<PAGE> 1
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 Section 240.14a-11(c) or
Section 240.14a-12
WHITEHALL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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 (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:
- --------------------------------------------------------------------------------
<PAGE> 2
WHITEHALL CORPORATION
2659 NOVA DRIVE
DALLAS, TEXAS 75229
April 12, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Whitehall Corporation to be held on Monday, May 13, 1996, at 10:00 a.m., local
time, at Aero Corporation, 5530 East Highway 90, Lake City, Florida 32055 (the
"Annual Meeting").
The Notice of Meeting and Proxy Statement on the following pages cover the
formal business of the Annual Meeting, which includes proposals (i) to elect
seven named nominees as directors of Whitehall Corporation and (ii) to ratify
the appointment of Arthur Andersen LLP, independent public accountants, as
Whitehall Corporation's auditors for the fiscal year ending December 31, 1996.
The Board of Directors recommends that stockholders vote in favor of each
proposal. We strongly encourage all stockholders to participate by voting their
shares by proxy whether or not they plan to attend the Annual Meeting. Please
sign, date, and mail the enclosed proxy card as soon as possible. If you do
attend the Annual Meeting, you may still vote in person.
For your information, enclosed is the 1995 Annual Report of Whitehall
Corporation. We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ GEORGE F. BAKER
GEORGE F. BAKER
Chairman of the Board
<PAGE> 3
WHITEHALL CORPORATION
2659 NOVA DRIVE
DALLAS, TEXAS 75229
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1996
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders (the "Annual Meeting") of Whitehall
Corporation, a Delaware corporation (the "Company"), will be held on Monday, May
13, 1996, at 10:00 a.m., local time, at Aero Corporation, 5530 East Highway 90,
Lake City, Florida 32055, for the purpose of considering and acting upon the
following proposals as set forth in the accompanying Proxy Statement:
1. To elect seven named nominees as directors of the Company to serve
until the next Annual Meeting of Stockholders or until their successors are
elected and qualified;
2. To ratify the appointment of Arthur Andersen LLP, independent
public accountants, as auditors of the Company for the fiscal year ending
December 31, 1996; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
Only stockholders of record at the close of business on March 25, 1996, are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof. A list of Stockholders entitled to vote at the annual
meeting will be available for examination at the Company's corporate office at
2659 Nova Drive, Dallas, Texas for 10 days prior to the meeting.
Whether or not you plan to attend the Annual Meeting, please complete,
date, and sign the enclosed proxy card and return it promptly to the Company in
the return envelope enclosed for your use. You may revoke your proxy at any time
before it is voted by delivering to the Secretary of the Company a written
notice of revocation bearing a later date than the proxy, by duly executing a
subsequent proxy relating to the same shares, or by attending and voting at the
Annual Meeting.
You are cordially invited to attend.
By Order of the Board of Directors,
/s/ BRUCE C. CONWAY
BRUCE C. CONWAY
Secretary
Dated: April 12, 1996
<PAGE> 4
WHITEHALL CORPORATION
2659 NOVA DRIVE
DALLAS, TEXAS 75229
PROXY STATEMENT
Accompanying this Proxy Statement is a Notice of Annual Meeting of
Stockholders and a form of proxy for the Annual Meeting of Stockholders (the
"Meeting") solicited by the Board of Directors (the "Board of Directors") of
Whitehall Corporation, a Delaware corporation (the "Company"). The Board of
Directors has fixed the close of business on March 25, 1996, as the record date
for the determination of stockholders who are entitled to notice of and to vote
at the Meeting or any adjournment or postponement thereof. The holders of a
majority of the outstanding shares of common stock of the Company, $0.10 par
value per share (the "Common Stock"), present in person, or represented by
proxy, will constitute a quorum at the Meeting.
This Proxy Statement and the enclosed proxy are being sent to the
stockholders of the Company on or about April 12, 1996.
Only stockholders of record at the close of business on March 25, 1996,
will be entitled to vote at the Meeting. At the close of business on such record
date there were outstanding 2,741,300 shares of the Common Stock which Common
Stock constitutes the only class of voting securities of the Company issued and
outstanding. Each share of the Common Stock entitles the holder to one vote.
Assuming the presence of a quorum, Directors of the Company shall be
elected by a plurality of the votes cast in person or by proxy at the Meeting.
Votes withheld with respect to any nominee for director will be excluded from
the vote totals and will have no effect on the determination of a plurality. The
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock present in person or represented by proxy at the Meeting is
necessary to ratify the appointment of Arthur Andersen LLP, independent public
accountants ("Arthur Andersen"), as the Company's auditors for the fiscal year
ending December 31, 1996, and to transact any other business as may properly
come before the Meeting or any adjournment or postponement thereof. For purposes
of determining whether a matter has received a majority vote, abstentions will
be included in the vote totals, with the result that an abstention has the same
effect as a negative vote. In instances where brokers are prohibited from
exercising discretionary authority for beneficial owners who have not returned a
proxy (so-called "broker non-votes"), those shares will not be included in the
vote totals and therefore will have no effect on the vote.
A proxy that is properly submitted to the Company may be properly revoked
at any time before it is voted. Proxies may be revoked by (i) delivering to the
Secretary of the Company, at or before the Meeting, a written notice of
revocation bearing a later date than the proxy, (ii) duly executing a subsequent
proxy relating to the same shares of the Common Stock and delivering it to the
Secretary of the Company at or before the Meeting, or (iii) attending the
Meeting and voting in person (although attendance at the Meeting will not in and
of itself constitute revocation of a proxy). With respect to the election of
directors of the Company ("Proposal 1"), unless authority to vote for all
directors or any individual director is withheld, all the shares represented by
a proxy will be voted for the election of directors as set forth in this Proxy
Statement. Where a stockholder has specified a vote for or against the
ratification of the appointment of Arthur Andersen as the Company's auditors
("Proposal 2"), such proxy will be voted as specified. If no such direction is
given, all the shares represented by the proxy will be voted in favor of
Proposal 1 and Proposal 2 and in the discretion of the persons named in the
accompanying proxy card as to any other business to properly come before the
Meeting or any adjournment or postponement thereof.
The cost of soliciting proxies will be paid by the Company, which will
reimburse brokerage firms, custodians, nominees, and fiduciaries for their
expenses in forwarding proxy material to the beneficial owners of the Common
Stock.
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING, PLEASE SIGN,
DATE, AND MAIL THE ENCLOSED PROXY CARD PROMPTLY.
<PAGE> 5
PROPOSAL 1
ELECTION OF DIRECTORS
Information regarding the nominees to each of the seven positions on the
Board of Directors of the Company (the "Nominees") to be elected at the Meeting
is set forth below. Unless authority to vote on the election of all Nominees or
any individual Nominee is specifically withheld by appropriate designation on
the face of the proxy card, the persons named in the accompanying proxy card
will vote such proxy for the election of the Nominees named below. If elected,
such Nominees will serve as directors of the Company until the next Annual
Meeting of Stockholders of the Company or until their successors are elected and
qualified.
Management does not contemplate that any of the Nominees will be unable to
serve, but if such a situation should arise, the persons named in the
accompanying proxy card will nominate and vote for the election of such other
person or persons as the Board of Directors recommends.
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- ---------------------------- --- ----------------------------------------------------------
<S> <C> <C>
George F. Baker............. 56 Mr. Baker has been a director of the Company since March
767 Fifth Avenue 1991, and he has served as Chairman of the Board of
New York, NY 10153 Directors and Chief Executive Officer since April 1991
and served as President from October 1991 until April
1995. Mr. Baker is a director of Digicon, Inc., an oil
and gas exploration company. Mr. Baker has been a
managing partner of Cambridge Capital Fund, L.P., an
investment partnership, since 1988 and, since 1967, a
managing partner of Baker Nye, L.P., an investment
partnership. Mr. Baker serves as Governor of Society of
the New York Hospital, Trustee of New York Zoological
Society, Trustee of Quebec Labrador Foundation, Trustee
of St. Paul's School, a member of the Associates of the
Harvard Graduate School of Business, a member of the
Visiting Committee of the John F. Kennedy School of
Government of Harvard College, and a member of the
Harvard College Committee of University Resources.
Bruce C. Conway............. 44 Mr. Conway has been a director of the Company since
4508 San Carlos October 1990 and he has served as Secretary since April
Dallas, TX 75205 1991. Mr. Conway has been President of Conway Holdings,
Inc., an oil and gas investment company, since its
formation in 1991, Vice President and a director of
Matrix Gas Corp., a natural gas company, since January
1993, and general partner of R.V. Lynch & Co., a gas
gathering company, since January 1991. Mr. Conway has
been Vice President and a director of Sibtex China Ltd.,
a joint venture partner in a Chinese pump manufacturer,
since December 1994 and a general partner of Alex
Properties, since 1994.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- ---------------------------- --- ----------------------------------------------------------
<S> <C> <C>
Arthur H. Hutton............ 64 Mr. Hutton has been a director of the Company since May
39 Sunset Drive 1993 and a consultant to Aero Corporation, a wholly-owned
Manhasset, NY 11030 subsidiary of the Company, since October 1991. Mr.
Hutton has been Vice Chairman and a director of World
Auxiliary Power Company, an aircraft modification
company, since January 1988 and was Advisor to the
Chairman of Pan American Commercial Services, a
subsidiary of Pan American World Airways, from 1987 to
1988. Mr. Hutton has served as President and Chief
Executive Officer of World Airways, Inc., Senior Vice
President of Pan American World Airways, and General
Manager of British West Indian Airways, each of which is
a commercial airline. Mr. Hutton is also an attorney and
member of the New York and California state bar
associations and, in July 1991, he retired as a Major
General in the United States Air Force Reserve.
John J. McAtee, Jr. ........ 59 Mr. McAtee has been a director of the Company since March
1345 Sixth Avenue 1991. Mr. McAtee is a director of Metzler Corporation, a
New York, NY 10105 subsidiary of Bankhaus von Metzler A.G. and a director
of U.S. Industries since June 1995. Mr. McAtee has
served as Vice Chairman and head or co-head of
Investment Banking since July 1990 of Smith Barney
Harris Upham & Co. Incorporated. Prior to July 1990, Mr.
McAtee was a senior partner at the law firm of Davis
Polk & Wardwell.
Jack S. Parker.............. 77 Mr. Parker has been a director of the Company since
260 Long Ridge Rd. October 1991. Mr. Parker has been a director of J.G.
Stamford, CT 06904 Boswell Company since 1980 and a member of the Advisory
Committee of Cambridge Capital Fund, L.P., an investment
partnership, since July 1988. Mr. Parker was the Vice
Chairman and Executive Officer of General Electric
Company from 1968 through 1980 and has served as a
director of General Electric Company, Santa Fe Pacific
Co., TRW, Inc., Pan Am and Pan American World Airways,
and BHP-Utah Minerals International.
Lewis S. White.............. 56 Mr. White has been a director of the Company since May
5 Orchard Hill Lane 1991 and was a consultant to the Company from April 1991
Greenwich, CT 06831 to September 1992. Mr. White has been President of L.S.
White & Co., a management consulting firm, since 1988
and was Vice President and Treasurer of Paramount
Communications, Inc., an entertainment and publishing
company, from April 1985 through February 1988 and was
Director, Corporate Finance for Union Carbide
Corporation from 1976 to April 1985. Mr. White is a
director of Kitty Hawk, Inc., an air cargo operator and
air charter manager.
John H. Wilson.............. 53 Mr. Wilson has been a director of the Company since July
1500 Three Lincoln Centre 1983. Mr. Wilson has served as President of the Company
Dallas, TX 75240 since May 1995. Mr. Wilson also served as interim
President of the Company from April 1991 until his
resignation in October 1991. Mr. Wilson is a director of
Capital Southwest Corporation, Encore Wire Corporation,
Norwood Promotional Products, Inc. and Palm Harbor
Homes, Inc. and has been the President of U.S. Equity
Corporation, a venture capital firm, since 1983.
</TABLE>
3
<PAGE> 7
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has several standing committees: an Executive
Committee, an Audit Committee, a Compensation Committee, and a Stock Option
Committee. The Board of Directors does not have a Nominating Committee.
The function of the Executive Committee is to exercise the powers and
duties of the Board of Directors while the Board of Directors is not in session
to the fullest extent permissible under Delaware law. During the 1995 fiscal
year, the members of the Executive Committee were: Chairman George F. Baker and
Messrs. Bruce C. Conway and John H. Wilson. The Executive Committee held no
meetings and acted once by written consent during the 1995 fiscal year.
The function of the Audit Committee is to recommend the engagement of the
Company's independent auditors and to review with such auditors the scope and
results of their audit. The Committee is composed exclusively of directors who
are, in the opinion of the Board of Directors, free from any relationships that
would interfere with the exercise of independent judgment as an Audit Committee
member. During the 1995 fiscal year, the members of the Audit Committee were:
Chairman Bruce C. Conway and Messrs. John J. McAtee, Jr. and Lewis S. White. The
Audit Committee held one meeting and did not act by written consent during the
1995 fiscal year.
The function of the Compensation Committee is to recommend rates of
compensation and other similar matters with respect to employees of the Company.
During the 1995 fiscal year, the members of the Compensation Committee were:
Chairman George F. Baker and Messrs. John H. Wilson and Bruce C. Conway. The
Compensation Committee held one meeting and did not act by written consent
during the 1995 fiscal year.
The functions of the Stock Option Committee are to administer and interpret
the Company's stock option plans, to grant options under such plans from time to
time to eligible employees and non-employee directors of the Company and to
determine the exercise price and option period at the time options are granted.
During the 1995 fiscal year, the members of the Stock Option Committee were:
Chairman Jack S. Parker and Messrs. John J. McAtee, Jr. and Arthur H. Hutton.
The Stock Option Committee held one meeting and did not act by written consent
during the 1995 fiscal year.
During the 1995 fiscal year, the Board of Directors held two meetings and
acted two times by written consent.
Each of the Directors attended both of the Board of Directors meetings held
in 1995 and 75% or more of the total number of meetings held by all committees
on which he served.
4
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth, for the Company's last three fiscal years,
the annual and long-term compensation of those persons who were, at December 31,
1995, (i) the Chief Executive Officer of the Company and (ii) all other
executive officers whose salary and bonus for the last fiscal year exceeded
$100,000 (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
SALARY BONUS COMPENSATION OPTIONS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#)
- -------------------------------------- ---- ------- ------ ------------ ------------
<S> <C> <C> <C> <C> <C>
George F. Baker(1).................... 1995 -0- -0- -0- -0-
Chairman and CEO 1994 -0- -0- -0- -0-
1993 -0- -0- -0- 50,000
John H. Wilson(2)..................... 1995 120,000 -0- -0- 30,000
President 1994 120,000 -0- -0- -0-
1993 48,000 -0- -0- 20,000
Mark A. Owen(3)....................... 1995 160,000 25,000 -0- -0-
President and CEO 1994 93,000 -0- -0- 20,000
Aero Corporation 1993 -0- -0- -0- -0-
Jerry L. Fortenberry(4)............... 1995 85,000 20,000 -0- -0-
Vice President and 1994 72,000 -0- -0- 2,500
General Manager 1993 67,000 -0- -0- -0-
Hydroscience, Inc.
Mark S. Stearns(5).................... 1995 80,000 20,000 -0- -0-
Vice President and 1994 65,000 10,000 -0- -0-
General Manager 1993 65,000 10,000 -0- -0-
Crystek Corporation
</TABLE>
- ---------------
(1) Mr. Baker was appointed as President of the Company on October 16, 1991 and
served until April 30, 1995. Mr. Baker did not receive a salary for service
as President.
(2) Mr. Wilson has been serving as President since May 1, 1995 and as an
operating officer of the Company since January 1, 1994.
(3) Mr. Owen was appointed to such position on June 1, 1994.
(4) Mr. Fortenberry was appointed to such position on May 1, 1995.
(5) Mr. Stearns was appointed to such position on June 1, 1995.
There were no stock options/SAR grants during 1995 to the Named Officers.
5
<PAGE> 9
The following table sets forth, for the Company's fiscal year ended
December 31, 1995, information concerning the exercise of options by the Named
Officers and the value of unexercised options of the Named Officers:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK VALUE OF
UNDERLYING UNEXERCISED
SHARES OF UNEXERCISED IN-THE-MONEY
COMMON STOCK OPTIONS AT FISCAL OPTIONS AT FISCAL
ACQUIRED YEAR END(#) YEAR END($)*
ON EXERCISE EXERCISABLE/ EXERCISABLE/
NAME # VALUE REALIZED $ UNEXERCISABLE UNEXERCISABLE
- ----------------------------------- ------------ ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
George F. Baker.................... -0- -0- 37,500 773,438
12,500 257,813
John H. Wilson..................... -0- -0- 18,000 361,875
32,000 637,750
Mark A. Owen....................... -0- -0- 4,000 83,500
16,000 334,000
Jerry L. Fortenberry............... -0- -0- 1,500 27,000
1,000 18,000
Mark S. Stearns.................... -0- -0- -0- -0-
-0- -0-
</TABLE>
- ---------------
* Based upon the closing price reported on the New York Stock Exchange on
December 31, 1995, of $33.50 per share of Common Stock.
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company or any of its subsidiaries
("Non-Employee Directors") each receive a quarterly fee of $2,000 for service on
the Board of Directors and an additional $400 for each meeting of the Board of
Directors attended plus travel and other business expenses. Arthur H. Hutton
received $12,000 in consulting fees in 1995 for services rendered to AeroCorp.
Non-Employee Directors are eligible to participate in the Whitehall
Corporation Non-Employee Directors' Stock Option Plan (the "Plan"). Pursuant to
the Plan, each Non-Employee Director has received a non-discretionary grant of
options to purchase 5,000 shares of Common Stock at an exercise price equal to
the fair market value of the Common Stock as of the date the options were
granted. All such options become exercisable in five equal annual installments
commencing one year after the grant date and expire ten years after the grant
date. No stock options were granted during 1995. In addition, the Plan provides
that the Stock Option Committee may, in its sole discretion, from time to time
grant additional options to Non-Employee Directors in recognition of the
performance of the Company and its subsidiaries, the performance of the Non-
Employee Director, or such other factors as the Committee may determine. No such
discretionary options were granted in fiscal 1995.
6
<PAGE> 10
REPORT OF THE COMPENSATION COMMITTEE
AND THE STOCK OPTION COMMITTEE ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consists of three
directors of the Company. It is authorized to review and consider the Company's
compensation standards and practices. On an annual basis, the Compensation
Committee considers suggestions from management and makes recommendations to the
Board of Directors concerning the cash compensation to be paid to executive
officers and other employees of the Company and its subsidiaries. The Stock
Option Committee of the Board of Directors was formed in March 1992 at the time
of the adoption of the Company's stock option plans. It consists of three Non-
Employee Directors. It administers such plans and awards long-term compensation
in the form of stock options to Non-Employee Directors, executive officers and
other eligible employees under such plans.
The Company's executive compensation program is designed to attract and
retain talented managers and to motivate such managers to enhance profitability
and stockholder returns. Executive officers' compensation consists of base
salary and benefits and may include incentives in the form of annual cash
bonuses and stock options.
In determining base salaries, the Compensation Committee considers
recommendations from the President of the Company or the chief executives of the
Company's subsidiaries. The Compensation Committee believes that executive
officers' base salaries are competitive in relation to those of other companies
of comparable size. The Compensation Committee has taken special notice that
management is currently leading the Company through a transition phase in which
new markets are being explored and developed. In future years, if such efforts
result in earnings growth for the Company, the Compensation Committee intends to
reward management with commensurate increases in salaries. Executive officers
hired in 1995 were awarded salaries commensurate with their prior positions and
experience.
Annual cash bonuses may be awarded at the Compensation Committee's
discretion for special individual contributions to the success of the Company.
Although bonuses are not formally tied to a performance target, the Committee
utilizes informal standards for earnings upon which the success of the Company
is judged. In 1995, discretionary cash bonuses were awarded to certain executive
officers based upon their individual contribution to the success of the Company.
All employees, including executive officers, and Non-Employee Directors are
eligible to receive grants of stock options from the Company. Options granted
generally have an exercise price equal to the market value of the Common Stock
on the date of grant, generally become exercisable in equal annual installments
over the five years after the date of grant and are contingent upon the
optionee's continued employment. The number of options granted to an individual
varies according to his or her individual contribution to the success of the
Company. On May 1, 1995 an employee of Aero Corporation, a wholly owned
subsidiary of the Company, received a grant of options to purchase 10,000 shares
of the Common Stock of the Company at an exercise price of $28.25 per share. The
Stock Option Committee intends to make future grants as necessary to focus
managers on building profitability and stockholder value.
In addition, the Company provides health care and retirement benefits for
executive officers on terms generally available to all employees of the Company
and its subsidiaries. The Compensation Committee believes that such benefits are
comparable to those offered by other similarly-situated companies. Except as
reported in the Summary Compensation Table, the amount of perquisites, as
determined in accordance with the rules of the Securities and Exchange
Commission relating to executive compensation, did not exceed the lesser of
$50,000 or 10% of the cash compensation of any executive officer in the last
fiscal year.
7
<PAGE> 11
Recent amendments to the federal income tax laws impose limitations on the
deductibility of compensation in excess of $1 million paid to executive officers
in certain circumstances. The Compensation Committee and the Stock Option
Committee intend that all compensation paid to the Company's executive officers
in 1996 will be deductible by the Company under such tax laws.
<TABLE>
<CAPTION>
MEMBERS OF THE MEMBERS OF THE
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
- --------------------------- ---------------------------
<S> <C>
George F. Baker (Chairman) Arthur H. Hutton
Bruce C. Conway John J. McAtee, Jr.
John H. Wilson Jack S. Parker (Chairman)
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee who are also Officers of the
Company are Mr. George F. Baker, Chief Executive Officer, John H. Wilson,
President and Bruce C. Conway, Secretary.
FIVE-YEAR STOCKHOLDER RETURN COMPARISON
Set forth below is a line-graph presentation comparing the cumulative
stockholder return on the Company's Common Stock, on an indexed basis, against
the cumulative total returns of the S&P Composite-500 Stock Index and the
Multi-Industry Companies Index published by Media General Financial Services for
the period of the Company's last five fiscal years (This comparison assumes that
$100 was invested on January 1, 1991 and assumes reinvestment of dividends and
distributions):
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG WHITEHALL CORPORATION,
S&P 500 INDEX AND MG GROUP INDEX
[GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD INDUSTRY
(FISCAL YEAR COVERED) WHITEHALL CP INDEX BROAD MARKET
<S> <C> <C> <C>
1990 100 100 100
1991 98.11 113.16 130.48
1992 134.91 126.38 140.46
1993 109.43 154.44 154.62
1994 169.81 147.66 156.66
1995 252.83 198.16 215.54
</TABLE>
8
<PAGE> 12
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as to the beneficial ownership
of the Company's Common Stock as of March 25, 1996 by (i) each director of the
Company, (ii) each Named Officer and (iii) all Directors and executive officers
of the Company as a group. Unless otherwise indicated, the beneficial ownership
for each person consists of sole voting and sole investment power.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES OUTSTANDING SHARES
NAME OF BENEFICIAL OWNER OF COMMON STOCK OF COMMON STOCK
---------------------------------------------------- ---------------- ------------------
<S> <C> <C>
George F. Baker..................................... 996,700(1) 36.4%
Bruce C. Conway..................................... 7,800(2) *
Arthur H. Hutton.................................... 3,000(3) *
John J. McAtee, Jr.................................. 4,500(4) *
Jack S. Parker...................................... 6,000(4) *
Lewis S. White...................................... 1,600(5) *
John H. Wilson...................................... 28,500(6) 1.0%
Mark A. Owen........................................ 4,000(7) *
Jerry L. Fortenberry................................ 1,200(8) *
Mark S. Stearns..................................... -0- *
All current directors and executive officers
as a group (12 persons)........................... 1,100,385(9) 40.1%
</TABLE>
- ---------------
* Represents less than 1% of the outstanding shares of Common Stock.
(1) Mr. Baker owns no Common Stock of the Company directly. However, as a
Managing Partner of Cambridge Capital Fund, L.P., and as a Managing Partner
of Baker Nye, L.P., he may be deemed to own beneficially the 657,200 shares
of Common Stock of the Company owned by Cambridge Capital Fund, L.P. and the
289,500 shares owned by Baker Nye, L.P. Mr. Baker is also deemed to own
beneficially 50,000 shares of Common Stock attributable to options
exercisable within 60 days.
(2) Includes 7,800 shares of Common Stock attributable to options exercisable
within 60 days.
(3) Includes 3,000 shares of Common Stock attributable to options exercisable
within 60 days.
(4) Includes 4,000 shares of Common Stock attributable to options exercisable
within 60 days.
(5) Includes 1,600 shares of Common Stock attributable to options exercisable
within 60 days.
(6) Includes 28,000 shares of Common Stock attributable to options exercisable
within 60 days.
(7) Includes 4,000 shares of Common Stock attributable to options exercisable
within 60 days.
(8) Includes 1,200 shares of Common Stock attributable to options exercisable
within 60 days.
(9) Includes 109,600 shares of Common Stock attributable to options exercisable
within 60 days. Also includes 947,315 shares of Common Stock as to which the
powers to vote and dispose are shared with related parties or family
members.
9
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to the beneficial ownership
of the Company's Common Stock as of March 25, 1996, unless otherwise indicated,
by each person who is known to the Company to be the beneficial owner of more
than 5% of the Common Stock. Unless otherwise indicated, the beneficial
ownership for each person consists of sole voting and sole investment power.
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS NUMBER OF SHARES OUTSTANDING SHARES
OF BENEFICIAL OWNER OF COMMON STOCK OF COMMON STOCK
---------------------------------------------------- ---------------- ------------------
<S> <C> <C>
Cambridge Capital Fund, L.P......................... 657,200 23.9%
767 Fifth Avenue
New York, NY 10153
Baker Nye, L.P...................................... 289,500 10.6
767 Fifth Avenue
New York, NY 10153
Lee D. Webster...................................... 255,002(1) 9.3
4931 Thunder Road
Dallas, TX 75244
Dimensional Fund Advisors Inc....................... 180,100(2) 6.6
1299 Ocean Avenue
Santa Monica, California 90401
</TABLE>
- ---------------
(1) Based upon information provided by Mr. Webster to the Company. Includes
68,438 shares owned by trusts for the benefit of Mr. Webster's children, for
which he serves as sole trustee and with respect to which he disclaims
beneficial ownership.
(2) Dimensional Fund Advisors Inc., a registered investment adviser
("Dimensional"), is deemed to have beneficial ownership of 180,100 shares of
Whitehall Corporation common stock as of December 31, 1995, all of which
shares are held in portfolios of DFA Investment Dimensions Group, Inc., a
registered open-end investment company, or in series of the DFA Investment
Trust Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
On December 31, 1995, pursuant to demand promissory notes executed between
1986 and 1990, Mr. Daniel R. Donham, a Vice President of the Company, was
indebted to the Company in the aggregate amount of approximately $213,000. On
the same date, pursuant to demand promissory notes executed between 1986 and
1990, Mr. E. Forrest Campbell, a Vice President of the Company, was indebted to
the Company in the aggregate amount of approximately $150,000.
10
<PAGE> 14
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires officers and
directors of the Company, and persons who own beneficially greater than ten
percent of the Common Stock of the Company ("ten-percent beneficial owners"), to
file with the Securities and Exchange Commission and the New York Stock Exchange
initial reports of beneficial ownership and reports of changes in beneficial
ownership of Common Stock on Forms 3, 4, and 5. Reporting parties are required
by regulation to furnish the Company with copies of all Section 16(a) reports.
To the Company's knowledge, all Section 16(a) filing requirements
applicable to its officers, directors, and ten-percent beneficial owners were
complied with in 1995 except Lewis S. White inadvertently filed late Form 4's
with respect to the exercise of stock options and the sale of the Company's
common stock.
PROPOSAL 2
INDEPENDENT PUBLIC ACCOUNTANTS
RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS AUDITORS
The Board of Directors has appointed the firm of Arthur Andersen LLP to
examine the financial statements of the Company for the year ending December 31,
1996, subject to ratification by the stockholders. Arthur Andersen LLP was
employed by the Company as its independent auditors for fiscal 1995.
Stockholders are asked to ratify the action of the Board of Directors in making
such appointment.
It is expected that representatives of Arthur Andersen LLP will attend the
Meeting, at which time they will be available to respond to appropriate
questions.
The Board of Directors recommends a vote for ratification, and it is
intended that proxies not marked to the contrary will be so voted. The
affirmative vote of the holders of a majority of the shares of the Common Stock
present at the Meeting in person or by proxy is required for the ratification of
the appointment of Arthur Andersen LLP as the Company's auditors.
OTHER BUSINESS
Management knows of no business to be brought before the Meeting other than
Proposal 1 and Proposal 2 as set forth in the Notice of Annual Meeting. If any
other proposals come before the Meeting, it is intended that the shares
represented by proxies shall be voted in accordance with the judgment of the
person or persons exercising that authority conferred by the proxies.
ANNUAL REPORT
Financial statements of the Company, the Company's independent public
accountant's report thereon and management's discussion and analysis of the
Company's financial condition and results of operations are contained in the
Company's 1995 Annual Report to Stockholders and the Company's Annual Report on
Form 10-K, copies of which have been sent to each stockholder of record along
with a copy of this Proxy Statement. Neither the Annual Report nor the Form 10-K
is to be regarded as proxy soliciting material or communications by means of
which any solicitation is to be made.
11
<PAGE> 15
STOCKHOLDER PROPOSALS
Proposals by stockholders intended to be presented at the next Annual
Meeting of Stockholders (to be held in 1997) must be received by the Company on
or before November 30, 1996, in order to be included in the proxy statement and
proxy for that meeting. The mailing address of the Company for submission of any
such proposals is given on the first page of this Proxy Statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE REQUESTED TO SIGN, DATE AND RETURN THE PROXY CARDS AS SOON AS POSSIBLE,
WHETHER OR NOT THEY EXPECT TO ATTEND THE UPCOMING ANNUAL MEETING IN PERSON.
By Order of the Board of Directors,
/s/ BRUCE C. CONWAY
BRUCE C. CONWAY
Secretary
12
<PAGE> 16
- --------------------------------------------------------------------------------
WHITEHALL CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
The undersigned hereby appoints George F. Baker,
Daniel R. Donham, and E. Forrest Campbell, III, and
each of them, with full power of substitution and
resubstitution, the attorney(s) and the proxy(ies)
of the undersigned, to vote all shares of Common
Stock of Whitehall Corporation (the "Company") which
the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held on May 13, 1996,
and any adjournment or postponement thereof, with
all the powers the undersigned would possess if
personally present, on the following matters, as
instructed below, and, in their discretion, on such
other matters as may properly come before the
meeting.
1. ELECTION OF DIRECTORS.
<TABLE>
<S> <C>
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote for
(except as indicated to the contrary below) all nominees listed below
</TABLE>
George F. Baker, Bruce C. Conway, Arthur H. Hutton,
John J. McAtee, Jr., Jack S. Parker, Lewis S. White
and
John H. Wilson
Instruction: If you wish to withhold authority and
preclude the proxy from voting for any
individual nominee(s), write the
name(s) in the space below:
----------------------------------------------------
2. RATIFICATION OF THE APPOINTMENT OF ARTHUR
ANDERSEN LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER
31, 1996.
/ / FOR / / AGAINST / / ABSTAIN
3. IN THEIR DISCRETION THE PROXIES NAMED ABOVE ARE
AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR
ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
- --------------------------------------------------------------------------------
<PAGE> 17
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF
NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF EACH NOMINEE NAMED IN PROPOSAL
1 AND "FOR" PROPOSAL 2.
Dated: , 1996
Please fill in date
NOTE: Please sign
exactly as name appears
on this Proxy Card.
Joint owners should
each sign.
-----------------------
Signature of
Stockholder
-----------------------
Signature of
Stockholder
When signing as
Attorney, Executor,
Administrator, Trustee
or Guardian, please
give full title as
such. If signer is a
corporation, please
sign with the
corporation's full name
by a duly authorized
officer, stating title.
If signer is a
partnership, please
sign with the
partnership's full name
by an authorized
person.
- --------------------------------------------------------------------------------
