-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VQ8RkRVOw8/tkOzvGWy3iY3ENRaIN4n4SrDn6c13LsbX3At75M6PK5AMS6omW9kx TjvzsVfFRTonSIa9FTksag== 0000830260-96-000002.txt : 19960308 0000830260-96-000002.hdr.sgml : 19960308 ACCESSION NUMBER: 0000830260-96-000002 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960425 FILED AS OF DATE: 19960307 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OREGON STEEL MILLS INC CENTRAL INDEX KEY: 0000830260 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 940506370 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09887 FILM NUMBER: 96531887 BUSINESS ADDRESS: STREET 1: 1000 BROADWAY BLDG STREET 2: 1000 S W BROADWAY, SUITE 2200 CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032239228 DEF 14A 1 PROXY STATEMENT, PROXY CARD SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant ( X ) Filed by a Party other than the Registrant ( ) Check the appropriate box: ( ) Preliminary Proxy Statement ( ) Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) ( X ) Definitive Proxy Statement ( ) Definitive Additional Materials ( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 OREGON STEEL MILLS, INC. ----------------------- (Name of Registrant as Specified In Its Charter) ----------------------- (Name of Person(s) Filing Proxy Statements if other than the Registrant) Payment of Filing Fee (Check the appropriate box): ( X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. ( ) $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). ( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11. 1) Title of each class of securities to which transaction applies: ------------------------------------------------------------- 2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------- 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-ll (Set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------- 4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------- 5) Total fee paid: ------------------------------------------------------------- ( ) Fee paid previously with preliminary materials. ( ) Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ------------------------------------------------------------- 2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------- 3) Filing Party: ------------------------------------------------------------- 4) Date Filed: ------------------------------------------------------------- OREGON STEEL MILLS, INC. ------ NOTICE OF ANNUAL MEETING OF STOCKHOLDERS ----------- TO BE HELD APRIL 25, 1996 9:30 A.M. PACIFIC TIME ------------ TO THE STOCKHOLDERS: You are invited to attend the Annual Meeting of Stockholders of Oregon Steel Mills, Inc. (the "Corporation") to be held at the Portland Rivergate Facility, 14400 N. Rivergate Boulevard, Portland, Oregon, on Thursday, April 25, 1996, at 9:30 a.m. Pacific Time. The meeting is being held for the following purposes: 1. To elect three Class B directors. 2. To consider and transact such other business as may properly come before the meeting or any adjournment thereof. Only stockholders of record at the close of business on March 1, 1996 are entitled to notice of, and to vote at, the meeting and any adjournment or postponement thereof. A list of stockholders entitled to vote at the meeting is available for inspection at the offices of the Corporation. By Order of the Board of Directors, LaNelle F. Lee SECRETARY March 15, 1996 Portland, Oregon YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. YOUR PROMPT RESPONSE COULD SAVE THE CORPORATION THE EXPENSE OF A FOLLOW- UP MAILING. OREGON STEEL MILLS, INC. 1000 SW BROADWAY BUILDING, SUITE 2200 PORTLAND, OREGON 97205 (503) 223-9228 -------------- PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS -------------- This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board") of Oregon Steel Mills, Inc. (the "Corporation") to be voted at the Annual Meeting of Stockholders to be held at the Portland Rivergate Facility, 14400 N. Rivergate Boulevard, Portland, Oregon on Thursday, April 25, 1996, at 9:30 a.m. Pacific Time, and any adjournments thereof. Only stockholders of record at the close of business on March 1, 1996, are entitled to notice of, and to vote at, the meeting. At the close of business on that date, the Corporation had 19,421,614 shares of Common Stock, $0.01 par value per share ("Common Stock"), outstanding. Holders of Common Stock are entitled to one vote for each share of Common Stock held. There are no cumulative voting rights. When a proxy in the form accompanying this proxy statement is properly executed and returned, the shares represented will be voted at the meeting in accordance with the instructions specified in the proxy. If no instructions are specified, the shares will be voted FOR Proposal 1 in the accompanying Notice of Annual Meeting of Stockholders, and such votes will be counted toward determining a quorum. Shares held of record by the Trustees of the Corporation's Employee Stock Ownership Plan Trust (the "ESOP") will be voted by the Trustees in accordance with instructions received from ESOP participants or, if no such instructions are received, the Trustees shall vote or take other action as they deem appropriate. Any person giving a proxy in the form accompanying this proxy statement has the power to revoke it at any time before its exercise. A stockholder may revoke a proxy by (i) written notice of such revocation to the Secretary of the Corporation at the above address; (ii) a later-dated proxy received by the Corporation; or (iii) attending the meeting and voting in person. Attendance at the meeting will not by itself revoke a proxy. Each share of Common Stock outstanding on the record date is entitled to one vote per share at the Annual Meeting of Stockholders. Shares of Common Stock represented in person or by proxy at the Annual Meeting (including abstentions and broker non-votes) will be tabulated by the inspector of election appointed for the meeting and will be counted in determining that a quorum is present. A plurality of the votes cast at the Annual Meeting is required to elect the directors. Proxies withholding authority to vote for a nominee will be treated as votes cast. Broker non-votes will not be treated as votes cast and therefore, will not be counted in calculating a plurality. The approximate date on which this proxy statement and the accompanying proxy card are being mailed to the Corporation's stockholders is March 15, 1996. Solicitation material will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others to forward to such beneficial owners. Original solicitation of proxies by mail may be supplemented by one or more telephone, telegram or personal solicitations by direc- 1 tors, officers or employees of the Corporation. No additional compensation will be paid for any such services. Except as described above, the Corporation does not intend to solicit proxies other than by mail. Costs of solicitation will be borne by the Corporation. PROPOSAL 1: NOMINATION AND ELECTION OF CLASS B DIRECTORS NOMINEES The Corporation has a classified Board consisting of three Class A directors, Messrs. Fulton, Keener and Sproul; three Class B directors, Messrs. Emerson, Gendron and Swindells; and three Class C directors, Messrs. Boklund, Landis and Maggetti. The Class A and C directors serve until the Annual Meetings of Stockholders to be held in 1998 and 1997, respectively, and until their successors are elected and qualified. At each Annual Meeting of Stockholders, directors are elected for a term of three years to succeed those directors whose terms expire at that annual meeting. The nominees for election as Class B directors are C. Lee Emerson, Edward C. Gendron and William Swindells, all of whom are members of the present Board. The Class B directors to be elected at the 1996 Annual Meeting will serve until the Annual Meeting of Stockholders in 1999 and until their successors are elected and qualified. Unless authority to vote for a director or directors is withheld, the accompanying proxy, if properly executed and returned, will be voted for the election of the Class B nominees named below. If authority to vote for one or more of the nominees is withheld, the withheld votes will not be cast for any of the other nominees unless the stockholder otherwise indicates on the proxy. If any nominee is unable or unwilling to serve as a director, proxies may be voted for such substitute nominees as may be designated by the Board. The Board has no reason to believe that any of the nominees will be unable or unwilling to serve as a director if elected. The following table sets forth information with respect to each person nominated for election as a Class B director and each other director, including their names and ages as of February 15, 1996, business experience during the past five years and directorships in other corporations. PRINCIPAL OCCUPATION AND DIRECTOR NAME CERTAIN OTHER DIRECTORSHIPS AGE SINCE - ----- --------------------------- --- ----- CLASS B (NOMINEES FOR TERMS OF OFFICE TO EXPIRE IN 1999): C. Lee Emerson Mr. Emerson was the Chairman of the 78 1976 Board of Directors of the Corporation from May 1982 through January 1992. He formerly served as President and Chief Executive Officer of the Corporation. Since 1992 he has been retired. Edward C. Gendron Mr. Gendron was the President, Chief 67 1976 Operating Officer and a director of Midland-Ross Corporation from 1976 to April 1983. In April 1983, Mr. Gendron became Vice Chairman of the Board of Directors and Chief Administrative Officer of Midland-Ross Corporation, positions he held until August 1986. Mr. Gendron has been President of E. C. Gendron Enterprises, a financial consulting firm, since 1986. 2 PRINCIPAL OCCUPATION AND DIRECTOR NAME CERTAIN OTHER DIRECTORSHIPS AGE SINCE - ----- --------------------------- --- ----- William Swindells Mr. Swindells is the Chairman of 65 1994 the Board of Directors of Willamette Industries, Inc. a diversified wood products company headquartered in Portland, Oregon, a position he has held since 1985. Mr. Swindells formally served as Chief Executive Officer of Willamette Industries, Inc. from 1985 until September 1995. He is currently a director of Standard Insurance Company and Airborne Express Company, and serves as Chairman of the Board of Trustees of Willamette University and as a trustee of Oregon Health Science University Foundation and the Oregon Historical Society. CLASS A (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1998): V. Neil Fulton Mr. Fulton was the Corporation's 67 1983 Secretary and Treasurer from 1970 to April 1989. Mr. Fulton became a director in April 1983 and was Vice President of Finance and Chief Financial Officer of the Corporation from October 1980 until February 1991. He continued as an employee of the Corporation until December 31, 1992. From January 1993 to the present Mr. Fulton has been retired. Robert W. Keener Mr. Keener was employed by Northwest 64 1994 Pipeline Corporation from 1973 to January 1994. Northwest Pipeline Corporation operates a natural gas transmission system in the Western United States. In 1975 he became Vice President - Gas Supply, and was named Senior Vice President - Gas Supply and Operations in 1980. He served as President and Chief Operating Officer from 1983 to 1992, and as Chief Executive Officer from 1992 until his retirement in January 1994. He is a former director and executive committee member of Key Bank Corporation of Utah. John A. Sproul Mr. Sproul was an Executive Vice 71 1989 President of Pacific Gas and Electric Company from 1977 to 1989. During most of that period, he was also Chairman of the Board and Chief Executive Officer of Pacific Gas Transmission Company, an interstate pipeline company. Since 1989 Mr. Sproul has been retired. 3 PRINCIPAL OCCUPATION AND DIRECTOR NAME CERTAIN OTHER DIRECTORSHIPS AGE SINCE - ----- --------------------------- --- ----- CLASS C (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1997): Thomas B. Boklund Mr. Boklund is the Chairman of the 56 1982 Board of Directors, Chief Executive Officer and President of the Corporation. He was Chief Operating Officer from May 1982 to July 1985, became Chief Executive Officer in August 1985, and Chairman of the Board of Directors in February 1992. He also served as President from May 1982 to February 1992, and was re-appointed in April 1994. He is currently a director of Paragon Trade Brands, Inc., a manufacturer of private label infant disposable diapers. Richard G. Landis Mr. Landis was President, Chairman 75 1987 and Chief Executive Officer of the Del Monte Corporation, a food and beverage company, from 1971 to November 1981 and President of the Pacific area of R.J. Reynolds Industries, Inc., a tobacco, food, beverage and transportation conglomerate, from November 1981 until his retirement in July 1983. Mr. Landis served as Chancellor of the University of LaVerne from July 1984 to October 1985. Mr. Landis served as a director of Potlatch Corporation, a diversified forest products company, from 1973 until December 1990. James A. Maggetti Mr. Maggetti was employed by Kaiser 71 1987 Steel Corporation from 1955 until his retirement in December 1983, where his last position was as a Vice President responsible for fabricating operations. He was Chairman of the Board of Napa Valley Bank from 1984 through April 1992 and Vice Chairman of the Board of Napa Valley Bancorp, the bank's holding company, from April 1982 through December 1991. Mr. Maggetti served as a director of Napa Valley Bank from June 1971 until April 1995 and as a director of WestAmerica Bancorporation from July 1993 until April 1995. DIRECTORS' COMPENSATION, MEETINGS AND STANDING COMMITTEES The Board has standing Executive, Audit and Compensation committees. The Board does not have a nominating committee. Directors who are not full-time employees of the Corporation receive an annual fee of $21,000, plus $1,200 for each Board and committee meeting attended and reimbursement of expenses. Directors who are full-time employees of the Corporation do not receive fees for serving on the Board or on committees. The Corporation has a deferred compensation plan for directors, by which all former and present outside directors of the Corporation who have served in the capacity of director since the 1986 Annual Meeting of Stockholders will be paid a benefit by the Corporation of $6,000 per year for each year served as an outside director up to a maximum of ten years. This benefit is to be 4 paid commencing with the calendar year following which such person ceases to be a director of the Corporation and payable to either the director, the director's estate, or other designated beneficiary. During 1995, the Board held five meetings, the Audit Committee held two meetings and the Compensation Committee held one meeting. Each director attended more than 75% of the aggregate number of Board meetings and meetings of committees of which he is a member which were held during the period for which he was a director. The Executive Committee may exercise all the authority of the Board, subject to actions of the full Board and except as otherwise provided by the Corporation's restated certificate of incorporation, the Corporation's bylaws or applicable law. The members of the Executive Committee are Messrs. Boklund, Emerson and Fulton. The Audit Committee reviews services provided by the Corporation's independent auditors, reviews with them the results of their audit, the adequacy of internal accounting controls, the quality of financial reporting and any recommendations they may have, and makes recommendations to the Board concerning their engagement or discharge. The members of the Audit Committee are Messrs. Emerson, Fulton, Gendron, Keener, Landis, Maggetti, Sproul and Swindells. The Compensation Committee establishes the general compensation policies of the Corporation and the compensation plans and specific compensation levels for executive officers, subject to approval of the Board. The members of the Compensation Committee during 1995 were Messrs. Emerson, Fulton, Gendron, Keener, Landis, Maggetti, Sproul and Swindells. 5 PRINCIPAL STOCKHOLDERS The following table sets forth certain information regarding the beneficial ownership of shares of the Common Stock as of February 15, 1996, by (i) each director, director nominee and named executive officer; (ii) each person known to the Corporation to be a beneficial owner of more than 5% of the outstanding shares of Common Stock; and (iii) all current directors and executive officers as a group. The persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the other footnotes to the table.
NUMBER PERCENTAGE NAME OF SHARES OF CLASS ---- ------------ ---------- L. Ray Adams (2) 2,908(4) * Thomas B. Boklund (1)(2) 79,494(3) * Joe E. Corvin (2) 31,543(3) * C. Lee Emerson (1) 88,515 * V. Neil Fulton (1) 6,568(4) * Edward C. Gendron (1) 2,000 * Edward J. Hepp, Jr. (2) 1,486(4) * Robert W. Keener (1) 1,000 Richard G. Landis (1) 5,600 * James A. Maggetti (1) 6,000 * Robert R. Mausshardt (2) 353(4) * John A. Sproul (1) 1,000 * William Swindells (1) 5,000 * Oregon Steel Mills, Inc. Employee Stock Ownership Plan Trust 1000 SW Broadway, Suite 2200 Portland, Oregon 97205 2,301,870 11.9% Scudder, Stevens & Clark, Inc. (6) 345 Park Avenue New York, New York 10154 2,234,500 11.5% State of Wisconsin (7) PO Box 7842 Madison, WI 53707 1,344,300 6.9% The Crabbe Huson Special Fund, Inc., and The Crabbe Huson Group, Inc. (8) 121 S.W. Morrison, Suite 1400 Portland, Oregon 97204 1,369,800 7.1% All directors and executive officers as a group (18 persons) 342,483(5) 1.8% - ------------- * Less than 1% of the outstanding Common Stock. 6 (1) Member of the Board of Directors. (2) Named executive officer. (3) All shares are held by the ESOP for Messrs. Boklund and Corvin. Participants in the ESOP have the power to vote these shares under the terms of the ESOP, but they do not have investment power with respect to such shares. (4) Includes 2,507 shares, 773 shares, 1,186 shares and 143 shares held by the ESOP for the accounts of Messrs. Adams, Fulton, Hepp and Mausshardt, respectively. Messrs. Adams, Fulton, Hepp and Mausshardt have the power to vote these shares under the terms of the ESOP, but they do not have investment power with respect to such shares. (5) Includes 222,242 shares held by the ESOP for the accounts as to which the respective beneficial owners have the power to direct the vote under the terms of the ESOP, but they do not have investment power with respect to such shares. (6) Based on the information obtained from an Amendment #2 to Schedule 13G dated February 7, 1996 filed by Scudder, Stevens & Clark, Inc. ("Scudder") with the Securities and Exchange Commission: Scudder has the sole power to dispose of 2,234,500 shares and the sole and shared power to vote 1,495,800 and 110,700, respectively, of such shares. (7) Based on the information obtained from an Amendment #1 to Schedule 13G dated February 1, 1996 filed by the State of Wisconsin Investment Board with the Securities and Exchange Commission. (8) Based on the information obtained from a Schedule 13G dated February 13, 1996, filed by The Crabbe Huson Special Fund, Inc., and The Crabbe Huson Group, Inc. with the Securities and Exchange Commission. The Crabbe Huson Special Fund, Inc. has the sole power to dispose of and to vote 1,103,100 shares. The Crabbe Huson Group, Inc. has the shared power to dispose of and to vote 266,700 shares. 7 /TABLE EXECUTIVE COMPENSATION The following table sets forth the compensation paid to or accrued by the Corporation and its subsidiaries for the Chief Executive Officer and each of the four most highly paid executive officers of the Corporation and its subsidiaries as of December 31, 1995.
SUMMARY COMPENSATION TABLE ANNUAL COMPENSATION(6) ALL OTHER COMPENSATION(6) ----------------------------------------- --------------------------------------------------- NAME AND OTHER ANNUAL ESOP THRIFT PLAN PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION CONTRIBUTION(2) CONTRIBUTION(3) SERP(4) TOTAL - ------------------ ---- ------ -------- ------------ --------------- --------------- ------- ------ Thomas B. Boklund 1995 $450,000 $ 28,676 - $ 1,986 $924 $4,242 $ 7,152 Chairman of the 1994 439,584 16,922 - 3,456 - - 3,456 Board, President 1993 400,000 42,200 - 5,354 - - 5,354 and CEO Joe E. Corvin 1995 $240,000 $ 15,294 - $ 1,986 $924 $ 48 $ 2,958 Senior Vice President 1994 229,584 8,816 - 3,456 - - 3,456 and Chief Operating1993 189,650 17,777 - 4,489 - - 4,489 Officer Edward J. Hepp, Jr. 1995 $218,750 $ 13,896 - $ 1,986 $924 $ 80 $ 2,990 Vice President, 1994 190,000 7,334 - 3,456 924 - 4,380 Commercial 1993 175,000 17,020 $33,601(5) 4,385 847 - 5,232 Robert R. Mausshardt 1995 $195,000 $ 12,426 - $ 1,986 $924 $ 398 $ 3,308 Vice President of 1994 195,000 7,527 - 3,456 924 - 4,380 Marketing, Tubular 1993 195,000 20,573 - 4,927 847 - 5,774 Products L. Ray Adams 1995 $195,000 $ 12,426 - $ 1,986 $924 $ 26 $ 2,936 Vice President of 1994 190,834 7,347 - 3,456 924 - 4,380 Finance and Chief 1993 175,000 19,766 - 4,421 847 - 5,268 Financial Officer - -------------- (1) Amounts earned pursuant to the Corporation's Profit Participation Plan. (2) Value of stock contributions made by the Corporation on behalf of the named executive to the Employee Stock Ownership Plan Trust, as determined at the time of such contribution. (3) Matching contributions made by the Corporation on behalf of the named executive to the Corporation's Thrift Plan. (4) Amounts paid under the Corporation's Supplemental Retirement Plan. (5) Amounts reimbursed for the payment of relocation expenses and related taxes, not expected to reoccur. (6) Pension benefits accrued in 1995 are not included in this Summary Compensation Table. 8
DEFINED BENEFIT RETIREMENT PLANS The Corporation's pension plans are defined benefit plans qualified under section 401(a) of the Internal Revenue Code (the "Code"). Executive officers and most other domestic employees of the Corporation are eligible to participate in the Oregon Steel Mills, Inc. Pension Plan (the "Plan") or similar plans. Normal retirement is at age 65. The amount of an employee's pension benefit and the resulting monthly payments an employee receives upon retirement are based upon the level of the employee's prior annual compensation, the employee's number of years of benefit service and other factors. The employee's annual pension benefit is equal to the sum of: (i) for each full or partial year of benefit service prior to January 1, 1994, 1% of the first $22,800 of Past Service Compensation, plus 1.6% of Past Service Compensation in excess of $22,800. ("Past Service Compensation" is the employee's average compensation for the years 1991, 1992 and 1993); plus, (ii) for each full or partial year of benefit service beginning on or after January 1, 1994, 1.2% of the employee's compensation during such year up to the employee's "Covered Compensation" amount for the year, plus 1.7% of the employee's compensation in excess of such "Covered Compensation" amount. ("Covered Compensation" for each year is determined by the employee's age and is taken from a Social Security Covered Compensation Table published annually in accordance with IRS regulations. For any given age, the Covered Compensation amount in the Table represents the average of the Social Security taxable wage bases over the 35-year period ending in the year someone that age will reach Social Security normal retirement age.) In addition to the Plan, the Corporation initiated effective May 1, 1994 a Supplemental Retirement Plan (the "SERP") to supplement the Plan and ESOP and make up for benefits which were lost because of the dollar limits imposed by sections 401(a)(17) and 415 of the Code on benefits and contributions under those plans. The SERP results in highly-compensated employees receiving retirement benefits calculated on the same basis as other employees. Employees become eligible for benefits under the SERP whenever: (a) the employee has service after the effective date; (b) the employee becomes eligible for benefits under the Plan or an allocation under the ESOP; and (c) the employee's benefit or allocation is limited by sections 401(a)(17) of the Code or by the dollar amount under section 415 of the Code, or both. The benefit paid under the SERP is the difference between the Plan benefit calculated as described above and the amount that would have been paid under the Plan in the absence of the dollar limits in Code sections 401(a)(17) and 415; plus the difference between the amount of ESOP benefit allocated to the participant under the ESOP after 1988 and the amount that would have been allocated in the absence of the dollar limits in Code sections 401(a)(17) and 415, plus dividends that would have been paid on such shares after May 1994. Such benefit payments are made at the time that the benefits under the Plan or ESOP, as applicable, are paid, or earlier upon an adverse IRS ruling. The Compensation Committee of the Board of Directors may amend or terminate the SERP at any time so long as rights already accrued at the time of such amendment or termination are preserved. 9 The following Pension Plan Table shows the covered compensation portion of the estimated annual benefits payable upon retirement at age 65 (including benefits under the SERP) in the specified compensation and years of service classifications.
PENSION PLAN TABLE (QUALIFIED PLAN PLUS SERP)(3) YEARS OF SERVICE Remuneration (2) 15 20 25 30 35 ---------------- -------- -------- -------- -------- -------- $125,000 $ 28,875 $ 38,500 $ 48,125 $ 57,750 $ 67,375 $150,000 35,250 47,000 58,750 70,500 82,250 $175,000 41,625 55,500 69,375 83,250 97,125 $200,000 48,000 64,000 80,000 96,000 112,000 $225,000 54,375 72,500 90,625 108,750 126,875 $250,000 60,750 81,000 101,250 121,500 141,750 $300,000 73,500 98,000 122,500 147,000 171,500 $350,000 86,250 115,000 143,750 172,500 201,250 $400,000 99,000 132,000 165,000 198,000 231,000 $450,000 111,750 149,000 186,250 223,500 260,750 $500,000 124,500 166,000 207,500 249,000 290,500 $550,000 137,250 183,000 228,750 274,500 320,250 $600,000(1) 150,000 200,000 250,000 300,000 350,000 (1) Represents 120% of the maximum compensation for the year ended December 31, 1995. (2) Based on the estimated straight-life annuity amounts for future service using 1996 as the first year of benefit service. Social Security Covered Compensation as defined above is assumed to be $40,000. (3) Does not include the ESOP benefit pursuant to the SERP which is not determined by years of service and final compensation. The portion of an employee's benefit attributable to years of benefit service in excess of 35 years, is limited to 1.0% of his Past Service Compensation for purposes of (i) above; and to 1.2% of his annual compensation for purposes of (ii) above. Notwithstanding the foregoing, an employee's compensation taken into account for any Plan year after 1993 shall not exceed $150,000 (or such other amount as may be prescribed for the relevant plan year by the Secretary of the Treasury pursuant to section 401(a)(17) of the Code). As previously described, the SERP will pay benefits on the additional compensation above that amount. The employee's annual pension benefit is reduced to the extent of the annuity value of: (i) any portion of the employee's account balances under the Corporation's Profit Participation Plan and the ESOP as of January 1, 1981 attributable to allocations on the basis of compensation in excess 10
of the Social Security taxable wage base; and (ii) any retirement benefits paid to the employee under the Corporation's Pension Plan for Union Employees which was terminated January 23, 1984. The Plan benefits are not subject to deduction for social security. For each named executive officer listed on the Summary Compensation Table, the applicable compensation each year is the sum of the "Salary" and "Bonus" compensation shown, limited as described above. Upon their retirement, assuming retirement at age 65 and no increase in current rates of annual compensation, and based upon years of service at December 31, 1995, Messrs. Boklund, Corvin, Hepp, Mausshardt and Adams would receive lifetime annual payments under the Plan and pension benefits pursuant to the SERP combined of $243,448, $128,044, $70,304, $48,236, and $87,732, respectively. Their credited years of service as of December 31, 1995 are twenty-two, twenty-six, four, eleven and seven years, respectively. In addition, ESOP benefits pursuant to the SERP would include dividends and the equivalent value of shares of common stock accrued through December 31, 1995 of $67,712, $3,002, $2,737, $6,942, and $1,637, respectively. Future ESOP benefit additions, if any, would be derived from discretionary annual ESOP allocations set by the Board of Directors. EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS The Corporation has employment agreements (the "Employment Agreements") with certain of its key employees, including Messrs. Boklund, Mausshardt, Hepp, Corvin and Adams ("Employees"). Each Employment Agreement is effective until June 1 of each year, with (a) automatic one-year extensions until the Employee reaches the age of 65 unless either the Corporation or the Employee provides prior notice that the Employment Agreement will not be extended, and (b) an automatic three-year extension in the event of a change of control of the Corporation (a "Change in Control"). Change in Control is defined to include, among other things, the transfer of 25% or more of the Corporation's voting securities to any person or entity other than the ESOP or the election of a majority of directors who were not nominated by the then current Board. The Employment Agreements provide, among other things, for severance compensation in the event that an Employee's employment is terminated by the employer without cause or by the Employee with good reason, all as defined in the Employment Agreements, during the three-year period following a Change in Control. Such severance compensation is to be calculated as the sum of (i) three times the Employee's annual base salary as of the date of the Change in Control, (ii) the four most recent quarterly cash distributions to such Employee from the Corporation's Profit Participation Plan, and (iii) an amount equal to the lump sum present actuarial value of the excess, if any, of the normal retirement allowance to which the Employee would have been entitled under the Pension Plan, assuming that the Employee continued as an active participant under such plan, without change in his rate of annual pay, until the earlier of his 65th birthday or the tenth anniversary of the date of the Change in Control, over the normal retirement allowance to which the Employee is actually entitled under such plan as of the date of termination. Under the Employment Agreements, any terminated Employee would also receive full base salary through the date of such termination of employment, reimbursement for any legal fees or expenses incurred by the Employee in seeking to enforce the Employment Agreement and certain non-cash employee benefits as specified in the Employment Agreement. 11 The Corporation has entered into Indemnification Agreements with each director and certain executive officer(s)(an "Indemnified Person"). Each agreement provides that the Corporation shall indemnify the Indemnified Person if and when the Indemnified Person is or was a party or is threatened to be made a party to any action, suit, arbitration, investigation, administrative hearing or any other proceeding (a "Proceeding") because of the Indemnified Person's status or former status as a director, officer or other agent of the Corporation or because of anything done or not done by the Indemnified Person in such capacity, against all expenses and liabilities actually and reasonably incurred by the Indemnified Person or on the Indemnified Person's behalf in connection with the investigation, defense, settlement or appeal of such Proceeding. The Corporation will advance to the Indemnified Person all reasonable defense expenses incurred in defense of any Proceeding. Further, each agreement provides that upon the acquisition of 30% or more of the outstanding shares of Common Stock, other than by the Corporation or the ESOP, without approval by a majority of the Corporation's Board prior to such acquisition, the Corporation will obtain and maintain over the term of the agreement an irrevocable standby letter of credit on terms satisfactory to the Indemnified Person in an appropriate amount (but not less than $500,000) naming the Indemnified Person as the beneficiary in order to secure the Corporation's obligation under the agreement. Finally, each agreement provides that the Corporation must maintain director and officer insurance in the amount of at least $2.0 million with coverage at least comparable to its then current insurance for the Indemnified Person for the term of the agreement. The Corporation may elect to not purchase the required insurance if the insurance is not reasonably available or if, in the reasonable business judgment of the directors of the Corporation, either the premium cost for such insurance is disproportionate to the amount of coverage or the coverage provided by such insurance is so limited that there is insufficient benefit from such insurance. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During 1995 the Compensation Committee members were John A. Sproul, Chairman, C. Lee Emerson, V. Neil Fulton, Edward C. Gendron, Robert W. Keener, Richard G. Landis, James A. Maggetti and William Swindells. Mr. Emerson was Chairman of the Board and an employee of the Corporation through January 1992. Mr. Fulton was the Corporation's Vice President of Finance and Chief Financial Officer until February 1991, and was an employee of the Corporation through December 31, 1992. BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation Committee of the Board establishes the general compensation policies of the Corporation and the compensation plans and specific compensation levels for executive officers, subject to approval of the Board. The Compensation Committee is composed of eight independent, non-employee directors. COMPENSATION PRINCIPLES The Corporation is committed to providing a compensation program that helps attract and retain the best people available. To ensure that compensation is competitive, the Corporation regularly compares its pay practices with those of comparable companies and sets pay parameters based on this review. The Corporation has maintained the philosophy that compensation of all employees should be directly and materially linked to operating and financial performance of the Corporation. To achieve this linkage, employee compensation is heavily weighted towards compen- 12 sation paid on the basis of pre-tax profit. The Corporation has also established stock ownership as part of non-union employee compensation to promote the alignment of employee long range interests with those of the stockholders. In addition, the Corporation believes that whenever possible the compensation and benefit program provided to the executive officers should be based on similar principles as for all other non-union employees. These principles align all employee compensation with the Corporation's objectives, operating strategy, management initiatives and financial performance. The program: Attracts and retains key individuals critical to the long- term success of the Corporation. Supports a performance-oriented environment in which everyone is working together in pursuit of the Corporation's goals. Encourages the Corporation's long-term growth and profitability and the enhancement of stockholder value. COMPARATIVE EVALUATION The Corporation seeks to align total compensation for its executive officers with that of comparable executive positions in other manufacturing companies and other steel companies. To assist it in doing so, in 1993 the Compensation Committee commissioned a study of executive compensation by an independent compensation consulting firm (the "Study"). The Study focused on total compensation for the 11 most senior executive positions. In preparing the Study, the consulting firm: (a) reviewed extensive background data on the Corporation, including financial reports and forecasts, compensation data, organizational charts, business plans, annual reports and position descriptions; (b) conducted individual interviews with the incumbents of the positions covered by the Study; (c) reviewed the compensation practices of eleven steel companies as described in their proxy statements to stockholders, including 5 of the 6 companies included in the S&P Steel Index illustrated in the Performance Graph; and (d) reviewed competitive practices and pay levels in over 200 durable goods manufacturing companies (including steel companies) surveyed by the consultant. COMPENSATION ELEMENTS There are three elements in the Corporation's executive officer compensation program, all determined by individual performance and corporate profitability. Those elements and the relevant conclusions of the Study are as follows: BASE SALARY COMPENSATION The Compensation Committee adjusts base salary levels within pre- established ranges to reflect the responsibilities and performance of individuals. The responsibilities assumed, the skills and experience required by the job, and the performance of the individual are relatively equal considerations in determining base salary. The Study concluded, among other things, that the Corporation's base salaries for the senior executive positions were in aggregate 4% below competitive levels, and that group benefit and perquisite values were consistent with competitive levels. The Study noted that in the past the success of the Profit Participation Plan and the capital accumulation that occurred under the ESOP have historically offset the salary level disparity and successfully provided both short and long- term incentives. 13 ANNUAL INCENTIVE COMPENSATION As noted above, the Corporation believes that all employees share in the responsibility for achieving profits. Accordingly, the Corporation has discretionary Profit Participation Plans under which it distributes quarterly to most of its U.S. employees with over three months of employment 12% to 20%, depending on location, of its domestic pre-tax earnings after adjustments for certain non-operating items. Each employee, including executive officers, receives a share of the distribution based on the level of the employee's base compensation compared with the total base compensation of all eligible employees. The Corporation may modify, amend or terminate the plans at the discretion of the Board of Directors, subject to the terms of various labor agreements. EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) The Corporation has an ESOP for qualified employees (generally those employees with six months of employment) of Oregon Steel Mills, Inc. and its subsidiaries, Napa Pipe Corporation and Oregon Steel Mills - Fontana Division, Inc. Annual contributions to the ESOP, which are at the discretion of the Board, are based upon the financial performance of those entities. The annual contribution may be in cash or Common Stock but historically has been Common Stock. Shares are allocated to the accounts of qualified employees, including executive officers, at the end of each year in proportion to each eligible employee's total eligible compensation compared with the total eligible compensation of all eligible employees. As noted above, the purpose of this program is to provide additional incentive for employees to work to maximize stockholder value. The ESOP program utilizes vesting periods and diversification features that encourage employees to retain ownership of the Corporation's Common Stock and continue in the employ of the Corporation. In addition to the Profit Participation and ESOP plans, the Study recommended that consideration be given to various supplemental retirement and other incentive plans. The Compensation Committee accepted in principal the Study's recommendations as to supplemental retirement plans, and initiated in 1994 the SERP. As discussed previously under the heading "Defined Benefit Retirement Plans", the SERP supplements pension and ESOP benefits, making up for benefits which were lost because of the dollar limits imposed by sections 401(a)(17) and 415 of the Code. CHIEF EXECUTIVE OFFICER ("CEO") COMPENSATION The Compensation Committee has used the same policies with respect to the compensation of Mr. Boklund. In determining Mr. Boklund's base salary for 1994, the Committee reviewed the Study and Mr. Boklund's performance and responsibilities. The Committee noted the additional responsibilities undertaken by Mr. Boklund in 1994, including assuming the office of President, overseeing the tremendous growth in capacity, and developing and implementing the capital improvement program, and determined to increase his base salary (effective March 1994) to $450,000. As Mr. Boklund's additional responsibilities continued into 1995, his base salary in 1995 remained the same as in 1994. He participates in the profits of the Corporation and the ESOP under the same provisions and formulas as other domestic employees of the Corporation. The Corporation does not have any "Excessive Employee Remuneration" as defined in section 162(m) of the Code. 14 COMPENSATION COMMITTEE DURING 1995 John A. Sproul, Chairman C. Lee Emerson V. Neil Fulton Edward C. Gendron Robert W. Keener Richard G. Landis James A. Maggetti William Swindells PERFORMANCE GRAPH Set forth below is a line graph comparing the cumulative total stockholder return of the Corporation's Common Stock, based on the market price of Common Stock and assuming reinvestment of dividends, with the cumulative total return of companies on the Standard and Poors' 500 Stock Index ("S&P 500 Index") and the Standard & Poors' Steel Index ("S&P Steel Index"). STOCKHOLDER RETURN - ------------------ MEASUREMENT PERIOD OREGON S&P 500 S&P STEEL (FISCAL YEAR COVERED) STEEL INDEX INDEX - ---------------------------------------------------------------------- MEASUREMENT POINT - 12/31/90 $100.00 $100.00 $100.00 FYE 12/31/91 90.81 130.34 122.86 FYE 12/31/92 111.02 140.25 160.72 FYE 12/31/93 112.07 154.33 211.40 FYE 12/31/94 71.84 156.42 205.65 FYE 12/31/95 66.03 214.99 190.66 - ---------- (a) Dividends are reinvested at the end of the month in which they are paid. (b) Assumes $100 invested in Oregon Steel, the S&P 500 Index companies and the S&P Steel Index companies on December 31, 1990. COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT Based on the Corporation's review of Forms 3, 4, and 5 furnished to the Corporation pursuant to Section 16 of the Securities Exchange Act of 1934, as amended, all such forms were filed on a timely basis except for an inadvertent late filing by Mr. Keener of a Form 4 relating to the purchase of 1,000 shares of Common Stock. 15 INDEPENDENT ACCOUNTANTS During the fiscal year 1995, Coopers & Lybrand L.L.P. served as independent accountants to the Corporation. They have been appointed as the Corporation's independent accountants for the fiscal year 1996 by the Board of Directors. Representatives of Coopers & Lybrand L.L.P. will be present at the Annual Meeting and will be available to respond to appropriate questions. They do not expect to make any statement but will have the opportunity to make a statement if they desire to do so. OTHER MATTERS The Board knows of no other matters to be brought before the Annual Meeting. However, if any other business properly comes before the meeting, the persons named in the accompanying form of proxy will vote or refrain from voting thereon in accordance with their judgment pursuant to the discretionary authority given them in the proxy. STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING Stockholder proposals submitted for inclusion in the 1997 proxy materials and consideration at the 1997 Annual Meeting of Stockholders must be received by the Corporation by November 15, 1996. Any such proposal should comply with the rules promulgated by the Securities and Exchange Commission governing stockholder proposals submitted for inclusion in proxy materials. LaNelle F. Lee SECRETARY Portland, Oregon March 15, 1996 16 OREGON STEEL MILLS, INC. ANNUAL MEETING - APRIL 25, 1996 PROXY SOLICITED BY BOARD OF DIRECTORS The undersigned hereby appoints Thomas B. Boklund and L. Ray Adams, and each of them, proxies with power of substitution to vote on behalf of the undersigned all shares which the undersigned may be entitled to vote at the Annual Meeting of Stockholders of Oregon Steel Mills, Inc. on April 25, 1996, and any adjournment thereof, with all powers that the undersigned would possess if personally present, with respect to the item on the reverse side. THE SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED ON THE REVERSE HEREOF. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. THE PROXIES MAY VOTE IN THEIR DISCRETION AS TO OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING. PLEASE MARK, DATE, SIGN, AND RETURN THE PROXY CARD PROMPTLY. (CONTINUED AND TO BE SIGNED ON REVERSE) (Triangle)FOLD AND DETACH HERE(Triangle) OREGON STEEL MILLS, INC. ANNUAL MEETING OF STOCKHOLDERS Thursday, April 25, 1996 Please mark (Square box your votes as in which an indicated in "X" has been this example marked) 1. Election of Class B Directors FOR [ ] FOR all nominees listed below (except as marked to the contrary below) or, if any named nominee is unable to serve, for a substitute nominee. WITHHOLD [ ] WITHHOLD AUTHORITY to vote for all nominees listed below. C. Lee Emerson, Edward C. Gendron, William Swindells (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON THE LINE BELOW.) --------------- ---------------- --------------- THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE. (To the left of "Dated" Dated: , 1996 appears a 3/8-inch, ----------------- horizontal black line; a perpendicular 3/8-inch ------------------------------ black line extends ------------------------------ downward from the right Signature or Signatures corner of the horizontal line.) Please date and sign exactly as name is imprinted hereon, including designation as executor, trustee, etc., if applicable. When shares are held jointly, each joint owner should sign. If a corporation, please sign in full corporate name by the president or other authorized officer. If a partnership, please sign in partnership name by authorized person. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. (Triangle)FOLD AND DETACH HERE(Triangle) OREGON STEEL MILLS, INC. ANNUAL MEETING OF STOCKHOLDERS Thursday, April 25, 1996 -----END PRIVACY-ENHANCED MESSAGE-----