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)
-----------------------
(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:
-------------------------------------------------------------
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):
-------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------
5) Total fee paid:
-------------------------------------------------------------
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
-------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
OREGON STEEL MILLS, INC.
------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------
TO BE HELD
APRIL 25, 1996
9:30 A.M. PACIFIC 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
Portland Rivergate Facility, 14400 N. Rivergate Boulevard, Portland,
Oregon, on Thursday, April 25, 1996, at 9:30 a.m. Pacific Time.
The meeting is being held for the following purposes:
1. To elect three Class B 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 1,
1996 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 15, 1996
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>
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 Portland Rivergate Facility,
14400 N. Rivergate Boulevard, Portland, Oregon on Thursday, April 25,
1996, at 9:30 a.m. Pacific Time, and any adjournments thereof.
Only stockholders of record at the close of business on March 1,
1996, 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, the Trustees
shall vote or take other action as they deem appropriate. 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 15, 1996. 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 direc-
1
<PAGE>
tors, 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 B 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 A and C
directors serve until the Annual Meetings of Stockholders to be held
in 1998 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 B directors are C. Lee
Emerson, Edward C. Gendron and William Swindells, all of whom are
members of the present Board. The Class B directors to be elected at
the 1996 Annual Meeting will serve until the Annual Meeting of
Stockholders in 1999 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 B 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.
The following table sets forth information with respect to each
person nominated for election as a Class B director and each other
director, including their names and ages as of February 15, 1996,
business experience during the past five years and directorships in
other corporations.
PRINCIPAL OCCUPATION AND DIRECTOR
NAME CERTAIN OTHER DIRECTORSHIPS AGE SINCE
- ----- --------------------------- --- -----
CLASS B (NOMINEES FOR TERMS OF OFFICE TO EXPIRE
IN 1999):
C. Lee Emerson Mr. Emerson was the Chairman of the 78 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 67 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.
2
<PAGE>
PRINCIPAL OCCUPATION AND DIRECTOR
NAME CERTAIN OTHER DIRECTORSHIPS AGE SINCE
- ----- --------------------------- --- -----
William Swindells Mr. Swindells is the Chairman of 65 1994
the Board of Directors of
Willamette Industries, Inc. a
diversified wood products company
headquartered in Portland, Oregon,
a position he has held since 1985.
Mr. Swindells formally served as
Chief Executive Officer of Willamette
Industries, Inc. from 1985 until
September 1995. 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.
CLASS A (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1998):
V. Neil Fulton Mr. Fulton was the Corporation's 67 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.
Robert W. Keener Mr. Keener was employed by Northwest 64 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 71 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.
3
<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 56 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
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 75 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 71 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. Mr. Maggetti
served as a director of Napa Valley
Bank from June 1971 until April 1995
and as a director of WestAmerica
Bancorporation from July 1993 until
April 1995.
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 to be
4
<PAGE>
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 1995, the Board held five meetings, the Audit Committee
held two meetings and the Compensation Committee held one meeting.
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 1995 were
Messrs. Emerson, Fulton, Gendron, Keener, Landis, Maggetti, Sproul and
Swindells.
5
<PAGE>
<TABLE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial ownership of shares of the Common
Stock as of February 15, 1996, 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.
<CAPTION>
NUMBER PERCENTAGE
NAME OF SHARES OF CLASS
---- ------------ ----------
<S> <C> <C>
L. Ray Adams (2) 2,908(4) *
Thomas B. Boklund (1)(2) 79,494(3) *
Joe E. Corvin (2) 31,543(3) *
C. Lee Emerson (1) 88,515 *
V. Neil Fulton (1) 6,568(4) *
Edward C. Gendron (1) 2,000 *
Edward J. Hepp, Jr. (2) 1,486(4) *
Robert W. Keener (1) 1,000
Richard G. Landis (1) 5,600 *
James A. Maggetti (1) 6,000 *
Robert R. Mausshardt (2) 353(4) *
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 2,301,870 11.9%
Scudder, Stevens & Clark, Inc. (6)
345 Park Avenue
New York, New York 10154 2,234,500 11.5%
State of Wisconsin (7)
PO Box 7842
Madison, WI 53707 1,344,300 6.9%
The Crabbe Huson Special Fund, Inc.,
and The Crabbe Huson Group, Inc. (8)
121 S.W. Morrison, Suite 1400
Portland, Oregon 97204 1,369,800 7.1%
All directors and
executive officers as a group
(18 persons) 342,483(5) 1.8%
- -------------
* Less than 1% of the outstanding Common Stock.
6
<PAGE>
(1) Member of the Board of Directors.
(2) Named executive officer.
(3) All shares are held by the ESOP for Messrs. Boklund and Corvin.
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 2,507 shares, 773 shares, 1,186 shares and 143 shares
held by the ESOP for the accounts of Messrs. Adams, Fulton, Hepp
and Mausshardt, respectively. Messrs. Adams, Fulton, Hepp and
Mausshardt 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.
(5) Includes 222,242 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) Based on the information obtained from an Amendment #2 to Schedule
13G dated February 7, 1996 filed by Scudder, Stevens & Clark, Inc.
("Scudder") with the Securities and Exchange Commission: Scudder
has the sole power to dispose of 2,234,500 shares and the sole and
shared power to vote 1,495,800 and 110,700, respectively, of such
shares.
(7) Based on the information obtained from an Amendment #1 to Schedule
13G dated February 1, 1996 filed by the State of Wisconsin
Investment Board with the Securities and Exchange Commission.
(8) Based on the information obtained from a Schedule 13G dated
February 13, 1996, filed by The Crabbe Huson Special Fund, Inc.,
and The Crabbe Huson Group, Inc. with the Securities and Exchange
Commission. The Crabbe Huson Special Fund, Inc. has the sole
power to dispose of and to vote 1,103,100 shares. The Crabbe
Huson Group, Inc. has the shared power to dispose of and to vote
266,700 shares.
7
/TABLE
<PAGE>
<TABLE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to or accrued by the Corporation and its subsidiaries for
the Chief Executive Officer and each of the four most highly paid executive officers of the Corporation and its
subsidiaries as of December 31, 1995.
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(6) ALL OTHER COMPENSATION(6)
----------------------------------------- ---------------------------------------------------
NAME AND OTHER ANNUAL ESOP THRIFT PLAN
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION CONTRIBUTION(2) CONTRIBUTION(3) SERP(4) TOTAL
- ------------------ ---- ------ -------- ------------ --------------- --------------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas B. Boklund 1995 $450,000 $ 28,676 - $ 1,986 $924 $4,242 $ 7,152
Chairman of the 1994 439,584 16,922 - 3,456 - - 3,456
Board, President 1993 400,000 42,200 - 5,354 - - 5,354
and CEO
Joe E. Corvin 1995 $240,000 $ 15,294 - $ 1,986 $924 $ 48 $ 2,958
Senior Vice President 1994 229,584 8,816 - 3,456 - - 3,456
and Chief Operating1993 189,650 17,777 - 4,489 - - 4,489
Officer
Edward J. Hepp, Jr. 1995 $218,750 $ 13,896 - $ 1,986 $924 $ 80 $ 2,990
Vice President, 1994 190,000 7,334 - 3,456 924 - 4,380
Commercial 1993 175,000 17,020 $33,601(5) 4,385 847 - 5,232
Robert R. Mausshardt 1995 $195,000 $ 12,426 - $ 1,986 $924 $ 398 $ 3,308
Vice President of 1994 195,000 7,527 - 3,456 924 - 4,380
Marketing, Tubular 1993 195,000 20,573 - 4,927 847 - 5,774
Products
L. Ray Adams 1995 $195,000 $ 12,426 - $ 1,986 $924 $ 26 $ 2,936
Vice President of 1994 190,834 7,347 - 3,456 924 - 4,380
Finance and Chief 1993 175,000 19,766 - 4,421 847 - 5,268
Financial Officer
- --------------
(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 paid under the Corporation's Supplemental Retirement Plan.
(5) Amounts reimbursed for the payment of relocation expenses and related taxes, not expected to reoccur.
(6) Pension benefits accrued in 1995 are not included in this Summary Compensation Table.
8
</TABLE>
<PAGE>
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. 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.
9
<PAGE>
<TABLE>
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.
<CAPTION>
PENSION PLAN TABLE
(QUALIFIED PLAN PLUS SERP)(3)
YEARS OF SERVICE
Remuneration (2) 15 20 25 30 35
---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$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
$550,000 137,250 183,000 228,750 274,500 320,250
$600,000(1) 150,000 200,000 250,000 300,000 350,000
(1) Represents 120% of the maximum compensation for the year ended December 31, 1995.
(2) Based on the estimated straight-life annuity amounts for future service using 1996 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.
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
10
</TABLE>
<PAGE>
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, 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, 1995, Messrs. Boklund, Corvin, Hepp,
Mausshardt and Adams would receive lifetime annual payments under the
Plan and pension benefits pursuant to the SERP combined of $243,448,
$128,044, $70,304, $48,236, and $87,732, respectively. Their credited
years of service as of December 31, 1995 are twenty-two, twenty-six,
four, eleven 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, 1995 of
$67,712, $3,002, $2,737, $6,942, and $1,637, respectively. Future ESOP
benefit additions, if any, would be derived from discretionary annual
ESOP allocations set by the Board of Directors.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL ARRANGEMENTS
The Corporation has employment agreements (the "Employment
Agreements") with certain of its key employees, including Messrs.
Boklund, Mausshardt, Hepp, Corvin and Adams ("Employees"). 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, 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.
11
<PAGE>
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 1995 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.
COMPENSATION PRINCIPLES
<PAGE>
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 of the
Corporation. To achieve this linkage, employee compensation is heavily
weighted towards compen-
12
<PAGE>
sation 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 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 Participation 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.
13
<PAGE>
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
(effective March 1994) to $450,000. As Mr. Boklund's additional
responsibilities continued into 1995, his base salary in 1995 remained
the same as in 1994. He participates in the profits of the Corporation
and the ESOP under the same provisions and formulas as other domestic
employees of the Corporation.
The Corporation does not have any "Excessive Employee
Remuneration" as defined in section 162(m) of the Code.
14
<PAGE>
COMPENSATION COMMITTEE DURING 1995
John A. Sproul, Chairman
C. Lee Emerson
V. Neil Fulton
Edward C. Gendron
Robert W. Keener
Richard G. Landis
James A. Maggetti
William Swindells
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 - 12/31/90 $100.00 $100.00 $100.00
FYE 12/31/91 90.81 130.34 122.86
FYE 12/31/92 111.02 140.25 160.72
FYE 12/31/93 112.07 154.33 211.40
FYE 12/31/94 71.84 156.42 205.65
FYE 12/31/95 66.03 214.99 190.66
- ----------
(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, 1990.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Based on the Corporation's review of Forms 3, 4, and 5 furnished
to the Corporation pursuant to Section 16 of the Securities Exchange
Act of 1934, as amended, all such forms were filed on a timely basis
except for an inadvertent late filing by Mr. Keener of a Form 4
relating to the purchase of 1,000 shares of Common Stock.
15
<PAGE>
INDEPENDENT ACCOUNTANTS
During the fiscal year 1995, 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 1996
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.
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 1997 ANNUAL MEETING
Stockholder proposals submitted for inclusion in the 1997 proxy
materials and consideration at the 1997 Annual Meeting of Stockholders
must be received by the Corporation by November 15, 1996. 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 15, 1996
16
<PAGE>
OREGON STEEL MILLS, INC.
ANNUAL MEETING - APRIL 25, 1996
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 25, 1996, and any adjournment thereof, with all
powers that the undersigned would possess if personally present, with
respect to the item on the reverse side.
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.
PLEASE MARK, DATE, SIGN, AND RETURN THE PROXY CARD PROMPTLY.
(CONTINUED AND TO BE SIGNED ON REVERSE)
(Triangle)FOLD AND DETACH HERE(Triangle)
OREGON STEEL MILLS, INC.
ANNUAL MEETING OF STOCKHOLDERS
Thursday, April 25, 1996
<PAGE>
Please mark (Square box
your votes as in which an
indicated in "X" has been
this example marked)
1. Election of Class B Directors
FOR
[ ] 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
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
C. Lee Emerson, Edward C. Gendron, William Swindells
(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.
(To the left of "Dated" Dated: , 1996
appears a 3/8-inch, -----------------
horizontal black line;
a perpendicular 3/8-inch ------------------------------
black line extends ------------------------------
downward from the right Signature or Signatures
corner of the horizontal
line.)
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.
(Triangle)FOLD AND DETACH HERE(Triangle)
OREGON STEEL MILLS, INC.
ANNUAL MEETING OF STOCKHOLDERS
Thursday, April 25, 1996
