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 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant |_|
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a- 6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14(a)-12
WHX CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
<PAGE>
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0- 11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
-1-
<PAGE>
WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 1998
---------------------------
TO THE STOCKHOLDERS OF
WHX CORPORATION:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders of
WHX CORPORATION (the "Company") will be held at the Dupont Hotel, 11th & Market
Streets, Wilmington, Delaware 19801, on June 29, 1998 at 11:00 A.M. for the
following purposes:
1. To elect three (3) Class II Directors to serve until the
expiration of their term and until their successors have been duly
elected and shall have qualified;
2. To approve an amendment to the Company's 1991 Incentive and
Nonqualified Stock Option Plan (the "1991 Plan") whereby the total
number of shares of the Company's Common Stock available for issuance
under the 1991 Plan will be increased to 3,500,000 shares from
2,500,000 shares;
3. To ratify the appointment of Price Waterhouse LLP as the
Company's independent public accountants for the fiscal year ending
December 31, 1998; and
4. 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 May 25, 1998
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
May 29, 1998
<PAGE>
WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
---------------------------
ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 1998
---------------------------
PROXY STATEMENT
This Proxy Statement is being mailed to the stockholders of WHX
Corporation (the "Company") on or about May 29, 1998 in connection with the
solicitation by the Board of Directors of the Company (the "Board of Directors")
of proxies for use at the 1998 Annual Meeting of stockholders of the Company
(the "Meeting") to be held at the Dupont Hotel, 11th & Market Streets,
Wilmington, Delaware 19801, on June 29, 1998 at 11:00 A.M. The Meeting has been
called for the following purposes: (1) to elect three (3) Class II Directors;
(2) to approve an amendment (the "1991 Plan Amendment") to the Company's 1991
Incentive and Nonqualified Stock Option Plan (the "1991 Plan") whereby the total
number of shares of the Company's common stock, par value $.01 per share (the
"Common Stock") available for issuance under the 1991 Plan will be increased to
3,500,000 shares from 2,500,000 shares; (3) to ratify the appointment of Price
Waterhouse LLP as the Company's independent public accountants for the fiscal
year ending December 31, 1998; and (4) 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 May 25, 1998
consisted of 18,770,921 shares of Common Stock, entitling the holders thereof to
one vote per share. Stockholders of record at the close of business on May 25,
1998 (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 Class II Directors of the persons who have been
nominated by the Board of Directors; (ii) to approve the 1991 Plan Amendment;
(iii) for the ratification of the appointment of Price Waterhouse LLP as the
Company's independent public accountants for the fiscal year ending December 31,
1998; and (iv) for any other matter that may properly be
<PAGE>
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. Since the 1991 Plan Amendment proposal
requires the approval of a majority of the outstanding shares present in person
or by proxy and entitled to vote, abstentions will have the effect of a negative
vote. Under the rules of the New York Stock Exchange, Inc. (the "NYSE"), 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. Under applicable Delaware law, a
broker non-vote will have the effect of a negative vote on the 1991 Plan
Amendment proposal.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of the
Common Stock of the Company outstanding at May 25, 1998, 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, (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. Unless otherwise indicated, each stockholder has sole
voting power and sole dispositive power with respect to the indicated shares.
<TABLE>
<CAPTION>
NAME AND ADDRESS PERCENTAGE
OF BENEFICIAL OWNER(1) SHARES BENEFICIALLY OWNED OF CLASS(2)
---------------------- ------------------------- -----------
<S> <C> <C>
Merrill Lynch & Co., Inc.(3)
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281 2,921,816 15.4%
Founders Financial Group, L.P.
53 Forest Avenue
Old Greenwich, Connecticut 06870 (4) 1,518,954 8.1%
Dewey Square Investors Corporation (5)
One Financial Center
Boston, Massachusetts 02111 1,403,978 7.5%
Donald Smith & Co., Inc. (6)
East 80, Route 4
Paramus, New Jersey 07652 1,350,000 7.2%
Lazard Freres & Co. LLC (7)
30 Rockefeller Plaza
New York, New York 10020 1,472,000 7.8%
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS PERCENTAGE
OF BENEFICIAL OWNER(1) SHARES BENEFICIALLY OWNED OF CLASS(2)
---------------------- ------------------------- -----------
<S> <C> <C>
Dimensional Fund Advisors Inc. (8)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 1,291,725 6.9%
WPN Corp.
126 Lower Broadford Road
Bellevue, Idaho 83313 1,029,483(9) 5.2%
Ronald LaBow 1,029,483(9) 5.2%
Neil D. Arnold 24,000(10) *
Paul W. Bucha 24,000(10) *
Robert A. Davidow 121,404(11) *
William Goldsmith 37,333(10) *
John R. Scheessele 0 *
Marvin L. Olshan 38,333(11) *
Raymond S. Troubh 34,000(12) *
James L. Wareham 0 *
Frederick G. Chbosky 6,028 *
James G. Bradley 0 *
Garen Smith 6,966(13) *
All Directors and Executive Officers as a Group
(16 persons) 1,368,298(14) 6.9%
</TABLE>
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* 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 May 25, 1998 of
18,770,921 shares.
(3) Based on a Schedule 13G filed in February 1997, Merrill Lynch & Co.,
Inc. ("ML&Co."), Fund Asset Management, L.P. ("FAM"), Merrill Lynch
Asset Management, L.P. ("MLAM"), Merrill Lynch Variable Series Fund,
Inc. ("MLVSF"), Merrill Lynch Phoenix Fund, Inc. ("Phoenix") and
Princeton Services, Inc. ("PSI") collectively beneficially hold
2,921,816 shares of Common Stock. This amount includes Common Stock
issuable upon conversion of Preferred Stock. The address of PSI, FAM,
MLAM, MLVSF and Phoenix is 800 Scudders Mill Road, Plainsboro, New
Jersey 08536. PSI disclaims beneficial ownership of such securities.
(4) Based on a Schedule 13G filed in February 1998, Founders Financial
Group, L.P, Forest Investment Management LLC, Michael A. Boyd, Inc. and
Michael A. Boyd collectively beneficially hold 1,518,954 shares of
Common Stock.
(5) Based on a Schedule 13G filed in February 1998, Dewey Square Investors
Corp. beneficially holds 1,403,978 shares of Common Stock. This amount
includes Common Stock issuable upon conversion of Preferred Stock.
(6) Based on Schedule 13G filed in February 1996, Donald Smith & Co., Inc.
beneficially holds 1,350,000 shares of Common Stock.
-3-
<PAGE>
(7) Based on a Schedule 13G filed in February 1998, Lazard Freres & Co. LLC
beneficially holds 1,472,000 shares of Common Stock.
(8) Based on a Schedule 13G filed in February 1998, Dimensional Fund
Advisors Inc. beneficially holds 1,291,725 shares of Common Stock.
(9) Based on a Schedule 13D filed jointly in December 1997 by WPN Corp.,
Ronald LaBow, Stewart E. Tabin and Neale X. Trangucci. Includes 917,833
shares of Common Stock issuable upon exercise of options within 60 days
hereof. Ronald LaBow, Chairman of the Board of the Company, is the sole
stockholder of WPN. Consequently, Mr. LaBow may be deemed to be the
beneficial owner of all shares of Common Stock owned by WPN. Mr. LaBow
disclaims beneficial ownership of the options to purchase 133,333
shares of Common Stock held by WPN as nominee for Messrs. Tabin and
Trangucci, respectively. Messrs. Tabin and Trangucci are officers and
directors of WPN and disclaim beneficial ownership of all shares of
Common Stock owned by WPN, except for options to purchase 133,333
shares of Common Stock held by WPN as nominee for Messrs. Tabin and
Trangucci. Each of Messrs. Tabin and Trangucci holds options,
exercisable within 60 days hereof, to purchase 301,666 shares of Common
Stock.
(10) Consists of shares of Common Stock issuable upon exercise of options
within 60 days hereof.
(11) Includes 37,333 shares of Common Stock issuable upon exercise of
options within 60 days hereof.
(12) Includes 32,000 shares of Common Stock issuable upon exercise of
options within 60 days hereof.
(13) Includes 6,666 shares of Common Stock issuable upon exercise of options
within 60 days hereof.
(14) Includes 1,155,251 shares of Common Stock issuable upon exercise of
options within 60 days hereof.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the 1996 Annual Meeting of Stockholders, the stockholders approved
an amendment to the Company's Certificate of Incorporation and Bylaws to, INTER
ALIA, provide for the classification of the Board of Directors into three
classes. The term of the current Class II Directors expires at the Meeting and
when their successors are duly elected and shall have qualified. All nominees
are currently Class II Directors of the Company. 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.
Unless authority is specifically withheld, proxies will be voted for
the election of the nominees named below, to serve as Class II Directors of the
Company for a term of office to expire at the third succeeding annual meeting of
stockholders after their election and until their successors have been duly
elected and qualified. Class II Directors shall be elected by a plurality of the
votes cast, in person or by proxy, at the Meeting. John R. Scheessele, a Class I
Director, resigned as a director of the Company in May 1998 in connection with
the termination of his employment with the Company. See "Executive
Compensation--Employment Agreements." The remaining Class I and Class III
Directors will continue to serve their respective terms, with the one Class I
Director having a term that expires at the 2000
-4-
<PAGE>
Annual Meeting of Stockholders of the Company and the three Class III Directors
having terms that expire at the 1999 Annual Meeting of Stockholders of the
Company.
The names of the nominees and certain information concerning them are
set forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST YEAR
CLASS OF FOR THE PAST FIVE YEARS BECAME
NAME DIRECTOR AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR(1)
- ---- -------- -------------------------------- --- -------------
<S> <C> <C> <C> <C>
Paul W. Bucha II DIRECTOR. Chairman of the Board 54 1993
of Wheeling-Pittsburgh Steel
Corporation ("WPSC") since April
1998. President, Paul W. Bucha &
Company, Inc., an international
marketing consulting firm from
1979 to April 1998; President,
BLHJ, Inc., an international
consulting firm, from July 1991 to
April 1998; President,
Congressional Medal of Honor
Society of U.S., since September
1995.
Marvin L. Olshan II DIRECTOR AND, SINCE 1991, 70 1991
SECRETARY OF THE COMPANY.
Partner, Olshan Grundman Frome
& Rosenzweig LLP, since 1956.
Raymond S. Troubh II DIRECTOR. Financial Consultant for 71 1992
in excess of past five years. Mr.
Troubh is also a director of
ARIAD Pharmaceuticals, Inc.,
Becton, Dickinson and Company, a
medical instrumentation and
equipment company, Diamond
Offshore Drilling, Inc., Foundation
Health Systems, Inc., General
American Investors Company,
Olsten Corporation, a temporary
help company, Petrie Stores
Corporation, a retail chain,
Starwood Hotels & Resorts, Time
Warner Inc. and Triarc
Companies, Inc., restaurants and
soft drinks.
</TABLE>
-5-
<PAGE>
The names of the Class I and Class III Directors, whose terms expire at
the 2000 and 1999 Annual Meeting of Stockholders of the Company, respectively,
who are currently serving their terms are set forth below.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST YEAR
CLASS OF FOR THE PAST FIVE YEARS BECAME
NAME DIRECTOR AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR(1)
- ---- -------- -------------------------------- --- -------------
<S> <C> <C> <C> <C>
Neil D. Arnold III DIRECTOR. Group Finance Director 49 1992
since December 1996 and
Executive Vice President,
Corporate Development from
September 1996 through
December 1996 of Lucas
Varity plc, Senior Vice
President and Chief
Financial Officer from July
1990 through September 1996
of Varity Corporation. Lucas
Varity plc designs,
manufactures and supplies
advanced technology systems,
products and services in the
world's automotive, diesel
engine and aerospace
industries.
Robert A. Davidow III DIRECTOR AND VICE CHAIRMAN OF 56 1992
THE BOARD. Private investor since
January 1990. Mr. Davidow is also
a director of Arden Group, Inc., a
supermarket holding company.
William Goldsmith I DIRECTOR. Management and 79 1987
Marketing Consultant since 1984;
Chairman of the Board of TMP,
Inc. from January 1991 to 1993;
Chairman of Overspin Golf since
1993; Chief Executive Officer of
Overspin Golf from January 1994
through October 1994; Chairman
of the Board and Chief Executive
Officer of Fiber Fuel International,
Inc., from 1994 to 1997; Life
Trustee to Carnegie Mellon
University since 1980.
Ronald LaBow III CHAIRMAN OF THE BOARD. 63 1991
President, Stonehill Investment
Corp. since February 1990. Mr.
LaBow is also a director of
Regency Equities Corp., a
real estate company.
</TABLE>
- ---------------
(1) The Company and its subsidiaries were reorganized into a new holding
company structure ("Corporate Reorganization") on July 26, 1994. Prior
to the Corporate Reorganization, all directors of the Company who were
directors at the time of the Corporate Reorganization were directors of
Wheeling-Pittsburgh Corporation ("WPC").
-6-
<PAGE>
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 on five occasions and took action by
unanimous written consent on four occasions during the fiscal year ended
December 31, 1997. There are five Committees of the Board of Directors: the
Executive Committee, the Audit Committee, the Compensation Committee, the
Nominating 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 on
one occasion and took action by unanimous written consent on seven occasions
during the fiscal year ended December 31, 1997. 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 and Neil D. Arnold.
The Audit Committee met on two occasions and took action by written consent on
one occasion during the fiscal year ended December 31, 1997. The 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
Interest Policy. The members of the Compensation Committee are Robert A.
Davidow, William Goldsmith and Marvin L. Olshan. The Compensation Committee met
on two occasions and took action by unanimous written consent on three occasions
during the fiscal year ended December 31, 1997. The Compensation Committee
reviews compensation arrangements and personnel matters. The members of the
Nominating Committee are Ronald LaBow, Marvin L. Olshan, Paul W. Bucha and
Robert A. Davidow. The Nominating Committee took action by written consent on
one occasion during the fiscal year ended December 31, 1997. The Nominating
Committee recommends nominees to the Board of Directors of the Company. The
members of the Stock Option Committee are Raymond S. Troubh and Robert A.
Davidow. The Stock Option Committee administers the granting of stock options
under the 1991 Plan. The Stock Option Committee took action by unanimous written
consent on one occasion during the fiscal year ended December 31, 1997.
Directors of the Company who are not employees of the Company or its
subsidiaries 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 Stock
Option Committee, 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 of the Company (other than the Chairman of the Board or
directors who are employees of the Company or its subsidiaries) 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 (the "1993 Plan"). All directors of the Company permitted to participate in
the 1993 Plan have received the maximum number of shares permitted to be issued
thereunder. In addition, directors of the Company (other than the Chairman of
the Board or directors who are employees of the Company or its subsidiaries)
also received options to purchase 25,000 shares of Common Stock on December 1,
1997 and receive options to purchase 5,000 shares of Common Stock per annum on
the date of each annual meeting of Stockholders (commencing with the Meeting) up
to a maximum of 40,000 shares of Common Stock pursuant to the Company's 1997
Directors Stock Option Plan.
-7-
<PAGE>
Pursuant to a management agreement effective as of January 3, 1991, as
amended (the "Management Agreement"), approved by a majority of the Company's
disinterested directors of the Company, WPN Corp. ("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 1997, WPN received a monthly fee of $458,333.33,
with total payments in 1997 of $5,500,000. In August 1997, the Company granted
WPN options to acquire 1,000,000 shares of Common Stock and a cash bonus of
$300,000. Such options are held by WPN as nominee for Ronald LaBow, Stewart E.
Tabin and Neale X. Trangucci, each of whom is an officer of WPN, and has the
right to acquire 600,000, 200,000 and 200,000 shares, respectively, of Common
Stock. 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
"Executive Officers -- Management Agreement with WPN."
-8-
<PAGE>
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 directors.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FOR THE PAST
NAME FIVE YEARS AND CURRENT PUBLIC DIRECTORSHIPS AGE
- ---- ------------------------------------------- ---
<S> <C> <C>
James G. Bradley EXECUTIVE VICE PRESIDENT. Executive Vice President of the 50
Company and President and Chief Executive Officer of
WPSC since April 1998. President and Chief Operating
Officer of Koppel Steel Company from November 1997 to
March 1998. Vice President of the Company from October
1995 to October 1997; Executive Vice President-Operations
of WPSC from October 1995 to October 1997; Vice
President-Operations of International Mill Service from 1992
to October 1995.
Robert D. LeBlanc EXECUTIVE VICE PRESIDENT. Executive Vice President of the 48
Company since April 1998. President and Chief Executive
Officer of Handy & Harman since April 1998. (Handy &
Harman was acquired by the Company in April 1998).
President and Chief Operating Officer of Handy & Harman
from July 1997 to April 1998. Executive Vice President of
Handy & Harman from November 1996 to July 1997.
Executive Vice President of Elf Atochem North America, Inc.
("Elf Atochem") from January 1994 to November 1996.
Group President of Elf Atochem from February 1990 to
January 1994.
Paul J. Mooney EXECUTIVE VICE PRESIDENT. Executive Vice President of the 46
Company, WPC and WPSC since November 1997. National
Director of Cross Border Filing Services with the Accounting,
Auditing and SEC Services department of Price Waterhouse
LLP from July 1996 to November 1997. Accounting and
Business Advisory Services Department--Pittsburgh Site
Leader of Price Waterhouse LLP from 1988 until November
1997. Client Service and Engagement Partner of Price
Waterhouse LLP from 1985 until November 1997.
Howard Mileaf VICE PRESIDENT -- GENERAL COUNSEL. Vice President -- 61
General Counsel of the Company since April
1998; Vice President -- Special Counsel of
the Company from April 1993 to April 1998.
Trustee/Director of Neuberger & Berman
Equity Mutual Funds, since 1984.
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FOR THE PAST
NAME FIVE YEARS AND CURRENT PUBLIC DIRECTORSHIPS AGE
- ---- ------------------------------------------- ---
<S> <C> <C>
Arnold Nance VICE PRESIDENT -- FINANCE. Vice President -- Finance since 41
April 1998. Vice President of Development and Planning of
Handy & Harman since May 1998. Special Assistant to the
Chairman of the Board of Directors since November 1995.
Vice President of Wheeling-Pittsburgh Radio Corporation
from July 1993 to November 1995. Vice President and Chief
Financial Officer of SH Holdings, Inc. from May 1991
through July 1993.
</TABLE>
-10-
<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 for the fiscal year ended
December 31, 1997 (Mr. James L. Wareham, who resigned from employment with the
Company effective February 28, 1997 and Mr. John R. Scheessele, who succeeded
Mr. Wareham as the Company's President and whose employment terminated on April
21, 1998), (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, 1997 and who were employed by the Company
at the end of fiscal 1997 and (iii) two additional individuals whose total
annual salary and bonus exceeded $100,000 during fiscal 1997 but who were not
employed by the Company at the end of fiscal 1997 (together with the CEO and the
executive officers identified in (ii) above, the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------- ------------------- ----------------------
Other Annual Securities
Salary Bonus Compensation Underlying All Other Compensation
YEAR ($) ($)(1) ($)(2) OPTIONS (#) ($)(3)
---- ----- ------ -------- ----------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
John R. Scheessele, 1997 358,974 -- 133,250(4) 240,000(5) 49,333(6)
President (7) 1996 -- -- -- -- --
1995 -- -- -- -- --
James L. Wareham, 1997 66,667 -- 9,001(8) -- 4,260
President (9) 1996 400,000 -- -- -- 47,140(10)
1995 400,000 90,000 -- -- 46,825(10)
Howard A. Mileaf 1997 120,000 40,000 -- -- 6,998
Vice President 1996 120,000 40,000 -- -- 6,264
1995 120,000 20,000 -- -- 5,940
Garen Smith, 1997 223,210 25,000 -- 20,000 3,000
Vice President 1996 200,230 63,826 -- 10,000 3,000
1995 150,000(11) 30,000 -- -- 3,000
James G. Bradley, 1997 133,333 53,333(12) -- 65,000 5,260
Vice President(13) 1996 160,000 -- -- 10,000 2,922
1995 40,000 -- -- -- --
Frederick G. Chbosky 1997 140,000 -- 17,051(14) -- 9,938
Chief Financial Officer(15) 1996 140,000 -- -- -- 10,272
1995 140,000 22,384 -- -- 10,020
</TABLE>
- ----------------------------
(1) Includes bonuses paid in 1996 for services rendered in the prior year
pursuant to the WPSC Management Incentive Program ("WPSC Management
Incentive Program") covering certain officers and salaried employees
of WPSC. Messrs. Wareham, Scheessele, Mileaf and Smith are not
eligible to participate in the WPSC
-11-
<PAGE>
Management Incentive Program. Mr. Wareham's employment agreement
provided for an annual bonus to be awarded in the sole discretion of
the Company. Mr. Wareham was granted a bonus in 1996 for services
rendered in the prior year. Mr. Smith's employment agreement provides
for an annual bonus based upon the achievements of certain targets
specified by the Board of Directors of the Company's wholly-owned
subsidiary, Unimast Incorporated ("Unimast"). Mr. Smith was granted a
bonus in 1996, 1997 and 1998 for services rendered in the prior years.
All bonus amounts have been attributed to the year in which the
services were performed.
(2) Excludes perquisites and other personal benefits unless the aggregate
amount of such compensation exceeds the lesser of either $50,000 or 10%
of the total of annual salary and bonus reported for such named
executive officer.
(3) Amounts shown, unless otherwise noted, reflect employer contributions
to WPSC Salaried Employees Pension Plan, except in the case of Mr.
Smith which amount reflects other employer pension contributions.
(4) Includes relocation allowance of $87,865 and membership dues of
$37,930.
(5) Options terminated in 1998 upon the termination of Mr. Scheessele's
employment with the Company.
(6) Includes insurance premiums paid by the Company in 1997 of $45,000.
(7) Employment with the Company commenced February 7, 1997 and terminated
on April 21, 1998.
(8) Includes membership dues of $3,848 and financial planning fees of
$4,081.
(9) Resigned from employment with the Company effective February 28, 1997.
(10) Includes insurance premiums paid by the Company in 1996 and 1995 of
$40,000 annually.
(11) Employment with the Company commenced March 31, 1995.
(12) Represents retention bonus paid upon conclusion of the strike by the
United Steel Workers of America.
(13) Resigned from employment with the Company effective October 31, 1997.
Effective April 23, 1998, Mr. Bradley replaced John R. Scheessele as
President and Chief Executive Officer of WPSC.
(14) Includes $6,223 for personal use of leased automobile and $7,265 of
membership dues.
(15) Resigned as an officer of the Company effective November 1, 1997.
-12-
<PAGE>
OPTION GRANTS TABLE. The following table sets forth certain
information regarding stock option grants made to each of the Named Executive
Officers during the fiscal year ended December 31, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual Rates
of Stock Price Appreciation for
Individual Grants Option Term
----------------- -------------------------------
% of Total
Options
Number of Securities Granted to Exercise
Underlying Options Employees in Price Expiration
Name Granted (#)(1) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- -------------- ------------- ------- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C>
John R. Scheessele 240,000(2) 22.6% 13.8125 9/25/07 2,084,786 5,283,257
James L. Wareham 0 0% -- -- -- --
Howard A. Mileaf 0 0% -- -- -- --
Garen Smith 20,000 1.9% 6.875 4/06/07 86,473 219,140
James G. Bradley 65,000(3) 6.1% 13.8125 9/25/07 564,630 1,430,882
Frederick G. Chbosky 0 0% -- -- -- --
</TABLE>
- -------------------
(1) All options were granted under the Company's 1991 Incentive and
Nonqualified Stock Option Plan and vest ratably over a three-year
period. This period commenced February 6, 1996.
(2) Options terminated in 1998 upon the termination of Mr. Scheessele's
employment with the Company.
(3) Options terminated on October 31, 1997 upon Mr. Bradley's resignation
from employment with the Company.
-13-
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as of December
31, 1997.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-
Underlying Unexercised the-Money Options at
Options at 1997 Fiscal 1997 Fiscal Year-
Year-End(#) Exercisable/ End($)(1) Exercisable/
Name Unexercisable Unexercisable
- ---- -------------------------- ---------------------------
<S> <C> <C>
John R. Scheessele 0/240,000(2) 0/0
James L. Wareham 0/0 0/0
Howard A. Mileaf 25,000/0 $16,875/0
Garen Smith 3,333/26,667 0/$102,500
James G. Bradley 0/0 0/0
Frederick G. Chbosky 0/0 0/0
</TABLE>
- ------------------
(1) On December 31, 1997, the last reported sales price of WHX Common Stock
as reported on the New York Stock Exchange Composite Tape was $12.00.
(2) Options terminated in 1998 upon the termination of Mr. Scheessele's
employment with the Company.
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
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 annual
benefits payable to Mr. Chbosky upon retirement are $18,667. 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. Mr. Chbosky is a party to a deferred
compensation agreement such as is described above. Except as described in this
paragraph, and in the next paragraph with respect to the employment agreements
of Messrs. Scheessele and Wareham, no plan or arrangement exists which results
in compensation to a Named Executive Officer in excess of $100,000 upon such
officer's future termination of employment or upon a change-of-control.
-14-
<PAGE>
EMPLOYMENT AGREEMENTS. Mr. John R. Scheessele commenced employment as
President of the Company, President of WPC and President, Chairman of the Board
and Chief Executive Officer of WPSC pursuant to a three-year employment
agreement, dated as of February 7, 1997, which was to be automatically extended
for successive three-year periods unless earlier terminated pursuant to the
provisions of such agreement. The agreement provided for an annual salary to Mr.
Scheessele of $400,000 and an annual bonus to be awarded in the sole discretion
of the Company. In addition, the employment agreement provided for Mr.
Scheessele to receive the cash surrender value of life insurance contracts
purchased by the Company upon termination of his employment. On April 21, 1998,
Mr. Scheessele's employment was terminated by the Company. Mr. Scheessele was
succeeded by James G. Bradley as President and Chief Executive Officer of WPSC.
Pursuant to the terms of Mr. Scheessele's employment agreement, upon termination
he was paid $1,200,000 and is entitled to receive other specified benefits for a
period of one year from the date of termination.
Mr. Wareham was employed pursuant to an agreement that provided for an
annual salary to Mr. Wareham of $400,000 and an annual bonus awarded in the sole
discretion of the Company. In addition, the employment agreement provided for
Mr. Wareham to receive the cash surrender value of life insurance contracts
purchased by the Company upon termination of his employment. In February 1997,
Mr. Wareham resigned from his positions with the Company and was succeeded by
Mr. Scheessele.
In November 1997, Mr. Frederick G. Chbosky resigned from his positions
as Chief Financial Officer of each of the Company, WPC and WPSC. In 1998, Mr.
Chbosky received from WPSC a severance payment of $128,100.
Mr. Garen Smith is a Vice President of the Company and is employed as
President and Chief Executive Officer of Unimast under a three-year employment
agreement dated as of April 8, 1994. The agreement provides for an annual salary
to Mr. Smith of $200,000 per year and an annual bonus of up to 37.5% of Mr.
Smith's annual base salary upon the achievement of certain performance targets
specified by the Board of Directors of Unimast. In the event Mr. Smith's
employment is terminated without cause, he is entitled to receive his annual
salary and health insurance benefits for an eighteen month period following his
termination.
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,
1997. 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, 1997 were approximately $814,000.
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 1996
and 1997, WPN received an annual fee of $5.5 million. In 1997, the Company
granted WPN options to acquire 1,000,000 shares of Common Stock and a cash bonus
of $300,000. Such options are held by WPN as nominee for Ronald LaBow, Stewart
E. Tabin and Neale X. Trangucci, each of whom is an officer of WPN, and has the
right to acquire 600,000, 200,000 and 200,000 shares, respectively, of Common
Stock. The Company provides indemnification for WPN's employees, officers and
directors
-15-
<PAGE>
against any liability, obligation or loss resulting from their actions pursuant
to the Management Agreement. The Management Agreement has a two year term and is
renewable automatically for successive two year periods, unless terminated by
either party upon 60 days' notice. 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.
1997 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 and Goldsmith,
non-employee directors of the Company, serve as members of the Compensation
Committee and are "non-employee directors" (within the meaning of Rule 16b-3
under the Exchange Act). Mr. Davidow serves as Chairman of the Compensation
Committee. The Compensation Committee met on two occasions and took action by
unanimous written consent on three occasions during the fiscal year ended
December 31, 1997.
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 management's 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 (the "Code"), 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. Base salary compensation of
executive officers is reviewed annually by the Compensation Committee, and
recommendations of the Compensation Committee in that regard are acted upon by
the Board of Directors. 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.
-16-
<PAGE>
Incentive Compensation
In 1997, all of the Company's then executive officers other than the
Company's President and two Vice Presidents were participants in the WPSC
Management Incentive Program for salaried employees of WPSC (aggregating
approximately 848 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 1997, the incentive target threshold was
established by the Company at an EBITDA to operating asset ratio of 10.40%. The
aggregate amount available for incentives increases as progressively higher
EBITDA ratios are achieved. The ratio achieved in 1997 for purposes of the WPSC
Management Incentive Program was below such target threshold, primarily as a
result of a work stoppage (the "Strike") by the United Steelworkers of America
("USWA") at WPSC which began October 1, 1996 and was settled in August 1997.
Accordingly, no funds were available to salaried employees of the Company
pursuant to the WPSC Management Incentive Program for 1997.
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. In connection with his efforts relating to the settlement of
the Strike, Mr. Bradley was awarded a bonus of $53,333 in 1997. In connection
with his performance in resolving certain of the Company's outstanding claims
against insurance carriers, Mr. Mileaf, who is not a participant in the WPSC
Management Incentive Program, was awarded a bonus of $140,000 in 1997. Garen
Smith, who also is not a participant in the WPSC Management Incentive Program,
was awarded a bonus of $25,000 in 1997, which was determined pursuant to an
objective formula provided in his employment agreement based upon the
performance of Unimast, of which Mr. Smith is President.
Compensation of Chief Executive Officer
Mr. James L. Wareham served as the Company's President, President of
WPC and President, Chairman of the Board and Chief Executive Officer of WPSC
until February 1997 at a salary of $400,000 per annum. Mr John R. Scheessele
succeeded Mr. Wareham in February 1997. Mr. Scheessele's salary was $400,000 per
annum. As described in the Employment Agreements section above, each of Messrs.
Wareham's and Scheessele's annual base salary of $400,000 was determined by
contract. In determining such amount, the Board of Directors considered the
responsibilities performed by Messrs. Wareham and Scheessele as President of the
Company and Chairman of the Board and Chief Executive Officer of
-17-
<PAGE>
WPSC, the performance of Messrs. Wareham and Scheessele in managing and
directing the Company's operations, the efforts by Messrs. Wareham and
Scheessele in assisting the Company to improve its capital base and financial
condition, a competitive assessment of survey data of other steel producers as
it relates to the Company's performance versus other integrated steel producers,
and the evaluation of the other factors described in "Salaries" above. Messrs.
Wareham's and Scheessele's compensation were in the low to medium range compared
to salaries received by chief executive officers of other integrated steel
producers. Mr. Scheessele's employment with the Company was terminated in April
1998 and he has not been succeeded as President of the Company. See "Executive
Compensation - Employment Agreements" for a description of Messrs. Wareham's and
Scheessele's employment agreement with the Company.
The Compensation Committee considered Messrs. Wareham and Scheessele
for cash performance bonuses 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 Messrs.
Wareham and Scheessele (e.g., management of the Company's operations during the
Strike, business combinations, corporate partnering and other similar
transactions). The Board of Directors did not award either of Messrs. Wareham or
Scheessele a bonus in 1997.
Stock Option and Other Plans
The Company awarded options to purchase 240,000, 20,000 and 65,000
shares of Common Stock to John R. Scheessele, Garen Smith and James G. Bradley,
respectively, in 1997. The exercise price for these options was $13.8125, $6.875
and $13.8125 per share, respectively, the fair market value of the Common Stock
on the respective 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. Each of Mr.
Bradley's and Mr. Scheessele's options were terminated on the respective dates
of the termination of their employment with the Company. It is the philosophy of
the Compensation Committee that stock options should be awarded to employees of
the 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 executive officers. As a
result of economic difficulties in the steel industry in general and for the
Company specifically, the Compensation Committee has been concerned about the
retention of talented executive and management personnel. 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. 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.
-18-
<PAGE>
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]
================================================================================
INDEXED RETURNS
- --------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997
- --------------------------------------------------------------------------------
S&P 500 Index 100.00 110.08 111.53 153.45 188.68 251.63
- --------------------------------------------------------------------------------
WHX CORP. 100.00 297.83 230.43 189.13 154.35 208.70
- --------------------------------------------------------------------------------
PEER GROUP 100.00 200.90 197.68 155.38 116.22 109.24
================================================================================
There can be no assurance that the Company's stock performance will
continue with the same or similar trends depicted in the graph above.
-19-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
John R. Scheessele, a former officer of the Company, WPC and WPSC was a
director of Wheeling-Nisshin Inc. ("Wheeling-Nisshin"). Akimune Takewaka is a
former director of WPSC and Wheeling-Nisshin, and was also Chairman of the Board
of Wheeling-Nisshin. Paul W. Bucha, the Chairman of the Board of WPSC, has
replaced Mr. Scheessele as WPSC's nominee to the Board of Wheeling-Nisshin. Mr.
Takewaka has been replaced by Masahiko Matsueda, a director of Wheeling-
Nisshin, as a director of WPSC. James D. Hesse, a former Vice President of the
Company, is President, Chief Executive Officer and a director of
Wheeling-Nisshin. The Company currently holds a 35.7% equity interest in
Wheeling-Nisshin.
In April 1998, Paul W. Bucha, a director of the Company, became
Chairman of the Board of WPSC. In connection therewith, Mr. Bucha has received
options to purchase 50,000 shares of Common Stock and will be paid an annual
base salary of $300,000 per annum in connection with such position.
Marvin L. Olshan, a director and Secretary of the Company, is a member
of Olshan Grundman Frome & Rosenzweig LLP, which firm 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, 1997 were
approximately $814,000.
MANAGEMENT AGREEMENT
Pursuant to a management agreement, as amended, between WHX and WPN, of
which Ronald LaBow, the Chairman of the Board of the WHX, is the sole
stockholder and an officer and a director, WPN provides financial, management,
advisory and consulting services to the Company. In 1996 and 1997, WPN received
an annual fee of $5.5 million. In 1997, the Company granted WPN options to
acquire 1,000,000 shares of Common Stock and a cash bonus of $300,000. Such
options are held by WPN as nominee for Ronald LaBow, Stewart E. Tabin and Neale
X. Trangucci, each of whom is an officer of WPN, and has the right to acquire
600,000, 200,000 and 200,000 shares, respectively, of Common Stock. 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.
PROPOSAL NO. 2
APPROVAL OF AMENDMENTS TO THE 1991 INCENTIVE
AND NONQUALIFIED STOCK OPTION PLAN
The Board of Directors proposes that the 1991 Plan Amendment, whereby
the number of shares reserved for issuance pursuant to the exercise of options
granted under the 1991 Plan will be increased from 2,500,000 shares of Common
Stock to 3,500,000 shares of Common Stock, be approved.
On September 24, 1991, the Board of Directors of Wheeling-Pittsburgh
Corporation ("WPC"), the Company's predecessor, adopted the 1991 Plan. The 1991
Plan was approved at the 1992 Annual Meeting of WPC Stockholders. In April 1993,
the Board of Directors of WPC voted to amend the 1991 Plan, subject to
stockholder approval, to increase the number of shares to 2,500,000 shares of
Common Stock, which amendment was approved at the July 22, 1994 Special Meeting
of WPC Stockholders.
-20-
<PAGE>
Shares of Common Stock may be issued under the 1991 Plan upon the exercise of
incentive stock options, as defined in Section 422 of the Code, and nonqualified
stock options.
The 1991 Plan is intended to assist the Company in securing and
retaining key employees by allowing them to participate in the ownership and
growth of the Company through the grant of incentive and nonqualified stock
options. The granting of such options serves as partial consideration for and
gives key employees an additional inducement to remain in the service of the
Company and its subsidiaries and provides them with an increased incentive to
work towards the Company's success.
The Board of Directors believes it is in the Company's and its
stockholders' best interests to approve the 1991 Plan Amendment because it would
(i) allow the Company to continue to grant options under the 1991 Plan which
facilitates the benefits of the additional incentive inherent in the ownership
of Common Stock by key employees and helps the Company retain the services of
key employees and (ii) enable compensation received under the 1991 Plan to
qualify as "performance-based" for purposes of Section 162(m) of the Code.
The proposed 1991 Plan Amendment is attached as Exhibit A to this Proxy
Statement.
The 1991 Plan currently authorizes the issuance of a maximum of
2,500,000 shares of Company Common Stock (and 3,500,000 shares subject to
stockholder approval of the 1991 Plan Amendment) pursuant to the exercise of
options granted thereunder. As of the date hereof, stock options to purchase
3,472,734 shares of Common Stock, at exercise prices ranging from $6.125 to
$16.625 per share, vesting over a three year period have been granted under the
1991 Plan, of which 617,501 options have lapsed and 520,000 options have been
granted subject to stockholder approval of the 1991 Plan Amendment. Options to
purchase 331,973 shares of Common Stock were exercised in 1997 and in 1998
through the Record Date. Options to purchase 2,119,098 shares of Common Stock
were outstanding as of the date hereof. On April 23, 1998, the Stock Option
Committee granted, subject to stockholder approval of the 1991 Plan Amendment,
options to purchase 260,000 and 260,000 shares of Common Stock, respectively, to
James G. Bradley and Robert D. LeBlanc. During the last completed fiscal year
and through the Record Date, options to purchase shares of Common Stock have
been granted pursuant to the 1991 Plan to (i) the Named Executive Officers, (ii)
all current executive officers as a group and (iii) all employees, including all
current officers who are not executive officers, as a group, as follows (options
to purchase shares of Common Stock have not been granted to any directors who
are not executive officers of the Company pursuant to the 1991 Plan):
NUMBER OF OPTIONS (#)(1)(2)
Named Executive Officers 288,418
Executive Group 400,000
Non-Executive Officer Employee Group 1,230,127
- -------------------
(1) On the Record Date, the last reported sales price of the Common Stock
as reported on the New York Stock Exchange Composite Tape was $14.25
per share.
(2) Information contained in this table is duplicative of information
contained in "Executive Compensation" and does not signify additional
grants of options to purchase shares of Common Stock.
-21-
<PAGE>
ADMINISTRATION
The 1991 Plan is administered by a Stock Option Committee (the "Option
Committee"), consisting of not less than three members of the Board of Directors
appointed by the Board of Directors. The Option Committee will select the key
employees who will be granted options to purchase shares of Common Stock under
the 1991 Plan and, subject to the provisions of the 1991 Plan, will determine
the terms and conditions and number of shares of Common Stock subject to each
such option. The Option Committee will also make any other determinations
necessary or advisable for the administration of the 1991 Plan. The
determinations by the Option Committee will be final and conclusive; however,
the grant of options to purchase shares of the Common Stock to a full-time
employee who is an executive officer of the Company, as well as the terms and
provisions of such option, requires the prior approval of a majority of the
members of the Board of Directors who are "disinterested persons." Generally,
options granted under the 1991 Plan vest and become exercisable in one-third
increments on the first, second and third anniversary of the date of grant,
respectively. The 1991 Plan will terminate on September 23, 2001, but may be
terminated by the Board of Directors at any time before that date.
OPTIONS
Upon the grant of an option to purchase shares of Common Stock to an
employee, the Option Committee will fix the number of shares of the Company's
Common Stock that the optionee may purchase upon exercise of such option and the
price at which the shares may be purchased. The option price for options shall
not be less than 100% of the "fair market value" of the shares of Common Stock
at the time such option is granted; provided, however, that with respect to an
incentive stock option in the case of an optionee, who, at the time such option
is granted, owns more than 10% of the voting stock of the Company or its
subsidiaries, then the purchase price per share shall be at least 110% of the
fair market value. "Fair market value" is deemed to be the closing price of
shares of Common Stock on such date, on the NYSE, or if the shares of Common
Stock are not listed on the NYSE, in the principal market in which such shares
of Common Stock are traded. The aggregate fair market value of shares of Common
Stock (determined at the time the incentive stock option is granted) subject to
incentive stock options granted to a key employee under all stock option plans
of the Company, and of the Company's subsidiaries (if any), and that become
exercisable for the first time by such key employee during any calendar year may
not exceed $100,000. Payment of the exercise price for shares of Common Stock
subject to options may be made with cash, check or such other instrument as may
be acceptable to the Company. Full payment for shares of Common Stock exercised
must be made at the time of exercise.
FEDERAL INCOME TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS. Incentive stock options granted under the 1991
Plan are intended to be "incentive stock options" as defined by Section 422 of
the Code. Under present law, the grantee of an incentive stock option will not
realize taxable income upon the grant or the exercise of the incentive stock
option and the Company will not receive an income tax deduction at either such
time. If the grantee does not sell the shares acquired upon exercise of an
incentive stock option within either (i) two years after the grant of the
incentive stock option or (ii) one year after the date of exercise of the
incentive stock option, the gain upon a subsequent sale of the shares will be
taxed as long-term capital gain. If the grantee, within either of the above
periods, disposes of the shares acquired upon exercise of the incentive stock
option, the grantee will recognize as ordinary income an amount equal to the
lesser of (i) the gain realized by the grantee upon such disposition or (ii) the
difference between the exercise price and the fair market value of the shares on
the date of exercise. In such event, the Company would be entitled to a
corresponding income tax deduction equal to the amount recognized as ordinary
income by the grantee. The gain in excess of such amount recognized by the
grantee as ordinary income would be taxed as a
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long-term capital gain or short-term capital gain (subject to the holding period
requirements for long-term or short-term capital gain treatment).
Unless the shares subject to an incentive stock option are subject to a
risk of forfeiture at the time the option is exercised, the exercise of the
incentive stock option will result in the excess of the stock's fair market
value on the date of exercise over the exercise price being included in the
optionee's alternative minimum taxable income (AMTI). If the shares are subject
to a risk of forfeiture and are nontransferable, the excess described above will
be included in AMTI when the risk of forfeiture lapses or the shares become
transferable, whichever occurs sooner. Liability for the alternative minimum tax
is complex and depends upon an individual's overall tax situation. Before
exercising an incentive stock option, a grantee should discuss the possible
application of the alternative minimum tax with his tax advisor in order to
determine the tax's impact.
NON-QUALIFIED STOCK OPTIONS. Upon exercise of a non-qualified stock
option granted under the 1991 Plan, or upon the exercise of an incentive stock
option that does not qualify for the tax treatment described above under
"Incentive Stock Options," the grantee will recognize ordinary income in an
amount equal to the excess of the fair market value of the shares received over
the exercise price of such shares. That amount increases the grantee's basis in
the stock acquired pursuant to the exercise of the non-qualified option. Upon a
subsequent sale of the stock, the grantee will incur short-term or long-term
gain or loss depending upon his holding period for the shares and upon the
shares' subsequent appreciation or depreciation in the value. The Company will
be allowed a federal income tax deduction for the amount recognized as ordinary
income by the grantee upon the grantee's exercise of the option.
SUMMARY OF TAX CONSEQUENCES. The foregoing outline is no more than a
summary of the federal income tax provisions relating to the grant and exercise
of options and stock appreciation rights under the 1991 Plan and the sale of
shares acquired under the 1991 Plan. Individual circumstances may vary these
results. The federal income tax laws and regulations are constantly being
amended, and each participant should rely upon his own tax counsel for advice
concerning the federal income tax provisions applicable to the 1991 Plan.
The Board of Directors believes it is in the Company's best interests
to approve the 1991 Plan Amendment which would allow the Company to continue to
grant options under the 1991 Plan to secure for the Company the benefits of the
additional incentive inherent in the ownership of shares of the Company's Common
Stock by key employees and to help the Company secure and retain the services of
key employees and to enable compensation under the 1991 Plan to qualify as
"performance-based" for purposes of Section 162(m) of the Code. The affirmative
vote of the holders of record of a majority of the shares of Common Stock
present in person or by proxy at the Meeting is required for approval of the
1991 Plan Amendment.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE 1991 PLAN AMENDMENT.
If a choice is specified on the proxy by the stockholder, the shares of Common
Stock will be voted as specified. If no specification is made, the shares of
Common Stock will be voted "FOR" approval of the 1991 Plan Amendment.
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PROPOSAL NO. 3
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, 1998. 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, 1997, 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. 3.
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. Innisfree M & A, 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 January 27, 1999.
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.
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<PAGE>
ANNUAL REPORT
All stockholders of record as of May 25, 1998 have been sent, or are
concurrently herewith being sent, a copy of the Company's Annual Report for the
fiscal year ended December 31, 1997. Such report contains certified consolidated
financial statements of the Company and its subsidiaries for the fiscal year
ended December 31, 1997.
By Order of the Company,
MARVIN L. OLSHAN, Secretary
Dated: New York, New York
May 29, 1998
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT
ON FORM 10-K, AS AMENDED FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 (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.
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<PAGE>
EXHIBIT A
AMENDMENT NO.3 TO
THE 1991 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN OF
WHEELING-PITTSBURGH CORPORATION
1. The 1991 Incentive and Nonqualified Stock Option Plan (the "Plan")
is hereby amended, subject to stockholder approval of this Agreement within one
(1) year of the date hereof, as follows:
Section 4 of the Plan is hereby amended in its entirety to read as
follows:
"4. STOCK RESERVED FOR THE PLAN.
Subject to adjustment as provided in Section 7 hereof, a total of three
and one-half million (3,500,000) shares of common stock, $.01 par value
("Stock"), of the Company shall be subject to the Plan. The shares of
Stock subject to the Plan shall consist of unissued shares or
previously issued shares reacquired and held by the Company or any
Subsidiary of the Company, and such amount of shares of Stock shall be
and is hereby reserved for such purpose. Any of such shares of Stock
which may remain unsold and which are not subject to outstanding
Options at the termination of the Plan shall cease to be reserved for
the purpose of the Plan, but until termination of the Plan the Company
shall at all times reserve a sufficient number of shares of Stock to
meet the requirements of the Plan. Should any Option expire or be
cancelled prior to its exercise in full or should the number of shares
of Stock to be delivered upon the exercise in full of an Option be
reduced for any reason, the shares of Stock theretofore subject to such
Option may again be subject to an Option under the Plan."
2. Except as amended hereby, the Plan shall remain in full force and
effect.
Dated as of April 23, 1998
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WHX CORPORATION
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 1998
The undersigned, a stockholder of WHX Corporation, a Delaware
corporation (the "Company"), does hereby appoint Ronald LaBow and Marvin L.
Olshan, 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 1998 Annual Meeting of
Stockholders of the Company to be held at the Dupont Hotel, 11th & Market
Streets, Wilmington, Delaware 19801, on June 29, 1998, 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 May 28, 1998, and a copy of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREIN GIVEN. UNLESS
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE DIRECTORS, TO APPROVE
AN AMENDMENT TO THE COMPANY'S 1991 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
WHEREBY THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR ISSUANCE THEREUNDER
WILL BE INCREASED TO 3,500,000 SHARES FROM 2,500,000 SHARES AND TO RATIFY THE
APPOINTMENT OF PRICE WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
1. To elect the following Class II directors: Paul W. Bucha,
Marvin L. Olshan and Raymond S. Troubh, to serve as directors
until the 2001 annual meeting of stockholders of the Company
and in each case 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 ABOVE:
2. To approve an amendment to the Company's 1991 Incentive and
Nonqualified Stock Option Plan whereby the number of shares of
common stock available for issuance thereunder will be
increased to 3,500,000 shares from 2,500,000 shares .
FOR ________ AGAINST ________ ABSTAIN ______
<PAGE>
3. To ratify the appointment of Price Waterhouse LLP as the
independent public accountants of the Company for the fiscal
year ending December 31, 1998.
FOR ________ AGAINST ________ ABSTAIN ______
4. 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: _____________
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