<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
A.K. STEEL HOLDING CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(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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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
AK Steel Holding Corporation Richard M. Wardrop, Jr.
703 CURTIS STREET CHAIRMAN AND CHIEF
MIDDLETOWN, OHIO 45043-0001 EXECUTIVE OFFICER
April 3, 1999
To our Stockholders:
It is a pleasure to invite you to the 2000 Annual Meeting of Stockholders of
AK Steel Holding Corporation. The meeting will be held at 10:00 a.m. on
Monday, May 15, 2000, at the Hotel duPont, Wilmington, Delaware.
Please read the enclosed Notice of Meeting and accompanying Proxy Statement
carefully. For those of you who cannot attend the meeting in person, I urge you
to participate by completing, signing, and returning your proxy in the enclosed
envelope. Your vote is important, and the management of AK Steel appreciates
your cooperation in directing proxies to vote at the meeting.
Attendance at the Annual Meeting will be limited to stockholders of record as
of the close of business on March 24, 2000, or their duly appointed proxies,
and to guests of management. If you or your appointed proxy plan to attend in
person, please complete, sign, detach and return the enclosed Request for
Admittance card.
Your continuing interest in our Company is appreciated. I look forward to
seeing you at the Annual Meeting.
Sincerely,
/s/ Richard M. Wardrop, Jr.
Chairman and Chief Executive Officer
<PAGE>
AK STEEL HOLDING CORPORATION
703 Curtis Street
Middletown, Ohio 45043
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
The 2000 Annual Meeting of Stockholders of AK Steel Holding Corporation (the
"Company") will be held in the duBarry Room of the Hotel duPont, 11th & Market
Streets, Wilmington, Delaware, on Monday, May 15, 2000, at 10:00 a.m., for the
following purposes:
1. To elect nine directors of the Company; and
2. To transact such other business as properly may come before the
meeting.
The Board of Directors has fixed March 24, 2000, as the record date for the
determination of stockholders entitled to receive notice of and to vote at the
Annual Meeting.
By order of the Board of Directors,
Brenda S. Harmon
Secretary
Middletown, Ohio
April 3, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK, DATE AND
SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY
WRITTEN NOTICE TO THAT EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR
BY ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
<PAGE>
AK STEEL HOLDING CORPORATION
703 Curtis Street
Middletown, Ohio 45043
----------------
PROXY STATEMENT
----------------
This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of AK Steel Holding Corporation (the "Company") of
proxies to be voted at the Annual Meeting of Stockholders of the Company to be
held on May 15, 2000 and at any and all adjournments thereof.
At the meeting, the Company's stockholders will vote for the election of
nine directors. Each duly executed proxy received prior to the meeting will be
voted in accordance with the choices specified therein by the stockholder. If
no contrary direction is specified, the proxy will be voted FOR the election
as directors of the nine nominees listed in this Proxy Statement. Stockholders
who execute proxies may revoke them at any time before they are voted by
filing with the Company a written notice of revocation, by delivering a duly
executed proxy bearing a later date or by attending the meeting and voting in
person.
The Board of Directors has fixed the close of business on March 24, 2000 as
the record date for the determination of stockholders entitled to notice of
and to vote at the meeting. At that date, there were issued and outstanding
111,235,678 shares of Common Stock and 307,931 shares of Preferred Stock, all
of which vote together as a single class. Holders of Common Stock and/or
Preferred Stock are entitled to one vote for each share held on all matters
that properly may come before the meeting.
ELECTION OF DIRECTORS
At present, the Company's Board of Directors consists of eleven persons, of
whom two, Messrs. Robert E. Northam and Cyrus Tang, will retire as directors
of the Company effective as of the date of the Annual Meeting. In anticipation
of the forthcoming retirement of Messrs. Northam and Tang, the Board of
Directors temporarily increased the number of directors to eleven, effective
January 1, 2000, and elected Messrs. Donald V. Fites and Daniel J. Meyer to
fill the resulting vacancies, with the expectation that they would stand for
election at the Annual Meeting, at which time the number of directors would
return to nine.
In accordance with the Company's By-laws, the Board of Directors has fixed
the number of directors at nine effective as of the date of the Annual
Meeting. If elected, each of the nominees listed below will serve as a
director of the Company for a term expiring on the date of the next succeeding
Annual Meeting of Stockholders and until his or her successor is duly elected
and qualifies. If any nominee is unable to serve, proxies may be voted for
another person designated by the Board of Directors. The Company has no reason
to believe that any nominee will be unable to serve.
Information Concerning Nominees for Directors
Set forth below is information with respect to the nine nominees for
election as directors, each of whom is presently serving as a director of the
Company.
Allen Born
[PHOTO] Mr. Born, age 66, a director of the Company since March 2,
1995, is Chairman of Born Investments, LLC, a private
investment firm involved in venture capital and directional
drilling for natural gas production. From November 1993 until
July 1998, he served as Chairman and Chief Executive Officer
of Alumax Inc., and for more than five years prior thereto he
served as Chairman and Chief Executive Officer of Amax Inc.
Mr. Born also is a director of Cyra Technologies, Inc. and
Inmet Mining, and serves as a Vice Chairman of the Kennedy
Center's Corporate Fund Board.
<PAGE>
Donald V. Fites
[PHOTO] Mr. Fites, age 66, was elected a director of the Company
effective January 1, 2000. Mr. Fites was the Chairman and
Chief Executive Officer of Caterpillar Inc. from June 1990
until his retirement in February 1999. He continues to serve
on its board of directors and is a director of AT&T Corp.,
Georgia-Pacific Corporation, Exxon-Mobil Corporation and
Wolverine World Wide Inc. Mr. Fites is chairman of the
National Advisory Board of The Salvation Army, a director of
The World Methodist Council, a trustee of Valparaiso
University and a member of The Business Council.
John A. Georges
[PHOTO] Mr. Georges, age 69, a director of the Company since April 7,
1994, is the retired Chairman and Chief Executive Officer of
International Paper Company, having served in that position
from 1985 to March 1996. Following his retirement, he served
until March 1998 as a Senior Managing Director of Windward
Capital Partners LLP, a private investment partnership. Mr.
Georges also is a director of Ryder Systems Inc. and Warner-
Lambert Company and is a member of The Business Council, the
Trilateral Commission and the Board of the University of
Illinois Foundation.
Dr. Bonnie G. Hill
[PHOTO] Dr. Hill, age 58, a director of the Company since April 7,
1994, is Senior Vice President of Community Relations for the
Los Angeles Times. She continues as President and Chief
Executive Officer of The Times Mirror Foundation and as a Vice
President of The Times Mirror Company, having been elected to
those positions in February 1997. From July 1992 until January
1997, she was Dean of the McIntire School of Commerce at the
University of Virginia. She also is a director of Niagara
Mohawk Holdings Inc., Hershey Foods Corporation and Home Depot
Inc.
Robert H. Jenkins
[PHOTO] Mr. Jenkins, age 57, a director of the Company since January
24, 1996, served as Chairman of the Board of Sundstrand
Corporation from April 1997 and as President and Chief
Executive Officer of that company from September 1995, in each
case until his retirement in August 1999 following the merger
of Sundstrand Corporation with and into United Technologies
Corporation in June 1999. For more than five years prior
thereto, Mr. Jenkins was employed by Illinois Tool Works as
its Executive Vice President and in other senior management
positions. Mr. Jenkins also is a director of Clarcor Inc.,
Cordant Technologies Inc., Pella Corporation, Sentry Insurance
and Solutia, Inc. and has served as a member of the boards of
trustees of the Manufacturers Alliance and the National
Association of Manufacturers.
2
<PAGE>
Lawrence A. Leser
[PHOTO] Mr. Leser, age 64, a director of the Company since May 17,
1995, retired as Chairman of the E.W. Scripps Company in May
1999, having also served as its Chief Executive Officer from
July 1985 until May 1996. Mr. Leser also is a director of
Union Central Life Insurance Company and Student Loan Funding
Resources and is a Trustee of Xavier University.
Mr. Daniel J. Meyer
[PHOTO] Mr. Meyer, age 63, was elected a director of the Company
effective January 1, 2000. Mr. Meyer is the Chairman and Chief
Executive Officer of Milacron, Inc., a Cincinnati-based
plastics and metalworking technologies company, having served
in that position since 1991. He also serves on the board of
directors of the E. W. Scripps Company, Hubbell Inc. and
Broadwing Inc.
[PHOTO] Dr. James A. Thomson
Dr. Thomson, age 55, a director of the Company since March 18,
1996, is the President and Chief Executive Officer of The Rand
Corporation, having served in that capacity since August 1989.
He also serves as a director of Entrust Technologies Inc. and
Texas Biotechnology Corporation.
Richard M. Wardrop, Jr.
[PHOTO] Mr. Wardrop, age 54, was elected Chairman of the Board of the
Company effective January 27, 1997. He has been a director
since March 2, 1995, and Chief Executive Officer since May 16,
1995. Mr. Wardrop also served as President of the Company from
April 7, 1994, until March 20, 1997.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF EACH OF
THE FOREGOING NOMINEES.
3
<PAGE>
Committees of the Board of Directors
The Board of Directors has established an Audit Committee, a Compensation
Committee, a Public Affairs Committee and a Nominating and Governance
Committee. Messrs. Northam and Tang, who will be retiring from the Board of
Directors effective as of the date of the Annual Meeting, currently serve as
members of the Audit Committee. Mr. Northam also serves as a member of the
Compensation Committee and Mr. Tang also serves as a member of the Nominating
and Governance Committee.
The Audit Committee recommends to the Board of Directors the firm of
certified public accountants that will be appointed to serve as the
independent auditors of the Company's annual financial statements. The
Committee meets with representatives of that accounting firm to review the
plan, scope and results of the annual audit and the recommendations of the
independent accountants regarding the Company's internal accounting systems
and controls. During 1999, the Committee was comprised of Messrs. Georges
(Chairperson), Born, Northam and Tang. Effective January 1, 2000, they were
joined by Mr. Leser and Dr. Thomson.
The Compensation Committee makes recommendations to the Board of Directors
with regard to the Company's compensation and benefits policies and practices.
The Committee also reviews and makes recommendations to the Board of Directors
with respect to the compensation of the Company's principal executive officers
and administers the Company's Stock Incentive Plan. During 1999, the members
of the Committee were Messrs. Northam (Chairperson), Born and Leser and Dr.
Hill. Effective January 1, 2000, Mr. Born succeeded Mr. Northam as Chairperson
of the Committee and Mr. Jenkins joined the Committee.
The Public Affairs Committee reviews and makes recommendations to the Board
of Directors regarding the Company's public affairs policies and practices,
including its policies with respect to environmental compliance, employee
safety and health and equal employment opportunities. During 1999, the members
of the Committee were Dr. Hill (Chairperson), Messrs. Georges and Jenkins and
Dr. Thomson. Effective January 1, 2000, Mr. Jenkins and Dr. Thomson were
succeeded as members of the Committee by Messrs. Fites and Meyer.
The Nominating and Governance Committee reviews and makes recommendations to
the Board of Directors regarding the size, organization, membership
requirements, compensation and other practices and policies of the Board.
During 1999, the members of the Committee were Messrs. Leser (Chairperson),
Jenkins and Tang and Dr. Thomson. Effective January 1, 2000, Mr. Leser ceased
his membership on the Committee and was succeeded as Chairperson by Mr.
Jenkins, and Messrs. Fites and Meyer became members of the Committee.
Attendance at Meetings
During 1999, there were six regular meetings and five special telephonic
meetings of the Board of Directors, six meetings of the Audit Committee, five
meetings of each of the Compensation Committee and the Nominating and
Governance Committee and two meetings of the Public Affairs Committee. With
the exception of Mr. Born and Mr. Northam, each director attended at least 75%
of the meetings of the Board and those committees of which he or she was a
member.
Compensation of Directors
During 1999, each director who is not an employee of the Company received an
annual fee of $33,000 for service on the Board of Directors. One-half of that
amount was paid in the form of shares of Common Stock of the Company valued at
its market price on the date of issuance and the balance was paid in cash
(receipt of which may have been deferred pursuant to a prior election) or, at
the director's option, in the form of additional shares of Common Stock. Each
director who chairs a committee of the Board of Directors received an
additional annual fee of $3,600 for such service. Non-employee directors also
were paid a fee of $1,500 for each Board meeting and each committee meeting
they attended and were reimbursed for their expenses incurred in attending
those meetings. An employee of the Company who serves as a director receives
no additional compensation for
4
<PAGE>
such service. Upon first being elected to the Board, each non-employee
director also is granted options under the Company's Stock Incentive Plan to
purchase a total of 10,000 shares of the Company's Common Stock at its then
prevailing market price. The options vest on the first anniversary of the date
of grant and may be exercised at any time thereafter until the tenth
anniversary of the grant date or three years after retirement from the Board,
whichever is sooner.
Compliance With Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and officers, and persons
who own beneficially more than ten percent of a registered class of the
Company's equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
that class and other equity securities of the Company. Officers, directors and
greater-than-ten-percent beneficial owners are required by Rule 16a-3(e) under
the Exchange Act to furnish the Company with copies of all reports that they
file pursuant to Section 16(a).
To the Company's knowledge, based solely upon a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to the
Company's officers and directors were complied with, except that a report for
one transaction was filed late by Mr. Tang.
Certain Relationships And Transactions
In the ordinary course of business, the Company sells finished steel to, and
purchases steel scrap from, an affiliate of Tang Industries, Inc., of which
Cyrus Tang, currently a director of the Company, is President and Chief
Executive Officer. During 1999, those sales and purchases, which were made on
arm's-length terms, aggregated $21.0 million and $1.1 million, respectively.
5
<PAGE>
STOCK OWNERSHIP
Directors and Executive Officers
The following table sets forth as of March 24, 2000, information with respect
to the beneficial ownership of the Company's Common Stock by (i) each officer
of the Company named in the Summary Compensation Table on page 7, (ii) each
current director and each nominee for election as a director and (iii) all
directors and executive officers of the Company as a group. To the knowledge of
the Company, none of its directors or executive officers owns any shares of its
Preferred Stock.
<TABLE>
<CAPTION>
Percentage of
Shares Owned Outstanding
Beneficially(1) Shares(2)
--------------- -------------
<S> <C> <C>
Allen Born.................................. 17,342 *
Donald V. Fites............................. 1,500 *
John A. Georges............................. 18,404 *
Thomas C. Graham, Jr........................ 86,599 *
Dr. Bonnie G. Hill.......................... 6,149 *
John G. Hritz............................... 208,651 *
Robert H. Jenkins........................... 15,919 *
Lawrence A. Leser........................... 13,571 *
Daniel J. Meyer............................. -0- --
Richard E. Newsted.......................... 346,376 *
Robert E. Northam........................... 14,199 *
Cyrus Tang.................................. 143,404 *
Dr. James A Thomson......................... 13,069 *
Richard M. Wardrop, Jr...................... 1,346,448 1.21%
James L. Wareham............................ 217,798 *
All directors and executive officers as
a group (27 persons)....................... 3,124,179 2.81%
</TABLE>
- --------
(1) Includes shares subject to stock options exercisable within 60 days.
(2) An asterisk indicates ownership of less than 1%.
Other Beneficial Owners
To the knowledge of the Company, as of March 24, 2000, no person beneficially
owned more than five percent (5%) of the outstanding Common Stock or Preferred
Stock of the Company.
6
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Other Compensation
Annual compensation paid to executive officers of the Company consists of
salary and cash bonus awards under the Company's Annual Management Incentive
Plan. Long-term compensation consists of restricted stock awards and stock
options under the Company's Stock Incentive Plan and payouts in the form of
cash and restricted stock under the Company's Long-Term Performance Plan.
The following table sets forth the cash compensation, as well as certain
other compensation, paid or accrued by the Company for each of the past three
years to the Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company (the "Named Executives") serving
as such at December 31, 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- -----------------------------------
Awards Payouts
------------------------ ----------
All
Restricted Securities Other
Name and Stock Underlying LTIP Compen-
Principal Position Salary Bonus(1) Awards(2) Stock Options Payouts(3) sation(4)
at 12/31/99 Year ($) ($) ($) (# of Shares) ($) ($)
------------------ ---- --------- --------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard M. Wardrop, Jr. 1999 1,200,000 2,040,000 1,539,688 150,000 1,800,000 94,007
Chairman and Chief 1998 900,000 1,350,000 957,815 100,000 1,350,000 73,074
Executive Officer 1997 700,000 1,050,000 2,340,000 250,000 1,050,000 63,970
James L. Wareham 1999 400,000 600,000 355,313 25,000 600,000 36,224
President 1998 400,000 600,000 383,126 50,000 600,000 34,741
1997 333,333 500,000 449,219 60,000 500,000 37,618
John G. Hritz
Executive Vice Presi- 1999 350,000 350,000 826,251 80,000 350,000 26,313
dent and 1998 296,667 296,667 191,563 25,000 310,000 21,873
General Counsel 1997 246,667 246,667 151,750 20,000 270,000 20,635
Richard E. Newsted
Executive Vice Presi- 1999 350,000 350,000 437,750 40,000 350,000 25,551
dent, 1998 332,500 332,500 306,501 40,000 350,000 24,528
Commercial 1997 293,333 293,333 151,750 20,000 315,000 24,559
Thomas C. Graham, Jr. 1999 225,000 225,000 118,438 10,000 225,000 16,803
Vice President, 1998 225,000 225,000 76,625 10,000 225,000 16,660
Research and Engineering 1997 208,333 208,333 75,875 10,000 225,000 17,512
</TABLE>
- --------
(1) Amounts shown in this column represent bonuses earned under the Company's
Annual Management Incentive Plan.
(2) The dollar value of each restricted stock award indicated in this column
is based on the average price of the Company's Common Stock on the date of
the award. The amounts shown do not include the value of restricted stock
awards representing a portion of the payouts under the Company's Long-Term
Performance Plan. All awards shown in this column were granted pursuant to
the Company's Stock Incentive Plan. The aggregate number of shares of
restricted stock held by the Named Executives at December 31, 1999 and the
dollar value thereof (based on the closing price of the Company's Common
Stock on December 31, 1999) were as follows: for Mr. Wardrop--242,500,
$4,577,188; for Mr. Wareham--53,750, $1,014,531; for Mr. Hritz--58,000,
$1,094,750; for Mr. Newsted--52,500, $990,938; and for Mr. Graham--17,000,
$320,875. Dividends are paid on shares of restricted stock to the extent
declared and paid on the Company's Common Stock.
--------
Footnotes continue on following page.
7
<PAGE>
Footnotes continued from previous page
(3) The amounts shown in this column represent payouts under the Company's
Long-Term Performance Plan for the performance period ended December 31,
1999. One half of the amount shown for each Named Executive was paid in
cash (receipt of which may have been deferred pursuant to a prior election
by such Named Executive) and the balance in the form of an award of shares
of restricted stock valued on the basis of the market price of the
Company's Common Stock on the date of the approval of the share issuance
by the Compensation Committee. Those shares are in addition to shares
underlying restricted stock awards granted in 1999 pursuant to the Stock
Incentive Plan but are subject to all of the terms and conditions of that
plan and vest with respect to 20% of the shares on each of the first
through fifth anniversaries of the award.
(4) The amounts shown in this column for 1999 were derived as follows: (i) for
Mr. Wardrop, $10,007 was attributed to him for imputed income arising out
of a Company-provided life insurance plan and $84,000 represents the
Company's matching contributions for his account to the Company's thrift
plan; (ii) for Mr. Wareham, $8,224 was attributed to him for imputed
income arising out of a Company-provided life insurance plan and $28,000
represents the Company's matching contribution for his account to the
Company's thrift plan; (iii) for Mr. Hritz, $1,713 was attributed to him
for imputed income arising out of a Company-provided life insurance plan
and $24,500 represents the Company's matching contribution for his account
to the Company's thrift plan; (iv) for Mr. Newsted, $1,051 was attributed
to him for imputed income arising out of a Company-provided life insurance
plan and $24,500 represents the Company's matching contribution for his
account to the Company's thrift plan; and (v) for Mr. Graham, $1,053 was
attributed to him for imputed income arising out of a Company-provided
life insurance plan, and $15,750 represents the Company's matching
contribution for his account to the Company's thrift plan.
Stock Options
Pursuant to its Stock Incentive Plan, the Company grants to its key
employees, including its executive officers, options to purchase shares of its
Common Stock. The plan does not provide for, and the Company does not grant,
stock appreciation rights.
8
<PAGE>
The following table sets forth information with respect to stock options
granted to the Named Executives in 1999:
Stock Option Grants in 1999
<TABLE>
<CAPTION>
Potential
Percent of Realizable Value at
Total Assumed Annual
Options Exercise Rates of Stock
Options Granted to Price Price Appreciation
Granted Employees Per for Option Term(3)
(# of in 1999 Share Expiration -------------------
Name shares) (%) ($)(1) Date 5% ($) 10% ($)
- ---- ------- ---------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
R.M. Wardrop, Jr.... 150,000 29.07 23.6875 5/20/09 2,234,541 5,662,766
J.L. Wareham........ 25,000 4.84 23.6875 5/20/09 372,424 943,794
J.G. Hritz.......... 80,000 15.50 22.8594 (2) 1,150,092 2,914,560
R.E. Newsted........ 40,000 7.75 23.6875 5/20/09 595,878 1,510,071
T.C. Graham, Jr..... 10,000 1.94 23.6875 5/20/09 148,969 377,518
</TABLE>
- --------
(1) All options provide for an exercise price equal to the fair market value
of the underlying shares as of the date of grant.
(2) For Mr. Hritz, options with respect to 40,000 shares will expire on each
of January 21, 2009 and May 20, 2009.
(3) The amounts shown in these columns represent the potential appreciation in
the value of the options over their stated term of ten years, based upon
assumed compounded rates of appreciation of 5% per year (equivalent to
62.89%) and 10% per year (equivalent to 159.37%), respectively. Those
amounts are not intended as forecasts of future appreciation, which is
dependent upon the actual increase, if any, in the market price of the
shares underlying the options, and there is no assurance that the amounts
of appreciation shown in these columns will be realized.
The following table provides information as to options exercised by each of
the Named Executives in 1999 and the value of options held by them at year
end:
Aggregate Option Exercises in 1999 and
Option Values at December 31, 1999
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Number Options at In-the-Money Options at
of Shares December 31, 1999 December 31, 1999($)(1)
Acquired on Value ------------------------- -------------------------
Name Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
R.M. Wardrop, Jr. ...... -0- -- 680,002 299,998 2,028,744 -0-
J.L. Wareham............ -0- -- 56,667 78,333 36,248 18,124
J.G. Hritz.............. -0- -- 51,000 103,332 30,076 -0-
R.E. Newsted............ -0- -- 188,668 73,332 521,248 -0-
T.C. Graham, Jr......... -0- -- 35,002 19,998 -0- -0-
</TABLE>
- --------
(1) Calculated on the basis of the difference between the option exercise
price and the closing price of the Company's Common Stock on the New York
Stock Exchange on December 31, 1999 ($18.875 per share).
Long-Term Incentive Awards
The Company's Long-Term Performance Plan is designed to increase
management's focus on the Company's longer term performance relative to that
of a group of five other steel producers--Bethlehem Steel Corporation, LTV
Steel Company, Inc., National Steel Corporation, Nucor Corporation and the
U.S. Steel Group of USX Corporation--and to further enhance the Company's
ability to retain the services of its key executives.
9
<PAGE>
Long-term performance is measured on the basis of what the Company deems to
be a critical indicator of profitability in the steel industry--operating
profit per ton of steel shipped--which, for purposes of the plan, is assessed
both cumulatively and annually over a performance period of three years, with
a new performance period commencing annually. Payouts are shown in the Summary
Compensation Table on page 7.
Payouts under the plan are made shortly following the expiration of the
applicable performance period. No payout is made unless (i) the Company
reports net income for the last year of the performance period and (ii) the
Company's operating profit per ton ranks at least in the upper 50% of the
competitor group either on a cumulative basis over the entire performance
period or during the last year of the performance period. The payout to each
participating executive is determined by multiplying the executive's
annualized base salary as of the end of the performance period by an award
percentage. A target percentage for each executive is established at or
shortly following the beginning of the performance period, subject to the
approval of the Compensation Committee. The actual award percentage may be
higher or lower than the target percentage, depending upon the Company's
performance relative to that of the competitor group during the performance
period, and currently ranges from a threshold of 15% of the target percentage
to a maximum of 200% of the target percentage. An executive would be entitled
to the maximum payout only if the Company's performance ranks first among the
competitor group both on a cumulative basis over the entire performance period
and during the last year thereof. No payment is made to an executive who has
voluntarily resigned or been discharged for cause prior to the scheduled date
of payout. Upon retirement or certain other termination events, an executive
is entitled under the Plan to receive, in lieu of any amounts to which he or
she otherwise might have been entitled in respect of performance periods that
commenced prior thereto but are scheduled to expire thereafter, a payment
equal to his or her payout for the performance period last ended prior to the
date of his or her retirement or termination of employment. An executive who
quits or whose employment is terminated for cause forfeits any rights to
payment for performance periods for which payment has not yet been made. Up to
50% of an executive's payout may be made in the form of an award of shares of
restricted stock, which vests with respect to 20% of the shares on each of the
first through fifth anniversaries of the award date.
The following table sets forth information with respect to potential payouts
to the Named Executives pursuant to the Company's Long-Term Performance Plan:
Projected Long-Term Performance Plan Payouts
<TABLE>
<CAPTION>
Number of
Shares, Performance Projected Future Payouts(2)
Units or Period Until -----------------------------
Other Maturation or Threshold Target Maximum
Name Rights(1) Payout ($) ($) ($)
- ---- --------- --------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
R.M. Wardrop, Jr........ 85 1/1/99-12/31/01 153,000 1,020,000 2,040,000
J.L. Wareham............ 75 1/1/99-12/31/01 45,000 300,000 600,000
J.G. Hritz.............. 50 1/1/99-12/31/01 26,250 175,000 350,000
R.E. Newsted............ 50 1/1/99-12/31/01 26,250 175,000 350,000
T.C. Graham, Jr......... 50 1/1/99-12/31/01 16,875 112,500 225,000
</TABLE>
- --------
(1) The number set forth in this column for a Named Executive is the target
percentage specified by the Compensation Committee.
(2) For purposes of projecting a Named Executive's future payout, the
applicable target percentage has been multiplied against the Named
Executive's annualized base salary as of December 31, 1999. A Named
Executive's ultimate payout will be determined by multiplying the
applicable award percentage against his or her annualized base salary at
December 31, 2001, which may not be the same as that in effect at December
31, 1999.
10
<PAGE>
Agreements with Principal Officers
The Company's executive officers and certain other key managers are covered
by agreements that provide for severance payments and certain other benefits
in the event (a "Triggering Event") of a diminution of the covered employee's
salary or responsibility or a termination of the employee's employment other
than for cause (as defined in the agreements). The agreements generally
provide that upon the occurrence of a Triggering Event, an elected officer
(including each of the Named Executives) would be entitled to (i) a lump sum
severance payment equal to the salary to which that officer would otherwise
have been entitled for a period (the "severance payment period") of 36 months
(if the Triggering Event occurs within 24 months following the occurrence of a
Change in Control, as defined in the agreements) or 24 months (in the case of
a Triggering Event occurring other than within 24 months after a Change in
Control); (ii) a lump sum payment under the Company's Annual Management
Incentive Plan of a sum equal to the aggregate annual bonuses to which the
officer would have been entitled for the applicable severance payment period
based upon the bonus actually received by the employee under that plan for the
year preceding the Triggering Event; (iii) payment of any Long-Term
Performance Plan award earned, but not yet paid, and a lump-sum payment equal
to the award paid or earned for the prior performance period; (iv) the
immediate vesting and lapse of all restrictions on shares that were the
subject of restricted stock awards to the employee under the Company's Stock
Incentive Plan; (v) the right, for a period of three years following the
Triggering Event, to exercise any stock options that were outstanding at the
date of the Triggering Event; and (vi) continuing coverage under the Company's
benefit plans (including life, health and other insurance benefits) for the
duration of the applicable severance payment period. For all key managers
other than executive officers, the applicable severance period is 18 months,
whether or not the Triggering Event is preceded by a Change in Control. The
agreements with certain senior executive officers (including the Named
Executives) also provide that, upon either (i) an involuntary termination of
employment other than for cause (whether or not preceded by a Change in
Control) or (ii) a voluntary termination of employment for good reason (as
defined in the agreements) within 24 months following a Change in Control, the
officer would be entitled to a further lump sum payment equal to (and in lieu
of) all amounts to which that officer would otherwise have been entitled under
the Company's supplemental retirement plan (described below under "Pension
Plans"), such payment to be calculated as if he had become fully vested under
the plan and had retired at age 60 (or his then actual age, if higher). If the
Triggering Event is preceded by a Change in Control and any portion of the
required payments to an elected officer becomes subject to the federal excise
tax on so-called "parachute payments," the agreement with that officer
provides for "gross-up" so that the net amount retained by the officer, after
deduction of the excise tax and any applicable taxes on the "gross-up"
payment, is not reduced as a consequence of such excise tax. The Company's
agreements with its senior executive officers (including the Named Executives)
provide to each such officer the right, exercisable only during a thirty-day
period commencing (i) immediately after the occurrence of a Change in Control
in the case of the Chief Executive Officer, and (ii) 180 days following the
occurrence of a Change in Control in the case of all other senior executive
officers, to voluntarily terminate his or her employment and obtain the same
benefits as would be available following a Triggering Event.
Pension Plans
The Company's executive officers are eligible for retirement benefits under
either of two qualified benefit plans: (i) a defined benefit plan (the
"Defined Benefit Plan") that provides benefits based on an employee's highest
eligible earnings in any 60 consecutive months of service during his or her
last 120 consecutive months of service, or (ii) a cash balance plan (the "Cash
Balance Plan") that accumulates credits based on an employee's length of
service and his or her compensation throughout that period of service. An
employee's eligibility for coverage under a particular plan is generally
determined on the basis of the date at which he or she commenced employment
with the Company.
Executive officers are also eligible for benefits under a supplemental
retirement plan (the "Supplemental Plan") that provides a "make up" of
qualified plan benefits that may be denied to participants in the qualified
plans because of limitations imposed by the Internal Revenue Code of 1986, as
amended, as well as supplemental
11
<PAGE>
benefits for employees with a minimum of ten years of service, including at
least five years of service as a member of key management. The benefit derived
from the Supplemental Plan is subject to an offset for any benefit from the
Company's qualified plan and any other employer-provided qualified plan. A
participant's benefit under the Supplemental Plan, before giving effect to
such offset, is equal to the greater of
(a) 50% of his or her average covered compensation (base salary, bonus
under the Annual Management Incentive Plan and payout under the Long-
Term Performance Plan) during the relevant calculation period, or
(b) the participant's benefit under the applicable qualified plan in which
he or she participates, calculated without regard to the limitations
imposed by the Internal Revenue Code of 1986, as amended.
Estimated Annual Pension Benefits
Each of the Named Executives (other than Mr. Hritz) and all but seven of the
Company's other officers, participate in the Cash Balance Plan. Mr. Hritz and
seven other officers participate in the Defined Benefit Plan. Except for Mr.
Wareham, who will accrue a supplemental retirement benefit under the terms of
the Supplemental Plan in effect at time of his employment, and two officers
who were employees of Armco Inc. until its acquisition by the Company on
September 30, 1999, all officers are covered under the Supplemental Plan. The
following table sets forth the estimated combined annual retirement benefits
(calculated on a straight life annuity basis) that may become payable to a
covered participant in the higher compensation classifications under either of
the qualified plans and the Supplemental Plan, assuming satisfaction of the
requisite service requirements at time of retirement:
<TABLE>
<CAPTION>
Estimated Maximum Benefit
------------------------------------------------------------
Average
Covered Estimated
Compensation ($) Benefit ($)
---------------- -----------
<S> <C>
400,000 200,000
800,000 400,000
1,200,000 600,000
1,600,000 800,000
2,000,000 1,000,000
2,400,000 1,200,000
</TABLE>
The following table sets forth, as of December 31, 1999, the number of years
of creditable service and the applicable covered compensation for pension
benefit calculation purposes for each of the Named Executives:
<TABLE>
<CAPTION>
Years of Covered
Name Service Compensation ($)
---- -------- ----------------
<S> <C> <C>
R.M. Wardrop, Jr. ............................... 7.5 3,813,333
J.L. Wareham..................................... 2.8 1,600,000
R.E. Newsted..................................... 5.3 988,889
J.G. Hritz....................................... 10.3 905,556
T.C. Graham, Jr. ................................ 3.5 663,889
</TABLE>
12
<PAGE>
Compensation Committee Report on Executive Compensation
Compensation Policies
The functions of the Compensation Committee (the "Committee") are to review
and recommend to the Board of Directors the compensation of the Company's
executive officers, to review the duties and responsibilities of those
officers, to review the Company's overall compensation and personnel policies,
to administer the Company's Stock Incentive Plan, Long-Term Performance Plan
and certain other employee benefit plans, and to review and make
recommendations to the Board of Directors with respect to the Company's
incentive compensation plans, pension and savings plans and employee
retirement policies, benefits and plans. With respect to the Company's
executive compensation arrangements, the Committee's goal is to establish a
compensation program that strengthens the commonality of interest between
management and the Company's stockholders, links compensation with Company
performance and enables the Company to attract and retain executives of high
caliber and ability.
Executive Officer Compensation Components
The key elements of the Company's executive officer compensation program are
base salary, bonus awards under the Annual Management Incentive Plan and long-
term incentives consisting of awards under the Long- Term Performance Plan and
awards of stock options and restricted stock under the Stock Incentive Plan.
Each of these elements is addressed separately below.
Base Salary
Salary levels are assigned to positions within competitive standards based
on job responsibilities and a review of the salary levels for comparable
positions at other major corporations, as disclosed in compensation surveys
conducted by independent consulting firms. Corporations for which compensation
data are included in these surveys include various industrial companies with
operations of comparable size and scope to those of the Company, as well as
the largest publicly owned integrated steel companies in the United States.
Increases in base salary for an executive officer are based on individual
performance, Company performance and market compensation trends. The Committee
does not rely on any specific formula nor does it assign specific weights to
the various factors used in determining base salaries. Strong individual
performance and strong Company performance would generally result in above-
average increases. Below-market increases or no increases would generally
occur in years when individual performance and Company performance are below
expectations.
Annual Management Incentive Plan
The Company's Annual Management Incentive Plan is designed to motivate
executive officers to focus on both financial and non-financial goals that
directly impact shareholders. A bonus award under the plan is expressed as a
percentage of an executive's total base compensation for the year. Depending
upon the extent to which prescribed targets are achieved or exceeded, that
percentage may vary from approximately 50% at target levels to as much as 170%
for the Chairman and Chief Executive Officer, 150% for the President and 100%
for each of the other executive officers. If the minimum specified target is
not achieved, no bonus is payable.
Because the Company's performance for 1999 exceeded each of the financial
and non-financial targets, bonus awards for 1999 as a percentage of base
compensation were 170% for Mr. Wardrop, 150% for Mr. Wareham and 100% for each
of the other Named Executives.
Long-Term Performance Plan
The Company's Long-Term Performance Plan is designed to increase
management's focus on the Company's performance relative to that of its
principal competitors over a multi-year period and to further enhance the
Company's ability to retain the services of its key executives.
13
<PAGE>
Because the Company's operating profit per ton exceeded that of all other
companies in the competitor group during 1997, 1998 and 1999, each of the
participating executives (including each of the Named Executives) received the
maximum payout for the performance period that ended December 31, 1999 (which
ranged from 100% of annualized base salary at December 31, 1999, in the case
of Messrs. Newsted, Hritz and Graham to 150% of annualized base salary at
December 31, 1999, in the case of Messrs. Wardrop and Wareham).
Stock Incentive Plan
Grants of stock options and restricted stock awards under the Company's
Stock Incentive Plan are designed to link executive compensation to
appreciation in the market price of the Company's Common Stock and to
encourage executives to remain in the employ of the Company. Grants of options
and restricted stock awards were made during 1999 to each of the executives
named in the Summary Compensation Table based upon the recommendations of an
independent compensation consultant and consideration of the executive's
performance and contribution to the Company. These grants are reflected in the
Summary Compensation Table.
Compensation of Chief Executive Officer
During 1999, Mr. Wardrop's annual base salary was increased from $900,000 to
$1,200,000. He also received an annual bonus of $2,040,000 for that year
pursuant to the Company's Annual Management Incentive Plan based solely upon
corporate performance for the year. In addition, pursuant to the Stock
Incentive Plan, Mr. Wardrop was granted options with respect to 150,000 shares
and restricted stock awards with respect to 65,000 shares. He also received an
award under the Long-Term Performance Plan providing a target opportunity
equal to 75% of his base salary as of the end of a three-year performance
period that ended December 31, 1999. Each of these compensation components was
based upon the recommendation of an independent compensation consultant as
well as the Committee's recognition of Mr. Wardrop's individual contribution
to the Company's achievements during 1999, including its successful
acquisition of Armco Inc.
Policy with Respect to Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code (the "Code") generally limits to
$1,000,000 per covered executive the deductibility for federal income tax
purposes of the annual compensation paid to a company's chief executive
officer and each of its other four most highly compensated executive officers.
Under the provisions of Section 162(m), there may be excluded from the
$1,000,000 limit compensation that is determined on the basis of certain
performance goals under plans that meet certain specific criteria.
Compensation attributable to the exercise of options granted under the Stock
Incentive Plan, as well as bonuses paid under the Annual Management Incentive
Plan and the Long-Term Performance Plan, are excluded from the $1,000,000
limit as a consequence of certain amendments to those plans that were approved
by stockholders.
The Compensation Committee
Allen Born, Chairman
Dr. Bonnie G. Hill
Robert H. Jenkins
Lawrence A. Leser
Robert E. Northam
Compensation Committee Interlocks
The members of the Compensation Committee are not employees of the Company
and do not participate in any of the Company's management compensation
programs. No member of the Committee is an executive officer of a company of
which an executive officer of the Company serves as a director.
14
<PAGE>
COMPARATIVE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's Common Stock for the five-year period from January 1, 1995 through
December 31, 1999, with the cumulative total return for the same period of (i)
the Standard & Poor's 500 Stock Index and (ii) a peer group consisting of the
four largest publicly owned integrated steel companies in the United States
(Bethlehem Steel Corporation, LTV Corporation, National Steel Corporation and
the U.S. Steel Group of USX Corporation). These comparisons assume an
investment of $100 at the commencement of the period and reinvestment of
dividends. With respect to companies in the peer group, the returns of each
company have been weighted to reflect its stock market capitalization relative
to that of the other companies in the group.
Cumulative Total Returns
January 1, 1995 through December 31, 1999
(Value of $100 invested on January 1, 1995)
Value of
Investment ($)
Legend
<TABLE>
<CAPTION>
January 1, December 31, December 31, December 31, December 31, December 31,
Symbol Description 1995 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C>
[Square] AK STEEL $100.00 $111.87 $131.55 $120.03 $163.63 $134.68
[Circle] PEER GROUP $100.00 $ 84.05 $ 73.29 $ 72.93 $ 56.21 $ 69.80
[Diamond] S&P 500 $100.00 $137.45 $168.92 $225.21 $289.43 $350.26
</TABLE>
15
<PAGE>
OTHER MATTERS
Any proposals of stockholders intended to be presented at the Annual Meeting
of Stockholders in 2001 must be submitted in writing, addressed to the
Secretary of the Company at its principal executive offices, and received by
the Company by December 4, 2000, in order to be considered for inclusion in
the proxy statement and form of proxy for that meeting.
The Company's audited financial statements as of and for the year ended
December 31, 1999, together with the report thereon of Deloitte & Touche LLP,
independent public accountants, are included in the Company's Annual Report on
Form 10-K under the Securities Exchange Act of 1934. A copy of the 1999 Annual
Report on Form 10-K is included in the Company's 1999 Annual Report to
Stockholders and is being furnished to stockholders together with this Proxy
Statement.
The Board of Directors has selected Deloitte & Touche LLP as the Company's
independent accountants for the current fiscal year. Representatives of
Deloitte & Touche LLP are expected to be present at the Annual Meeting and
will respond to appropriate questions.
This Proxy Statement and the accompanying form of proxy will initially be
mailed to stockholders on or about April 4, 2000 together with the 1999 Annual
Report to Stockholders. In addition, the Company is requesting banks, brokers
and other custodians, nominees and fiduciaries to forward these proxy
materials and the accompanying reports to the beneficial owners of shares of
the Company's Common Stock held by them of record and will reimburse them for
their reasonable out-of-pocket expenses for doing so. The Company has retained
Innisfree M&A Incorporated to assist in the solicitation of proxies for a fee
estimated to be $7,500 plus out-of-pocket expenses. Solicitation of proxies
also may be made by officers and employees of the Company. The cost of
soliciting proxies will be borne by the Company.
The Board of Directors does not know of any matters to be presented at the
meeting other than those set forth in the accompanying Notice of Meeting.
However, if any other matters properly come before the meeting, it is intended
that the holders of proxies will vote thereon in their discretion.
By order of the Board of Directors,
Brenda S. Harmon
Secretary
Middletown, Ohio
April 3, 2000
16
<PAGE>
AK STEEL HOLDING CORPORATION
Annual Meeting of Stockholders
To be held on May 15, 2000
The undersigned stockholder of AK Steel Holding Corporation (the "Company")
hereby appoints Richard M. Wardrop, Jr., John G. Hritz and Brenda S. Harmon, and
each of them, as attorneys and proxies, each with full power of substitution, to
represent the undersigned at the Annual Meeting of Stockholders of the Company
to be held on May 15, 2000, and at any adjournment thereof, with authority to
vote at such meeting all shares of Common Stock and/or Preferred Stock of the
Company owned by the undersigned on March 24, 2000, in accordance with the
directions indicated herein.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION AS A DIRECTOR OF EACH OF THE NINE NOMINEES
NAMED ON THE REVERSE SIDE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NINE NOMINEES
NAMED FOR ELECTION AS A DIRECTOR.
<PAGE>
ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to to vote for all nominees
the contrary below) listed below
Nominees: Allen Born, John A. Georges, Donald V. Fites, Dr. Bonnie G. Hill,
Robert H. Jenkins, Lawrence A. Leser, Daniel J. Meyer, Dr. James A.
Thomson and Richard M. Wardrop, Jr.
(INSTRUCTIONS: To withhold authority to vote for an individual nominee named
above, strike a line through that nominee's name)
And to transact such other business as may properly come before the meeting or
any adjournment thereof.
Date: -----------------------------------------
Signature(s): ---------------------------------
Signature(s): ---------------------------------
(Please date and sign exactly as name appears
hereon. When signing as attorney, administrator,
trustee, custodian or guardian, give full title
as such. When more than one owner, all should
sign. Proxies executed by a partnership or
corporation should be signed in the full
partnership or corporate name by a partner or
authorized officer.)
Please sign, date and return this proxy card
promptly using the enclosed envelope.
