frank J. LaRosa.
Base Salary
Base salaries are determined by an assessment of salaries paid
by companies within NS Group'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 committee and Mr. Robichaud using these criteria.
The board hired Mr. Robichaud in June 1999 as President and Chief
Operating Officer and he was promoted to Chief Executive Officer
in February 2000. The board promoted Mr. Beible to Executive Vice
President and Chief Operating Officer in May 2000. See the
information entitled "Other Compensation Agreements" for a
discussion of Mr. Robichaud's and Mr. Beible's cash compensation.
Mr. C. R. Borland's base salary is reviewed and established
annually by the committee. In addition to the criteria described
above, we also consider the overall performance of NS Group when
establishing Mr. C. R. Borland's and Mr. Robichaud's base salary.
Mr. C. R. Borland's base salary was last increased in fiscal 1997
by 4.7% and Mr. Robichaud's salary was increased upon his
promotion to Chief Executive Officer in February 2000.
Bonus Incentive
The executive officers and other key employees are eligible
to participate in NS Group's bonus plan. Participants may be
awarded annual bonuses if NS Group and/or its operating
subsidiaries meet certain financial performance criteria. Annual
bonuses for Mr. C. R. Borland, Mr. Robichaud and the other
executive officers are based upon company-wide financial
performance criteria including operating margins, return on
assets, return on total capital and sales growth. The bonus
percentage for Mr. C. R. Borland, Mr. Robichaud 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, Mr.
Robichaud and the other executive officers earned bonuses during
the last three fiscal years as follows:
Fiscal Percent of Salary
2000 No bonus earned
1999 No bonus earned
1998 9.7% - 20.0%
Stock Option Incentive
Long-term incentive awards provided through NS Group's stock
option plans are designed to develop and maintain strong
management through share ownership. Executive officers have
historically been granted non-qualified stock options under NS
Group's stock option plans. With certain exceptions, the exercise
price for options granted has approximated the market value of NS
Group's common stock on the date of grant, and options generally
become exercisable over periods ranging from three to eight years.
The number of options granted to executive officers is based
upon current performance, anticipated future contribution based on
that performance, the ability to improve 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 of shares and price of options granted.
Mr. Robichaud recommends stock option grants for the other
executive officers and the committee takes into consideration such
recommendations and has final approval over such awards. With
respect to Mr. C. R. Borland and Mr. Robichaud, the committee
determines the options to be granted. Options for 300,000 shares
of common stock were granted to Mr. Beible in fiscal 2000 in
connection with his promotion to Executive Vice President and
Chief Operating Officer. We believe this grant effectively aligns
Mr. Beible's potential long-term incentive compensation with his
charge to bring significant increase in shareholder value. See
the option tables for information concerning grants and exercises
of options and fiscal year-end option values. Also, see the
information entitled "Other Compensation Agreements" for a
discussion of Mr. Beible's option grant.
This report has been furnished by:
The Executive Compensation Committee of the Board of Directors
Patrick J.B. Donnelly (Chairman)
George A. Helland, Jr.
Gary L. Kott
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation
The following table shows for each of the last three fiscal
years compensation awarded to, earned by, or paid to the chief
executive officer and each of the other officers serving in an
executive officer capacity during fiscal 2000 for services
rendered to NS Group.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
Name and Other Securities All other
Principal Fiscal Annual Underlying Compen-
Position Year Salary Bonus Compensation Options/SARs sation (2)
Clifford R. 2000 $413,750 $ 0 $ 1,033 0 $17,958
Borland 1999 413,750 0 1,000 0 19,048
Chairman 1998 413,750 81,830 1,000 30,000 17,758
(3) (7)
Rene J. 2000 $346,666 $ 0 $ 3,333 14,400 $ 9,590
Robichaud 1999 87,500 0 32,299 550,000 1,575
President
and Chief
Executive
Officer (4)
William W. 2000 $243,862 $ 0 $ 38,987 300,000 $ 8,793
Beible, Jr. 1999 215,000 0 120,023 0 8,593
Executive 1998 17,917 0 0 20,000 0
Vice
President
and Chief
Operating
Officer(5)
Thomas J. 2000 $151,670 $ 0 $ 0 16,400 $ 4,398
Depenbrock 1999 135,000 0 0 0 3,841
Vice 1998 135,000 14,028 0 9,000 4,500
President,
Secretary,
Treasurer
and Chief
Financial
Officer(7)
Thomas L. 2000 $137,962 $ 0 $ 1,233 13,800 $ 5,643
Golatzki 1999 132,000 0 1,233 0 5,449
Vice 1998 132,000 13,716 1,200 9,000 6,068
President,
Engineering
Energy &
Materials(7)
Frank J. 2000 $75,853 $ 0 $39,991 23,600 $ 0
LaRosa II
Vice
President,
Human
Resources &
Information
Technology (6)
(1) Other Annual Compensation for Messrs. Borland and Golatzki
for all periods, and for Mr. Robichaud in fiscal 2000, represents
reimbursements for the payment of taxes. The amount for Mr.
Robichaud in fiscal 1999 consisted of relocation expenses. The
amount for Mr. Beible in fiscal 2000 consisted of travel and
living expenses of $30,868 incurred in connection with his duties
between Pennsylvania and Kentucky and $5,218 of relocation
expenses and a tax reimbursement of $2,901. The amount for Mr.
Beible in fiscal 1999 consisted of $32,700 of travel and living
expenses, relocation expenses of $44,422 and a tax reimbursement
of $42,901. The amount for Mr. LaRosa consists of relocation
expenses.
(2) NS Group has purchased disability insurance policies for the
benefit of certain of its employees, including the executive officers.
In the event an insured is disabled for more than 60 days, he will be
paid an amount ranging from 18% to 54% of his current base salary during
the term of such disability up to age 65. NS Group paid $14,558, $1,365
and $2,949 in premiums in each of fiscal years 2000, 1999 and 1998 for
Mr. C. R. Borland, Mr. Depenbrock and Mr. Golatzki, respectively. The
Company also paid premiums for Mr. Robichaud - $6,190 and Mr. Beible -
$5,393 in fiscal 2000. In fiscal 1999, the Company paid premiums for
Mr. Robichaud - $0 and Mr. Beible - $5,393.
All Other Compensation includes Company matching contributions to
the NS Group Inc. Salaried Retirement Savings Plan for the fiscal years
2000, 1999 and 1998 as follows: Mr. C. R. Borland, $3,400, $3,200, $3,200;
Mr. Robichaud, $3,400, $1,575, $0; Mr. Beible, $3,400, $3,200, $0; Mr.
Depenbrock, $3,033, $2,476, $3,135; Mr. Golatzki, $2,694, $2,500, $3,119.
(3) Mr. Borland was also Chief Executive of NS Group until
February 2000.
(4) Mr. Robichaud joined NS Group in June 1999 as President and
Chief Operating Officer and was promoted to Chief Executive Officer in
February 2000.
(5) Mr. Beible joined Koppel Steel Corporation, a subsidiary of
NS Group, on July 22, 1998.
(6) Mr. LaRosa joined NS Group in March 2000.
(7) During fiscal 1998, payments were made for estimated annual
bonuses to Mr. C. R. Borland, Mr. Depenbrock and Mr. Golatzki in the
amounts of $147,074, $25,213 and $24,652, respectively. Subsequent to
the end of fiscal 1998, it was determined that estimated bonus payments
exceeded amounts earned. All excess payments under the bonus plan were
repaid in fiscal 1999. The amounts reflected in the table as Bonus for
fiscal 1998 are the actual amounts earned.
Option Grants in Fiscal 2000
The following table shows certain information concerning
stock options granted during fiscal 2000 to the executive officers
named in the Summary Compensation Table.
OPTIONS/SAR GRANTS IN FISCAL YEAR
Percent
of Potential
Number Total Realizable Value
of Options at Assumed Annual
Securities Granted to Per Rates of Stock Price
Underlying Employees Share Expira- Appreciation for
Options in Fiscal Exercise tion Option Term (3)
Name Granted Year Price Date 5% 10%
Rene J.
Robichaud 14,400(1) 2.1% $17.625 5/8/10 $ 159,613 $ 404,492
William W.
Beible, Jr. 300,000(1) 43.2% $17.625 5/8/10 $3,325,280 $8,426,913
Thomas J.
Depenbrock 16,400(1) 2.4% $17.625 5/8/10 $ 181,782 $ 460,671
Thomas L.
Golatzki 13,800(1) 2.0% $17.625 5/8/10 $ 152,963 $ 387,638
Frank J.
LaRosa II 13,600(1) 2.0% $17.625 5/8/10 $ 150,746 $ 382,020
10,000(2) 1.4% $13.438 3/7/10 $ 84,508 $ 214,159
(1) Represents non-qualified stock options granted on May 8,
2000, pursuant to the NS Group, Inc. 1995 Stock Option and Stock
Appreciation Rights Plan. Mr. Beible's options become exercisable
over a five-year period in increments of 20% per year beginning
with the first anniversary of the date of grant. All other
options become exercisable over a three year period in increments
of 33 1/3% beginning with the first anniversary of the date of grant.
(2) Represents non-qualified stock options granted to Mr. LaRosa
on his hire date of March 7, 2000, exercisable over a five year
period in increments of 20% beginning with the first anniversary
of the date of grant.
(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 NS Group.
Option/SAR Exercises in Fiscal 2000 and Fiscal Year-end Option Values
OPTION/SAR EXERCISES IN FISCAL 2000 AND FISCAL YEAR-END OPTION/SAR VALUES
No. of Total Number of Total Value of
Shares Shares Underlying Unexercised,
Acquired Unexercised In-the-Money
on Value Options/SARs at Options/SARs held
Name Exercised Realized Fiscal Year End at Fiscal Year End (1)
Exercis Unexercis Exercis Unexerci
able able able sable
Clifford R.
Borland 11,000 $12,389 121,466 18,267 $1,562,361 $ 159,097
Rene J.
Robichaud 0 0 110,000 454,400 $ 603,350 $5,558,584
William W.
Beible, Jr. 0 0 13,340 306,660 $ 185,726 $ 92,724
Thomas J.
Depenbrock 7,000 $ 2,853 35,589 19,400 $ 461,175 $ 53,109
Thomas L.
Golatzki 7,000 $ 7,884 35,589 16,800 $ 461,175 $ 47,298
Frank J.
LaRosa II 0 0 0 23,600 $ 0 $ 64,225
(1) In-the-Money Options/SARs are those in which the fair market
value of the underlying securities at fiscal year-end exceeds the
exercise price of the option or SAR.
Change of Control Agreements
NS Group has entered into change of control severance
agreements with Messrs. C. R. Borland, Robichaud, Beible,
Depenbrock, and Golatzki. These agreements provide that if,
during the two year period following a "change of control," NS
Group terminates the executive's employment other than for cause,
or the executive terminates his employment for good reason, then
the executive will receive a defined payment, certain medical,
dental, life and disability insurance benefits and outside
assistance in finding other employment. Payments to Messrs. C. R.
Borland, Robichaud, and Beible would be the aggregate of three
times the amount of their then current base salary and three times
the average amount of their bonus payments in the prior five
years, plus a pro rata portion of their current year bonus. The
payments to Messrs. Depenbrock and Golatzki would be the aggregate
of two times the amount of their then current base salary and two
times the average amount of their bonus payments in the prior five
years, plus a pro rata portion of their current year bonus.
Under the terms of the agreements, a "change of control" of
NS Group means:
a sale of substantially all of its assets;
a merger with the result that its shareholders hold less than
51% of the voting power of the merged entity;
a liquidation;
a tender offer or other purchases resulting in a group of
persons (other than a group of persons with respect to which Mr.
C. R. Borland is the beneficial owner of the majority of the
voting securities) becoming the beneficial owner of 30% or more of
NS Group's securities; or changes in the composition of the
majority of the members of the board
In these agreements, each executive also agrees not to divulge
confidential information or to solicit any present or prospective executive
employee of NS Group to be employed by a competitor.
Other Compensation Agreements
The named executive officers, except Mr. LaRosa, have entered
into salary continuation agreements. The agreements provide
payment upon retirement at or after age 62, of an amount equal to
50% of the officer's then current salary for life, with payments
for a minimum of 10 years either to the participant or his
descendants. These benefits do not vest until retirement, at
which time they vest 100%. These agreements have been partially
funded with insurance policies.
When Mr. Robichaud was hired as President and COO in June
1999, he entered into a three year employment agreement with NS
Group, which has since been amended, that specifies a minimum
annual base salary of $315,000 and eligibility for participation
in the bonus incentive program, the stock option program and other
fringe benefits generally available to other executives of NS
Group. When Mr. Robichaud was promoted to Chief Executive Officer
in February 2000, his base salary was increased to $375,000 per
year. Under the terms of the agreement, Mr. Robichaud received a
one-time grant of stock options for 550,000 shares of NS Group
common stock. The agreement guarantees three years' salary and
bonus and 60% of the grant in the event Mr. Robichaud employment
is terminated for reasons other than cause.
When Mr. Beible was promoted to Executive Vice President and
COO in May 2000, he entered into a two-year employment agreement
with NS Group that specifies a minimum annual base salary of
$265,000 and eligibility for participation in the bonus incentive
program, the stock option program and other fringe benefits
generally available to other executives of NS Group. Under the
terms of the agreement, Mr. Beible received a one-time grant of
stock options for 300,000 shares of NS Group common stock. See
the "Options Granted in Fiscal 2000" table for more information.
The agreement guarantees one year's salary and bonus and 100,000
shares of the grant in the event Mr. Beible's employment is
terminated for reasons other than cause.
Compensation Committee Interlocks and Insider Participation
The Executive Compensation Committee is composed of
Messrs. Donnelly, Kott, and Helland, Jr., none of whom has served
as an officer or employee of NS Group. Mr. P. C. Borland, Jr.,
who served in various positions with NS Group prior to fiscal 1999
resigned from his position on the committee effective November 6,
2000. Mr. John B. Lally, a former director of the company, owns
the controlling interest in L B Industries, Inc. NS Group 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. were $16.9 million in fiscal 2000.
Mr. Lally retired from the board on July 20, 2000.
PERFORMANCE GRAPH
The graph below compares NS Group's cumulative total
shareholder return from September 30, 1995 through September 30, 2000,
with the cumulative total return for the same period measured by the
Standard & Poor's 500 Composite Index and the Standard & Poor's SmallCap
600 Oil and Gas (Drilling and Equipment) Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1)
1995 1996 1997 1998 1999 2000
NS Group, Inc. $100 $108.3 $1,079.2 $204.2 $358.3 $662.0
Standard & Poor's 500
Composite Index $100 $120.3 $ 169.0 $184.3 $235.5 $266.8
Standard & Poor's SmallCap
600 Oil and Gas Index $100 $155.9 $ 278.6 $102.9 $123.4 $176.0
(1) The graph assumes $100 invested on September 30, 1995 in NS Group's
common stock, the Standard & Poor's 500 Composite Index, and the Standard
& Poor's SmallCap 600 Oil and Gas Index.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Mr. P. C. Borland, Jr. receives annual payments of $108,000
under NS Group's salary continuation program for services he
rendered as an employee prior to his retirement in fiscal 1998.
This annual benefit is payable for life, with a minimum of 10
years to either Mr. P. C. Borland, Jr. or his descendants. NS
Group paid aggregate life insurance premiums under the salary
continuation program in fiscal 2000 on behalf of Mr. P. C.
Borland, Jr. in the amount of $21,000.
In fiscal 1998, Mr. P. C. Borland, Jr. was paid an estimated
annual bonus that exceeded the amount earned by $78,882. This
amount is being repaid through a reduction in board fees and at
September 30, 2000, the balance was $16,737.
OTHER MATTERS
Shareholders may submit proposals on matters appropriate for
shareholder action at future annual meetings by following the rules
of the Securities and Exchange Commission. Ordinarily, shareholder
proposals intended for inclusion in next year's proxy statement must
be received by NS Group not later than 120 days before the date of
this proxy statement. However, because the board of directors has
voted to change NS Group's fiscal year to a calendar year ending
December 31, next year's proxy statement will not be mailed until
after December 2001. Once we have determined the approximate mailing
date of next year's proxy statement, we will notify shareholders
in a Quarterly Report on Form 10-Q of the date by which it must
receive shareholder proposals for inclusion in such proxy
statement.
In order for a shareholder to nominate a candidate for
director, under our bylaws timely notice of the nomination must be
given to NS Group in advance of the meeting. Ordinarily, such
notice must be given not less than 90 days nor more than 120 days
before the meeting (but if NS Group gives less than 100 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.
The notice must be given to the Secretary of NS Group, whose
address is 530 West Ninth Street, Newport, Kentucky 41071. Any
shareholder desiring a copy of our bylaws will be furnished one
without charge upon written request to the Secretary.
By Order of the Board of Directors,
/s/Thomas J. Depenbrock
Thomas J. Depenbrock Newport, Kentucky
Vice President and Secretary December 26, 2000
Appendix A
CHARTER
of the
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
of
NS GROUP, INC.
ARTICLE I
ORGANIZATION
The By-Laws of NS Group, Inc. provide for a committee of the
Board of Directors known as the Audit Committee of the Board of
Directors.
ARTICLE II
PURPOSE
The purpose of the Audit Committee is to assist the Board of
Directors by overseeing the internal and external processes
relating to the keeping of the Company's financial and accounting
records and the preparation of its financial statements.
ARTICLE III
MEMBERSHIP
The membership of the Audit Committee shall be composed of
Directors of the corporation who are independent of the management
of the corporation and are free from any relationship with the
Corporation which would, in the opinion of the Board of Directors,
interfere with their exercise of independent judgment as members
of the Audit Committee. No member of the Audit Committee shall be
an employee of the corporation during such time as such director
is a member of the Audit Committee or for a period of three (3)
years after his or her employment with the Corporation terminates.
No member of the Audit Committee shall be related to any officer
of the Corporation. The Audit Committee shall contain not less
than three (3) independent Directors of the corporation, each of
whom shall be elected by the Board of Directors at the Annual
Organizational Meeting of the Board, or until their successors
shall be duly elected and qualified. The Audit Committee shall
have a chairman elected by the Board of Directors of the
corporation. Each member of the Audit Committee shall have, or
within a reasonable time of their appointment acquire, a working
familiarity with basic finance and accounting practices and
procedures. At least one member of the Audit Committee shall have
accounting or related financial management experience and
expertise.
ARTICLE IV
DUTIES OF THE AUDIT COMMITTEE
The Audit Committee shall have the responsibility of:
A. overseeing that the management of the corporation
maintains the reliability and integrity of the accounting
policies, procedures and financial reporting and disclosure
practices of the corporation and its subsidiaries (herein
collectively "the Corporation");
B. overseeing that management has established and maintains
processes and procedures to assure that an adequate system of
internal financial controls is at all times functioning within the
Corporation;
C. overseeing that management has established and maintains
processes to assure compliance by the Corporation with all
applicable laws, regulations and company policy;
D. annually reviewing and updating, if required, the
Charter of the Audit Committee;
E. overseeing the performance of the Corporation's
independent public accountants and immediately reviewing any
disagreements between management and the independent public
accountants;
F. ensuring the independence of the independent public
accountants, including obtaining from the independent public
accountants on an annual basis a formal written statement
regarding their independence and engaging in a dialogue with
respect to any disclosed relationships.
G. reviewing the Corporation's annual financial statements
as well as any financial or other reports or information submitted
by the Corporation to any governmental body or to the public,
including any certification, report, opinion or review rendered by
the Corporation's independent public accountants;
H. meeting not less than semi-annually with the Chief
Financial Officer of the Corporation to review the compliance by
the Chief Financial Officer with the financial reporting policies
of the Corporation;
I. reviewing, prior to filing, the 10-K and 10-Q reports to
be filed by the Corporation with the Securities and Exchange
Commission. The chair of the Committee may represent the entire
Committee for purposes of this review.
J. Conferring with the independent public accountants and
the Corporation's internal auditors concerning the scope of the
independent public auditors' examinations of the books and records
of the Corporation and reviewing and approving the opinion of the
independent public accounts which is to be included in the annual
audit.
K. Obtaining from the independent public auditors and the
Corporation's internal auditors their recommendations regarding
internal controls and other matters relating to the accounting
procedures and the books and records of the Corporation, and
ensuring the correction of controls deemed by the Audit Committee
to be deficient;
L. Maintaining minutes or other records, either separately
or within the minutes of the Board of Directors, of meetings and
activities of the Audit Committee;
M. Conducting or authorizing investigations into any
matters within the Audit Committee's scope of responsibilities.
The Audit Committee shall be empowered to retain independent
counsel, accountants or others to assist in the conduct of any
such investigation.
N. Reviewing with the Chief Financial Officer of the
Corporation the compliance by the Corporation with all debt
covenants which may be in place from time to time, and reviewing
annually with the independent public auditors their annual written
statement delineating all relationships between the independent
public auditors and the company, and assessing whether any
disclosed relationships require taking appropriate action.
ARTICLE V
MEETINGS OF THE COMMITTEE
The Audit Committee shall meet not less frequently than two
(2) times each fiscal year and more frequently as it believes is
necessary or appropriate to fulfill its duties and
responsibilities under this Charter. The Committee shall report
regularly to the Board of Directors on the Committee's activities
and discuss with the Board any specific items brought to the
attention of the Committee by the Corporation's independent
accountants or the Corporation's Chief Financial Officer.
ARTICLE VI
SELECTING AND SUPERVISING
THE INDEPENDENT PUBLIC ACCOUNTANTS
The Committee shall be responsible for selecting and
recommending to the Board of Directors for appointment, the
Corporation's independent public auditors for each fiscal year.
The ultimate responsibility of the independent public accountants
is to the Committee and the Board of Directors. The Committee
shall meet, as a Committee, not less frequently than two (2) times
a year with the Corporation's independent public auditors and
shall review annually with the independent public auditors their
projected fees for the upcoming fiscal year and also review in
detail the fees charged by the independent public auditors for the
current fiscal year. The Audit Committee shall discuss annually
with the independent public auditors the auditors' opinion to be
included in the Corporation's annual report. The Audit Committee
shall review and approve the independent public auditors' annual
engagement letter.
ARTICLE VII
LIMITATIONS OF THE AUDIT COMMITTEE
The Committee recognizes that its role is one of oversight
and that it is not the duty or responsibility of the Committee to
conduct audits or to determine if the Company's financial
statements are complete and accurate and in accordance with
generally accepted accounting principles. It is the
responsibility of the Company's management to prepare the
financial statements and the responsibility of the Company's
outside auditors to conduct the audit. It also is not the duty of
the Committee to resolve any disagreements between the Company's
management and its independent public accountants.
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFOMATION
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 Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e) (2))
X Definite 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)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the appropriate box):
X No fee required
Fee computed on table below per Exchange Act
Rules 14a-6(k) (a) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
Per unit price other underlying values 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)
(3) Proposed maximum aggregate value of transaction:
(4) 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 of 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) Dated Filed:
NS GROUP, INC.
X Please mark votes as in this example
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 15, 2001
The undersigned hereby appoints Thomas J. Depenbrock and James J. Crowe or
either of them as Proxies (acting by a majority or, if 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 either 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 19, 2000,
at the Annual Meeting of Shareholders to be held on February 15, 2001, or
at any adjournment, or adjournments thereof.
Item 1. Election of the following seven (7) nominees as Directors
FOR WITHHOLD FOR ALL EXCEPT
Clifford R. Borland; Paul C. Borland, Jr.; David A.B. Brown; Patrick J.B.
Donnelly; George A. Helland, Jr.; Gary A. Kott; Rene J. Robichaud
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 2001.
FOR AGAINST ABSTAIN
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 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.
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.
