UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 28, 2005
OREGON STEEL MILLS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-9887 94-0506370
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1000 S.W. BROADWAY, SUITE 2200; PORTLAND, OREGON 97205
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(Address of principal executive offices) (Zip code)
(503) 223-9228
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the
Exchange Act (17 CFR 240.13e-4 (c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
This summary is not intended to be a complete description of all of the
compensation terms. For further information, review the Oregon Steel Mills, Inc.
("Company") Form 10-K for the year ended December 31, 2004 and proxy statement
for the April 28, 2005 Annual Meeting of Stockholders.
2005 LONG-TERM INCENTIVE PLAN
On April 28, 2005, the Oregon Steel Mills, Inc. 2005 Long-Term Incentive Plan
("2005 LTIP") was approved by stockholders. Key features of the 2005 LTIP are:
[BULLET] Term of Plan: The 2005 LTIP becomes effective upon stockholder
approval, and provides that no further grants under the 2005 LTIP may
be made after May 31, 2010.
[BULLET] Plan Administered by Independent Committee: The 2005 LTIP will be
managed by the Nominating/Corporate Governance and Compensation
Committee ("Committee"), which is comprised solely of independent,
non-employee directors, and the Committee has engaged an independent
executive compensation consultant to advise the Committee on
compensation.
[BULLET] Authorized Shares: The total number of shares of common stock available
for delivery pursuant to awards under the 2005 LTIP over its entire
term is 500,000, which represents approximately 1.4% of the Company's
common stock outstanding as of March 31, 2005.
[BULLET] Types of Awards: The 2005 LTIP authorizes the grant of several types of
stock-based awards, including performance awards, incentive stock
options ("ISOs"), nonstatutory stock options ("NSOs"), stock
appreciation rights ("SARs"), restricted stock awards, and other stock
unit awards.
[BULLET] Minimum Vesting: The 2005 LTIP provides for certain minimum vesting
requirements that must be followed, except in the case of a change in
control of the Company. First, options that vest based solely upon
continued employment or service may not fully vest sooner than three
years after the grant date. Second, restricted stock awards and other
stock unit awards that vest solely based upon continued employment or
service may not vest sooner than two years after the grant date, except
that awards may be approved with a restriction period of less than two
years with respect to up to 50,000 shares. Finally, performance share
awards, performance units, restricted stock awards and other stock unit
awards that vest upon the attainment of performance goals must provide
for a performance period established by the Committee.
[BULLET] No Discount Stock Options: The 2005 LTIP prohibits the grant of a stock
option with an exercise price less than the fair market value of the
Company's stock on the date of grant.
[BULLET] No Repricing of Stock Options: No amendments to the 2005 LTIP will
permit the Company to reprice any outstanding option without the
prior approval of stockholders.
2005 EXECUTIVE OFFICER LONG-TERM INCENTIVE PROGRAM
On April 28, 2005, pursuant to the 2005 LTIP, the Board approved, upon the
recommendation of the Committee, the grant of performance-based equity awards
("Performance Shares") under the 2005 LTIP to executive officers of the Company
as a component of their total 2005 compensation package. The awards approved on
April 28, 2005 replaced the awards approved on March 1, 2005 subject to
stockholder approval of the 2005 LTIP and previously disclosed. Each award is
expressed as a target number of Performance Shares of the Company's common stock
determined by dividing the target long-term incentive value by the 20 trading
day average closing share price at the beginning of the Performance Period. For
the Performance Shares granted on April 28, 2005, the Performance Period started
January 1, 2005 and the 20 trading day average closing share price was $19.01.
The awards previously approved on March 1, 2005 were determined based on an
estimated share price.
The number of Performance Shares, if any, actually earned by the grantee under
an award will be based upon the performance of the Company over a three-year
performance period (the "Performance Period") beginning January 1, 2005 and
ending December 31, 2007. Depending upon the Company's performance with
reference to the performance categories described below, a grantee ultimately
may earn from zero to two times the target number of Performance Shares granted.
The performance categories used to determine how many Performance Shares
ultimately will be earned are (1) the Company's total shareholder return
("TSR"), defined as stock price appreciation including reinvestment of
dividends, during the Performance Period relative to the TSR during that same
period of the selected industry peer group, and (2) the three-year average
earnings before interest, taxes, depreciation and amortization ("EBITDA") per
ton of steel shipped. One half of the total target number of Performance Shares
awarded may be earned based on the relative TSR performance and the other half
may be earned based on the EBITDA per ton of steel shipped performance. For each
performance category, performance levels have been set that will earn threshold
(.25 times), target (1 times) and superior (2 times) the target payouts. If the
threshold performance level is not achieved in a category as of the end of the
award's Performance Period, then none of the Performance Shares tied to that
category would be earned. If at least the threshold is achieved in a category,
then Performance Shares will be earned in an amount equal to the number of the
award's target shares tied to that category, multiplied by a percentage
determined by a straight-line interpolation between the level of the Company's
performance in that category and the above-stated payout percentages. Earned
awards will be paid 60% in cash and 40% in Company stock.
Grants of a total of 101,000 Performance Shares were awarded on April 28, 2005,
subject to the results of the performance criteria for the three-year
Performance Period 2005 through 2007. Among the recipients of the awards were
the following named executive officers for 2005 and their corresponding target
award: James E. Declusin, President and Chief Executive Officer (31,562
Performance Shares); L. Ray Adams, Vice President Finance, Chief Financial
Officer and Treasurer (15,781 Performance Shares); Jennifer R. Murray, Vice
President Administration and Corporate Secretary, (3,945 Performance Shares) and
Robert A. Simon, Vice President and General Manager RMSM (5,260 Performance
Shares).
2005 DIRECTORS' EQUITY COMPENSATION
As a result of stockholder approval of the 2005 LTIP, the Non-employee
Directors' Equity Compensation Program approved by the Board of Directors March
1, 2005, became effective and the Non-employee Directors' Stock Option Plan was
discontinued. Under this program, a new non-employee director will be granted
$30,000 (dollar denominated) in restricted Company common stock, vesting in
equal parts over three years, upon initial election or appointment to the Board,
and on the date of the Annual Meeting of Stockholders all non-employee directors
will receive an annual grant of $25,000 (dollar-denominated) in restricted
Company common stock, vesting in equal parts over three years.
On April 28, 2005, pursuant to the Non-employee Directors' Equity Program,
grants of a total of 12,976 shares of restricted Company common stock were
awarded, specifically a grant of 1,622 restricted shares to each of the
following Directors: Harry Demorest, William Kinnune, Carl Neun, David
Parkinson, Stephen Reynolds, William Swindells, Frank Walker, and Brett Wilcox.
The grants were determined based on a $25,000 annual grant value, divided by
$15.41, the Fair Market Value of the shares on the grant date, as defined by the
2005 LTIP (the average of the highest and lowest sale prices of the Company's
common stock on the New York Stock Exchange).
SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
ITEM 5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
YEAR
On April 28, 2005, the Board approved, upon the recommendation of the
Compensation Committee, and effective immediately, an amendment to the Bylaws
related to officers. Article 4.1 of the Bylaws was amended such that one of the
officers of the Company must be the Chief Financial Officer. Article 4.2.3 was
amended to say, "In the event the President is absent or disabled, the Board of
Directors shall promptly meet to confer the title, powers and duties of the
President on another officer or officers. Until the Board of Directors takes
such action, the Chief Financial Officer shall exercise all power and perform
all the duties of the President." Previously, Article 4.2.3 stated that the Vice
Presidents, in the order of their seniority, may assume and perform the duties
of the President in the absence or disability of the President or whenever the
office is vacant.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
EXHIBIT
NUMBER DESCRIPTION
3.1 Article 4 of the Company's Bylaws (as amended and restated on
April 28, 2005).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OREGON STEEL MILLS, INC.
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(Registrant)
Date: May 4, 2005 By: /s/ Jeff S. Stewart
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Jeff S. Stewart
Corporate Controller
(Principal Accounting Officer)