<PAGE> 1
SCHEDULE 14A INFORMATION
___________
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
[x] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GENEVA STEEL COMPANY
_________________________________________________
(Name of Registrant as Specified in its Charter)
Geneva Steel Company
10 South Geneva Road
Vineyard, Utah 84058
_________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
CALCULATION OF FILING FEE
(1) Title of each class of securities to which transaction applies: N/A
-----
(2) Aggregate number of securities to which transaction applies: N/A
-----
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
-----
(4) Proposed maximum aggregate value of transaction: N/A
-----
[ ] 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: N/A
-----
(2) Form, Schedule or Registration Statement No.: N/A
-----
(3) Filing Party: N/A
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(4) Date Filed: N/A
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<PAGE> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 28, 1995
[LOGO] GENEVA STEEL
You are cordially invited to attend the Annual Meeting of Shareholders of
Geneva Steel Company (the "Company"), which will be held on Tuesday, March 28,
1995, at 10:00 a.m., at the Screening Room, Sundance Resort, Sundance, Utah
84604 (the "Annual Meeting"), for the following purposes:
(i) To elect seven directors of the Company, each to serve until the next
annual meeting of shareholders and until their respective successors
have been duly elected and qualified;
(ii) To consider and vote upon a proposal to ratify the appointment of Arthur
Andersen LLP as independent auditor of the Company for the fiscal year
ending September 30, 1995; and
(iii) To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on January 23, 1995 as
the record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors
KEN C. JOHNSEN
Secretary
January 27, 1995
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, TO ASSURE
THAT YOUR SHARES WILL BE REPRESENTED, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY WITHOUT DELAY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES. YOUR PROXY WILL NOT BE USED
IF YOU ARE PRESENT AT THE ANNUAL MEETING AND DESIRE TO VOTE YOUR SHARES
PERSONALLY.
<PAGE> 3
GENEVA STEEL COMPANY
10 SOUTH GENEVA ROAD
VINEYARD, UTAH 84058
____________________
PROXY STATEMENT
____________________
ANNUAL MEETING OF SHAREHOLDERS
MARCH 28, 1995
SOLICITATION OF PROXIES
This Proxy Statement is being furnished to the shareholders of Geneva Steel
Company, a Utah corporation doing business as "Geneva Steel" (the "Company" or
"Geneva"), in connection with the solicitation by the Board of Directors of the
Company of proxies from holders of outstanding shares of the Company's Class A
Common Stock, no par value (the "Class A Common Stock" or "Class A Shares"),
and the Company's Class B Common Stock, no par value (the "Class B Common
Stock" or "Class B Shares"), for use at the Annual Meeting of Shareholders of
the Company to be held Tuesday, March 28, 1995, and at any adjournment or
postponement thereof (the "Annual Meeting"). The Class A Common Stock and the
Class B Common Stock are sometimes referred to collectively as the "Common
Stock." This Proxy Statement, the Notice of Annual Meeting of Shareholders and
the accompanying form of proxy are first being mailed to shareholders of the
Company on or about January 27, 1995.
The Company will bear all costs and expenses relating to the solicitation of
proxies, including the costs of preparing, printing and mailing to shareholders
this Proxy Statement and accompanying material. In addition to the
solicitation of proxies by mail, the directors, officers and employees of the
Company, without receiving additional compensation therefor, may solicit
proxies personally or by telephone. Arrangements will be made with brokerage
firms and other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of the shares of Class A Common
Stock held by such persons, and the Company will reimburse such brokerage
firms, custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred by them in connection therewith.
VOTING
RECORD DATE
The Board of Directors has fixed the close of business on January 23, 1995 as
the record date for determination of shareholders entitled to notice of and to
vote at the Annual Meeting (the "Record Date"). As of the Record Date, there
were issued and outstanding 13,122,878 shares of Class A Common Stock and
20,639,688 shares of Class B Common Stock. The holders of record of the shares
of Common Stock on the Record Date entitled to be voted at the Annual Meeting
are entitled to cast one vote per share on each matter submitted to a vote at
the Annual Meeting. Accordingly, a total of 33,762,566 votes are entitled to
be cast on each matter submitted to a vote at the Annual Meeting.
PROXIES
Shares of the Common Stock which are entitled to be voted at the Annual
Meeting and which are represented by properly executed proxies will be voted in
accordance with the instructions indicated on such proxies. If no instructions
are indicated, such shares will be voted (i) FOR the election of each of the
seven (7) director nominees; (ii) FOR the ratification of the appointment by
the Board of Directors of Arthur Andersen LLP to be the independent auditor of
the Company for the fiscal year ending September 30, 1995; and (iii) in the
discretion of the proxy holders as to any other matters which may properly come
before the Annual Meeting.
<PAGE> 4
A shareholder who has executed and returned a proxy may revoke it at any time
prior to its exercise at the Annual Meeting by executing and returning a proxy
bearing a later date, by filing with the Secretary of the Company, at the
address set forth above, a written notice of revocation bearing a later date
than the proxy being revoked, or by voting the Common Stock covered thereby in
person at the Annual Meeting.
REQUIRED VOTE
A majority of the outstanding shares of Common Stock entitled to vote,
represented in person or by properly executed proxy, is required for a quorum.
An abstention will be counted as "represented" for the purpose of determining
the presence or absence of a quorum. A broker non-vote, which is an indication
by a broker that it does not have discretionary authority to vote on a
particular matter, will not be treated as "represented" for quorum purposes.
Under Utah corporate law, once a quorum is established, shareholder approval
with respect to a particular proposal is generally obtained when the votes cast
in favor of the proposal exceed the votes cast against such proposal.
Accordingly, abstentions and broker non-votes will not have the effect of being
considered as votes cast against any matter considered at the Annual Meeting.
With respect to the election of directors and the proposed ratification of
the independent auditor, holders of the Class A Common Stock and the Class B
Common Stock will vote together as one class. In the election of directors,
the seven (7) nominees receiving the highest number of votes will be elected.
For approval of the proposed ratification of the independent auditor, the votes
cast in favor of the proposal must exceed the votes cast against the proposal.
ELECTION OF DIRECTORS
At the Annual Meeting, seven (7) directors of the Company (constituting the
entire Board of Directors) are to be elected to serve until the next annual
meeting of shareholders and until their successors shall be duly elected and
qualified. Each of the nominees for director identified below is currently a
director of the Company. If any of the nominees should be unavailable to
serve, which is not now anticipated, the proxies solicited hereby will be voted
for such other persons as shall be designated by the present Board of
Directors. The seven (7) nominees receiving the highest number of votes at the
Annual Meeting will be elected.
NOMINEES FOR ELECTION AS DIRECTORS
Certain information with respect to each nominee is set forth below.
JOSEPH A. CANNON, 45, has been a director of the Company since its inception
in February 1987, and has served as Chairman of the Board of Directors from
March 1987 to the present. Mr. Cannon served as President of the Company from
July 1987 to May 1991 and as Chief Executive Officer from July 1987 to July
1991, when he resigned in order to run for the U.S. Senate. Mr. Cannon
returned to the Company as Chief Executive Officer in October 1992 and has
continued to serve in such capacity. From February 1985 to September 1987, Mr.
Cannon was engaged in the private practice of law with Pillsbury, Madison &
Sutro in its Washington, D.C. office, specializing in environmental law. From
May 1981 to February 1985, he was employed in various capacities by and became
Assistant Administrator of the Environmental Protection Agency. As Assistant
Administrator, Mr. Cannon was responsible for the development, implementation
and enforcement of federal air quality and radiation regulations throughout the
United States.
ROBERT J. GROW, 45, has been Chief Operating Officer of the Company since
December 1989 and was elected as President in May 1991. From August 1988 to
December 1989, he was employed by the Company in various capacities, including
Vice President, Executive Vice President and General Counsel. He has served as
a director of the Company from its inception. From 1976 to September 1987, Mr.
Grow was engaged in the private practice of law with the Salt Lake City, Utah
law firm of Kimball, Parr, Waddoups, Brown & Gee, specializing in real property
and general corporate law. Mr. Grow also holds a B.S. degree in Electrical
Engineering from the University of Utah.
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<PAGE> 5
RICHARD D. CLAYTON, 38, has been a director of the Company since February
1993 and has served as Executive Vice President and Vice President of
Environment since November 1991. He was Vice President of Environment and
Special Projects of the Company from December 1989 through October 1991 and
Vice President of Energy and Special Projects from July 1989 to December 1989.
From 1981 to July 1989, Mr. Clayton was engaged in the private practice of law
with Kimball, Parr, Waddoups, Brown & Gee, specializing in corporate
counseling, real property and tax law.
A. BLAINE HUNTSMAN, 58, has been a director of the Company since December
1988. Mr. Huntsman is currently Chairman of the Board and Chief Executive
Officer of Olympus Capital Corporation, a savings and loan holding company
headquartered in Salt Lake City, Utah, and has served in such capacities since
December 1988 and June 1988, respectively. Mr. Huntsman is also currently a
director of Zion's Cooperative Mercantile Institution, a retailing company
located in Salt Lake City, Utah, a position he has held since 1977. Mr.
Huntsman is a retired Professor of Finance from the University of Utah David
Eccles School of Business and served as Dean of the David Eccles School of
Business from 1975 to 1980. He has served as a director of many private and
public companies, including Huntsman Container Corporation, Dean Witter
Reynolds and Arcata Corporation.
A. THURL JACOBSON, 75, has been a director of the Company since November 1989
and served as a consultant to the Company from January 1989 to December 1991.
Mr. Jacobson was President and a director of Amerada Hess Corporation when he
retired in 1972. Mr. Jacobson rejoined Amerada Hess Corporation as Group Vice
President of Exploration and Production from 1976 to 1986. He is currently an
independent petroleum operator and management consultant.
ARCH L. MADSEN, 81, has been a director of the Company since December 1988.
Mr. Madsen has been President Emeritus of Bonneville International Corporation,
a national communications company headquartered in Salt Lake City, Utah, since
July 1985 and served as the founding President of such company from 1963 to
July 1985. He remains active in a number of national and international
broadcasting organizations, and is also active in various civic, educational
and charitable institutions.
R. J. SHOPF, 61, has been a director of the Company since September 1989 and
served as an independent advisor to the Company from March 1988 to September
1989. Mr. Shopf is the President of Southwest Business Associates, a
consulting company (a position which he previously held from 1984 to February
1988, and from January 1989 to October 1992), and has served in this capacity
since August 1994. Mr. Shopf served as President and Chief Executive Officer
of Pioneer Chlor Alkali Investments, Inc. ("Pioneer"), from August 1993 until
August 1994. Mr. Shopf also served as President of Imperial West Chemical
Company, an affiliate of Pioneer, from January 1992 until August 1994, and as
President of All Pure Chemical Company, also an affiliate of Pioneer, from
October 1992 until August 1994. From March 1988 to January 1989, Mr. Shopf was
employed by First Texas Merchant Banking Group, a division of Gibraltar Savings
Association, as Senior Vice President in charge of portfolio management.
COMMITTEES AND MEETINGS
The Board of Directors has a standing Audit Committee and a Compensation and
Nominating Committee. The members of the Audit Committee are Messrs. Shopf
(Chairman) and Madsen, and the members of the Compensation and Nominating
Committee are Messrs. Huntsman (Chairman), Madsen and Shopf.
The Audit Committee met two (2) times during the fiscal year ended September
30, 1994. Its functions are: (i) to review and recommend the selection of the
Company's independent auditor; (ii) to review the Company's internal controls
and all services performed by the Company's independent auditor; and (iii) to
review and report to the Board of Directors with respect to the scope of audit
procedures, accounting practices and internal accounting and financial controls
of the Company.
The Compensation and Nominating Committee met two (2) times during the 1994
fiscal year. Its functions are: (i) to determine and adopt compensation
arrangements for executive officers of the Company, subject to approval by the
Board of Directors; (ii) to review and administer any stock option, stock award
and employee
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benefit plan or arrangement established for the benefit of the executive
officers of the Company; and (iii) to review and recommend director and officer
nominees for election by the Company's shareholders or the Board of Directors,
as the case may be. The Compensation and Nominating Committee does not have a
formal procedure for considering nominees to the Board of Directors recommended
by the shareholders.
During the fiscal year ended September 30, 1994, there were seven (7)
meetings held by the Board of Directors of the Company. No director attended
fewer than 75 percent of the total number of meetings of the Board and of the
committees on which he served.
DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid a director's fee of
$22,000 per year for serving on the Board of Directors, $3,000 per year for
serving as chairman of any committee, $1,500 for each Board meeting attended
and $1,000 for each committee meeting attended. Each non-employee director who
serves for not less than five years also receives a deferred compensation
payment in each of the five years after termination of service in the same
amount as the director's fee received by non-employee directors during the
period. All directors are also reimbursed by the Company for their
out-of-pocket travel and related expenses incurred in attending all Board and
committee meetings.
EXECUTIVE OFFICERS
In addition to Messrs. Cannon, Grow and Clayton, certain information is
furnished with respect to the following executive officers of the Company:
MAX E. SORENSON, 45, has been Senior Vice President of Engineering and
Technology of the Company since November 1991. He was Vice President of
Engineering from December 1989 through October 1991. Before joining the
Company, Mr. Sorenson was employed by Inland Steel Company, most recently as
Manager of Research and Development for Raw Materials and Primary Processes.
Mr. Sorenson holds a B.S. degree in Metallurgical Engineering from the
University of Utah and a Masters degree in Industrial Management from Purdue
University.
DENNIS L. WANLASS, 46, has been Vice President, Treasurer and Chief Financial
Officer of the Company since September 1989 and was Controller of the Company
from January 1988 to September 1989. Before joining the Company, Mr. Wanlass
was employed by Eastman Christensen, then a joint venture of Norton Company and
Texas Eastern, in various accounting and financial capacities. Mr. Wanlass is
a certified public accountant.
KEN C. JOHNSEN, 36, has been Vice President and General Counsel of the
Company since November 1991 and has served as Secretary of the Company since
February 1992. He was Manager of Special Projects for the Company from
February 1991 through October 1991. From 1986 to 1991, Mr. Johnsen was
engaged in the private practice of law with Kimball, Parr, Waddoups, Brown &
Gee, specializing in corporate counseling and civil litigation. Mr. Johnsen
received his law degree from Yale Law School and a B.A. degree in Finance from
Utah State University.
PHILIP E. JONES, 59, has been Vice President of Customer Service and
Marketing of the Company since September 1990. From October 1989 to September
1990, Mr. Jones was Senior Director of Customer Service, Marketing and Sales of
the Company and was Manager of Customer Technical Services from October 1987 to
October 1989. Prior to joining the Company, he was a consultant to Lone Star
Steel and had been employed by USX for 30 years, primarily at the Geneva Steel
plant where he held several positions, including Chief Metallurgist. Mr. Jones
is a graduate of the University of Utah with a B.S. degree in Metallurgical
Engineering.
CARL E. RAMNITZ, 48, has been Vice President of Human Resources since October
1988 and was Vice President of Human Resources and Public Affairs of the
Company from September 1987 to September 1988. Prior to joining the Company,
he was employed by USX Corporation ("USX") for 18 years in various employment
and
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labor related capacities, most recently as Manager of Employee Relations for
the Geneva Steel plant before it was acquired by the Company and for USX's
Pittsburg, California steel plant.
RALPH F. POWERS, 60, has been Vice President of Manufacturing of the Company
since May 1992. From December 1991 until May 1992, Mr. Powers was General
Manager of Operational Improvements for the Company. Prior to joining the
Company, Mr. Powers was employed by USX and its related entities for more than
30 years, most recently as Project Director with USX Engineers and Consultants,
Inc., where he managed the commissioning, testing and start-up of an $850
million cold rolling facility in West Java, Indonesia.
EXECUTIVE COMPENSATION
The compensation of Joseph A. Cannon, the Company's Chief Executive Officer,
and the four other most highly paid executive officers (collectively, the
"Named Executive Officers") is discussed in the following tables and in the
report from the Compensation and Nominating Committee of the Board of
Directors.
SUMMARY COMPENSATION TABLE
The following table sets forth, for the fiscal years ended September 30,
1994, 1993 and 1992, the compensation paid to the Company's Named Executive
Officers.
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------------------------------
Annual Compensation Awards Payouts
------------------------------------------------ ----------------------- -----------------------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Principal Salary Bonus Compensation Award(s) Options Payouts Compensation
Position Year ($)(1) ($)(2) ($) ($)(3) (#) ($) ($)(4)
- ------------------- ---- ------- ------ ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph A. Cannon 1994 450,000 8,236 0 0 12,000 0 17,829
Chief Executive 1993 346,500 5,299 0 0 12,000 0 25,999
Officer 1992 0 0 * 0 0 0 60,000(5)
Robert J. Grow 1994 400,000 7,431 0 0 11,000 0 17,829
President and 1993 334,000 4,710 0 0 11,000 0 22,058
Chief Operating 1992 312,000 0 * 0 10,000 0 *
Officer
Richard D. 1994 265,000 4,924 0 0 9,000 0 19,900
Clayton 1993 202,750 3,120 0 0 9,000 0 18,883
Executive Vice 1992 182,000 0 * 0 8,000 0 *
President
Max E. Sorenson 1994 185,000 3,491 0 0 8,000 0 19,414
Senior Vice 1993 163,250 2,178 0 0 7,500 0 16,768
President 1992 156,000 0 * 0 7,500 0 *
Dennis L. Wanlass 1994 175,000 3,312 0 0 7,000 0 19,000
Vice President 1993 160,750 2,061 0 0 7,000 0 16,561
1992 156,000 0 * 0 7,000 0 *
</TABLE>
- --------------
* Under the transition rules of the Securities and Exchange Commission (the
"SEC"), no disclosure is required for fiscal years ended prior to December
15, 1992.
(1) Includes compensation deferred or accrued at the election of the Named
Executive Officer under the Company's Management Employee Savings and
Pension Plan (the "Management Plan").
(2) Amounts for fiscal years 1994 and 1993 represent payments under the
Company's Performance Dividend Plan.
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(3) None of the Named Executive Officers received any restricted stock awards
during the three years presented, nor did any of them hold any such stock
as of September 30, 1994.
(4) Includes contributions made by the Company pursuant to the Management Plan
and the dollar value of premiums paid by the Company pursuant to the
Company's split dollar life insurance plan. For fiscal year 1994, such
amounts were as follows: Joseph A. Cannon, $14,249 Company contributions,
$3,580 insurance premiums; Robert J. Grow, $14,249 Company contributions,
$3,580 insurance premiums; Richard D. Clayton, $17,422 Company
contributions, $2,478 insurance premiums; Max E. Sorenson, $15,834 Company
contributions, $3,580 insurance premiums; and Dennis L. Wanlass, $15,564
Company contributions, $3,436 insurance premiums.
(5) For the year ended September 30, 1992, Mr. Cannon was paid $60,000 for
serving as Chairman of the Board of Directors. During this period, Mr.
Cannon was not an executive officer or employee of the Company.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to individual grants
of stock options made by the Company to the Named Executive Officers during the
fiscal year ended September 30, 1994. The Company did not grant any stock
appreciation rights during the fiscal year ended September 30, 1994.
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Value
---------------------------------------------------------- at Assumed Annual Rates of
Number of Percent of Stock Price Appreciation
Securities Total Options for Option Term
Underlying Granted to Exercise or --------------------------
Options Granted Employees in Base Price Expiration
Name (#)(1) Fiscal Year ($/Sh)(2) Date 5%($) 10%($)
- ----------------- --------------- ------------- ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Joseph A. Cannon 12,000 9.3% $16.50 4/5/99 $31,731 $ 91,892
Robert J. Grow 11,000 8.6 16.50 4/5/99 29,086 84,234
Richard D. Clayton 9,000 7.0 15.00 4/5/04 84,901 215,155
Max E. Sorenson 8,000 6.2 15.00 4/5/04 75,467 191,249
Dennis L. Wanlass 7,000 5.4 15.00 4/5/04 66,034 167,343
</TABLE>
- ---------------
(1) Options granted pursuant to the Geneva Steel Key Employee Plan (the "Key
Employee Plan"). The options granted to Messrs. Cannon and Grow become
exercisable according to the following schedule: 40% on April 5, 1996,
and an additional 30% on each anniversary thereof. The options granted to
the other Named Executive Officers become exercisable according to the
following schedule: 40% on April 5, 1996, and an additional 20% on each
anniversary thereof.
(2) On the date of grant, the market price of the underlying Class A Common
Stock was $15.00 per share.
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<PAGE> 9
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information with respect to the exercise of
options to acquire shares of the Company's Class A Common Stock by the Named
Executive Officers during the fiscal year ended September 30, 1994, as well as
the aggregate number and value of unexercised options held by the Named
Executive Officers on September 30, 1994.
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options at
at September 30, 1994(#) September 30, 1994($)(1)
-------------------------- ----------------------------
Shares Acquired Value
Name on Exercise(#) Realized($) Exercisable Unexercisable Exerciseable Unexercisable
- ----------------- --------------- ----------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph A. Cannon -0- -0- -0- 24,000 $ -0- $ 78,840
Robert J. Grow -0- -0- 32,400 32,600 243,216 156,424
Richard D. Clayton -0- -0- 42,800 32,700 313,164 202,041
Max E. Sorenson -0- -0- 29,400 26,600 217,551 163,232
Dennis L. Wanlass 10,000 $93,400 32,400 28,100 238,214 177,466
- ---------------
</TABLE>
(1) Reflects the difference between the value of the Class A Common Stock on
September 30, 1994 and the exercise price of the options granted.
EMPLOYMENT AGREEMENTS
The Company maintained during fiscal year 1994 a supplemental retirement plan
(the "Supplemental Plan") which benefits certain executive officers and
management personnel. The Supplemental Plan generally provides for the payment
of supplemental benefits to covered individuals upon retirement at age 62,
based on the number of years of Company employment. The maximum benefit under
the Supplemental Plan, which is available after sixteen and two-thirds years of
service, is $50,000 per year, payable for ten years. All of the Named
Executive Officers are covered by the Supplemental Plan.
REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION AND NOMINATING COMMITTEE
OF THE BOARD OF DIRECTORS
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that incorporates by reference, in
whole or in part, subsequent filings including, without limitation, this Proxy
Statement, the following Report of the Compensation and Nominating Committee
and the Performance Graph set forth on page 10 hereof shall not be deemed to be
incorporated by reference into any such filings.
The Compensation and Nominating Committee (the "Committee") of the Board of
Directors of Geneva is comprised entirely of directors who are not employees of
Geneva. Subject to any action which may be taken by the full Board of
Directors, the Board has delegated to the Committee the authority:
1. To determine the compensation of Joseph A. Cannon, Chairman of the Board
and Chief Executive Officer of Geneva, including discretionary awards under
Geneva's incentive compensation plans;
2. To approve, upon recommendations by Mr. Cannon, the compensation
arrangements of executive officers of Geneva, other than Mr. Cannon, including
the Named Executive Officers identified in the Summary Compensation Table
above; and
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<PAGE> 10
3. To administer Geneva's Key Employee Plan and make awards thereunder to
Geneva's executive officers and other managers and key employees and to carry
out the duties and responsibilities of the Board of Directors regarding
Geneva's other compensation plans.
Pursuant to the proxy rules promulgated by the SEC, this Report describes the
compensation policies of the Committee applicable to the executive officers of
Geneva, including the relationship of corporate performance to the compensation
of the executive officers for fiscal year 1994. The Report also discusses the
1994 compensation of Mr. Cannon. As used below, the term "Executive Officers"
refers to the executive officers of Geneva other than Mr. Cannon.
Compensation Policies. Geneva's compensation policies for Executive Officers
are designed to provide competitive levels of compensation, thereby allowing
Geneva to attract and retain highly-qualified executive officers whose
contributions are necessary for the continued growth and success of Geneva.
The Committee approves salary increases and bonuses of Executive Officers. The
Company's principal compensation policy is to compensate Executive Officers
based on the performance of both the individual Executive Officer and the
Company. The Committee believes that ownership of stock by Executive Officers
is desirable, and Geneva's compensation policies and plans are designed to
encourage such stock ownership. The vesting of stock options is generally made
contingent upon the continued employment of the Executive Officer over a
specified period of time. Information concerning the implementation of these
policies in connection with the compensation arrangements of the Executive
Officers and Mr. Cannon is provided below. The Committee believes that the
$1.0 million compensation deduction cap recently promulgated under the Internal
Revenue Code will not affect the Company's compensation policies.
Annual Salaries. The annual salaries of Executive Officers are fixed
initially at amounts that are deemed competitive for executives with comparable
ability and experience, taking into account salary levels of executive
employees of companies deemed comparable to Geneva. Salaries of Executive
Officers are generally reviewed annually and adjustments are made based on the
evaluation of the individual's overall performance. In setting salary levels
for fiscal year 1994, the Committee considered primarily the significant
strides made by the Company toward the achievement of its goals with respect to
modernization of the Company's facilities, and the role played by each of the
Executive Officers in that effort.
Incentive Bonuses. In June 1993, the Company established a Performance
Dividend Plan (the "Performance Plan") which provides for the monthly payment
of additional cash compensation to all management and union employees based
upon the Company's volume of product shipments. Cash payments made to
Executive Officers under the Performance Plan during fiscal year 1994 were
determined according to the same formula used to determine payments to all
other managers. The compensation of Executive Officers has at times also
included incentive compensation in the form of cash bonuses based on overall
Company performance, determined subjectively rather than pursuant to an
objective formula or criteria. In 1994, the Committee elected to defer
consideration of any cash bonuses for the Executive Officers and Mr. Cannon
until the Committee is able to assess more effectively the results of the
implementation of recent phases of the Company's modernization efforts.
Stock Options. Under the Company's Key Employee Plan, the Committee has
awarded to executive officers, managers and key employees, options to purchase
Class A Common Stock. The options have generally vested at the rate of 40% of
the underlying shares at the end of two years following the grant and an
additional 20% each year thereafter. The options are generally exercisable for
ten years from the date of grant at a price equal to 100% of the fair market
value of the underlying shares on such date. Because each of Messrs. Cannon
and Grow beneficially owns more than 10% of the voting power of the Company,
applicable tax laws require that incentive stock options granted to them must
be exercisable for no more than five years at a price equal to 110% of the fair
market value on the date of grant. Consequently, incentive stock options
granted to Messrs. Cannon and Grow generally vest in four rather than five
years.
Options granted have not had performance contingencies, but realization of
the value provided through the options has generally required the Executive
Officer to remain employed by Geneva until the options vest, and the value of
the amounts realizable through the exercise of the options depends on increases
in the per share value of the Common Stock, which aligns the interests of the
Executive Officers in regard to that element of compensation with the interests
of the shareholders over the life of the option.
8
<PAGE> 11
Compensation of Chief Executive Officer. At the conclusion of fiscal year
1993, the Committee approved a salary increase for Mr. Cannon to $450,000,
effective retroactively as of July 1993. The Committee determined that the
salary increase was appropriate because of the leadership provided by Mr.
Cannon in strategic planning and the accomplishment of a number of key Company
objectives, including (i) advancing the Company's aggressive modernization
program, (ii) successfully completing difficult labor negotiations, (iii)
implementing a Company-wide employee communications program, and (iv)
completing a major financing during the 1993 fiscal year. Mr. Cannon's salary
remained at that level through fiscal year 1994. During the past fiscal year,
Mr. Cannon received additional compensation of $8,236 pursuant to the
Performance Plan, based upon the formula applicable to all executive officers
and managerial employees. Mr. Cannon was also granted options for the purchase
of 12,000 shares of Class A Common Stock, which the Committee deemed an
appropriate element of long-term incentive compensation for Mr. Cannon
consistent with the contributions of Mr. Cannon and the compensation policies
discussed above.
Other Compensation Plans. The Company maintains insurance and retirement
agreements with certain of its executive officers and managers, including with
Mr. Cannon and the Named Executive Officers, which provide for payment of a
death benefit (net of premiums paid and recovered by the Company) to a
designated beneficiary or for payment of a retirement benefit upon reaching age
62. Geneva also has a number of other broad- based employee benefit plans in
which executive officers participate on the same terms as other employees
meeting the eligibility requirements, subject to any legal limitations on
amounts that may be contributed to or benefits payable under the plans.
Submitted by the Compensation and Nominating Committee of the Board of
Directors:
A. Blaine Huntsman
Arch L. Madsen
R. J. Shopf
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total shareholder return
on the Company's Class A Common Stock, calculated on a dividend reinvested
basis, from March 31, 1990 through September 30, 1994, compared with the S&P
500 Index and the S&P Steel Index.
CUMULATIVE TOTAL RETURN
Based on investment of $100 beginning March 31, 1990
<TABLE>
<CAPTION> S&P S&P
MEASUREMENT PERIOD GENEVA 500 STEEL
(FISCAL YEAR COVERED) STEEL INDEX INDEX
<S> <C> <C>
March 90 $100 $100 $100
Sept. 90 118 92 73
Sept. 91 182 120 95
Sept. 92 76 134 97
Sept. 93 124 151 152
Sept. 94 182 156 195
</TABLE>
Source: Georgeson & Company Inc.
Note: The Class A Common Stock of Geneva Steel started publicly trading on
March 27, 1990.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of ownership and
reports of changes in ownership with the SEC and the New York and Pacific Stock
Exchanges. Executive officers and directors are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company and
written representations from the Company's executive officers and directors,
the Company noted that all required forms were timely filed during the past
fiscal year.
10
<PAGE> 13
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth information as of December 31, 1994 with
respect to the beneficial ownership of shares of the Class A Common Stock and
Class B Common Stock by each person known by the Company to be the beneficial
owner of more than 5% of either of such classes of Common Stock, by each
director, by each of the Named Executive Officers, and by all directors and
officers as a group. The number of Class A Shares does not include Class A
Shares issuable upon conversion of Class B Shares. Unless otherwise noted,
each person named has sole voting and investment power with respect to the
shares indicated. The percentages set forth below have been computed based on
the number of outstanding securities, excluding treasury shares held by the
Company, and are based on 13,118,183 shares of Class A and 20,639,688 shares of
Class B Common Stock outstanding as of December 31, 1994:
<TABLE>
<CAPTION>
Beneficial Ownership
as of December 31, 1994*
---------------------------------
Percentage of
Number of Class
NAME AND ADDRESS OF BENEFICIAL OWNER Shares Outstanding
- ------------------------------------ --------- ------------
<S> <C> <C>
Class A Common Stock:
Wellington Management Company . . . . . . . . . . . . . . . . . . . 1,490,000(1) 11.36%
75 State Street
Boston, Massachusetts 02109
Robert J. Grow . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,600(2) **
Richard D. Clayton . . . . . . . . . . . . . . . . . . . . . . . . . 52,700(3) **
Dennis L. Wanlass . . . . . . . . . . . . . . . . . . . . . . . . . 42,300(3) **
Max E. Sorenson . . . . . . . . . . . . . . . . . . . . . . . . . . 38,000(4) **
R. J. Shopf . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 **
A. Blaine Huntsman . . . . . . . . . . . . . . . . . . . . . . . . . 10,000(5) **
Joseph A. Cannon . . . . . . . . . . . . . . . . . . . . . . . . . . 3,256(6) **
Arch L. Madsen . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 **
A. Thurl Jacobson . . . . . . . . . . . . . . . . . . . . . . . . . 560 **
All directors and officers as a group (13 persons) . . . . . . . . . 248,616(7) 1.87%
Class B Common Stock (8):
Joseph A. Cannon . . . . . . . . . . . . . . . . . . . . . . . . . . 11,630,544(9) 56.35%
Robert J. Grow . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,855,319 42.90
Richard D. Clayton . . . . . . . . . . . . . . . . . . . . . . . . . 33,825(10) **
All directors and officers as a group (3 persons) . . . . . . . . . 20,519,688 99.42%
- -----------------
</TABLE>
* Beneficial ownership for each person holding options exercisable
within 60 days has been calculated as though shares subject to such
options were outstanding, but such shares have not been deemed
outstanding for the purpose of calculating the percentage of the class
owned by any other person.
** Less than 1% of outstanding shares.
11
<PAGE> 14
(1) Shares held by Wellington Management Company are held as investment
advisor for numerous investment counseling clients, including the
Windsor Fund, Inc., which is the only such client known to hold more
than 5% of the outstanding Class A Common Stock. Wellington
Management Company may be deemed to be the beneficial owner of the
shares by virtue of the investment and/or voting discretion it
possesses pursuant to its investment advising agreements with its
clients.
(2) Includes 39,000 shares subject to presently exercisable options and
15,500 shares owned by Mr. Grow's spouse which may be deemed to be
beneficially owned by him. Mr. Grow disclaims beneficial ownership of
the shares owned by his spouse.
(3) Represents shares subject to presently exercisable options.
(4) Includes 2,000 shares owned by Mr. Sorenson's Individual Retirement
Account, and 36,000 shares subject to presently exercisable options.
(5) Includes 1,000 shares owned by Mr. Huntsman's spouse and 9,000 shares
owned by Evergreen Investment, Ltd., a Utah limited partnership in
which Mr. Huntsman is a limited partner with 17.5% ownership. All
such shares may be deemed to be beneficially owned by Mr. Huntsman;
however, he disclaims beneficial ownership of all such shares.
(6) Includes 3,156 shares held by Riverwood Limited Partnership, of which
Joseph A. Cannon is general partner.
(7) Includes 198,000 shares subject to presently exercisable options.
(8) The Class B Common Stock is convertible into Class A Common Stock at a
rate of ten shares of Class B Common Stock for one share of Class A
Common Stock. If they were to convert their shares of Class B Common
Stock into shares of Class A Common Stock, Mr. Cannon would
beneficially own 1,166,310 shares of Class A Common Stock, Mr. Grow
would beneficially own 945,132 shares of Class A Common Stock
(including shares owned by his spouse), Mr. Clayton would beneficially
own 56,083 shares of Class A Common Stock (including shares owned by
his spouse) and all directors and officers as a group would
beneficially own 2,300,585 shares of Class A Common Stock (including
all shares subject to presently exercisable options). In the event of
such conversions, Mr. Cannon would own 7.7% of the outstanding Class A
Common Stock; Mr. Grow would own 6.2% of the outstanding Class A
Common Stock; Mr. Clayton would own less than 1% of the outstanding
Class A Common Stock; and all directors and officers as a group would
own 15.0% of the outstanding Class A Common Stock.
(9) Includes 828,013 shares held by Riverwood Limited Partnership, of
which Joseph A. Cannon is general partner.
(10) Includes 16,830 shares owned by Mr. Clayton's spouse which may be
deemed to be beneficially owned by him. Mr. Clayton disclaims
beneficial ownership of such shares.
Joseph A. Cannon and Robert J. Grow together beneficially own 99.3% of
the outstanding shares of Class B Common Stock and 61% of the total voting
power of the Company. They are therefore able to determine the outcome of
fundamental corporate transactions such as the election of directors,
amendments of the Company's articles of incorporation (except for certain
amendments which are, by mandatory provisions of law, subject to a class vote
of shareholders) and sale of all or substantially all of the Company's assets,
and to prevent certain mergers or consolidations involving the Company. Joseph
A. Cannon has obtained loans of approximately $6.0 million from a bank which
are collateralized by a pledge of Class B Common Stock. Enforcement of the
loan agreement could decrease the Class B Common Stock held by Mr. Cannon and
other restrictions applicable to the transfer of Class B Common Stock could
affect the relative control positions of Messrs. Cannon and Grow.
12
<PAGE> 15
RATIFICATION OF SELECTION OF AUDITOR
The Audit Committee has recommended, and the Board of Directors has
selected, the firm of Arthur Andersen LLP, independent certified public
accountants, to audit the financial statements of the Company for the fiscal
year ending September 30, 1995, subject to ratification by the shareholders.
Arthur Andersen LLP has acted as independent auditor of the Company since 1987.
The Board of Directors anticipates that one or more representatives of Arthur
Andersen LLP will be present at the Annual Meeting, will have an opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.
The Board of Directors recommends that shareholders vote FOR
ratification of the appointment of Arthur Andersen LLP as the Company's
independent auditor.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows
of no other matters to be presented for action at the Annual Meeting. However,
if any further business should properly come before the meeting, the persons
named as proxies in the accompanying form will vote on such business in
accordance with their best judgment.
PROPOSALS OF SHAREHOLDERS
Proposals which shareholders intend to present at the annual meeting
of shareholders to be held in calendar year 1996 must be received by Ken C.
Johnsen, Vice President, Secretary and General Counsel of the Company, at the
Company's executive offices, 10 South Geneva Road, Vineyard, Utah 84058, no
later than September 30, 1995.
ADDITIONAL INFORMATION
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY PERSON FROM WHOM A
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, UPON THE WRITTEN REQUEST OF SUCH
PERSON, A COPY OF THE COMPANY'S 1994 ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO (AS WELL AS EXHIBITS THERETO, IF
SPECIFICALLY REQUESTED), REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. WRITTEN REQUESTS FOR SUCH INFORMATION SHOULD BE DIRECTED TO THE
CORPORATE COMMUNICATIONS DEPARTMENT OF THE COMPANY.
13
<PAGE> 16
PROXY
GENEVA STEEL COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph A. Cannon, Robert J. Grow and Ken C.
Johnsen, and each of them, as proxies, with full power of substitution, and
hereby authorizes them to represent and vote, as designated below, all shares
of Common Stock of Geneva Steel Company, a Utah corporation (the "Company"),
held of record by the undersigned on January 23, 1995 at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at the Screening Room, Sundance
Resort, Sundance, Utah 84604, on March 28, 1995, at 10:00 a.m., local time, or
at any adjournment or postponement thereof, upon the matters set forth below,
all in accordance with and as more fully described in the accompanying Notice
of Annual Meeting and Proxy Statement, receipt of which is hereby
acknowledged.
1. ELECTION OF DIRECTORS, each to serve until the next annual meeting of
shareholders of the Company and until their respective successors shall
have been duly elected and shall qualify.
/ / FOR all nominees listed below (except as market to the contrary).
/ / WITHHOLD AUTHORITY to vote for all nominees listed below.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.)
<TABLE>
<S> <C> <C> <C>
JOSEPH A. CANNON ROBERT J. GROW A. THURL JACOBSON R.J. SHOPF
RICHARD D. CLAYTON A. BLAINE HUNTSMAN ARCH L. MADSEN
</TABLE>
2. PROPOSAL TO RATIFY the appointment of Arthur Andersen LLP as the
independent auditor of the Company.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
(continued)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED ABOVE, AND FOR THE
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT
AUDITOR OF THE COMPANY.
Please complete, sign and date this proxy where indicated and return it
promptly in the accompanying prepaid envelope.
<TABLE>
<S> <C>
DATED: ___________________________________, 199_ ______________________________________
Signature
______________________________________
Signature if held jointly
</TABLE>
(Please sign above exactly as the shares are issued. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.)
