Edgar Filing: OREGON STEEL MILLS INC

OREGON STEEL MILLS, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD
MAY 1, 2003
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 Double Tree Hotel, Jantzen
Beach Complex, 909 N. Hayden Island Drive, Portland, OR 97217, on Thursday, May
1, 2003, at 9:30 a.m. Pacific Time.

The meeting is being held for the following purposes:

1. To elect three Class C directors;

2. To approve an amendment to the Corporation's Restated Certificate of
Incorporation, as amended, to increase the number of authorized shares
of Common Stock from 30,000,000 to 45,000,000 shares; and

3. 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 10, 2003, 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.

Admission to the meeting will be by Admission Ticket only. If you are a
stockholder of record or an ESOP participant and plan to attend the Annual
Meeting, please keep your Admission Ticket, which is enclosed, and present the
ticket for admission to the meeting. If you are a stockholder whose shares are
not registered in your own name and you plan to attend the meeting, please bring
a copy of the voting form sent to you by the stockholder of record (your broker,
bank, etc.) or other evidence of stock ownership.

By Order of the Board of Directors,

Jennifer R. Murray
SECRETARY
March 25, 2003
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 S.W. BROADWAY
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 Double Tree Hotel, Jantzen Beach Complex, 909 N. Hayden Island Drive,
Portland, OR 97217, on Thursday, May 1, 2003, at 9:30 a.m. Pacific Time, and any
adjournments thereof.

Only stockholders of record at the close of business on March 10, 2003 are
entitled to notice of, and to vote at, the meeting. At the close of business on
that date, the Corporation had 25,789,854 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 and Proposal 2 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. For
Proposal 1, (i) the nominees receiving a plurality of the votes cast at the
Annual Meeting are elected as directors; (ii) withholding authority to vote for
a director will be treated as a vote cast against the nominee; and (iii) a
broker non-vote will not be treated as a vote cast. For Proposal 2, (i) the
affirmative vote of the holders of a majority of all shares of the Corporation's
stock outstanding on the Record Date is required for approval; and (ii)
abstentions and broker non-votes will have the same effect as votes cast against
Proposal 2.

The approximate date on which this proxy statement and the accompanying
proxy card are being mailed to the Corporation's stockholders is March 25, 2003.
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 directors, 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 C DIRECTORS

NOMINEES

The Corporation has a classified Board consisting of three Class A
directors, Messrs. Corvin, Parkinson, and Sproul; three Class B directors,
Messrs. Demorest, Reynolds, and Swindells; and three Class C directors, Messrs.
Declusin, Neun, and Walker. Class A and B directors serve until the Annual
Meetings of Stockholders to be held in 2004 and 2005, 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.

-1-

The nominees for election as Class C directors are James Declusin, Carl W.
Neun, and Frank M. Walker, each is a member of the present Board. The Class C
directors to be elected at the 2003 Annual Meeting will serve until the Annual
Meeting of Stockholders in 2006 and until their successors are elected and
qualified.

Unless authority to vote for a director is withheld, the accompanying
proxy, if properly executed and returned, will be voted for the election of the
Class C nominees named below. If authority to vote for the nominees is withheld,
the withheld votes will not be cast for any other nominee. If any nominee is
unable or unwilling to serve as a director, proxies may be voted for such
substitute nominee as may be designated by the Board. The Board has no reason to
believe that any nominee will be unable or unwilling to serve as a director if
elected.

The following table sets forth information with respect to the persons
nominated for election as Class C directors and each other director, including
their names and ages as of February 15, 2003, business experience during the
past five years, and directorships in other corporations.

Principal Occupation and Director
Name Certain Other Directorships Age Since
---- --------------------------------- --- -----

CLASS C (NOMINEES WHOSE TERM OF OFFICE WILL EXPIRE IN 2006):

James Declusin Mr. Declusin spent sixteen years with California Steel 60 2000
Industries, most recently serving as Senior
Executive Vice President and Chief Operating
Officer, retiring on October 31, 2000. Prior to
that time, Mr. Declusin spent seventeen years in
various management positions in the commercial area
of Kaiser Steel Corporation.

Carl W. Neun Mr. Neun was Senior Vice President and Chief Financial Officer 59 2002
for Tektronix, Inc., an electronics manufacturing company, from
1993 until his retirement in 2000. Mr. Neun also serves on
the boards of RadiSys Corporation, Planar Systems,
and Powerwave Technologies.

Frank M. Walker Mr. Walker is President, Chief Executive Officer and a Director 57 2002
of Feralloy Corporation, a steel processing and
distribution corporation. He has held these
positions since 1993. He also serves on the Board
of Delta Steel, Inc.

CLASS B (DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 2005):

Harry L.Demorest Mr. Demorest is President and Chief Executive Officer and 61 2001
a Director of Columbia Forest Products, Inc., a leading
manufacturer of hardwood plywood, veneer, and flooring, a
position he has held since March 1996. He is also a director
on the boards of the Oregon Museum of Science and Industry,
Friends of the Children, and the Portland Police Foundation.

Stephen P. Reynolds Mr. Reynolds is President and Chief Executive Officer and 55 1999
a director of Puget Energy, Bellevue, Washington. Prior to
joining Puget Energy in January of 2002, Mr. Reynolds
served as President and Chief Executive Officer of Reynolds
Energy International, an energy advisory firm in Houston,
Texas. From 1987 to 1997, he served as President and Chief
Executive Officer of Pacific Gas Transmission Company. He
also serves on the boards of the Corporate Council for the
Arts; the Nature Conservancy of Washington; the Washington
Roundtable, the Edison Electric Institute and the American
Gas Association.

William Swindells Mr. Swindells is the Chairman of the Board of Directors 72 1994
and is the former Chairman of the Board of Directors of
Willamette Industries, Inc., a diversified wood products
company. While at Willamette Industries, Inc., he held
the position of Chairman of the Board from 1985 to
February 2002 and also held the position of Chief Executive
Officer from 1985 until September 1995 and again from
November 1997 until December 1998. He is a director on
the board of Airborne Express Company, and serves as a
trustee of Willamette University and the Oregon Health
& Science University Foundation.

-2-

Principal Occupation and Director
Name Certain Other Directorships Age Since
---- --------------------------- --- --------

CLASS A (DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 2004):

Joe E.Corvin Mr. Corvin is the President and Chief Executive Officer 58 1997
of the Corporation. He was Vice President and General
Manager of the Portland Steelworks from May 1992
to June 1994, was Senior Vice President of
Operations of the Corporation from June 1994 to
May 1996, Chief Operating Officer of the
Corporation from June 1994 to January 2000, was
President of the Corporation's Oregon Steel Mills
Division from May 1996 to November 1996 and became
President of the Corporation in December 1996 and
Chief Executive Officer in January 2000.

David L. Parkinson Mr. Parkinson is a Consultant to Rail America, a New York 65 2001
Stock Exchange company. He was Chairman and Chief Executive
Officer of ParkSierra Rail Group from 1998 to 2002.
Mr. Parkinson is on the board of directors for Napa Landmarks
and California Short Line Railroad Association, and the
Foundation of Intermodal Research.

John A. Sproul Mr. Sproul was an Executive Vice President of Pacific Gas and 78 1989
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.

DIRECTORS' COMPENSATION, MEETINGS AND STANDING COMMITTEES

The Board has standing Executive, Audit, and Nominating and Compensation
Committees. 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 Board established, effective April 26, 2002, the Non-Employee
Directors' Stock Option Plan (the "Directors' Stock Option Plan"). The
Directors' Stock Option Plan provides for outside directors to receive initial
grants of options to purchase 4,000 shares of common stock on the effective date
and annual grants of options to purchase 1,500 shares of the common stock on the
day of the annual meeting, at an exercise price equal to the closing price on
the grant date, and vesting over three years. New directors receive an initial
grant of options to purchase 2,000 shares on the day after their appointment. On
April 26, 2002, each non-employee director received initial grants of options to
purchase 4,000 shares.

The Board terminated the Oregon Steel Mills, Inc. Directors' Retirement
Plan (the "Retirement Plan") as of December 31, 2001. Under the Retirement Plan,
in effect since January 1, 1998, retiring directors who had completed five years
of service as an outside director were paid $20,000 annually until the number of
payments equals the number of full years of service as an outside director. The
payment terms were convertible to a lump-sum present value payment if so elected
by the retiring director and approved by the Compensation Committee.

In terminating the Retirement Plan, terms of payment of vested benefits
were arranged for the two current outside directors with more than five years of
service on the Board. Mr. John A. Sproul, who began as an outside director in
1989, will receive six annual payments of $34,504.92, beginning in January 2002.
Mr. William Swindells, an outside director since 1994, will receive six annual
payments of $22,752.21.

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 during 2002 were Messrs.
Corvin, Demorest and Reynolds. Mr. Swindells as Chairman of the Board is an ex
officio member of each Committee.

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 during 2002
were Messrs. Demorest, Neun, Parkinson, and Sproul.

-3-

In 2002, the functions of the Nominating Committee and Compensation
Committee were combined into the Nominating and Compensation ("Compensation")
Committee. This Committee makes recommendations to the Board concerning
nominations of directors and selection of directors for membership on the
various board committees. The Compensation Committee will consider stockholder
suggestions as to nominees for directors, such suggestions should be addressed
to the Secretary of the Corporation at its principal executive offices and
contain the information required by Section 1.2 of the Corporation's bylaws. In
order to be considered for the 2004 Annual Meeting of Stockholders, such
suggestions should be received by no later than November 26, 2003.

The Compensation Committee, subject to approval of the Board, establishes
the general compensation policies of the Corporation and the compensation plans
and specific compensation levels for executive officers and establishes
guidelines for the compensation of other personnel. The members of the
Compensation Committee during 2002 were Messrs. Reynolds, Declusin, and Walker.

During 2002, the Board held 4 meetings, the Audit Committee held 4
meetings, and the Compensation Committee held 4 meetings. Each incumbent
director attended at least 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.

OTHER RELATIONSHIPS

Oregon Feralloy Partners is a joint venture between Feralloy Corporation
("Feralloy") and the Corporation that processes plate from hot roll coil product
produced by the Corporation. Feralloy is the operating partner and owns 40% and
the Corporation owns 60%, leases certain real property in Portland, Oregon to
the joint venture and provides a limited guaranty for financing. During 2002,
such transactions amounted to approximately $7 million. Mr. Walker is the
president and Chief Executive Officer of Feralloy.

PROPOSAL 2: AMENDMENT OF THE CORPORATION'S RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

Paragraph 1 of the Fourth Article of the Corporation's Restated Certificate of
Incorporation, as amended, is proposed to be amended to read as follows:

(1) The total number of shares of all classes of stock which
the Corporation has the authority to issue is 46,000,000, consisting of
two classes of shares of stock, to be designated Common Stock and
Preferred Stock. The total number of shares of Common Stock to be
issued is 45,000,000 shares, $0.01 par value per share, and the total
number of shares of Preferred Stock authorized to be issued is
1,000,000 shares, $0.01 par value per share.

The Corporation's Restated Certificate of Incorporation, as amended,
currently authorizes the Corporation to issue up to 30,000,000 shares of Common
Stock, $0.01 par value per share and 1,000,000 shares of Preferred Stock, $0.01
per share. As of March 10, 2003, there were 25,789,854 outstanding shares of
Common Stock, 1,748,400 unissued shares of Common Stock reserved for issuance
and 2,461,746 unissued and unreserved shares of Common Stock. As of March 10,
2003, there were no outstanding shares of Preferred Stock, but 600,000 shares of
Preferred Stock are reserved for issuance in connection with the Corporation's
Rights Agreement.

On February 6, 2003, the Board of Directors unanimously determined that
it would be advisable and in the best interest of the Corporation to increase
the number of authorized shares of Common Stock in order to provide the
Corporation with an adequate supply of authorized but unissued shares of Common
Stock for general corporate needs, including additional financing, payment of
stock dividends, stock splits, acquisitions of other businesses and employee
incentive and benefit plans. While the Corporation currently has no
arrangements, understandings, or commitments with respect to the issuance of any
of the additional shares, it is considered advisable to have sufficient
authorized and unissued shares available to enable the Corporation, as the need
may arise, to move promptly to take advantage of market conditions and the
availability of other favorable opportunities without the delay and expense
involved in calling a special meeting of stockholders. Unless otherwise required
by applicable law or regulation, the additional shares of Common Stock will be
issuable without further authorization by vote or consent of the stockholders
and on such terms and for such consideration as may be determined by the Board.

The amendment increasing the authorized capital of the Corporation,
could, under certain circumstances, discourage or make more difficult an attempt
to gain control of the Corporation or the Board by tender offer or proxy
contest, or to consummate a merger or consolidation with the Corporation after
acquiring control, and to remove incumbent management, even if such transactions
were favorable to the stockholders of the Corporation. In certain circumstances,
the issuance of the additional shares may be used to create voting impediments
or to frustrate persons seeking to gain control of the Corporation, especially
if the shares were issued in a private placement to persons sympathetic to
management and opposed to any attempt to gain control of the Corporation.
Accordingly, this proposal to amend the Restated Certificate of Incorporation
may be deemed (under certain circumstances which may or may not occur) to be an
antitakeover measure. However, the proposal is not being presented as, nor is it
part of, any plan to adopt a series of antitakeover measures.

-4-

The additional authorized shares of Common Stock would, when issued,
have the same rights as the issued and outstanding shares of Common Stock. There
are no preemptive rights with respect to any shares of Common Stock. Although
the Board would authorize the issuance of additional shares of Common Stock
based on its judgment as in the best interests of the Corporation and its
stockholders, the issuance of Common Stock could have the effect of diluting the
voting power and book value per share of the outstanding Common Stock. THE BOARD
RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO INCREASE THE NUMBER OF AUTHORIZED
---
COMMON SHARES.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of shares of the Common Stock as of February 1, 2003 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
footnotes to the table.

Number Percentage
Name of Shares of Class
---- --------- ----------
Joe E. Corvin (1) (2) 157,475(3) *
L. Ray Adams (2) 58,477(4) *
Michael D. Buckentin (2) 36,610(5) *
James Declusin (1) -- *
Harry L. Demorest (1) 36,500 *
Larry R. Lawrence (2) 43,830(6) *
Carl W. Neun (1) ---- *
David L. Parkinson (1) 7,800 *
Stephen P. Reynolds (1) 100 *
Robert A. Simon (2) 33,134(7) *
John A. Sproul (1) 2,000 *
William Swindells (1) 26,000 *
Frank M. Walker (1) 750 *
Dimensional Fund Advisors, Inc. (8)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 2,045,661(8) 7.93%
First Pacific Advisors, Inc. (9)
11400 West Olympic Boulevard, Suite 1200
Los Angeles, California 90064 3,797,400(9) 14.7%
Sage Asset Management, LLC (10)
153 East 53rd Street, 48th Floor
New York, New York 10022 1,536,900(10) 6.0%
RS Investment Management Co. (11)
388 Market Street, Suite 200
San Francisco, California 94111 1,487,600(11) 5.8%
All directors and executive officers
as a group (17 persons) 517,057(12) *

-------------------
* Less than 2% of the outstanding Common Stock.

(1) Member of the Board of Directors.

(2) Named executive officer.

(3) Includes 2,000 shares held directly, 31,874 shares held by the ESOP for the
account of Mr. Corvin and 123,601 shares that may be acquired within 60 days
of February 1, 2003, pursuant to stock options awarded under the Company's
stock option plan. Mr. Corvin has the power to vote the shares under the
terms of the ESOP, but he does not have investment power with respect to
such shares.

-5-

(4) Includes 10,600 shares held directly, 1,110 shares held by the ESOP for the
account of Mr. Adams, and 46,767 shares that may be acquired within 60 days
of February 1, 2003, pursuant to stock options awarded under the Company's
stock option plan. Mr. Adams has the power to vote the shares under the
terms of the ESOP but he does not have investment power with respect to such
shares.

(5) Includes 2,000 shares held directly, 1,376 shares held by the ESOP for the
account of Mr. Buckentin, and 33,234 shares that may be acquired within 60
days of February 1, 2003, pursuant to stock options awarded under the
Company's stock option plan. Mr. Buckentin has the power to vote the shares
under the terms of the ESOP but he does not have investment power with
respect to such shares.

(6) Includes 5,100 shares held directly, 3,796 shares held by the ESOP for the
account of Mr. Lawrence, and 34,934 shares that may be acquired within 60
days of February 1, 2003, pursuant to stock options awarded under the
Company's stock option plan. Mr. Lawrence has the power to vote the shares
under the terms of the ESOP but he does not have investment power with
respect to such shares.

(7) Includes 100 shares head directly, 200 shares held by the ESOP for the
account of Mr. Simon, and 32,834 shares that may be acquired within 60 days
of February 1, 2003, pursuant to stock options awarded under the Company's
stock option plan. Mr. Simon has the power to vote the shares under the
terms of the ESOP but he does not have investment power with respect to such
shares.

(8) Based on the information obtained from Schedule 13G/A dated February 3, 2003
filed by Dimensional Fund Advisors Inc. with the Securities and Exchange
Commission.

(9) Based upon information obtained from Schedule 13G Amendment No. 6 dated
February 11, 2003, filed by First Pacific Advisors, Inc. with the Securities
and Exchange Commission: First Pacific Advisors, Inc. has the shared power
to dispose of 3,797,400 shares and the shared power to vote 1,603,700
shares.

(10) Based upon information obtained from Schedule 13G Amendment No. 2 dated
February 14, 2003, filed by Sage Asset Management, L.L.C., Sage Opportunity
Fund, L.P., Sage Master Investments Ltd., Barry Haimes and Katherine Hensel
with the Securities and Exchange Commission: Each of Sage Asset Management,
L.L.C., Sage Master Investment Ltd., Barry Haimes and Katherine Hensel has
shared power to vote 1,536,900 shares and shared power to dispose of
1,536,900 shares and Sage Opportunity Fund, L.P. has shared voting and
dispositive power over 276,000 shares.

(11)Based upon information obtained from Schedule 13G Amendment No. 1 dated
February 14, 2003, filed by R.S. Investment Management Co. L.L.C., R.S.
Investment Management L.P. and G. Randall Hecht: Each filer has shared
voting and dispositive power over 1,487,600 shares.

(12)Includes 52,849 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, and shares that may be acquired within 60 days of February 1,
2003 pursuant to stock options awarded under the Company's stock option
plan.

-6-

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, 2002.

SUMMARY COMPENSATION TABLE
LONG TERM ALL OTHER
ANNUAL COMPENSATION (5) COMPENSATION COMPENSATION(5)
------------------------------------------------------------------------- -----------------

Shares
Underlying
Name and Annual ESOP Stock Options Thrift Plan
Incentive --------------
Principal Position Year Salary Plan(1) Contribution SERP(3) (#) Contribution(4)
------------------ ---- ------ -------- ------------- -------- --- ---------------

JOE E. CORVIN 2002 $550,000 $200,000 $__ $__ __ $__
President and 2001 550,000 -- -- -- 114,500 --
Chief Executive Officer 2000 545,833 -- 15 38 55,000 --

L. RAY ADAMS 2002 $280,000 $ 80,000 $__ $__ __ $2,750
Vice President Finance 2001 269,063 -- -- -- 43,400 4,800
and Chief Financial Officer 2000 262,500 -- 15 16 20,000 4,800

LARRY R. LAWRENCE 2002 $250,000 $ 35,000 $__ $__ __ $2,750
Senior Vice President of Sales 2001 231,250 -- -- -- 32,000 4,800
OSM Division 2000 220,000 -- -- 4 13,800 4,800

MICHAEL D. BUCKENTIN 2002 $230,000 $ 35,000 $__ $__ __ $2,750
Vice President Operations 2001 217,500 -- -- -- 31,600 4,800
OSM Division 2000 212,905 -- -- $ 2 13,200 4,800

ROBERT A. SIMON 2002 $220,000 $ 69,000 $__ $__ ___ $__
Vice President and General 2001 213,750 -- -- -- 30,900 --
Manager
RMSM Division 2000 146,250 -- -- -- 13,200 --

-------------
(1) Year 2002 amounts were earned under the 2002 Annual Incentive Plan and paid
in 2003.

(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. Year 2000 amounts were distributions of forfeited
shares.

(3) Amounts paid under the Corporation's Supplemental Retirement Plan.

(4) Matching contributions made by the Corporation on behalf of the named
executive to the Corporation's Thrift Plan.

(5) Pension benefits accrued in 2000-2002 are not included in this Summary
Compensation Table.

-7-

OPTION GRANTS DURING FISCAL 2002

In April 2000, the stockholders approved the Corporation's 2000 Long-Term
Incentive Nonqualified Stock Option Plan ("Option Plan"). The Option Plan is
administered by the Compensation Committee of the Board of Directors and
provides for grants to officers and employees of options to acquire up to one
million shares of the Common Stock, subject to the limitations set forth in the
Option Plan. Pursuant to the Option Plan, the granting of options is at the
discretion of the Board of Directors, and it has the authority to set the terms
and conditions of the options granted. No options were granted under the plan in
2002. As of February 1, 2003, options to purchase 620,000 shares of the Common
Stock were outstanding under the Option Plan.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES

The following table sets forth certain information concerning each exercise
of stock options during the last completed fiscal year by each of the named
executive officers and the fiscal year-end value of unexercised options:

-----------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)

Number of Value of
Securities Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($)(1)
Shares Exercisable/ Exercisable/
Name Acquired on Value Realized Unexercisable Unexercisable
Exercise (#) ($)
-----------------------------------------------------------------------------------------------------------------------------

Joe E. Corvin 0 0 121,101 / 46,799 $ 105,061 / $ 23,894
-----------------------------------------------------------------------------------------------------------------------------

L. Ray Adams 0 0 45,600 / 17,800 $ 38,939 / $ 9,059
-----------------------------------------------------------------------------------------------------------------------------

Larry R. Lawrence 0 0 33,767 / 13,433 $ 27,245 / $ 6,438
-----------------------------------------------------------------------------------------------------------------------------

Michael D. Buckentin 0 0 32,067 / 12,733 $ 25,410 / $ 5,832
-----------------------------------------------------------------------------------------------------------------------------

Robert A. Simon 0 0 31,667 / 12,533 $ 25,302 / $ 5,778
-----------------------------------------------------------------------------------------------------------------------------
(1) Based on $4.02, which is the price last sold of the Corporation's common
stock on 12/31/02.

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

-10-

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 section 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 sections 401(a)(17) and 415 of the Code; 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

-8-

absence of the dollar limits in sections 401(a)(17) and 415 of the Code, 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.

The following Pension Plan Table shows 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)(2)

=============================================================================================================
YEARS OF SERVICE
-------------------------------------------------------------------------------------------------------------

REMUNERATION(1) 15 20 25 30 35
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
125,000 27,375 36,500 45,625 54,750 63,875
-------------------------------------------------------------------------------------------------------------
150,000 33,750 45,000 56,250 67,500 78,750
-------------------------------------------------------------------------------------------------------------
175,000 40,125 53,500 66,875 80,250 93,625
-------------------------------------------------------------------------------------------------------------
200,000 46,500 62,000 77,500 93,000 108,500
-------------------------------------------------------------------------------------------------------------
225,000 52,875 70,500 88,125 105,750 123,375
-------------------------------------------------------------------------------------------------------------
250,000 59,250 79,000 98,750 118,500 138,250
-------------------------------------------------------------------------------------------------------------
300,000 72,000 96,000 120,000 144,000 168,000
-------------------------------------------------------------------------------------------------------------
350,000 84,750 113,000 141,250 169,500 197,750
-------------------------------------------------------------------------------------------------------------
400,000 97,500 130,000 162,500 195,000 227,500
-------------------------------------------------------------------------------------------------------------
450,000 110,250 147,000 183,750 220,500 257,250
-------------------------------------------------------------------------------------------------------------
500,000 123,000 164,000 205,000 246,000 287,000
-------------------------------------------------------------------------------------------------------------
550,000 135,750 181,000 226,250 271,500 316,750
-------------------------------------------------------------------------------------------------------------
600,000 148,500 198,000 247,500 297,000 346,500
-------------------------------------------------------------------------------------------------------------
650,000 161,250 215,000 268,750 322,500 376,250
-------------------------------------------------------------------------------------------------------------
700,000 174,000 232,000 290,000 348,000 406,000
-------------------------------------------------------------------------------------------------------------
750,000 186,750 249,000 311,250 373,500 435,750
-------------------------------------------------------------------------------------------------------------
800,000 199,500 266,000 332,500 399,000 465,500
-------------------------------------------------------------------------------------------------------------
850,000 212,250 283,000 353,750 424,500 495,250
=============================================================================================================

(1) Represents at least 125% of the maximum compensation for the year
ended December 31, 2003.

(2) Estimates assume all service is after January 1, 1994, and Social
Security Covered Compensation as defined above is $60,000 for all
years. The estimates do 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 plan benefits are not subject to deduction for Social
Security or other offset amounts.

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, 2002, Messrs. Corvin, Adams,
Lawrence, Buckentin, and Simon would receive lifetime annual payments under the
Plan and pension benefits pursuant to the SERP combined of $171,757, $105,950,
$77,112, $107,376, and $94,908, respectively. Their credited years of service as
of December 31, 2002, are thirty-three, fifteen, fifteen, fourteen and eleven
respectively. In addition, ESOP benefits pursuant to the SERP

-9-

would include dividends and the equivalent value of shares of Common Stock
accrued through December 31, 2002, of $2,516, $1,101, $296, $110 and $0,
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

In July 2000, the Corporation entered into change-in-control agreements
("Agreements") with Messrs. Corvin, Adams, Buckentin, and Lawrence and certain
other key employees ("Employees"). 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
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 Agreements, during the
three-year period following a Change in Control. Severance compensation is to be
calculated as the sum of (i) three times the Employee's annual base salary as of
the date of termination or immediately prior to the Change in Control, whichever
is greater; (ii) 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; and
(iii) group health benefits substantially similar to what the Employee was
receiving immediately prior to the date of termination. In addition, the
Corporation will pay an additional amount to the Employee to compensate for
excise taxes the Employee is required to pay on "excess parachute payments."

The Corporation has entered into Indemnification Agreements with each
director and certain executive officers (an "Indemnified Person"). Each
agreement provides that the Corporation shall indemnify the Indemnified Person
to the fullest extent permitted by applicable law or the Corporation's Restated
Certificate of Incorporation, including 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 will purchase and maintain director and officer insurance 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 2002 the Compensation Committee members were Stephen P. Reynolds,
Chairman, James E. Declusin, and Frank M. Walker and William Swindells was an
ex officio member.

BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

Subject to approval of the Board, the Compensation Committee(the
"Committee") of the Board establishes the general compensation policies of
the Corporation and the compensation plans and specific compensation levels for
executive officers and establishes guidelines for the compensation of other
personnel. The 2002 Committee was composed of independent, non-employee
directors.

-10-

COMPENSATION PRINCIPLES

The Corporation believes that the compensation program should be designed
to attract, retain, and motivate talented employees to contribute to the
Corporation's long-term success. To ensure that compensation is competitive, the
Corporation periodically collects and analyzes compensation practices of
companies and competitors in its location and industry and uses that information
as the basis to determine whether the Corporation's compensation program is in a
competitive range.

The Corporation maintains the philosophy that compensation of all employees
should be directly and materially linked to operating and financial performance
of the Corporation, and that incentive compensation should be a greater part of
total compensation for more senior positions. To achieve this linkage, incentive
compensation programs are provided based upon performance measures relevant to
the employee or executive participants, for example quality production, cost
reduction, operating income, or return on assets.

These principles align all employee compensation with the Corporation's
objectives, operating strategy, management initiatives, and financial
performance. Within this overall philosophy, the Corporation's objectives are
to:
(BULLET) Offer a total compensation program that takes into consideration the
compensation practices of comparable companies with whom the
Corporation competes for executive talent.

(BULLET) Support a performance-oriented environment in which everyone is working
together in pursuit of the Corporation's short-term and long-term
goals.

(BULLET) To maximize 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 employees and
executive officers with that of comparable executive positions in other
manufacturing and steel companies.

In 2000, the Corporation retained an independent outside consulting firm to
review total compensation and incentive compensation elements compared to those
utilized at other manufacturing companies. As a result, the consultants observed
that base salaries were competitive but incentive opportunities were below
market, and certain performance-based incentive plans were recommended for
executives.

In 2001, the Corporation again retained an independent consulting firm to
review and benchmark executive and employee compensation. Overall, employee
compensation was found to be at or slightly above market. The consultant's
report to the committee on executive compensation compared the base salary,
incentive compensation, and other benefits of the Corporation to other durable
goods manufacturing companies (the "Report"). The Report focused on total
compensation for the eight most senior executive positions. In preparing the
Report, the consulting firm reviewed the executive position descriptions and
competitive practices and pay levels for numerous durable goods manufacturing
companies (including steel companies). The Report concluded that while executive
base salaries were competitive, the Corporation's incentive compensation for
executives was below market for comparable positions. As a result, the
Corporation plans to gradually increase the opportunity for incentive compen-
sation.

EXECUTIVE COMPENSATION ELEMENTS

There are four elements in the Corporation's executive officer compensation
program, all determined by position, individual performance, and corporate
performance and profitability.

BASE SALARY

The Committee sets base salary levels for all officers at levels that are
competitive with similar positions at other comparable companies, and that
reflect the responsibilities and performance of the individuals.

INCENTIVE COMPENSATION

Since 2000, executive officers participate in the Annual Incentive Plan
("AIP") and are excluded from the employee profit participation and gainsharing
incentive plans. The AIP is designed to reward participants with an annual
bonus if return on assets meets or exceeds the benchmark set by the Board of
Directors. The annual incentive compensation is determined based upon the
Division's and Corporation's actual return on assets for the year, and
calculated for each participant at a predetermined percentage of base salary.

LONG-TERM INCENTIVE (STOCK OPTION) PLAN

In April 2000, stockholders approved a long-term incentive plan which is a
non-qualified stock option plan. No options were granted during 2002. See
section entitled "Option Grants During Fiscal 2002" on page 8.

-11-

EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

The Corporation has an ESOP for qualified employees of Oregon Steel Mills,
Inc. Annual contributions to the ESOP, which are at the discretion of the Board,
are based upon the financial performance of the Corporation. The annual
contribution may be in cash or Common Stock but historically has been in Common
Stock. No contributions have been made to the ESOP since 1997.

The Corporation also has a SERP (as discussed previously under the heading
"Defined Benefit Retirement Plans") whereby 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 Committee has used the aforementioned compensation principles with
respect to the salary of Mr. Corvin who became CEO of the Corporation on January
1, 2000. Mr. Corvin's base salary for 2002 was the same as for 2001 and 2000. In
2002, Mr. Corvin received no options to purchase shares under the stock option
plan. During 2002, Mr. Corvin did not receive any compensation under the AIP or
ESOP, [but Mr. Corvin was entitled in 2003 to an AIP payment in the amount of
$200,000 as a result of the Corporation's 2002 performance.]

The Corporation does not have any "Excessive Employee Remuneration" as
defined in section 162(m) of the Code.

COMPENSATION COMMITTEE DURING 2002
Stephen P. Reynolds, Chairman
James E. Declusin
Frank M. Walker
William Swindells, ex officio

AUDIT COMMITTEE REPORT OF THE BOARD OF DIRECTORS

The Board of Directors maintains an Audit Committee comprised of outside
directors. The Board of Directors and the Audit Committee believe that the Audit
Committee's current member composition satisfies the rule of the New York Stock
Exchange that governs audit committee composition.

The Audit Committee oversees the Corporation's financial reporting process
on behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process, including the systems of
internal controls. In fulfilling its oversight responsibilities, the Audit
Committee reviewed the audited financial statements in the Annual Report with
management including a discussion of the quality, not just the acceptability, of
the accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.

The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of the Corporation's
audited financial statements to generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Corporation's
accounting principles and such other matters as are required to be discussed
with the Committee under generally accepted auditing standards, including
Statement on Auditing Standards No. 61, COMMUNICATION WITH AUDIT COMMITTEES. In
addition, the Audit Committee has received from the independent auditors the
written disclosures and letter required by Independence Standards Board No. 1
(Independence Discussions with Audit Committees) and discussed with them their
independence from the Corporation and its management. The Audit Committee has
considered whether the independent auditor's provision of non-audit services to
the Corporation is compatible with maintaining the auditor's independence.

The function of the Audit Committee members is not intended to duplicate or
to certify the activities of management and the independent auditor, nor can the
Committee certify that the independent auditor is "independent" under applicable
rules. The Committee serves a board-level oversight role, in which it provides
advice, counsel, and direction to management and the auditors on the basis of
the information it receives, discussions with management and the auditors, and
the experience of the Committee's members in business, financial and accounting
matters.

RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP or its predecessor has been the independent
accounting firm that audits the financial statements of the Company and all of
its subsidiaries.

In addition to performing the audit of the Company's consolidated financial
statements, PricewaterhouseCoopers LLP provided various other services during
the last two years. The aggregate fees billed for the last two years for each of
the following categories of services are set forth below:

-12-

2002 (IN THOUSANDS)
---- --------------
Audit Fees: $ 370.9
Audit Related Fees: $ 176.1
Tax Fees: $ 122.7
Financial Information Systems Design and
Implementation Fees: $ 0.0
All Other Fees: $ 0.0

2001
----
Audit Fees: $ 274.6
Audit Related Fees: $ 38.0
Tax Fees: $ 18.1
Financial Information Systems Design and
Implementation Fees: $ 0.0
All Other Fees: $ 0.0

Audit fees include annual audit of the Company's consolidated financial
statements and review of interim financial statements in the Company's Reports
on Form 10Q.

Audit related fees include audits of the Company's employee benefit plans,
review of registration statements and issuance of comfort letters.

Tax related services include review and assistance with tax returns for
various legal entities of the Company, and tax advice and planning for income
and other taxes.

The Company's policy is that the Audit Committee will recommend to the
Board of Directors the outside auditor to be appointed and the fee to be paid to
the outside auditor. The Audit Committee is also responsible for reviewing and
approving engagements of significant non-audit work performed by the outside
auditors. Representatives of PricewaterhouseCoopers LLP will be present at the
Annual Meeting, will have an opportunity to make any statements they desire, and
will also be available to respond to appropriate questions from stockholders.

AUDIT COMMITTEE DURING 2002

Harry L. Demorest, Chairman
Carl W. Neun
David L. Parkinson
John A. Sproul
William Swindells, ex officio

-13-

PERFORMANCE GRAPH (ASTERISK)

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 Russell 2000 Index and the Standard & Poor's Steel Index.

STOCKHOLDER RETURN RUSSELL
MEASUREMENT PERIOD OREGON 2000 S&P STEEL
(FISCAL YEAR COVERED) STEEL INDEX INDEX
--------------------- ------ ---------- -----------

MEASUREMENT POINT - 12/31/97 $100.00 $100.00 $100.00

FYE 12/31/98 57.57 97.45 86.61
FYE 12/31/99 40.49 118.17 95.27
FYE 12/31/00 5.53 114.60 59.89
FYE 12/31/01 25.77 117.45 76.86
FYE 12/31/02 20.93 93.39 58.69

(ASTERISK) $100 invested on 12/31/97 in stock or index-including reinvestment
of dividends. Fiscal year ending December 31.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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.

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 2004 ANNUAL MEETING

Stockholder proposals submitted for inclusion in the 2004 proxy materials
and consideration at the 2004 Annual Meeting of Stockholders must be received by
the Corporation no later than November 26, 2003 and no earlier than October 27,
2003. Any such proposal should comply with the rules promulgated by the
Securities and Exchange Commission governing stockholder proposals submitted for
inclusion in proxy materials.

-14-

In order to be considered at the 2004 Annual Meeting of Stockholders,
written notice of a non-Rule 14a-8 stockholder proposal or director nomination
must contain the information required by the Company's bylaws and must be
received by the Company no later than November 26, 2003 and no earlier than
October 27, 2003.

Jennifer R. Murray
SECRETARY
Portland, Oregon
March 25, 2003

-15-

2003 ANNUAL MEETING GUIDELINES

In the interest of an orderly and constructive meeting, the following
guidelines will apply for the 2003 Oregon Steel Mills, Inc. Annual Meeting of
Stockholders:

1. To gain entrance at the meeting, you must present the enclosed Admission
Ticket or evidence of ownership of Oregon Steel Mills, Inc. stock.

2. Except those employed by the Corporation to provide a record of the
proceedings, the use of cameras, sound recording equipment, microphones,
megaphones, and other noisemaking devices is prohibited. Briefcases,
purses, and parcels may be examined or searched before you are admitted to
the meeting. No signs, placards, banners, leaflets, or similar materials
may be brought into the meeting.

3. The business of the meeting is set forth in the Notice of Annual Meeting
of Stockholders and Proxy Statement dated March 25, 2003. Whether or not
you plan to attend the meeting, please sign, date, and return the proxy
form in the envelope provided. If you wish to change your vote or have not
voted by proxy, a ballot will be distributed to you at the meeting.

4. Please register your attendance at the meeting on the sign-up sheet at the
registration table. If you wish to comment on a proposal which will be
voted on at the meeting or ask an appropriate question about the business
of the Corporation at the end of the meeting, please register your
intention to do so on the sign-up sheet at the registration table.

5. Time has been reserved at the end of the meeting for stockholder questions
that relate to the business of the Corporation. After you have registered
and at the appropriate time, please go to the microphone, state your name,
and confirm that you are a stockholder before asking your question. Please
direct all comments or questions to the Chairman. Comments or questions
from the floor are limited to two minutes to provide an opportunity for as
many stockholders as possible.

6. Personal grievances or claims are not appropriate subjects for the
meeting.

7. The Chairman in his sole discretion shall have authority to conduct the
meeting and rule on any questions or procedures that may arise. Voting
results announced by the Inspector of Election at the meeting are
preliminary. Final results will be included in the summary of the results
of the meeting included in the Corporation's first Quarterly Report on
Form 10-Q.

-16-

OREGON STEEL MILLS, INC.
ANNUAL MEETING - May 1, 2003
PROXY SOLICITED BY BOARD OF DIRECTORS

The undersigned hereby appoints Joe E. Corvin 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 May 1, 2003
and any adjournment thereof, with all powers that the undersigned would possess
if personally present, with respect to the items 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 PROPOSALS 1 AND 2. 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]

ADMISSION TICKET

ADMISSION TICKET FOR THE 2002 OREGON STEEL MILLS, INC.
ANNUAL MEETING OF STOCKHOLDERS,
THURSDAY, MAY 1, 2003, AT 9:30 A.M. PACIFIC TIME
AT THE DOUBLE TREE HOTEL, JANTZEN BEACH COMPLEX,
909 N. HAYDEN ISLAND DRIVE, PORTLAND, OREGON 97217.

Please mark [Square box
your votes in which an
as indicated "X" has been
in this example. marked]

1. Election of Class C Directors FOR WITHHOLD
01 JAMES DECLUSIN [ ] [ ]
02 CARL W. NEUN
03 FRANK M. WALKER

2. To approve an amendment to the Corporation's Restated Certificate of
Incorporation as amended, to increase the number of authorized shares of
Common Stock from 30,000,000 to 45,000,000 shares.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

(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 IN FAVOR OF PROPOSALS 1 AND 2.

Dated: , 2003
-----------

[To the left of "Date" -----------------------
appears a 3/8-inch, Signature of Shareholder
horizontal black line;
a perpendicular 3/8-inch -----------------------
black line extends Signature or Signatures
downward from the right
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]

ADMISSION TICKET

ADMISSION TICKET FOR THE 2003 OREGON STEEL MILLS, INC. ANNUAL MEETING OF
STOCKHOLDERS, THURSDAY, MAY 1, 2003, AT 9:30 A.M. PACITIC TIME AT THE
DOUBLE TREE HOTEL, JANTZEN BEACH COMPLEX, 909 N. HAYDEN ISLAND DRIVE,
PORTLAND, OREGON 97217.

THIS IS NOT A PROXY

Admits stockholder(s) or duly appointed proxy(ies) of record only.

NON-TRANSFERABLE.

THIS TICKET, OR OTHER EVIDENCE OF STOCK OWNERSHIP, MUST BE PRESENTED TO ENTER
THE MEETING.

Admittance will be based upon availability of seating.

THE DISTRIBUTION OF LEAFLETS AND OTHER MATERIAL IS NOT PERMITTED. CAMERAS,
TAPE RECORDERS, MICROPHONES, MEGAPHONES, AND OTHER NOISE MAKING DEVICES ARE
PROHIBITED IN THE MEETING. THANK YOU FOR YOUR COOPERATION.