SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule
14(a)-12
WHX CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
WHX CORPORATION
- -------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement)
Payment of filing fee (check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
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 0-11.
(1) Title of each class of securities to which transaction
applies:
- -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
- --------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
/ / 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:
- -------------------------------------------------------------------------------
-2-
<PAGE>
WHX CORPORATION
110 East 59th Street
New York, New York 10022
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 15, 1995
---------------------------
TO THE STOCKHOLDERS OF
WHX CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of WHX
CORPORATION (the "Company") will be held at the Dupont Hotel, 11th & Market
Streets, Wilmington, Delaware 19801, on December 15, 1995 at 11:00 A.M. for the
following purposes:
1. To elect nine (9) members of the Board of Directors to
serve until the next annual meeting of stockholders and until their
successors have been duly elected and shall have qualified;
2. To ratify the appointment of Price Waterhouse LLP as the
Company's independent public accountants for the fiscal year ending
December 31, 1995; and
3. To consider and act upon such other business as may
properly come before the meeting.
Only stockholders of record at the close of business on November 15,
1995 will be entitled to vote at the Annual Meeting.
PLEASE SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY, WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING, IN ORDER THAT YOUR SHARES MAY BE VOTED FOR
YOU. A RETURN ENVELOPE IS PROVIDED FOR YOUR CONVENIENCE.
By Order of the Board of Directors,
MARVIN L. OLSHAN
Secretary
Dated: New York, New York
November 17, 1995
<PAGE>
WHX CORPORATION
110 East 59th Street
New York, New York 10022
---------------------------
ANNUAL MEETING OF STOCKHOLDERS
December 15, 1995
---------------------------
PROXY STATEMENT
This Proxy Statement is being mailed to the stockholders of WHX
Corporation (the "Company") on or about November 17, 1995 in connection with the
solicitation by the Board of Directors of the Company of proxies for use at the
1995 Annual Meeting of stockholders of the Company (the "Meeting") to be held at
Dupont Hotel, 11th & Market Streets, Wilmington, Delaware 19801 on December 15,
1995 at 11:00 A.M. The Meeting has been called for the following purposes: (1)
to elect nine (9) directors; (2) to ratify the appointment of Price Waterhouse
LLP as the Company's independent public accountants for the fiscal year ending
December 31, 1995; and (3) to consider and act upon such other business as may
properly come before the Meeting.
PROXIES AND VOTING RIGHTS
The voting securities of the Company outstanding on November 14, 1995
consisted of 28,023,094 shares of common stock, par value $.01 (the "Common
Stock"), entitling the holders thereof to one vote per share. Stockholders of
record at the close of business on November 15, 1995 (the "Record Date") are
entitled to notice of and to vote at the Meeting. Each of such shares is
entitled to one vote. There was no other class of voting securities of the
Company outstanding on that date. All shares of Common Stock have equal voting
rights. A majority of the outstanding shares of Common Stock is required to be
present in person or by proxy to constitute a quorum.
All proxies delivered pursuant to this solicitation may be revoked by
the person executing the same by notice in writing received at the office of the
Company at any time prior to exercise. If not revoked, the shares of Common
Stock represented thereby will be voted at the Meeting. All proxies will be
voted in accordance with the instructions specified thereon. If no specification
is indicated on the Proxy, the shares of Common Stock represented thereby will
be voted (i) for the election as Directors of the persons who have been
nominated by the Board of Directors, (ii) for the ratification of the
appointment of Price Waterhouse LLP as the Company's independent public
accountants for the fiscal year ending December 31, 1995, and (iii) for any
other matter that may properly be brought before the Meeting in accordance with
the judgment of the person or persons voting the Proxy.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on all proposals (except on
the election of directors) and will be counted as present for purposes of the
item on which the abstention is noted. Under the rules of the New York Stock
Exchange, Inc., brokers who hold shares in street name for customers have the
authority to vote on certain items when they have not received instructions from
beneficial owners. Brokers that do not receive instructions are entitled to vote
on the election of directors and the ratification of the auditors.
<PAGE>
SECURITY OWNERSHIP
The following table sets forth information concerning ownership of the
Common Stock of the Company outstanding as at November 14, 1995, by (i) each
person known by the Company to be the beneficial owner of more than five percent
of the Common Stock, (ii) each director and nominee for election as a director,
(iii) each of the executive officers named in the summary compensation table and
(iv) by all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Name and Address Percentage
of Beneficial Owner(1) Shares Beneficially Owned of Class(2)
---------------------- ------------------------- -----------
<S> <C> <C>
Fidelity Management and
Research Corporation(3)
82 Devonshire Street
Boston, Massachusetts 02109 1,682,200 6.0%
Wellington Management Company(4)
75 State Street
Boston, Massachusetts 02109 1,601,200 5.7%
Neil D. Arnold 8,000(5) *
Paul W. Bucha 8,000(5) *
Ronald LaBow(6) 2,449,773(7)(8) 8.6%
Robert A. Davidow(9) 58,371(10) *
William Goldsmith 18,667(5) *
Lynn Williams 0 *
Marvin L. Olshan 19,667(10) *
Raymond S. Troubh 15,334(11) *
James L. Wareham 66,948(5) *
Frederick G. Chbosky 20,197(12) *
James D. Hesse 14,169(5) *
DeWayne W. Tuthill 19,169(5) *
Howard Mileaf 13,333(5) *
All Directors and Executive Officers as a
Group (15 persons) 2,711,928(13) 9.5%
</TABLE>
- -------------------------
* less than one percent.
(1) Each director and executive officer has sole voting power and sole
dispositive power with respect to all shares beneficially owned by him
unless otherwise indicated.
(2) Based upon shares of Common Stock outstanding at November 14, 1995 of
28,023,094 shares.
-2-
<PAGE>
(3) Based on Form 13F-E for the quarter ended June 30, 1995, filed with the
Securities and Exchange Commission (the "Commission").
(4) Based on Form 13F for the quarter ended September 30, 1995, filed with
the Commission.
(5) Consists of shares of Common Stock issuable upon exercise of options
within 60 days hereof.
(6) Ronald LaBow, Chairman of the Board of the Company, is the sole
stockholder of WPN Corp. ("WPN"), which is the sole general partner of
RM Capital Partners ("RM") and of DR Capital Partners ("DR").
Consequently, Mr. LaBow may be deemed to be the beneficial owner of all
shares of Common Stock owned by RM and DR, each of which owns 1,000,000
shares of Common Stock.
(7) Based on a joint Schedule 13D dated January 11, 1991, as amended, filed
with the Commission, and additional information furnished to the
Company.
(8) Includes 388,333 shares of Common Stock issuable upon exercise of
options, within 60 days hereof, owned by WPN, of which Mr. LaBow is the
president and sole shareholder.
(9) Robert A. Davidow, a director of the Company, is a partner in a limited
partner of each of RM and DR.
(10) Includes 18,667 shares of Common Stock issuable upon exercise of
options within 60 days hereof.
(11) Consists of 13,334 shares of Common Stock issuable upon exercise of
options within 60 days hereof.
(12) Consists of 14,169 shares of Common Stock issuable upon exercise of
options within 60 days hereof.
(13) Consists of 601,456 shares of Common Stock issuable upon exercise of
options within 60 days hereof.
PROPOSAL NO. 1
Election of Directors
Unless authority is specifically withheld, proxies will be voted for
the election of the nominees named below to serve as directors of the Company
until the next annual meeting of stockholders of the Company and until their
successors shall be duly elected and qualified. Directors shall be elected by a
plurality of the votes cast, in person or by proxy, at the Meeting.
The terms of the current directors expire at the Meeting and when their
successors are duly elected and qualified. All nominees are currently directors
of the Company except for Lynn Williams. Management has no reason to believe
that any of the nominees will be unable or unwilling to serve as a director, if
elected. Should any nominee not be a candidate at the time of the Meeting (a
situation which is not now anticipated), proxies may be voted in favor of the
remaining nominees and may also be voted for a substitute nominee selected by
the Board of Directors.
-3-
<PAGE>
The names of the nominees and certain information concerning them are
set forth below:
<TABLE>
<CAPTION>
Principal Occupation First Year
for the Past Five Years Became
Name and Current Public Directorships Age a Director(1)
- ---- -------------------------------- --- -------------
<S> <C> <C> <C>
Neil D. Arnold Director. Senior Vice President and Chief 46 1992
Financial Officer of Varity Corporation, a
manufacturer of automotive components and diesel
engines, since August 1990; prior thereto for
in excess of six years, a Vice President or
Senior Vice President of such corporation.
Paul W. Bucha Director. President, Paul W. Bucha and Company, 52 1993
Inc., an international marketing consulting
firm, since 1979; President and Managing
Partner, Port Liberte Partners 1984-January
1993. Port Liberte Partners filed a petition
for bankruptcy under Chapter 11 of the
Bankruptcy Code in January 1991. A plan of
reorganization has been confirmed by the
bankruptcy court and Port Liberte Partners
emerged from bankruptcy in December 1992;
Recipient, Congressional Medal of Honor.
Robert A. Davidow Director. Private investor since January 1990. 53 1991
Mr. Davidow is also a Director of Arden Group,
Inc.
William Goldsmith Director. Management and Marketing Consultant 77 1987
since 1984; Chairman of the Board of TMP, Inc.
from January 1991 to 1993; Chairman and Chief
Executive Officer of Overspin Golf, since January
1994; Chairman of the Board and Chief Executive
Officer of Fiber Fuel International, Inc., from 1994
to present. Life Trustee to Carnegie Mellon
University since 1980.
Ronald LaBow Chairman of the Board. President, Stonehill 60 1991
Investment Corp. ("Stonehill"), since February
1990. Formerly with Neuberger & Berman, a New
York based investment advisory and management
firm, from 1978 to 1990. Mr. LaBow is also a
director of Regency Equities Corp. and Teledyne,
Inc.
Marvin L. Olshan Director and, since 1991, Secretary of the 67 1991
Company. Partner, Olshan Grundman Frome &
Rosenzweig LLP, 1956 to present.
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation First Year
for the Past Five Years Became
Name and Current Public Directorships Age a Director(1)
- ---- -------------------------------- --- -------------
<S> <C> <C> <C>
Raymond S. Troubh Director. Financial consultant for in excess of the 69 1992
past five years; Mr. Troubh is also a director of
ADT Limited, American West Airlines, Inc.,
Applied Power Inc., ARIAD Pharmaceuticals,
Inc., Becton, Dickinson and Company, Benson
Eyecare Corporation, Diamond Offshore Drilling,
Inc. Foundation Health Corporation, General
American Investors Company, Manville
Corporation, Olsten Corporation, Petrie Stores
Corporation, Riverwood International
Corporation, Time Warner Inc. and Triarc
Companies, Inc.
James L. Wareham Director and, since 1992, President of the 55 1989
Company. Chairman of the Board and Chief
Executive Officer of Wheeling-Pittsburgh Steel
Corporation ("WPSC") since September 1992, and
Director, President and Chief Operating Officer of
WPSC since May 1989; Mr. Wareham is also a
director of ViroGroup, Inc. and Wesbanco
Corporation.
Lynn Williams Director. Retired since March 1994. President of 71 Nominee
United Steelworkers of America from November
1983 to March 1994.
</TABLE>
- -------------------------------------
(1) Prior to a corporate reorganization of the Company and its subsidiaries
in July 1994 (the "Corporate Reorganization"), all WHX directors were
directors of Wheeling-Pittsburgh Corporation ("WPC"), a wholly-owned
subsidiary of the Company since the Corporate Reorganization, since the
year indicated.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES.
Meetings and Committees
The Board of Directors met or took action by unanimous written consent
on 14 occasions during the fiscal year ended December 31, 1994. There are five
Committees of the Board of Directors: the Audit Committee, the Executive
Committee, the Nominating Committee, the Compensation Committee and the Stock
Option Committee (for the 1991 Plan). The members of the Executive Committee are
Ronald LaBow, Robert A. Davidow, Marvin L. Olshan, Raymond S. Troubh and Neil D.
Arnold. The Executive Committee met or took action by unanimous written consent
on 9 occasions during the fiscal year ended December 31, 1994. The Executive
Committee possesses and exercises all the power and authority of the Board of
Directors in the management and direction of the business and affairs of the
Company except as limited by law and except for the power to change the
membership or to fill vacancies on the Board of Directors or the Executive
Committee. The members of the Audit Committee are Robert A. Davidow, Raymond S.
Troubh, Neil D. Arnold and Paul W. Bucha. The Audit Committee met on 5 occasions
during the fiscal year ended December 31, 1994. The
-5-
<PAGE>
Audit Committee annually recommends to the Board of Directors independent public
accountants to serve as auditors of the Company's books, records and accounts,
reviews the scope of the audits performed by such auditors and the audit reports
prepared by them, reviews and monitors the Company's internal accounting
procedures and monitors compliance with the Company's Code of Ethics Policy and
Conflict of Interests Policy. The members of the Compensation Committee are
Robert A. Davidow, William Goldsmith and Marvin L. Olshan. The Compensation
Committee met on 4 occasions during the fiscal year ended December 31, 1994. The
Compensation Committee reviews compensation arrangements and personnel matters.
The members of the Nominating Committee are Ronald LaBow, Marvin L. Olshan and
Robert A. Davidow. The Nominating Committee met on 1 occasion during the fiscal
year ended December 31, 1994. The Nominating Committee recommends nominees to
the Board of Directors of the Company. The members of the Stock Option Committee
are Ronald LaBow, Robert A. Davidow and Marvin L. Olshan. The Stock Option
Committee administers the granting of stock options under the 1991 Plan.
Directors of the Company who are not officers of the Company or WPSC
are entitled to receive compensation for serving as directors in the amount of
$40,000 per annum and $1,000 per Board Meeting, $800 per Committee Meeting
attended in person and $500 per telephonic meeting other than the Executive and
Stock Option Committees, and $1,000 per day of consultation and other services
provided other than at meetings of the Board or Committees thereof, at the
request of the Chairman of the Board. Committee Chairmen also receive an
additional annual fee of $1,800. Directors also receive options to purchase
8,000 shares of Common Stock per annum on the date of each annual meeting of
Stockholders up to a maximum of 40,000 shares of Common Stock pursuant to the
Company's 1993 Directors and Non-employee Officers Stock Option Plan.
Pursuant to a management agreement effective as of January 3, 1991, as
amended (the "Management Agreement"), approved by a majority of the
disinterested directors of the Company, WPN, of which Ronald LaBow, the Chairman
of the Board of the Company is the sole stockholder and an officer and director,
provides financial, management advisory and consulting services to the Company,
subject to the supervision and control of the disinterested directors. In 1994,
WPN received a monthly fee of $250,000 through April 1, 1994, at which time the
Management Agreement was amended to provide for a monthly fee of $458,333.33,
with total payments in 1994 of $4,875,000. The Company believes that the cost of
obtaining the type and quality of services rendered by WPN under the Management
Agreement is no less favorable than that at which the Company could obtain such
services from unaffiliated entities. The terms of such Management Agreement are
reviewed annually. See "Management - Management Agreement with WPN."
MANAGEMENT
Executive Officers of the Company
The following table contains the names, positions and ages of the
executive officers of the Company who are not nominees for director.
<TABLE>
<CAPTION>
Principal Occupation for the Past
Name Five Years and Current Public Directorships(1) Age
- ---- ---------------------------------------------- ---
<S> <C> <C>
James G. Bradley Vice President. Vice President of the Company since October 50
1995; Executive Vice President-Operations of
WPSC since October 1995; Vice
President-Operations of International Mill
Service from 1992 to October 1995; Vice
President-Operations/Plant Manager of
USS/Kobe Steel Company from 1990 to 1992.
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation for the Past
Name Five Years and Current Public Directorships(1) Age
- ---- ---------------------------------------------- ---
<S> <C> <C>
Frederick G. Chbosky Chief Financial Officer. Chief Financial Officer of the Company 51
since June 1991. Executive Vice President-Finance of WPSC since
December 1992. Vice President-Finance and Chief Financial
Officer of WPSC since September 1985 and Director of WPSC
since January 1991. Vice President--Purchasing Traffic and Raw
Materials with WPSC from 1983 to 1985. Comptroller of WPSC
from 1980 to 1983. Various financial positions with WPSC, 1975
to 1980. Director, Wheeling-Nisshin, Inc.
James D. Hesse Vice President. Vice President of the Company since January 57
1994. Executive Vice President-Commercial and Chief Operating
Officer of WPSC since February 1994. Vice President-Commercial
of WPSC since July 1991. Vice President-Corporate Planning and
Marketing of WPSC, August 1986 to July 1991. General Manager
of Sales-Products, June 1980 to August 1986. Tin Mill Products
Manager, September 1976 to June 1980. Various line and staff
sales positions with WPSC, 1962 to 1976.
Howard Mileaf Vice President-Special Counsel. Vice President-Special Counsel to 58
the Company since April 1993. Special Counsel to the Company,
February 1992 to April 1993. Consultant, August 1991 to April
1993. Vice President and General Counsel, Keene Corporation,
August 1981 to August 1991. Trustee/Director of Neuberger &
Berman Equity Mutual Funds, 1984 to present. Director, Kevlin
Corporation.
Garen Smith Vice President. Vice President of the Company since October 52
1995. President and Chief Executive Officer of Unimast
Incorporated since April 1991 (Unimast was acquired by the
Company in March 1995). National Sales Manager-Dietrich
Industries from 1978 to 1990.
DeWayne Tuthill Vice President. Vice President of the Company since December 59
1993. Executive Vice President-Manufacturing since February
1994. Vice President-Purchasing, Traffic and Raw Materials of
WPSC since February 1989. Manager, Materials, Elliott Company,
1982 to 1989. General Manager Purchasing and Traffic and various
</TABLE>
- ----------------------
(1) Prior to the Corporate Organizations in July 1994, all Executive
Officers at such time were Executive Officers of WPC.
-7-
<PAGE>
Executive Compensation
SUMMARY COMPENSATION TABLE. The following table sets forth, for the
fiscal years indicated, all compensation awarded to, earned by or paid to (i)
the chief executive officer ("CEO") of the Company (Mr. James L. Wareham, the
President of the Company) and (ii) the four most highly compensated executive
officers of the Company other than the CEO whose salary and bonus exceeded
$100,000 with respect to the fiscal year ended December 31, 1994 and who were
employed by the Company on December 31, 1994 (together with the CEO, the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Principal
Position Annual Compensation Long Term Compensation
------------------ ------------------- ----------------------
Other Annual Securities All other
Name and Principal Salary Bonus Compensation Underlying Compensation
Position Year ($) ($)(1) ($) Options (#) ($)(2)
----------- ---- ------ ------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
James L. Wareham, 1994 400,000 140,000 - 80,000 44,877(3)
President 1993 366,667 125,000 - 22,921 37,644(3)
1992 300,000 -- - 25,000 9,007
Frederick G. Chbosky, 1994 140,000 37,622 - - 7,560
Chief Financial Officer 1993 140,000 26,334 - 13,753 6,384
1992 140,000 - - 15,000 6,216
James D. Hesse, 1994 147,250 43,476 - - 17,737
Vice President 1993 117,000 19,917 - 13,753 12,845
1992 117,000 - - 15,000 9,896
DeWayne W. Tuthill, 1994 133,808 40,768 - - 7,770
Vice President 1993 120,700 19,866 - 13,753 6,681
1992 115,908 - - 15,000 6,103
Howard Mileaf, 1994 120,000 40,000 - 10,000 5,616
Vice President 1993 136,125(4) 20,000 - 15,000 900
1992 - - - - 103,500(5)
</TABLE>
- ----------------------------
(1) Includes bonuses in April 1994, for services rendered in 1993, and
February 1995, for services rendered in 1994, pursuant to the WPSC
Management Incentive Program ("WPSC Management Incentive Program")
covering officers and salaried employees of WPSC. Messrs. Wareham and
Mileaf are not eligible to participate in the WPSC Management
Incentive Program. Mr. Wareham's employment agreement provides for an
annual bonus to be awarded in the sole discretion of the Company.
Messrs. Wareham and Mileaf were each granted bonuses in April 1994,
for services rendered in 1993, and bonuses in March 1995, for services
rendered in 1994. All bonus amounts have been attributed to the year
in which the services were performed.
(2) Amounts shown reflect employer contributions to WPSC Salaried Employees
Pension Plan, unless otherwise noted.
(3) Includes insurance premiums paid by the Company in 1994 and 1993 of
$40,000 and $26,667, respectively.
(4) Includes payments totalling $56,125 for consulting services to the
Company performed prior to the commencement of Mr. Mileaf's full time
employment with the Company.
(5) Reflects payment relating to Mr Mileaf's position as Special Counsel to
the Company.
-8-
<PAGE>
Option Grants Table. The following table sets forth certain information
regarding stock option grants made to each of the Named Executive Officers
during the fiscal year ended December 31, 1994.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
----------------------------------------------------------- -------------------------
Number of
Securities % of Total
Underlying Options
Options Granted to Exercise
Granted Employees in Price Expiration
Name (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
- ---- ----- ------------ -------- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
James L. Wareham 80,000 15.2 14.625 4-4-04 735,808 1,864,679
James D. Hesse 0 0.0 0.000 -- 0 0
Frederick G. Chbosky 0 0.0 0.000 -- 0 0
DeWayne W. Tuthill 0 0.0 0.000 -- 0 0
Howard Mileaf 10,000 1.9 14.625 4-03-04 91,978 233,085
</TABLE>
- -------------------
All options granted above were granted pursuant to the 1991 Incentive
and Non-Qualified Stock Option Plan (the "1991 Plan") and vest ratably over a
three-year period. The options which expire on April 4, 2004 were granted on
April 5, 1994 and the options which expire on April 3, 2004 were granted on
April 4, 1994.
-9-
<PAGE>
Option Exercises and Year-End Option Values Table. The following table
sets forth certain information as to each of the Named Executive Officers
concerning exercises of options during the last fiscal year and unexercised
stock options held as of December 31, 1994.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities
Underlying Value of
Unexercised Unexercised In-
Options at 1994 the-Money Options
Shares Fiscal Year- at 1994 Fiscal
Acquired Value End(#) Year-End($)(1)
on Realized Exercisable/ Exercisable/
Name Exercise(#) ($) Unexercisable Unexercisable
- ---- ------------- ------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C>
James L. Wareham 0 0 24,307/103,614 134,382/118,763
James D. Hesse 5,000 69,375 4,584/14,169 20,628/71,261
Frederick G. Chbosky 10,000 128,750 4,584/14,169 20,628/71,261
DeWayne W. Tuthill 5,000 55,188 9,584/14,169 50,628/71,261
Howard Mileaf 0 0 5,000/20,000 11,875/23,750
</TABLE>
- ------------------
(1) On December 31, 1994, the last reported sales price of WHX Common Stock
as reported on the New York Stock Exchange Composite Tape was $13.25.
LONG-TERM INCENTIVE AND PENSION PLANS. The Company does not have any
long-term incentive or defined benefit pension plans.
DEFERRED COMPENSATION AGREEMENTS. Certain key employees of the Company
and its subsidiaries are parties to deferred compensation agreements and/or
severance agreements. The deferred compensation agreements generally provide
that if the employee remains continuously in the employ of the Company until the
fifth anniversary of the approval of the Company's Plan of Reorganization (the
"Plan") (which Plan was approved on January 3, 1991), or if the employee's
employment is terminated within such period by reason of permanent disability,
retirement at age 65 or involuntary termination without good cause, the employee
is entitled to receive, over a fifteen-year period commencing at the later of
age 65 or termination of employment, an amount equal to twice his base salary
for the most recent twelve-month period of his employment prior to January 3,
1996. The estimated annual benefits payable to Messrs. Chbosky, Tuthill and
Hesse upon retirement are $18,667, $18,000 and $20,000, respectively. Certain
other deferred compensation payments are payable by WPSC in certain
circumstances, such as a demotion in job status without good cause, death or as
a result of a change of control of the Company. Each of Messrs. Chbosky, Tuthill
and Hesse is a party to a deferred compensation agreement described above.
Except as described in this paragraph, and in the next paragraph with respect to
the employment agreement of Mr. Wareham, no plan or arrangement exists which
results in compensation to a Named Executive Officer in excess of $100,000 in
any year upon such officer's future termination of employment or upon a
change-of-control.
-10-
<PAGE>
EMPLOYMENT AGREEMENTS. Mr. James L. Wareham is employed as President of
the Company and Chairman of the Board and Chief Executive Officer of WPSC under
a two-year agreement expiring April 29, 1995, which shall be automatically
extended for successive two-year periods, unless earlier terminated. The
agreement provides for an annual salary to Mr. Wareham of $400,000 per year and
an annual bonus awarded in the sole discretion of the Company. In April 1994,
Mr. Wareham was granted a cash bonus of $125,000 and options to purchase 80,000
shares of Common Stock at the then prevailing market price pursuant to the 1991
Plan for services rendered in 1993. In March 1995, Mr. Wareham was granted a
cash bonus of $140,000 for services rendered in 1994. The Company considered
several factors in determining whether to pay a bonus to Mr. Wareham including
the performance of Mr. Wareham and the resulting benefits to the Company and the
overall performance of the Company as measured by the guidelines discussed
herein used to determine the bonuses of other senior executives of the Company.
In addition, the employment agreement provides for Mr. Wareham to receive the
cash surrender value of life insurance contracts purchased by the Company upon
termination of his employment. The annual premium paid by the Company on the
life insurance contracts is $40,000. In the event Mr. Wareham's employment is
terminated without cause or Mr. Wareham voluntarily terminates his employment
due to a material change in the nature and scope of his authorities and duties
after a change in control of the Company occurs, he is entitled to receive a
payment of $800,000, and other specified benefits for a period of one year from
the date of termination. Specified benefits under Mr. Wareham's employment
agreement may be forfeited under certain circumstances.
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION. Messrs.
Davidow, Goldsmith and Olshan each served as a member of the Compensation
Committee of the Board of Directors during the fiscal year ended December 31,
1994. Mr. Olshan is a member of Olshan Grundman Frome & Rosenzweig LLP, which
has been retained as outside general counsel to the Company since January 1991.
Fees received from the Company by such firm during the fiscal year ended
December 31, 1994 of $981,077 did not exceed 5% of the Company's revenues.
MANAGEMENT AGREEMENT WITH WPN. Pursuant to the Management Agreement,
approved by a majority of the disinterested directors of the Company, WPN
provides financial, management advisory and consulting services to the Company,
subject to the supervision and control of the disinterested directors. Such
services include, among others, identification, evaluation and negotiation of
acquisitions, responsibility for financing matters, review of annual and
quarterly budgets, supervision and administration, as appropriate, of all of the
Company's accounting and financial functions and review and supervision of the
Company's reporting obligations under Federal and state securities laws. In
exchange for such services, from June 1992 to March 1994 WPN received a fixed
monthly fee of $250,000. On April 1, 1994, the Management Agreement was amended
to provide for a monthly fee of $458,333.33. The Company provides
indemnification for WPN's employees, officers and directors against any
liability, obligation or loss resulting from their actions pursuant to the
Management Agreement. The Management Agreement has a one year term and is
renewable automatically for successive one year periods, unless terminated by
either party upon 60 days' notice. On July 29, 1993, WPN was granted options to
purchase 600,000 shares of Common Stock. Mr. LaBow is the sole stockholder and
an officer and director of WPN. WPN has not derived any other income and has not
received reimbursement of any of its expenses (other than health benefits and
standard directors' fees) from the Company in connection with the performance of
services described above. The Company believes that the cost of obtaining the
type and quality of services rendered by WPN under the Management Agreement is
no less favorable than the cost at which the Company could obtain such services
from unaffiliated entities.
-11-
<PAGE>
1994 COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee determines the cash and other incentive
compensation, if any, to be paid to the Company's executive officers and key
employees. The Compensation Committee is also responsible for the administration
and award of stock options under the 1991 Plan. Messrs. Davidow, Goldsmith and
Olshan, non-employee directors of the Company, serve as members of the
Compensation Committee and are "disinterested directors" (within the meaning of
Rule 16b-3 under the Exchange Act). Mr. Davidow serves as Chairman of the
Committee. During Fiscal 1994, there were four meetings of the Compensation
Committee, with all committee members attending all meetings.
COMPENSATION PHILOSOPHY
The Compensation Committee's executive compensation philosophy is to
base management's pay, in part, on achievement of the Company's annual and
long-term performance goals, to provide competitive levels of compensation, to
recognize individual initiative, achievement and length of service to the
Company, and to assist the Company in attracting and retaining qualified
management. The Compensation Committee also believes that the potential for
equity ownership by management is beneficial in aligning managements' and
stockholders' interests in the enhancement of stockholder value. The Company has
not established a policy with regard to Section 162(m) of the Internal Revenue
Code of 1986, as amended, since the Company has not and does not currently
anticipate paying compensation in excess of $1 million per annum to any
employee.
SALARIES
Base salaries for the Company's executive officers are determined
initially by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive marketplace
for management talent, including a comparison of base salaries for comparable
positions at other integrated steel producers. Annual salary adjustments are
determined by evaluating the competitive marketplace; the performance of the
Company which includes in descending level of importance, operating income of
the Company and cash management, production efficiency and quality of products;
the performance of the executive; the length of the executive's service to the
Company and any increased responsibilities assumed by the executive. The Company
places itself between the low and medium levels in determining salaries compared
to the other domestic integrated steel producers, which companies include the
steel companies utilized in the graph under "Common Stock Performance" below.
INCENTIVE COMPENSATION
In 1994, all of the Company's then executive officers other than the
Company's President and one Vice President were participants in the WPSC
Management Incentive Program for salaried employees of WPSC (aggregating
approximately 950 employees), which was adopted by the Company in 1993. The
purpose of the WPSC Management Incentive Program is to reward those employees
that demonstrate outstanding performance in the pursuit of pre-defined Company
and individual objectives. The total amount available for distribution is based
on the Company's consolidated financial performance as determined by a
pre-defined formula set each year which is based upon earnings before income
taxes, depreciation and amortization ("EBITDA") as a percentage of applicable
assets. The performance of each executive officer is then evaluated for the
fiscal year based upon predetermined goals to determine the level of incentives
to be awarded. The Company believes that this program effectively rewards
employees based both on their individual achievements and on the financial
success of the Company. Incentives are to be paid no later than 120 days after
the end of the fiscal year. In 1994, the incentive target threshold was
established by the Company at an EBITDA to operating asset ratio of 10.60%. The
aggregate amount available for incentives increases as progressively higher
EBITDA ratios are achieved. The ratio achieved in 1994 for purposes of the WPSC
Management Incentive Program was 13.99%.
-12-
<PAGE>
Accordingly, the aggregate amount available to salaried employees of the Company
pursuant to the WPSC Management Incentive Program for 1994 was $6,624,000.
Messrs. Chbosky, Hesse and Tuthill received $37,622, $43,476 and $40,768,
respectively, in February 1995 under the WPSC Management Incentive Program.
The Company from time to time considers the payment of discretionary
bonuses to its executive officers. Bonuses would be determined based, first,
upon the level of achievement by the Company of its strategic and operating
goals and, second, upon the level of personal achievement by participants. The
achievement of goals by the Company includes, in descending order, among other
things, the performance of the Company as measured by return on assets and the
operating income of the Company, production efficiency and quality of products.
The achievement of personal goals includes the actual performance of the unit of
the Company for which the executive officer has responsibility as compared to
the planned performance thereof, the level of cost savings achieved by such
executive officer, other individual contributions, the ability to manage and
motivate employees and the achievement of assigned projects. Bonuses are
determined annually after the close of each fiscal year. Despite achievement of
personal goals, bonuses may not be given based upon the performance of the
Company as a whole. No discretionary bonuses were awarded in 1994, except for a
bonus of $40,000 to Mr. Mileaf and a bonus of $140,000 to Mr. Wareham, as
discussed below, neither of whom are participants in the WPSC Management
Incentive Program.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
As described in the Employment Contracts section above, Mr. Wareham's
base salary of $400,000, is determined by contract and is based upon the
responsibilities performed by Mr. Wareham as President of the Company and
Chairman of the Board and Chief Executive Officer of WPSC, the performance of
Mr. Wareham in assisting the Company to position itself to continue operating
profitability in 1994 (income before extraordinary charges was $86.4 million in
fiscal 1994 compared to income before extraordinary changes of $30.7 million in
fiscal 1993), a competitive assessment of survey data of other steel producers
as it relates to the Company's performance versus other integrated steel
producers, the efforts by Mr. Wareham in assisting the Company in completing
several financings for the Company which improved its capital base and financial
condition (during 1994 net financing activities provided in excess of $250.0
million of cash availability to the Company and the Company amended and restated
its inventory based working capital credit facility), the efforts by Mr. Wareham
in consummating several strategic acquisitions and the evaluation of the other
factors described in "Salaries" above. Mr. Wareham's compensation is in the low
to medium range compared to salaries received by chief executive officers of
other integrated steel producers.
The Compensation Committee shall consider Mr. Wareham for a cash
performance bonus in accordance with the following terms: the factors discussed
in the above paragraph; the bonuses paid to other senior executives of the
Company; the overall performance of the Company and WPSC as measured by
guidelines used to determine the bonuses of other senior executives of the
Company and WPSC including the operating income of the Company, production
efficiency and quality of products; and the transactions effected for the
benefit of the Company or WPSC that are outside of the ordinary course of
business and directly or indirectly accomplished through the efforts of Mr.
Wareham (e.g., business combinations, corporate partnering and other similar
transactions). In 1994 Mr. Wareham received a bonus of $140,000.
STOCK OPTION AND OTHER PLANS
In April 1994, the Compensation Committee awarded stock options for an
aggregate of 90,000 shares of Common Stock to Messrs. Wareham and Mileaf. The
exercise price for options was $14.625 per share, the fair market values of the
Common Stock on the date of grant. In keeping with the philosophy of the
Compensation Committee, these options become exercisable one year after grant,
vest over a three-year period, and generally can be exercised only if the
optionee is employed by the Company at the time of exercise. It is the
philosophy of the Compensation Committee that stock options should be awarded
only to employees of the
-13-
<PAGE>
Company to promote long-term interests between such employees and the Company's
stockholders through an equity interest in the Company and assist in the
retention of such employees. The Compensation Committee also considered the
amount and terms of options previously granted to the executive officers of the
Company. The Compensation Committee believes the potential for equity ownership
by management is beneficial in aligning management's and stockholders' interest
in the enhancement of stockholder value. The award of such options to Messrs.
Wareham and Mileaf was based on each of their performances in assisting the
Company to position itself to continue operating profitability in 1994 (income
before extraordinary charges was $86.4 million in fiscal 1994 compared to income
before extraordinary charges of $30.7 million in fiscal 1993), the Company's
performance versus other integrated steel producers as demonstrated by the
continuance of operating profitability of the Company, production quality and
efficiency, cost savings achieved by the Company, the evaluation of the job
performance of each executive, including their relative level of responsibility
and each of their efforts in assisting the Company in completing several
financings for the Company which improved the Company's capital base and
financial condition. Participation in restricted stock, profit sharing and sales
incentive plans is offered, pursuant to their terms, to provide incentive to
executive officers to contribute to corporate growth and profitability.
Compensation Committee: William Goldsmith; Robert A. Davidow; Marvin L.
Olshan.
Common Stock Performance: The following graph compares, for each of the
fiscal years indicated, the yearly percentage change in the Company's cumulative
total stockholder return on its Common Stock with the cumulative total return of
a) the Standard and Poor's Index, a broad equity market index, and b) an index
consisting of the following steel companies: Armco Inc., Bethlehem Corporation,
Inland Steel Industries, Inc., LTV Corporation and Weirton Steel Corp.
[PERFORMANCE GRAPH]
1989 1990 1991 1992 1993 1994
S&P 500 Index 100.00 96.90 126.42 136.05 149.76 151.74
WHX Corp. 100.00 32.58 62.92 51.69 153.93 119.10
Peer Group 100.00 70.66 67.11 74.48 139.16 139.62
There can be no assurance that the Company's stock performance will
continue with the same or similar trends depicted in the graph above.
-14-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Frederick G. Chbosky, Chief Financial Officer of the Company and a
director and Executive Vice President-Finance of WPSC, is a director of
Wheeling-Nisshin, Inc. ("Wheeling-Nisshin"). The Company currently holds a 35.7%
equity interest in Wheeling-Nisshin.
Ronald LaBow, Chairman of the Board is the sole stockholder of WPN,
which is the sole general partner of RM and DR. See "Security Ownership." The
Company is party to a Management Agreement with WPN. See "Management -
Management Agreement with WPN."
Marvin L. Olshan, a Director and Secretary of the Company, is a member
of Olshan Grundman Frome & Rosenzweig LLP, which has been retained as outside
general counsel to the Company since January 1991. Fees received from the
Company by such firm during the fiscal year ended December 31, 1994 of $981,077
did not exceed 5% of the Company's revenues.
PROPOSAL NO. 2
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Price Waterhouse LLP has been selected as the
independent public accountants for the Company for the fiscal year ending
December 31, 1995. Although the selection of accountants does not require
ratification, the Board of Directors have directed that the appointment of Price
Waterhouse LLP be submitted to stockholders for ratification due to the
significance of their appointment by the Company. If stockholders do not ratify
the appointment of Price Waterhouse LLP, the Board of Directors will consider
the appointment of other certified public accountants. A representative of that
firm, which served as the Company's independent public accountants for the
fiscal year ended December 31, 1994, is expected to be present at the Meeting
and, if he so desires, will have the opportunity to make a statement, and in any
event will be available to respond to appropriate questions.
The Board of Directors Recommends a Vote "FOR" Adoption of Proposal No.
2.
SOLICITATION STATEMENT
All expenses in connection with the solicitation of proxies will be
borne by the Company. In addition to the use of the mails, solicitations may be
made by regular employees of the Company, by telephone, telegraph or personal
contact, without additional compensation. Georgeson & Company, Inc. has been
retained to assist in the solicitation of proxies for a fee of $7,500, plus
expenses. The Company will, upon request, reimburse brokerage houses and persons
holding shares of Common Stock in the names of their nominees for their
reasonable expenses in sending solicited material to their principals.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the proxy materials to be
distributed in connection with the next annual meeting of stockholders of the
Company, stockholder proposals for such meeting must be submitted to the Company
no later than July 19, 1996.
OTHER MATTERS
So far as now known, there is no business other than that described
above to be presented for action by the stockholders at the Meeting, but it is
intended that the proxies will be voted upon any other matters and proposals
that may legally come before the Meeting or any adjournment thereof, in
accordance with the discretion of the persons named therein.
-15-
<PAGE>
ANNUAL REPORT
All stockholders of record as of November 15, 1995 have been sent, or
are concurrently herewith being sent, a copy of the Company's Annual Report for
the fiscal year ended December 31, 1994. Such report contains certified
consolidated financial statements of the Company and its subsidiaries for the
fiscal year ended December 31, 1994.
By Order of the Company,
MARVIN L. OLSHAN, Secretary
Dated: New York, New York
November 17, 1995
The Company will furnish, without charge, a copy of its Annual Report
on Form 10-K for the fiscal year ended December 31, 1994 (without exhibits) (as
filed with the Securities and Exchange Commission) to stockholders of record on
the Record Date who make written request therefor to Marvin L. Olshan,
Secretary, WHX Corporation, 110 East 59th Street, New York, New York 10022.
-16-
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WHX CORPORATION
Proxy -- Annual Meeting of Stockholders
December 15, 1995
The undersigned, a stockholder of WHX Corporation, a Delaware
corporation (the "Company"), does hereby appoint Ronald LaBow and James L.
Wareham, and each of them, the true and lawful attorneys and proxies with full
power of substitution, for and in the name, place and stead of the undersigned,
to vote all of the shares of Common Stock of the Company which the undersigned
would be entitled to vote if personally present at the 1995 Annual Meeting of
Stockholders of the Company to be held at the Dupont Hotel, 11th & Market
Streets, Wilmington, Delaware 19801, on December 15, 1995, at 11:00 A.M., Local
Time, or at any adjournment or adjournments thereof.
The undersigned hereby revokes any proxy or proxies heretofore given
and acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated November 17, 1995, and a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREIN GIVEN. UNLESS
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE DIRECTORS AND TO
RATIFY THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS.
1. ELECTION OF DIRECTORS:
To elect the following directors: Neil D. Arnold, Paul W.
Bucha, Robert A. Davidow, William Goldsmith, Ronald LaBow,
Marvin L. Olshan, Raymond S. Troubh, James L. Wareham and
Lynn Williams to serve until the next annual meeting of
stockholders and until their successors have been duly
elected and qualified.
WITHHELD ________________________
FOR ALL FROM ALL ________________________
NOMINEES ___ NOMINEES ___ ________________________
TO WITHHOLD AUTHORITY TO
VOTE FOR ANY NOMINEE(S),
PRINT NAME(S) ABOVE:
78148.
<PAGE>
2. To ratify the appointment of Price Waterhouse LLP as the
independent public accountants of the Company for the fiscal
year ending December 31, 1995.
FOR ___________ AGAINST ________ ABSTAIN ______
3. DISCRETIONARY AUTHORITY: To vote with discretionary authority
with respect to all other matters which may come before the
Meeting.
NOTE: Your signature should appear the same as your name appears hereon. In
signing as attorney, executor, administrator, trustee or guardian, please
indicate the capacity in which signing. When signing as joint tenants, all
parties in the joint tenancy must sign. When a proxy is given by a corporation,
it should be signed by an authorized officer and the corporate seal affixed. No
postage is required if mailed in the United States.
Signature:___________________________ Date___________
Signature:___________________________ Date___________
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW: _____________________________
-2-
