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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ( X )
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
( X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
OREGON STEEL MILLS, INC.
-----------------------
(Name of Registrant as Specified In Its Charter)
L. Ray Adams
-----------------------
(Name of Person(s) Filing Proxy Statements if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
( X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
O-11.
1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-ll (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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( ) 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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OREGON STEEL MILLS, INC.
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------
To be Held
April 28, 1995
8:30 A.M. Pacific Time
9:30 A.M. Mountain Time
-----------
TO THE STOCKHOLDERS:
You are invited to attend the Annual Meeting of Stockholders of
Oregon Steel Mills, Inc. (the "Corporation") to be held at the offices
of its subsidiary, CF&I Steel, L.P., 1612 E. Abriendo, Pueblo, Colorado
on Friday, April 28, 1995, at 9:30 a.m. Mountain Time.
The meeting is being held for the following purposes:
1. To elect three Class A directors.
2. To consider and transact such other business as may properly
come before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 10,
1995 are entitled to notice of, and to vote at, the meeting and any
adjournment or postponement thereof. A list of stockholders entitled to
vote at the meeting is available for inspection at the offices of the
Corporation.
By Order of the Board of Directors,
LaNelle F. Lee
Secretary
March 20, 1995
Portland, Oregon
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY MAIL THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED. YOUR PROMPT RESPONSE COULD
SAVE THE CORPORATION THE EXPENSE OF A FOLLOW-UP MAILING.
<PAGE>
<PAGE>
OREGON STEEL MILLS, INC.
1000 SW Broadway Building,
Suite 2200
Portland, Oregon 97205
(503) 223-9228
---------
PROXY STATEMENT
Annual Meeting of Stockholders
---------
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors (the "Board") of
Oregon Steel Mills, Inc. (the "Corporation") to be voted at the Annual
Meeting of Stockholders to be held at the offices of its subsidiary,
CF&I Steel, L.P., 1612 E. Abriendo, Pueblo, Colorado on Friday, April
28, 1995, at 9:30 Mountain Time, and any adjournments thereof.
Only stockholders of record at the close of business on March 10,
1995, are entitled to notice of, and to vote at, the meeting. At the
close of business on that date, the Corporation had 19,421,614 shares of
Common Stock, $0.01 par value per share ("Common Stock"), outstanding.
Holders of Common Stock are entitled to one vote for each share of
Common Stock held. There are no cumulative voting rights.
When a proxy in the form accompanying this proxy statement is
properly executed and returned, the shares represented will be voted at
the meeting in accordance with the instructions specified in the proxy.
If no instructions are specified, the shares will be voted FOR Proposal
1 in the accompanying Notice of Annual Meeting of Stockholders, and such
votes will be counted toward determining a quorum. Shares held of record
by the Trustees of the Corporation's Employee Stock Ownership Plan Trust
(the "ESOP") will be voted by the Trustees in accordance with
instructions received from ESOP participants or, if no such instructions
are received, FOR Proposal 1. Any person giving a proxy in the form
accompanying this proxy statement has the power to revoke it at any time
before its exercise. A stockholder may revoke a proxy by (i) written
notice of such revocation to the Secretary of the Corporation at the
above address; (ii) a later-dated proxy received by the Corporation; or
(iii) attending the meeting and voting in person. Attendance at the
meeting will not by itself revoke a proxy.
Each share of Common Stock outstanding on the record date is
entitled to one vote per share at the Annual Meeting of Stockholders.
Shares of Common Stock represented in person or by proxy at the Annual
Meeting (including abstentions and broker non-votes) will be tabulated
by the inspector of election appointed for the meeting and will be
counted in determining that a quorum is present. A plurality of the
votes cast at the Annual Meeting is required to elect the directors.
Proxies withholding authority to vote for a nominee will be treated as
votes cast. Broker non-votes will not be treated as votes cast and
therefore, will not be counted in calculating a plurality.
The approximate date on which this proxy statement and the
accompanying proxy card are being mailed to the Corporation's
stockholders is March 20, 1995. Solicitation material will be furnished
to brokerage houses, fiduciaries and custodians holding shares in their
names that are beneficially owned by others to forward to such
beneficial owners. Original solicitation of proxies by mail may be
supplemented by one or more telephone, telegram or personal
solicitations by
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<PAGE>
directors, officers or employees of the Corporation. No additional
compensation will be paid for any such services. Except as described
above, the Corporation does not intend to solicit proxies other than by
mail. Costs of solicitation will be borne by the Corporation.
PROPOSAL 1: NOMINATION AND ELECTION OF CLASS A DIRECTORS
Nominees
The Corporation has a classified Board consisting of three Class A
directors, Messrs. Fulton, Keener* and Sproul; three Class B directors,
Messrs. Emerson, Gendron and Swindells**; and three Class C directors,
Messrs. Boklund, Landis and Maggetti. The Class B and C directors serve
until the Annual Meetings of Stockholders to be held in 1996 and 1997,
respectively, and until their successors are elected and qualified. At
each Annual Meeting of Stockholders, directors are elected for a term of
three years to succeed those directors whose terms expire at that annual
meeting.
The nominees for election as Class A directors are V. Neil Fulton,
Robert W. Keener and John A. Sproul, all of whom are members of the
present Board. The Class A directors to be elected at the 1995 Annual
Meeting will serve until the Annual Meeting of Stockholders in 1998 and
until their successors are elected and qualified.
Unless authority to vote for a director or directors is withheld,
the accompanying proxy, if properly executed and returned, will be voted
for the election of the Class A nominees named below. If authority to
vote for one or more of the nominees is withheld, the withheld votes
will not be cast for any of the other nominees unless the stockholder
otherwise indicates on the proxy. If any nominee is unable or unwilling
to serve as a director, proxies may be voted for such substitute
nominees as may be designated by the Board. The Board has no reason to
believe that any of the nominees will be unable or unwilling to serve as
a director if elected.
* Mr. Keener was elected to the Board in January 1994 to fill the
vacancy left by the death of Mr. Alan C. Furth.
** Mr. Swindells was elected to the board in July 1994 to fill the
vacancy left by the resignation of Mr. Robert J. Sikora.
The following table sets forth information with respect to each person
nominated for election as a Class A director and each other director,
including their names and ages as of February 22, 1995, business
experience during the past five years and directorships in other
corporations.
Principal Occupation and Director
Name Certain Other Directorships Age Since
- ---- --------------------------- --- ------
CLASS A (NOMINEES FOR TERMS OF OFFICE TO EXPIRE IN 1998):
V. Neil Fulton Mr. Fulton was the Corporation's 66 1983
Secretary and Treasurer from 1970 to
April 1989. Mr. Fulton became a
director in April 1983 and was Vice
President of Finance and Chief
Financial Officer of the Corporation
from October 1980 until February 1991.
He continued as an employee of the
Corporation until December 31, 1992.
From January 1993 to the present Mr.
Fulton has been retired.
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<PAGE>
Principal Occupation and Director
Name Certain Other Directorships Age Since
- ---- --------------------------- --- ------
Robert W. Keener Mr. Keener was employed by Northwest 63 1994
Pipeline Corporation from 1973 to
January 1994. Northwest Pipeline
Corporation operates a natural gas
transmission system in the Western
United States. In 1975 he became Vice
President - Gas Supply, and was named
Senior Vice President - Gas Supply and
Operations in 1980. He served as
President and Chief Operating Officer
from 1983 to 1992, and as Chief
Executive Officer from 1992 until his
retirement in January 1994. He is a
former director and executive committee
member of Key Bank Corporation of Utah.
John A. Sproul Mr. Sproul was an Executive Vice 70 1989
President of Pacific Gas and Electric
Company from 1977 to 1989. During most
of that period, he was also Chairman of
the Board and Chief Executive Officer
of Pacific Gas Transmission Company, an
interstate pipeline company. Since
1989 Mr. Sproul has been retired.
CLASS B (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1996):
C. Lee Emerson Mr. Emerson was the Chairman of the 77 1976
Board of Directors of the
Corporation from May 1982 through
January 1992. He formerly served as
President and Chief Executive Officer
of the Corporation. Since 1992 he has
been retired.
Edward C. Gendron Mr. Gendron was the President, Chief 66 1976
Operating Officer and a director of
Midland-Ross Corporation from 1976 to
April 1983. In April 1983, Mr. Gendron
became Vice Chairman of the Board of
Directors and Chief Administrative
Officer of Midland-Ross Corporation,
positions he held until August 1986.
Mr. Gendron has been President of E. C.
Gendron Enterprises, a financial
consulting firm, since 1986.
William Swindells Mr. Swindells is the Chairman and Chief 64 1994
Executive Officer of Willamette
Industries, Inc., a diversified
wood products company headquartered in
Portland, Oregon, a position he has
held since 1985. He is currently a
director of Standard Insurance Company
and Airborne Express Company, and
serves as Chairman of the Board of
Trustees of Willamette University and
as a trustee of Oregon Health Science
University Foundation and the Oregon
Historical Society.
<PAGE>
<PAGE>
Principal Occupation and Director
Name Certain Other Directorships Age Since
- ---- --------------------------- --- ------
CLASS C (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1997):
Thomas B. Boklund Mr. Boklund is the Chairman of the 55 1982
Board of Directors, Chief Executive
Officer and President of the
Corporation. He was Chief Operating
Officer from May 1982 to July 1985,
became Chief Executive Officer in
August 1985, and Chairman of the Board
of Directors in February 1992. He also
served as President from May 1982 to
February 1992, and was re-appointed to
that office upon the retirement of Mr.
Sikora in April 1994. He is currently
a director of Paragon Trade Brands,
Inc., a manufacturer of private label
infant disposable diapers.
Richard G. Landis Mr. Landis was President, Chairman 74 1987
and Chief Executive Officer of the Del
Monte Corporation, a food and beverage
company, from 1971 to November 1981 and
President of the Pacific area of R.J.
Reynolds Industries, Inc., a tobacco,
food, beverage and transportation
conglomerate, from November 1981 until
his retirement in July 1983. Mr.
Landis served as Chancellor of the
University of LaVerne from July 1984 to
October 1985. Mr. Landis served as a
director of Potlatch Corporation, a
diversified forest products company,
from 1973 until December 1990.
James A. Maggetti Mr. Maggetti was employed by Kaiser 70 1987
Steel Corporation from 1955 until his
retirement in December 1983, where his
last position was as a Vice President
responsible for fabricating operations.
He was Chairman of the Board of Napa
Valley Bank from 1984 through April
1992 and Vice Chairman of the Board
of Napa Valley Bancorp, the bank's
holding company, from April 1982
through December 1991. He is
currently a director of Napa Valley
Bank and has been a director of
Westamerica Bancorporation since
July 1993.
DIRECTORS' COMPENSATION, MEETINGS AND STANDING COMMITTEES
The Board has standing Executive, Audit and Compensation
committees. The Board does not have a nominating committee. Directors
who are not full-time employees of the Corporation receive an annual fee
of $21,000, plus $1,200 for each Board and committee meeting attended
and reimbursement of expenses. Directors who are full-time employees of
the Corporation do not receive fees for serving on the Board or on
committees.
The Corporation has a deferred compensation plan for directors, by
which all former and present outside directors of the Corporation who
have served in the capacity of director since the 1986 Annual Meeting of
Stockholders will be paid a benefit by the Corporation of $6,000 per
year for each year served as an outside director up to a maximum of ten
years. This benefit is
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to be paid commencing with the calendar year following which such person
ceases to be a director of the Corporation and payable to either the
director, the director's estate, or other designated beneficiary.
During 1994, the Board held four meetings, the Audit Committee held
two meetings and the Compensation Committee held four meetings. Each
director attended more than 75% of the aggregate number of Board
meetings and meetings of committees of which he is a member which were
held during the period for which he was a director.
The Executive Committee may exercise all the authority of the
Board, subject to actions of the full Board and except as otherwise
provided by the Corporation's restated certificate of incorporation, the
Corporation's bylaws or applicable law. The members of the Executive
Committee are Messrs. Boklund, Emerson and Fulton.
The Audit Committee reviews services provided by the Corporation's
independent auditors, reviews with them the results of their audit, the
adequacy of internal accounting controls, the quality of financial
reporting and any recommendations they may have, and makes
recommendations to the Board concerning their engagement or discharge.
The members of the Audit Committee are Messrs. Emerson, Fulton, Gendron,
Keener, Landis, Maggetti, Sproul and Swindells.
The Compensation Committee establishes the general compensation
policies of the Corporation and the compensation plans and specific
compensation levels for executive officers, subject to approval of the
board. The members of the Compensation Committee during 1994 were
Messrs. Emerson, Fulton, Gendron, Keener, Landis, Maggetti, Sproul and
Swindells.
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PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of shares of the Common Stock as of February 28,
1995, by (i) each director, director nominee and named executive
officer; (ii) each person known to the Corporation to be a beneficial
owner of more than 5% of the outstanding shares of Common Stock; and
(iii) all current directors and executive officers as a group. The
persons named in the table have sole voting and investment power with
respect to all shares shown as beneficially owned by them, subject to
community property laws where applicable and to the information
contained in the other footnotes to the table.
Number Percentage
Name of Shares of Class
----- --------- ----------
Thomas B. Boklund (1)(2) 79,357(3) *
Joe E. Corvin (2) 43,889(3) *
C. Lee Emerson (1) 90,565 *
V. Neil Fulton (1) 6,568(4) *
Edward C. Gendron (1) 2,000 *
Edward J. Hepp, Jr. (2) 1,349(4) *
Robert W. Keener (1) -
Richard G. Landis (1) 5,600 *
James A. Maggetti (1) 6,000 *
Robert R. Mausshardt (2) 216(3) *
James R. McCaughey (2) 5,338 *
Robert J. Sikora (2)(6) 44,624 *
John A. Sproul (1) 1,000 *
William Swindells (1) 5,000 *
Oregon Steel Mills, Inc.
Employee Stock Ownership Plan Trust
1000 SW Broadway, Suite 2200
Portland, Oregon 97205 2,440,209 12.6%
Scudder, Stevens & Clark, Inc. (7)
345 Park Avenue
New York, New York 1,829,100 9.4%
All directors and executive
officers as a group
(19 persons) 361,073(5) 1.9%
- ---------
* Less than 1% of the outstanding Common Stock.
(1) Member of the Board of Directors.
(2) Named executive officer.
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(3) All shares are held by the ESOP for Messrs. Boklund, Corvin and
Mausshardt. Participants in the ESOP have the power to vote these shares
under the terms of the ESOP, but they do not have investment power with
respect to such shares.
(4) Includes 773 shares and 1,049 shares held by the ESOP for Messrs.
Fulton's and Hepp's accounts, respectively. Messrs. Fulton and Hepp have
the power to vote these shares under the terms of the ESOP, but do not
have investment power with respect to such shares.
(5) Includes 234,871 shares held by the ESOP for the accounts as to
which the respective beneficial owners have the power to direct the vote
under the terms of the ESOP, but they do not have investment power with
respect to such shares.
(6) Mr. Sikora retired in April 1994 and resigned as a director.
(7) Based on the information obtained from a Schedule 13G dated February
3, 1995 filed by Scudder, Stevens & Clark, Inc. ("Scudder") on behalf of
itself and Scudder, Stevens & Clark of Canada Ltd. _ Scudder, Stevens &
Clark du Canada Ltee. with the Securities and Exchange Commission:
Scudder has the sole power to dispose of 1,829,100 shares and the sole
and shared power to vote 838,100 and 133,800, respectively, of such
shares. The address of Scudder, Stevens & Clark of Canada Ltd. -
Scudder, Stevens & Clark du Canada Ltee. is 220 Bay Street - Suite 802,
Toronto, Ontario, Canada.
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EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to or accrued
by the Corporation and its subsidiaries for the Chief Executive Officer,
each of the four most highly paid executive officers of the Corporation
and its subsidiaries as of December 31, 1994, and other individuals
fitting such description, but not employed as of December 31, 1994.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION(7) ALL OTHER COMPENSATION(7)
------------------------------------------------------------------------------------
Name and Other Annual ESOP Thrift Plan
Principal Position Year Salary Bonus(1) Compensation Contribution(2) Contribution(3) Total
- ------------------ --- ------ -------- ------------ -------------- -------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas B. Boklund 1994 $439,584 $ 16,922 _ $ 3,456 _ $ 3,456
Chairman of the 1993 400,000 42,200 _ 5,354 _ 5,354
Board, President 1992 395,000 108,033 _ 15,532 _ 15,532
and CEO
Joe E. Corvin 1994 $229,584 $ 8,816 _ $ 3,456 _ $ 3,456
Senior Vice President 1993 189,650 17,777 _ 4,489 _ 4,489
and Chief Operating 1992 151,303 41,142 _ 13,124 _ 13,124
Officer
Edward J. Hepp, Jr. 1994 $190,000 $ 7,334 _ $ 3,456 $924 $ 4,380
Vice President, 1993 175,000 17,020 $ 33,601(4) 4,385 847 5,232
Commercial 1992 146,250 39,933 66,797(4) 15,099 873 15,972
Robert R. Mausshardt 1994 $195,000 $ 7,527 _ $ 3,456 $924 $ 4,380
Vice President of 1993 195,000 20,573 _ 4,927 847 5,774
Marketing, Tubular 1992 193,125 52,840 _ 15,532 _ 15,532
Products
James R. McCaughey 1994 $195,000 $ 10,291 $ 26,874(6) $ 3,456 $924 $ 4,380
Vice President and 1993 195,000 20,573 _ 4,927 847 5,774
General Manager, 1992 193,125 52,840 _ 15,532 794 16,326
Napa Facility
Robert J. Sikora (5) 1994 $ 87,500 $2,832 $202,393(5) _ $462 $ 462
Retired 1993 240,000 25,320 _ $ 5,354 847 6,201
1992 232,500 63,429 _ 15,532 636 16,168
- ------------
<FN>
(1) Amounts earned pursuant to the Corporation's Profit Participation Plan.
(2) Value of stock contributions made by the Corporation on behalf of the named executive to the Employee Stock Ownership
Plan Trust, as determined at the time of such contribution.
(3) Matching contributions made by the Corporation on behalf of the named executive to the Corporation's Thrift Plan.
(4) Amounts reimbursed for the payment of relocation expenses and related taxes, not expected to reoccur.
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<PAGE>
(5) Mr. Sikora was the President and Chief Operating Officer of the Corporation until his retirement in April 1994. His
retirement severance included $160,000 of severance pay, $24,378 of accrued unused vacation, and $18,015 of health
benefits, club memberships and other payments.
(6) Payment of accrued unused vacation which is not expected to reoccur.
(7) Pension and SERP benefits accrued in 1994 are not included in this Summary Compensation Table.
</FN>
</TABLE>
DEFINED BENEFIT RETIREMENT PLANS
The Corporation's pension plans are defined benefit plans qualified
under section 401(a) of the Internal Revenue Code (the "Code").
Executive officers and most other domestic employees of the Corporation
are eligible to participate in the Oregon Steel Mills, Inc. Pension Plan
(the "Plan") or similar plans. Normal retirement is at age 65.
The amount of an employee's pension benefit and the resulting
monthly payments an employee receives upon retirement are based upon the
level of the employee's prior annual compensation, the employee's number
of years of benefit service and other factors. The employee's annual
pension benefit is equal to the sum of:
(i) for each full or partial year of benefit service prior to
January 1, 1994, 1% of the first $22,800 of Past Service Compensation,
plus 1.6% of Past Service Compensation in excess of $22,800. ("Past
Service Compensation" is the employee's average compensation for the
years 1991, 1992 and 1993); plus,
(ii) for each full or partial year of benefit service beginning on
or after January 1, 1994, 1.2% of the employee's compensation during
such year up to the employee's "Covered Compensation" amount for the
year, plus 1.7% of the employee's compensation in excess of such
"Covered Compensation" amount. ("Covered Compensation" for each year is
determined by the employee's age and is taken from a Social Security
Covered Compensation Table published annually in accordance with IRS
regulations. For any given age, the Covered Compensation amount in the
Table represents the average of the Social Security taxable wage bases
over the 35-year period ending in the year someone that age will reach
Social Security normal retirement age.)
In addition to the Plan, the Corporation initiated effective May 1,
1994 a Supplemental Retirement Plan (the "SERP") to supplement the Plan
and ESOP and make up for benefits which were lost because of the dollar
limits imposed by sections 401(a)(17) and 415 of the Code on benefits
and contributions under those plans. The SERP results in
highly-compensated employees receiving retirement benefits calculated on
the same basis as other employees. Employees become eligible for
benefits under the SERP whenever: (a) the employee has service after the
effective date; (b) the employee becomes eligible for benefits under the
Plan or an allocation under the ESOP; and (c) the employee's benefit or
allocation is limited by sections 401(a)(17) of the Code or by the
dollar amount under section 415 of the Code, or both. The benefit paid
under the SERP is the difference between the Plan benefit calculated as
described above and the amount that would have been paid under the Plan
in the absence of the dollar limits in Code sections 401(a)(17) and 415;
plus the difference between the amount of ESOP benefit allocated to the
participant under the ESOP after 1988 and the amount that would have
been allocated in the absence of the dollar limits in Code sections
401(a)(17) and 415, plus dividends that would have been paid on such
shares after May 1994.
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Such benefit payments are made at the time that the benefits under the
Plan or ESOP, as applicable, are paid, or earlier upon an adverse IRS
ruling. The Compensation Committee of the Board of Directors may amend
or terminate the SERP at any time so long as rights already accrued at
the time of such amendment or termination are preserved.
The following Pension Plan Table shows the covered compensation
portion of the estimated annual benefits payable upon retirement at age
65 (including benefits under the SERP) in the specified compensation and
years of service classifications.
PENSION PLAN TABLE
(QUALIFIED PLAN PLUS SERP)(3)
Years of Service
Remuneration (2) 15 20 25 30 35
- --------------- -- -- -- -- --
$125,000 $ 28,875 $ 38,500 $ 48,125 $ 57,750 $ 67,375
$150,000 35,250 47,000 58,750 70,500 82,250
$175,000 41,625 55,500 69,375 83,250 97,125
$200,000 48,000 64,000 80,000 96,000 112,000
$225,000 54,375 72,500 90,625 108,750 126,875
$250,000 60,750 81,000 101,250 121,500 141,750
$300,000 73,500 98,000 122,500 147,000 171,500
$350,000 86,250 115,000 143,750 172,500 201,250
$400,000 99,000 132,000 165,000 198,000 231,000
$450,000 111,750 149,000 186,250 223,500 260,750
$500,000 124,500 166,000 207,500 249,000 290,500
$550,000(1) 137,250 183,000 228,750 274,500 320,250
(1) Represents 120% of the maximum compensation for the year ended
December 31, 1994.
(2) Based on the estimated straight-life annuity amounts for future
service using 1995 as the first year of benefit service. Social Security
Covered Compensation as defined above is assumed to be $40,000.
(3) Does not include the ESOP benefit pursuant to the SERP which is not
determined by years of service and final compensation.
The portion of an employee's benefit attributable to years of
benefit service in excess of 35 years, is limited to 1.0% of his Past
Service Compensation for purposes of (i) above; and to 1.2% of his
annual compensation for purposes of (ii) above. Notwithstanding the
foregoing, an employee's compensation taken into account for any Plan
year after 1993 shall not exceed $150,000 (or such other amount as may
be prescribed for the relevant plan year by the Secretary of the
Treasury pursuant to section 401(a)(17) of the Code). As previously
described, the SERP will pay benefits on the additional compensation
above that amount.
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The employee's annual pension benefit is reduced to the extent of
the annuity value of: (i) any portion of the employee's account balances
under the Corporation's Profit Participation Plan and the ESOP as of
January 1, 1981 attributable to allocations on the basis of compensation
in excess of the Social Security taxable wage base; and (ii) any
retirement benefits paid to the employee under the Corporation's Pension
Plan for Union Employees which was terminated January 23, 1984. The Plan
benefits are not subject to deduction for social security.
For each named executive officer listed on the Summary Compensation
Table except Mr. Sikora, the applicable compensation each year is the
sum of the "Salary" and "Bonus" compensation shown, limited as described
above. Upon their retirement, assuming retirement at age 65 and no
increase in current rates of annual compensation, and based upon years
of service at December 31, 1994, Messrs. Boklund, Corvin, Hepp,
Mausshardt, and McCaughey would receive lifetime annual payments under
the Plan and pension benefits pursuant to the SERP combined of $237,650,
$122,562, $58,651, $47,706, and $24,058, respectively. Their credited
years of service as of December 31, 1994 are twenty-one, twenty-five,
three, ten and seven years, respectively. In addition, ESOP benefits
pursuant to the SERP would include dividends and the equivalent value of
shares of common stock accrued through December 31, 1994 of $66,660, $0,
$899, $6,052, and $3,301, respectively. Future ESOP benefit additions,
if any, would be derived from discretionary annual ESOP allocations set
by the Board of Directors.
Effective April 28, 1994, Mr. Sikora retired from his employment
with the Corporation and resigned from the Board of Directors. In
addition to compensation included in the Summary Compensation Table, the
Corporation agreed to pay to Mr. Sikora $80,000 in 1995, a retirement
supplement of $42,725 per year for 1995 through 2000, and for
approximately 4 years, the cost of health care benefits, currently
$7,600 per year, as though Mr. Sikora were a continuing employee.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL ARRANGEMENTS
The Corporation entered into employment agreements (the "Employment
Agreements") with certain of its key employees, including Messrs.
Boklund and Mausshardt ("Employees") in January 1989, and with Messrs.
McCaughey and Hepp (also "Employees") in February 1991 and September
1991, respectively. Mr. Sikora had a similar agreement with the
Corporation until the time of his retirement. Each Employment Agreement
is effective until June 1 of each year, with (a) automatic one-year
extensions until the Employee reaches the age of 65 unless either the
Corporation or the Employee provides prior notice that the Employment
Agreement will not be extended, and (b) an automatic three-year
extension in the event of a change of control of the Corporation (a
"Change in Control"). Change in Control is defined to include, among
other things, the transfer of 25% or more of the Corporation's voting
securities to any person or entity other than the ESOP or the election
of a majority of directors who were not nominated by the then current
Board. The Employment Agreements provide, among other things, for
severance compensation in the event that an Employee's employment is
terminated by the employer without cause or by the Employee with good
reason, all as defined in the Employment Agreements, during the
three-year period following a Change in Control. Such severance
compensation is to be calculated as the sum of (i) three times the
Employee's annual base salary as of the date of the Change in Control,
(ii) the four most recent quarterly cash distributions to such Employee
from the Corporation's Profit Participation Plan, and (iii) an amount
equal to the lump sum present actuarial value of the excess, if any, of
the normal retirement allowance to which the Employee would have been
entitled under the Pension Plan,
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assuming that the Employee continued as an active participant under such
plan, without change in his rate of annual pay, until the earlier of his
65th birthday or the tenth anniversary of the date of the Change in
Control, over the normal retirement allowance to which the Employee is
actually entitled under such plan as of the date of termination. Under
the Employment Agreements, any terminated Employee would also receive
full base salary through the date of such termination of employment,
reimbursement for any legal fees or expenses incurred by the Employee in
seeking to enforce the Employment Agreement and certain non-cash
employee benefits as specified in the Employment Agreement.
The Corporation has entered into Indemnification Agreements with
each director and certain executive officer(s) (an "Indemnified
Person"). Each agreement provides that the Corporation shall indemnify
the Indemnified Person if and when the Indemnified Person is or was a
party or is threatened to be made a party to any action, suit,
arbitration, investigation, administrative hearing or any other
proceeding (a "Proceeding") because of the Indemnified Person's status
or former status as a director, officer or other agent of the
Corporation or because of anything done or not done by the Indemnified
Person in such capacity, against all expenses and liabilities actually
and reasonably incurred by the Indemnified Person or on the Indemnified
Person's behalf in connection with the investigation, defense,
settlement or appeal of such Proceeding. The Corporation will advance to
the Indemnified Person all reasonable defense expenses incurred in
defense of any Proceeding. Further, each agreement provides that upon
the acquisition of 30% or more of the outstanding shares of Common
Stock, other than by the Corporation or the ESOP, without approval by a
majority of the Corporation's Board prior to such acquisition, the
Corporation will obtain and maintain over the term of the agreement an
irrevocable standby letter of credit on terms satisfactory to the
Indemnified Person in an appropriate amount (but not less than $500,000)
naming the Indemnified Person as the beneficiary in order to secure the
Corporation's obligation under the agreement. Finally, each agreement
provides that the Corporation must maintain director and officer
insurance in the amount of at least $2.0 million with coverage at least
comparable to its then current insurance for the Indemnified Person for
the term of the agreement. The Corporation may elect to not purchase the
required insurance if the insurance is not reasonably available or if,
in the reasonable business judgment of the directors of the Corporation,
either the premium cost for such insurance is disproportionate to the
amount of coverage or the coverage provided by such insurance is so
limited that there is insufficient benefit from such insurance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1994 the Compensation Committee members were John A. Sproul,
Chairman, C. Lee Emerson, V. Neil Fulton, Edward C. Gendron, Robert W.
Keener, Richard G. Landis, James A. Maggetti and William Swindells. Mr.
Emerson was Chairman of the Board and an employee of the Corporation
through January 1992. Mr. Fulton was the Corporation's Vice President of
Finance and Chief Financial Officer until February 1991, and was an
employee of the Corporation through December 31, 1992.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board establishes the general
compensation policies of the Corporation and the compensation plans and
specific compensation levels for executive officers, subject to approval
of the board. The Compensation Committee is composed of eight
independent, non-employee directors.
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COMPENSATION PRINCIPLES
The Corporation is committed to providing a compensation program
that helps attract and retain the best people available. To ensure that
compensation is competitive, the Corporation regularly compares its pay
practices with those of comparable companies and sets pay parameters
based on this review. The Corporation has maintained the philosophy that
compensation of all employees should be directly and materially linked
to operating and financial performance. To achieve this linkage,
employee compensation is heavily weighted towards compensation paid on
the basis of pre-tax profit. The Corporation has also established stock
ownership as part of non-union employee compensation to promote the
alignment of employee long range interests with those of the
stockholders. In addition, the Corporation believes that whenever
possible the compensation and benefit program provided to the executive
officers should be based on similar principles as for all other
non-union employees. These principles align all employee compensation
with the Corporation's objectives, operating strategy, management
initiatives and financial performance. The program:
(Bullet) Attracts and retains key individuals critical to the
long-term success of the Corporation.
(Bullet) Supports a performance-oriented environment in which everyone
is working together in pursuit of the Corporation's goals.
(Bullet) Encourages the Corporation's long-term growth and
profitability and the enhancement of stockholder value.
COMPARATIVE EVALUATION
The Corporation seeks to align total compensation for its executive
officers with that of comparable executive positions in other
manufacturing companies and other steel companies.
To assist it in doing so, in 1993 the Compensation Committee
commissioned a study of executive compensation by an independent
compensation consulting firm (the "Study"). The Study focused on total
compensation for the 11 most senior executive positions. In preparing
the Study, the consulting firm: (a) reviewed extensive background data
on the Corporation, including financial reports and forecasts,
compensation data, organizational charts, business plans, annual reports
and position descriptions; (b) conducted individual interviews with the
incumbents of the positions covered by the Study; (c) reviewed the
compensation practices of eleven steel companies as described in their
proxy statements to stockholders, including 5 of the 6 companies
included in the S&P Steel Index illustrated in the Performance Graph;
and (d) reviewed competitive practices and pay levels in over 200
durable goods manufacturing companies (including steel companies)
surveyed by the consultant.
COMPENSATION ELEMENTS
There are three elements in the Corporation's executive officer
compensation program, all determined by individual performance and
corporate profitability. Those elements and the relevant conclusions of
the Study are as follows:
BASE SALARY COMPENSATION
The Compensation Committee adjusts base salary levels within
pre-established ranges to reflect the responsibilities and performance
of individuals. The responsibilities assumed, the skills and experience
required by the job, and the performance of the individual are
relatively equal considerations in determining base salary. The Study
concluded, among other things, that the
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Corporation's base salaries for the senior executive positions were in
aggregate 4% below competitive levels, and that group benefit and
perquisite values were consistent with competitive levels. The Study
noted that in the past the success of the profit sharing plan and the
capital accumulation that occurred under the ESOP have historically
offset the salary level disparity and successfully provided both short
and long-term incentives.
ANNUAL INCENTIVE COMPENSATION
As noted above, the Corporation believes that all employees share
in the responsibility for achieving profits. Accordingly, the
Corporation has discretionary Profit Participation Plans under which it
distributes quarterly to most of its U.S. employees with over three
months of employment 12% to 20%, depending on location, of its domestic
pre-tax earnings after adjustments for certain non-operating items. Each
employee, including executive officers, receives a share of the
distribution based on the level of the employee's base compensation
compared with the total base compensation of all eligible employees. The
Corporation may modify, amend or terminate the plans at the discretion
of the Board of Directors, subject to the terms of various labor
agreements.
EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
The Corporation has an ESOP for qualified employees (generally
those employees with six months of employment) of Oregon Steel Mills,
Inc. and its subsidiaries, Napa Pipe Corporation and Oregon Steel Mills
- - Fontana Division, Inc. Annual contributions to the ESOP, which are at
the discretion of the Board, are based upon the financial performance of
those entities. The annual contribution may be in cash or Common Stock
but historically has been Common Stock. Shares are allocated to the
accounts of qualified employees, including executive officers, at the
end of each year in proportion to each eligible employee's total
eligible compensation compared with the total eligible compensation of
all eligible employees. As noted above, the purpose of this program is
to provide additional incentive for employees to work to maximize
stockholder value. The ESOP program utilizes vesting periods and
diversification features that encourage employees to retain ownership of
the Corporation's Common Stock and continue in the employ of the
Corporation.
In addition to the Profit Participation and ESOP plans, the Study
recommended that consideration be given to various supplemental
retirement and other incentive plans. The Compensation Committee
accepted in principal the Study's recommendations as to supplemental
retirement plans, and initiated in 1994 the SERP. As discussed
previously under the heading "Defined Benefit Retirement Plans", the
SERP supplements pension and ESOP benefits, making up for benefits which
were lost because of the dollar limits imposed by sections 401(a)(17)
and 415 of the Code.
CHIEF EXECUTIVE OFFICER ("CEO") COMPENSATION
The Compensation Committee has used the same policies with respect
to the compensation of Mr. Boklund. In determining Mr. Boklund's base
salary for 1994, the Committee reviewed the Study and Mr. Boklund's
performance and responsibilities. The Committee noted the additional
responsibilities undertaken by Mr. Boklund in 1994, including assuming
the office of President, overseeing the tremendous growth in capacity,
and developing and implementing the capital improvement program, and
determined to increase his base salary to $450,000. He participates in
the profits of the Corporation and the ESOP under the same provisions
and formulas as other domestic employees of the Corporation.
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Since 1992 the Corporation has been in a period of dramatic growth
and integration of newly-acquired facilities. 1993 was the first full
year with Camrose Pipe Company, the 60% owned Canadian subsidiary which
was acquired in June of 1992. 1994 was the first full year with CF&I
Steel, L.P., the Colorado steel-making subsidiary formed in March 1993,
which manufactures rail, rod, bar, wire and seamless tube products.
Compared to 1992, sales have increased 110%, and tons shipped have grown
by 153%, to $836 million and 1.7 million tons, respectively. However, in
keeping with the compensation principles stated above, and since profits
of the Corporation were lower in this period of transition, Mr.
Boklund's annual incentive compensation declined 61% from 1992 to 1993,
and another 57% in 1994. This resulted in a 14% reduction of his total
compensation in 1993, and a net increase of only 3% in 1994, including
the increase in base salary noted above. The Study concluded that prior
to the 1994 increase, Mr. Boklund's 1993 base salary was 94% of average
competitive base salaries in other durable goods manufacturers, and his
total cash compensation was 89% of average competitive total cash
compensation in other durable goods manufacturers.
The Corporation does not have any "Excessive Employee Remuneration"
as defined in section 162(m) of the Code.
COMPENSATION COMMITTEE DURING 1994
John A. Sproul, Chairman
C. Lee Emerson
V. Neil Fulton
Edward C. Gendron
Robert W. Keener (1)
Richard G. Landis
James A. Maggetti
William Swindells (2)
(1) Appointed in January 1994 to replace Mr. Furth.
(2) Appointed upon his election to the Board in July 1994.
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PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total
stockholder return of the Corporation's Common Stock, based on the
market price of Common Stock and assuming reinvestment of dividends,
with the cumulative total return of companies on the Standard and Poors'
500 Stock Index ("S&P 500 Index") and the Standard & Poors' Steel Index
("S&P Steel Index").
STOCKHOLDER RETURN
- ------------------
MEASUREMENT PERIOD OREGON S&P 500 S&P STEEL
(FISCAL YEAR COVERED) STEEL INDEX INDEX
- -------------------- ------- ------- ----------
MEASUREMENT POINT - 12/31/89 $100.00 $100.00 $100.00
FYE 12/31/90 202.17 96.89 84.10
FYE 12/31/91 183.58 126.29 103.33
FYE 12/31/92 224.45 135.90 135.17
FYE 12/31/93 226.57 149.54 177.79
FYE 12/31/94 145.23 151.56 172.96
- ----------
(a) Dividends are reinvested at the end of the month in which they are
paid.
(b) Assumes $100 invested in Oregon Steel, the S&P 500 Index companies
and the S&P Steel Index companies on December 31, 1989.
INDEPENDENT ACCOUNTANTS
During the fiscal year 1994, Coopers & Lybrand L.L.P. served as
independent accountants to the Corporation. They have been appointed as
the Corporation's independent accountants for the fiscal year 1995 by
the Board of Directors. Representatives of Coopers & Lybrand L.L.P.
will be present at the Annual Meeting and will be available to respond
to appropriate questions. They do not expect to make any statement but
will have the opportunity to make a statement if they desire to do so.
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OTHER MATTERS
The Board knows of no other matters to be brought before the Annual
Meeting. However, if any other business properly comes before the
meeting, the persons named in the accompanying form of proxy will vote
or refrain from voting thereon in accordance with their judgment
pursuant to the discretionary authority given them in the proxy.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Stockholder proposals submitted for inclusion in the 1996 proxy
materials and consideration at the 1996 Annual Meeting of Stockholders
must be received by the Corporation by November 19, 1995. Any such
proposal should comply with the rules promulgated by the Securities and
Exchange Commission governing stockholder proposals submitted for
inclusion in proxy materials.
LaNelle F. Lee
Secretary
Portland, Oregon
March 20, 1995
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OREGON STEEL MILLS, INC.
PROXY STATEMENT
Annual Meeting of Stockholders
Errata
The following addition should be made to the Principal Stockholders
list on Page 6.
Number Number
Name of Shares of Shares
State of Wisconsin
Investment Board
PO Box 7842
Madison, WI 53707 1,324,000 6.8%
This information is based on the information obtained from a
Schedule 13G filing dated February 13, 1995.
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OREGON STEEL MILLS, INC.
Annual Meeting -- April 28, 1995
PROXY SOLICITED BY BOARD OF DIRECTORS
The undersigned hereby appoints Thomas B. Boklund and L. Ray Adams,
and each of them, proxies with power of substitution to vote on behalf
of the undersigned all shares which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders of Oregon Steel Mills, Inc.
on April 28, 1995, and any adjournment thereof, with all powers that the
undersigned would possess if personally present, with respect to the
following:
1. Election of Class A Directors
[ ] FOR all nominees listed below (except as marked to the contrary
below) or, if any named nominee is unable to serve, for a
substitute nominee.
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
V. Neil Fulton, Robert W. Keener, John A. Sproul
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the line below.)
--------------- ---------------- ---------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE.
In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
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THE SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED AS SPECIFIED ON THE REVERSE HEREOF. IF NO SPECIFICATION IS MADE,
THIS PROXY WILL BE VOTED FOR PROPOSAL 1. THE PROXIES MAY VOTE IN THEIR
DISCRETION AS TO OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE
MEETING.
Date: _________________, 1995
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Signature or Signatures
Please date and sign exactly as name is imprinted hereon, including
designation as executor, trustee, etc., if applicable. When shares are
held jointly, each joint owner should sign. If a corporation, please
sign in full corporate name by the president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
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