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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
Proxy Statement
(Pursuant to Section 14(a) of the Securities Exchange Act of 1934)
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FILED BY THE REGISTRANT / /
FILED BY A PARTY OTHER THAN THE REGISTRANT /X/
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 Section240.14a-11(c) or
Section240.14a-12
STEEL OF WEST VIRGINIA, INC.
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(Name of Registrant as specified in its Charter)
CPT HOLDINGS, INC.
J&L STRUCTURAL, INC.
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(Name of Person(s) Filing Proxy Statement)
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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
$
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(5) Total fee paid:
$
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PROXY STATEMENT
OF
CPT HOLDINGS, INC.
1430 BROADWAY
NEW YORK, NEW YORK 10018
AND
J&L STRUCTURAL, INC.
111 STATION STREET
ALIQUIPPA, PENNSYLVANIA 15001
IN OPPOSITION TO THE BOARD OF DIRECTORS
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STEEL OF WEST VIRGINIA, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1997
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TO THE STOCKHOLDERS OF STEEL OF WEST VIRGINIA, INC.:
This proxy statement is furnished by CPT Holdings, Inc., a Minnesota
corporation ("CPT"), and its majority-owned subsidiary J&L Structural, Inc., a
Delaware corporation ("J&L"), in connection with their solicitation of proxies
for use at the Annual Meeting of Stockholders (the "Annual Meeting") of Steel of
West Virginia, Inc., a Delaware corporation (the "Company"), to be held on
Thursday, May 15, 1997 at 10:30 a.m., at the Radisson Hotel Huntington, 1001 3rd
Avenue, Huntington, West Virginia, and at any adjournment(s) or postponement(s)
thereof. The Company's Board of Directors has fixed the close of business on
March 31, 1997, as the record date for determining those stockholders who will
be entitled to vote at the Annual Meeting. This proxy statement (the "Proxy
Statement") and the enclosed BLUE revocable proxy card are first being made
available to stockholders on or about April , 1997. The mailing address of the
executive offices of the Company is 17th Street and 2nd Avenue, Huntington, West
Virginia 25703.
On February 11, 1997, management of CPT contacted the Company and proposed a
negotiated merger of the Company and J&L, pursuant to which, holders of the
Company's shares would have been paid $9.00 per share in cash. The closing price
of the Company's common stock on February 11th was $6.50 per share. The Company,
in a confidential letter dated February 21, 1997, stated that the Company's
Board of Directors formed a Special Committee comprised of non-employee
directors to evaluate CPT's proposal. The letter also stated that the Special
Committee engaged an investment banker and independent counsel to assist it in
conducting its evaluation. Both CPT and J&L subsequently made additional
requests of the Company that the parties meet and in these letters reiterated
their strong interest in pursuing a friendly combination. NOTWITHSTANDING CPT'S
NUMEROUS REQUESTS TO MEET WITH THE COMPANY'S MANAGEMENT AND DISCUSS THE
PROPOSAL, AND CPT'S EXPRESSED WILLINGNESS TO NEGOTIATE AND WORK OUT ANY ASPECT
OF THE PROPOSAL, INCLUDING PRICE, ON MARCH 11TH THE COMPANY REJECTED CPT'S
PROPOSAL AND HAS REFUSED TO EVEN MEET WITH CPT TO DISCUSS THE PROPOSAL. The ONLY
reason stated for rejection of CPT's proposal was that the Company's Board
believed it was in the best interests of the Company and its stockholders that
the Company remain independent. The Company requested that this correspondence
remain confidential and CPT honored that request while making further requests
for discussions.
Instead, on March 13, 1997, just two days after the Company's rejection of
the CPT proposal, the Company's Board adopted an anti-takeover device known as a
rights agreement or "poison pill," without stockholder approval or even
disclosing to stockholders the events that prompted that action (the "Poison
Pill Rights Agreement"). A vote of the stockholders is generally not required
for adoption of a poison pill and such plans are typically put in place by
boards of directors without stockholder approval, but it remains uncontroverted
that stockholders were not contacted regarding the plan's proposed adoption and,
more to
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the point, were not notified of the events that prompted its adoption. Poison
Pills are designed to make acquisition of a company or large holdings of a
company's stock more difficult or expensive so as to thwart any such attempt
unless that company's board of directors approves of the transaction.
The Board has rejected CPT's proposal and, by adopting the Poison Pill
Rights Agreement, has, in effect, denied the Company's stockholders the right to
consider the CPT proposal and any other acquisition offers unless the Board of
Directors approves of the transaction. CPT and J&L propose that the Company's
stockholders approve a non-binding resolution requesting that the Company's
Board evaluate proposed mergers or other similar business combinations with CPT
or any other qualified bidder for the Company, enter into good faith
negotiations with bidders and independently determine whether such transactions
are in the best interests of the stockholders and the Company. The Annual
Meeting will provide you with the opportunity to express your views on the
Board's actions by voting FOR the proposal of CPT and J&L and AGAINST the
Board's proposals.
Furthermore, in the Company's Proxy Statement, the Board of Directors has
recommended that stockholders adopt a series of anti-takeover devices on the
grounds that such devices would prevent acquirors from utilizing "disruptive
tactics" or "takeovers at unfair prices" to acquire control of the Company and
thus permit the Board to "evaluate the proposal and study alternative proposals
in the absence of the coercive atmosphere that might otherwise prevail and
without the imminent threat of a removal." The Board stated that such devices
were intended to require potential acquirors to approach the Board of Directors
to negotiate a proposed acquisition in order to obtain prior Board approval of
the proposed acquisition.
NOTWITHSTANDING THESE STATEMENTS BY THE COMPANY, THE COMPANY'S BOARD OF
DIRECTORS HAS REFUSED TO MEET WITH CPT TO EVEN DISCUSS CPT'S PROPOSAL. ALTHOUGH
THE COMPANY'S ANTI-TAKEOVER DEVICES MAY DETER COERCIVE TAKEOVER TACTICS, CPT AND
J&L BELIEVE THAT THE USE BY THE BOARD OF ANTI-TAKEOVER DEVICES IS NOT JUSTIFIED
IN THE CONTEXT OF CPT'S FRIENDLY MERGER PROPOSAL AND CPT'S EXPRESSED WILLINGNESS
TO NEGOTIATE ALL ASPECTS OF ITS PROPOSAL, INCLUDING PRICE. In the opinion of CPT
and J&L, the Company's Board should entertain all good faith proposals that may
maximize stockholder value; and CPT and J&L therefore urge you to vote AGAINST
the proposals of the Board of Directors.
AT THE ANNUAL MEETING, CPT AND J&L INTEND TO PROPOSE (THE "J&L PROPOSAL")
THAT:
1. Stockholders approve a non-binding resolution requesting that the
Company's Board enter into good faith negotiations with qualified bidders
for the Company, including CPT, in an effort to negotiate the sale of the
Company.
CPT AND J&L URGE THAT STOCKHOLDERS VOTE IN THE FOLLOWING MANNER AT THE
ANNUAL MEETING ON THE COMPANY'S ANTI-TAKEOVER PROPOSALS (THE "BOARD'S
PROPOSALS"):
2. Stockholders vote AGAINST the Company's proposed amendment to the
Certificate of Incorporation of the Company authorizing additional shares
of Common Stock;
3. Stockholders vote AGAINST the Company's proposed amendment to the
Certificate of Incorporation of the Company authorizing "blank check"
preferred stock; and
4. Stockholders vote AGAINST the Company's proposed amendment to the
Certificate of Incorporation of the Company eliminating the ability of
stockholders to act by written consent.
CPT AND J&L ARE SOLICITING YOUR PROXY TO VOTE FOR THE J&L PROPOSAL AND
AGAINST THE COMPANY'S ANTI-TAKEOVER PROPOSALS.
THE J&L PROPOSAL IS DESIGNED TO ENHANCE THE LIKELIHOOD THAT ACQUISITION
PROPOSALS WILL BE FULLY EXAMINED BY BOARD MEMBERS AND CAN BE CONSUMMATED WITHOUT
IMPEDIMENT. IF YOU WANT THE OPPORTUNITY TO TAKE DECISIONS REGARDING YOUR COMPANY
BACK INTO YOUR HANDS, VOTE FOR THE J&L PROPOSAL AND AGAINST THE COMPANY'S
ANTI-TAKEOVER PROPOSALS BY PROMPTLY SIGNING, DATING AND MAILING THE ENCLOSED
BLUE PROXY CARD TO CPT.
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IF YOU HAVE ALREADY SENT A PROXY TO THE BOARD OF DIRECTORS OF THE COMPANY,
YOU CAN REVOKE THAT PROXY AND VOTE FOR THE J&L PROPOSAL AND AGAINST THE
COMPANY'S ANTI-TAKEOVER PROPOSALS BY SIGNING, DATING AND MAILING THE ENCLOSED
BLUE PROXY CARD. ONLY YOUR LATEST DATED PROXY WILL COUNT AT THE MEETING.
If you have any questions or need assistance in voting your Shares, please
call D.F. King & Co., Inc., the proxy solicitor assisting in the solicitation,
toll free at 800-735-3529 or call collect at 212-269-5550.
CPT and J&L believe that the Company's Board should entertain potential
business combination proposals and take the appropriate actions to effect any
such transaction that may be deemed advantageous to the interests of the
stockholders. The Board's evaluation and approval of any proposed merger or
business combination will be subject to the exercise by the Board's members of
their fiduciary duties to the Company's stockholders.
According to the Company's proxy statement for the 1997 Annual Meeting of
Stockholders (the "Company's Proxy Statement"), on March 31, 1997, there were
5,991,276 outstanding shares of the Company's Common Stock, par value $.01 per
share (the "Shares"), the holders of which are entitled to one vote per share on
each matter to come before the Annual Meeting. Voting rights are non-cumulative.
A majority of the outstanding Shares will constitute a quorum at the Annual
Meeting and abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Directors are elected by plurality vote. The approval of the amendments to
the Company's Certificate of Incorporation will require the affirmative vote of
a majority of the outstanding Shares. Approval of the J&L Proposal and
ratification of the reappointment of the Company's independent accountants will
require the affirmative vote of a majority of the Shares voting on the proposal.
Abstentions and broker non-votes will not be counted in the election of
directors, the approval of the J&L Proposal or in determining whether
ratification of the Company's accountants has been given. Abstentions and broker
non-votes shall be counted as votes against the charter amendments proposed by
the Board.
BACKGROUND
On February 11, 1997, Richard L. Kramer, Chairman of the Board of CPT and
William L. Remley, President and Chief Executive Officer of CPT, in a
confidential letter to Robert L. Bunting, Jr., Chairman and Chief Executive
Officer of the Company and Timothy R. Duke, President and Chief Operating
Officer of the Company, proposed that CPT and the Company negotiate a friendly
merger of CPT's majority-owned subsidiary, J&L, with the Company. Pursuant to
the proposal, holders of the Company's Shares would have been paid $9.00 per
share in cash. The closing price of the Company's Shares on February 11th was
$6.50 per Share. In the letter, Mr. Kramer emphasized CPT's strong desire to
achieve a friendly, negotiated transaction and indicated CPT'S WILLINGNESS TO
NEGOTIATE ALL ASPECTS OF THE PROPOSAL, INCLUDING PRICE. CPT's letter requested a
meeting of the parties to discuss the proposed transaction.
In a confidential letter dated February 21, 1997, from the New York law firm
of Sierchio & Albert, P.C., Stephen A. Albert, a member of the Company's Board
and legal counsel to the Company, stated that the Company's Board of Directors
formed a Special Committee comprised of non-employee directors to "evaluate your
request for a dialogue regarding the proposal outlined in the [February 11th]
letter." The letter also stated that the Special Committee engaged an investment
banker and independent counsel to assist it in conducting its evaluation. Mr.
Albert advised that CPT would be contacted the week of March 10, 1997, and noted
that the Company would not disclose publicly the content of CPT's letter and
expected confidentiality in return.
On March 11, 1997, Mr. Albert wrote to CPT advising that "after careful
consideration, the Special Committee recommended to our Board of Directors,
which has accepted its recommendation, that it is in the best interests of the
Company and its stockholders to continue as an independent entity and not to
pursue your proposal." No other explanation was given. Again, Mr. Albert
requested that CPT treat this matter as "highly confidential."
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On March 13, 1997, the Company adopted a "poison pill" and in its March 17th
announcement regarding its adoption, the Company disingenuously refused to
disclose to its own stockholders, the press and the wider financial community
the events, namely CPT's proposal, that prompted that action. Instead, the
Company cited the protection of stockholders' interests "as its business
strategy and expansion plans are pursued" as the reason for the Poison Pill's
adoption.
On March 24, 1997, both CPT and J&L wrote to the Company, again expressing a
strong interest in pursuing a friendly combination and requesting commencement
of meaningful discussions. The Company's only response was to refuse to meet,
unless CPT agreed to an utterly unacceptable "standstill agreement."
Thereafter, on March 27, 1997, CPT and J&L learned from the Company's
preliminary proxy material filed with the Securities and Exchange Commission,
that at the Annual Meeting, the Company intends to submit proposals to
stockholders to adopt certain anti-takeover devices that, among other things,
will authorize the issuance of additional common stock, authorize a "blank
check" preferred stock issuance, and deprive stockholders of the right to act by
written consent as permitted under Delaware law.
In a press release dated April 1, 1997, CPT publicly disclosed the terms of
its offer for the Company and the response, or lack thereof, of the Company. CPT
expressed its disappointment with the refusal of the Company's management to
meet and discuss the proposal. In the release, CPT once again reiterated its
interest in seriously negotiating "a transaction which is in the best interests
of everyone."
On April 29, 1997, CPT made a request for a copy of the Company's
stockholder list pursuant to Rule 14a-7 under the Securities Exchange Act of
1934.
CPT has repeatedly sought to negotiate the proposed friendly merger with the
Company's management and the Company has rebuffed all such attempts. The
Company's refusal to meet with CPT along with the Board's adoption of a Poison
Pill and proposals for adoption of additional anti-takeover devices evidences a
course designed to entrench incumbent management, a course that, in the opinion
of CPT and J&L, cannot be reconciled with the best interests of the Company's
stockholders.
The Board has rejected CPT's merger proposal and by adopting the Poison Pill
Rights Agreement, has, in effect, denied the Company's stockholders the right to
consider any other acquisition offers unless the Company's Board approves of the
transaction. CPT and J&L propose that the Company's stockholders approve a
non-binding resolution requesting that the Company's Board evaluate proposed
mergers or other similar business combinations with CPT or any other qualified
bidder for the Company, enter into good faith negotiations with the bidders and
independently determine whether such transactions are in the best interests of
the stockholders and the Company. The Annual Meeting will provide you with the
opportunity to express your disapproval of the Board's actions by voting FOR the
J&L Proposal and AGAINST the Board's Proposals.
IS THE COMPANY'S BOARD ACTING IN THE BEST INTEREST OF THE STOCKHOLDERS
The Company's Board has acted to prevent, as a practical matter, the
consummation of a merger or other business combination of the Company with third
parties. The Board is now proposing a number of anti-takeover devices that
operate to impede or prevent consummation of a merger or acquisition without the
Board's prior approval. At the same time, the Board has refused to even discuss
CPT's proposal. The effect, in the opinion of CPT and J&L, is that the Board is
pursuing a "Just Say No" defense which is effectively preventing stockholders
from considering any merger or acquisition proposals unless the Company's Board
approves of the transaction.
UNLESS THE J&L PROPOSAL IS APPROVED AND THE BOARD'S PROPOSALS ARE REJECTED,
SUCH ANTI-TAKEOVER DEVICES MAY BE USED TO IMPEDE TRANSACTIONS THAT MAY BE
ADVANTAGEOUS TO STOCKHOLDERS. CPT AND J&L BELIEVE THAT APPROVAL OF THE J&L
PROPOSAL IS THE BEST WAY THAT YOU, THE OWNERS OF THE COMPANY, CAN ENSURE THAT
YOU WILL HAVE THE OPPORTUNITY TO DETERMINE WHETHER OR NOT TO ENTERTAIN PROPOSALS
TO MAXIMIZE STOCKHOLDER VALUE.
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Without stockholder approval, the Board of Directors has adopted the Poison
Pill Rights Agreement. Under the Poison Pill Rights Agreement, one Right has
been declared and will be distributed for each Share outstanding. Each Right
entitles stockholders to purchase, under certain conditions, one-half of a share
of the Company's Shares at a purchase price of $13.00. The Rights will be
exercisable if a person or group acquires beneficial ownership of 15% or more of
the Company's outstanding Shares or has announced a tender offer upon
consummation of which said person or group would own 15% or more of the
Company's outstanding Shares. Rights held by the 15%-or-more holder will become
void. The Rights will expire on March 18, 2007, unless redeemed earlier by the
Board of Directors. The Company may redeem the Rights for $.01 per Share,
subject to adjustment. A vote of the stockholders is generally not required for
adoption of a poison pill and such plans are typically put in place by boards of
directors without stockholder approval, but it remains uncontroverted that
stockholders were not contacted, regarding the plan's proposed adoption, more to
the point, and were not notified of the events that prompted its adoption. For a
more complete summary of the Poison Pill Rights Agreement, see the Company's
Report on Form 8-K dated March 13, 1997, which is incorporated herein by
reference.
In the Company's Proxy Statement, the Board of Directors has recommended
that stockholders adopt a series of so-called anti-takeover devices (which CPT
and J&L are proposing that stockholders vote against) on the grounds that such
devices would prevent acquirors from utilizing "disruptive tactics" or
"takeovers at unfair prices" to acquire control of the Company and thus permit
the Board to "evaluate the proposal and study alternative proposals in the
absence of the coercive atmosphere that might otherwise prevail and without the
imminent threat of a removal." The Board stated that such devices were intended
to require potential acquirors to approach the Board of Directors to negotiate a
proposed acquisition in order to obtain prior Board approval of the proposed
acquisition.
NOTWITHSTANDING THESE STATEMENTS BY THE COMPANY, THE COMPANY'S BOARD OF
DIRECTORS HAS REFUSED TO MEET WITH CPT TO EVEN DISCUSS CPT'S PROPOSAL. ALTHOUGH
THE COMPANY'S SO-CALLED ANTI-TAKEOVER DEVICES MAY DETER COERCIVE TAKEOVER
TACTICS, CPT AND J&L BELIEVE THAT THIS USE BY THE BOARD OF SO-CALLED ANTI-
TAKEOVER DEVICES IS NOT JUSTIFIED IN THE CONTEXT OF CPT'S FRIENDLY MERGER
PROPOSAL AND CPT'S EXPRESSED WILLINGNESS TO NEGOTIATE ALL ASPECTS OF ITS
PROPOSAL, INCLUDING PRICE.
In the opinion of CPT and J&L, such claims by the Company do not justify
denying stockholders the opportunity to determine for themselves whether to
entertain business combination proposals instead of relying on the current
Board's belief that remaining an independent entity will in the long term
produce greater value for stockholders than a sale of the Company. In the
opinion of CPT and J&L, the Company's Board should, subject to their fiduciary
duties to the Company's stockholders, take all actions necessary to properly
investigate and negotiate all good faith merger or acquisition proposals that
may be in the best interests of the stockholders. The Board's adoption of the
Poison Pill Rights Agreement coupled with the Board's proposed anti-takeover
devices is an attempt by the Board to discourage merger and acquisition attempts
that the Board does not favor, without consideration of the views of the
Company's stockholders who may deem such proposals to be advantageous to the
Company and its stockholders. CPT and J&L therefore urge you to vote FOR the J&L
Proposal and AGAINST the Board's Proposals.
ACTIONS YOU SHOULD TAKE
CPT and J&L propose: (i) that stockholders APPROVE a non-binding, precatory
resolution requesting that the Company's Board negotiate in good faith with
qualified bidders in an effort to negotiate the sale of the Company; and (ii)
that stockholders vote AGAINST the Company's proposed amendments to the
Company's Certificate of Incorporation. CPT and J&L believe that stockholders
should vote FOR the J&L Proposal and AGAINST the Board's Proposals for the
additional reasons set forth below.
CPT and J&L intend to present the J&L Proposal for stockholder approval at
the Annual Meeting as a separate proposal in the manner hereinafter set forth.
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PROPOSAL 1
NON-BINDING RESOLUTION REQUESTING THE BOARD OF DIRECTORS
TO ENTER INTO GOOD FAITH NEGOTIATIONS
WITH QUALIFIED BIDDERS
(PROPOSAL NO. 7 ON THE PROXY CARD)
THE PROPOSAL.
CPT and J&L propose that the stockholders of the Company adopt the following
resolution:
"RESOLVED, that it is the sense of the stockholders of Steel of
West Virginia, Inc. (the "Company"), that the Board of Directors
of the Company should enter into good faith negotiations with CPT
Holdings, Inc. and any other qualified bidder for the Company, in
an effort to negotiate the sale of the Company, it being
understood that this resolution is admonitory only and that the
Board of Directors must exercise its business judgment in
fulfillment of its fiduciary duties to the stockholders of the
Company."
REASONS FOR THE PROPOSAL.
The Company has rejected CPT's proposal to negotiate a merger transaction,
pursuant to which the Company's stockholders would have received $9.00 per Share
in cash. On the date the CPT proposal was made, the closing price of the
Company's Shares was $6.50 per Share. In addition to refusing to enter into
negotiations with CPT, the Company's adoption of the Poison Pill Rights
Agreement, has, in effect, denied the Company's stockholders the right to
consider acquisition offers from CPT or any other party unless the Company's
Board approves the transaction. CPT and J&L propose that the Company's
stockholders approve a non-binding resolution requesting that the Company's
Board evaluate proposed mergers or other similar business combinations with CPT
or any other qualified bidder for the Company, enter into arm's length
negotiations with the bidders and independently determine whether such
transactions are in the best interests of the stockholders and the Company.
Generally, under Delaware law, a board may, in the exercise of its business
judgment, reject a proposed transaction once negotiations commence if a board
concludes that such transaction is not in the best interest of its stockholders
so that approval of this resolution would not mandate the sale of the Company.
NOTWITHSTANDING CPT'S NUMEROUS ATTEMPTS TO NEGOTIATE A FRIENDLY MERGER OF
J&L AND THE COMPANY AND CPT'S EXPRESSED WILLINGNESS TO NEGOTIATE ALL ASPECTS OF
THE TRANSACTION, INCLUDING PRICE, THE COMPANY HAS REBUFFED ALL SUCH ATTEMPTS. It
is the opinion of CPT and J&L that the Company's Board should, subject to their
fiduciary duties to the Company's stockholders, take all actions necessary to
properly investigate and negotiate all good faith merger or acquisition
proposals.
One of the merits of approval of this Proposal is that it would send a clear
message to the Board that stockholders support the negotiation of a possible
merger with or acquisition of the Company by qualified bidders. The resolution
proposed to be adopted, is, however, non-binding and approval of this Proposal
does not mean that stockholders are recommending to the Board that the Board
necessarily approve of any transaction with CPT, J&L or any other third party,
but merely that the stockholders request that the Board enter into good faith
negotiations with CPT, J&L or such third party, subject to the exercise by the
Board of its business judgment and fulfillment of the Board's fiduciary duties
to the Company's stockholders.
In addition, the consideration by the Board of merger proposals and
commencement of good faith negotiations for the potential sale of the Company
would enable the Company's stockholders to better estimate the value of their
Shares and give stockholders the opportunity to ultimately maximize their value
through a sale of their Shares or the Company.
However, approval of Proposal 1 may have the affect of diverting
management's attention from the day to day operations of the Company.
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Furthermore, in the event Proposal 1 is approved by the Company's
stockholders and adopted by the Board, and the Board proceeds to entertain
potential bids for the Company, the Board's actions may invite hostile takeover
attempts and the use of coercive tactics to gain control of the Company which
may or may not increase stockholder value.
Nonetheless, CPT and J&L continue to believe that the merits of Proposal 1
outweigh the potential disadvantages and that Proposal 1 should be approved by
the Company's stockholders.
VOTE REQUIRED.
The affirmative vote of the holders of a majority of the Shares present in
person or by proxy at the Meeting and entitled to vote at the Annual Meeting
will be required to approve Proposal 1.
PROPOSALS 2-4
THE BOARD'S PROPOSED ANTI-TAKEOVER DEVICES
Proposals 2-4 relate to amendments to the provisions of the Certificate of
Incorporation of the Company proposed by the Board in the Company's Proxy
Statement that impede, or could be used to impede, the acquisition of the
Company and other efforts to maximize stockholder value. CPT and J&L strongly
urge you to vote AGAINST these anti-takeover devices.
PROPOSAL 2--PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED COMMON STOCK (PROPOSAL NO. 2 ON THE PROXY CARD)
THE PROPOSAL.
To amend the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 12,000,000 to 25,000,000 (actual
amount is dependent on whether Preferred Stock is also authorized by the
stockholders).
REASONS TO VOTE AGAINST THE PROPOSAL.
In the Company's Proxy Statement, management states that the additional
Shares to be authorized pursuant to this proposed amendment would be issuable at
any time without further stockholder approval. Although the Company has stated
it has no current plans to issue additional Shares, this increase in authorized
Shares may be utilized to effect the Poison Pill Rights Agreement, in the event
it is triggered. However, the Company has not disclosed any specific purpose for
the additional Shares.
The Company's stockholders are not entitled to preemptive rights, and as
such, their ownership interest in the Company will be diluted in the event any
newly-authorized Shares are issued in other than a pro rata manner.
Furthermore, the issuance of such newly-authorized Shares may be an
anti-takeover device designed to deter a merger of the Company. The Company
itself admits in its Proxy Statement that "[d]epending upon the circumstances in
which such additional shares of Common Stock are issued, the overall effects of
such issuance may be to render more difficult or to discourage a merger, tender
offer, proxy contest, or the assumption of control by a holder of a large block
of Common Stock and the removal of incumbent management. For example, such
shares could be used to create voting or other impediments or to discourage
persons seeking to gain control of the Company, and such shares could be
privately placed with purchasers favorable to the Board of Directors in opposing
such action. The issuance of new shares also could be used to dilute the stock
ownership of a person or entity seeking to obtain control of the Company should
the Board of Directors consider an action of such entity or person not to be in
the best interests of the stockholders and the Company."
CPT and J&L believe that such impediments to the merger or acquisition of
the Company should not be adopted. The adoption of this proposal would enable
management to thwart a merger or takeover
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attempt without any further stockholder review or approval of the Board's
actions required. ALTHOUGH SECTION 141 OF THE DGCL PROVIDES THAT THE BUSINESS
AND AFFAIRS OF EVERY CORPORATION ORGANIZED UNDER DELAWARE LAW SHALL BE MANAGED
BY OR UNDER THE DIRECTION OF A BOARD OF DIRECTORS, EXCEPT AS OTHERWISE PROVIDED
UNDER THE DGCL OR THE COMPANY'S CERTIFICATE OF INCORPORATION, CPT AND J&L ARE OF
THE OPINION THAT YOU, THE STOCKHOLDERS, SHOULD RETAIN CONTROL OVER DECISIONS
THAT DIRECTLY AFFECT YOUR RIGHTS AS A STOCKHOLDER SUCH AS THE ISSUANCE OF
ADDITIONAL SHARES.
VOTE REQUIRED.
The affirmative vote of the holders of a majority of the Shares entitled to
vote at the Annual Meeting will be required to adopt the amendment described in
Proposal 2.
CPT AND J&L STRONGLY URGE YOU TO VOTE AGAINST
THE BOARD'S ANTI-TAKEOVER PROPOSAL
PROPOSAL 3--PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO
AUTHORIZE 2,000,000 SHARES OF "BLANK CHECK" PREFERRED STOCK (PROPOSAL NO. 3 ON
THE PROXY CARD)
THE PROPOSAL.
To amend the Company's Certificate of Incorporation to authorize the
issuance of up to 2,000,000 shares of "Blank Check" Preferred Stock, the terms
and conditions of which are to be established by the Board of Directors from
time to time.
REASONS TO VOTE AGAINST THE PROPOSAL.
The type of preferred stock described in the Company's Proxy Statement is
known as "Blank Check" Preferred Stock due to the fact that its terms, including
voting rights, are determined by the Board of Directors. The Preferred Stock
would be issuable at any time without further stockholder approval. Therefore,
the Board may issue Preferred Stock with rights and preferences senior to those
of the Common Stock, without stockholder approval. The Preferred Stock may rank
senior to the Shares with respect to voting rights, dividends and liquidation
rights. Furthermore, stockholders have no preemptive rights to purchase or
otherwise acquire any Preferred Stock that may be issued by the Board.
Once again, the Company, in its Proxy Statement, admits that the overall
effect of the issuance of the Preferred Stock "may be to render more difficult
or to discourage a merger, tender offer, proxy contest, or the assumption of
control by a holder of a large block of Common Stock and the removal of
incumbent management."
CPT and J&L believe that the Board's only purpose in proposing the
authorization of "Blank Check" Preferred Stock is to impede the merger or
acquisition of the Company. Approval of this proposal would enable the Board to
issue the preferred stock for such a purpose, without any required review
process or approval of the stockholders.
VOTE REQUIRED.
The affirmative vote of holders of a majority of the Shares entitled to vote
at the Annual Meeting will be required to adopt the amendment described in
Proposal 3.
DON'T SUPPORT THE BOARD'S ANTI-TAKEOVER DEVICES -
VOTE AGAINST THIS PROPOSAL
8
<PAGE>
PROPOSAL 4--PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO
PROVIDE THAT STOCKHOLDER ACTION MAY BE TAKEN ONLY AT A MEETING (PROPOSAL NO. 4
ON THE PROXY CARD)
THE PROPOSAL.
To amend the Company's Certificate of Incorporation to require that
stockholder action may be taken only at an annual or special meeting and to
prohibit stockholder action by written consent. Also, to amend the section of
the Company's By-Laws which permits stockholder action by written consent.
REASONS TO VOTE AGAINST THE PROPOSAL.
This Proposal, if enacted, would deprive stockholders of their right to act
by written consent, a right afforded to stockholders by the Delaware General
Corporation Law and adopted by the Company in its By-Laws.
The Board's reasons for approval of this Proposal outlined in the Company's
Proxy Statement continue to exhibit the same cavalier and highly paternalistic
attitude the Board has shown towards the Company's stockholders as evidenced by
its initial failure to disclose CPT's merger proposal to its stockholders.
According to the Company's Proxy Statement, the Board fears that stockholders
may act in a context without "the full benefit of the knowledge, advice or
participation of the Company's management and the Board of Directors."
CPT and J&L believe that this Proposal simply takes away rights granted to
the Company's stockholders and empowers the Board with the ability to discourage
merger and acquisition attempts that the Board does not favor, despite the fact
that such business combinations may be advantageous to the stockholders. In
fact, the mere presence of a provision such as this in the Company's Certificate
of Incorporation, particularly when coupled with the Poison Pill Rights
Agreement and the provisions proposed by the Board in Proposals 2 and 3, may
deter potential bidders from approaching the Company because of a bidder's
inability to take action by written consent to remove impediments to completion
of a transaction, such as the Poison Pill Rights Agreement and other
anti-takeover devices. It is the opinion of CPT and J&L that stockholders are
more than capable of deciding for themselves what is in their own best
interests, and should continue to be able to do so.
VOTE REQUIRED.
The affirmative vote of the holders of a majority of the Shares entitled to
vote at the Annual Meeting will be required to adopt the amendment described in
Proposal 4.
THE ONLY WAY TO PROTECT YOUR RIGHTS
IS TO VOTE AGAINST THE BOARD'S ANTI-TAKEOVER PROPOSALS
OTHER MATTERS
According to the Company's Proxy Statement, the Board will present two other
proposals at the Annual Meeting. The Board will nominate its slate of nominees
for the election of directors and will propose that the appointment of the
Company's independent accountants be ratified. CPT and J&L express no opinion
and make no recommendations on these proposals. CPT and J&L are not aware of any
matters, other than those discussed herein, to be considered at the Annual
Meeting. However, if any other matters properly come before the Annual Meeting
which CPT and J&L do not know, a reasonable time before the Annual Meeting, are
to be presented, including any motion to adjourn the Annual Meeting prior to the
taking of a vote on the election of directors and other matters set forth in
this Proxy Statement, the persons named in the BLUE proxy card, or their
substitutes, will vote in their discretion all Shares covered by BLUE proxy
cards with respect to such matters.
9
<PAGE>
VOTING AND PROXY PROCEDURES
Shares represented by properly executed BLUE proxies will be voted as
directed or, if no direction is indicated, will be voted FOR the J&L Proposal
(Proposal 7 on the BLUE proxy card) and AGAINST the Board's Proposals (Proposals
2, 3 and 4 on the BLUE proxy card). A stockholder's failure to vote on Proposals
1 and 5 on the BLUE proxy card will be treated as a non-vote and will not be
counted.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS AND THEIR DIRECTORS AND
EXECUTIVE OFFICERS
Mentmore, CPT and J&L may be deemed to be participants in the proxy
solicitation as that term is defined in Item 4 of Rule 14a-101 under the
Exchange Act (the "Participants"), and thereby are required to disclose the
following information.
CPT is a holding company which, through its indirect, majority-owned
operating subsidiary, J&L, is a nationwide independent producer of high quality
lightweight structural steel shapes, with a leading market share in the
Northeast, Southeast and Mid-Atlantic regions. The Company's products are used
primarily in the manufactured housing, truck trailer, and highway safety systems
industries. Mentmore is a privately-owned investment company with interests in
the steel, plastics, textiles and financial services industries. Mentmore's and
CPT's principal offices are located at 1430 Broadway, 13th Floor, New York, New
York 10018-3308. J&L's principal offices are located at 111 Station Street,
Aliquippa, Pennsylvania 15001.
As of the date of this Proxy Statement, Mentmore was the record owner of 50
Shares. Mentmore purchased 100 Shares on March 27, 1997 in cash in an open
market transaction and Mentmore has not otherwise purchased or sold any
securities of the Company within the past two years. On April 28, 1997, 50
Shares were transferred by Mentmore to the account of CPT. CPT has not otherwise
purchased or sold any securities of the Company within the past two years. Other
than as set forth above, neither Mentmore nor CPT owns any securities of the
Company of record which are not owned beneficially.
The directors and executive officers of Mentmore may be deemed to own
beneficially the Shares owned by Mentmore and CPT. Other than such beneficial
ownership, to the knowledge of CPT and J&L, none of the directors or executive
officers of Mentmore, CPT or J&L, or any of their respective associates are the
beneficial or record owner of any securities of the Company.
Mentmore, CPT and J&L and their respective directors and executive officers
have a direct interest in the adoption of Proposal 1 presented in this Proxy
Statement due to the fact that the Proposal's approval may cause the Company's
Board to entertain a merger offer from CPT and/or J&L, a transaction that has
been sought by those entities and that may benefit Mentmore, CPT, J&L and their
respective directors and executive officers. In addition, the participants have
an interest in the disapproval of the Board's proposals to amend the Company's
Certificate of Incorporation in that the approval of any one of them, but most
certainly, the approval of all of them, may have the effect of precluding a
merger attempt by any company, including the Participants in this solicitation.
POSSIBLE CONFLICT OF INTEREST OF PARTICIPANTS. The solicitation of proxies
by the Participants in connection with the Annual Meeting of Stockholders is
motivated by their interest in consummating a transaction with the Company that
they believe will benefit the Participants and may also benefit the Company's
stockholders. The Participants' solicitation of proxies is not intended for the
purpose of increasing the inherent value of their Shares, and their interest
may, therefore, be deemed to be in conflict with the Company's other
stockholders.
SOLICITATION OF PROXIES
Signed proxies will be solicited by mail, advertisement, telephone,
telegraph and in person. Solicitation will be made by certain officers and
employees of CPT and J&L, none of whom will receive additional compensation for
such solicitation. CPT and J&L also have retained D.F. King & Co., Inc. ("D.F.
King") for solicitation and advisory services in connection with this
solicitation, for which D.F. King will receive a
10
<PAGE>
fee of $12,500 together with reimbursement for its reasonable out-of-pocket
expenses. CPT and J&L have also agreed to indemnify D.F. King against certain
liabilities and expenses, including liabilities and expenses under federal
securities laws. D.F. King will solicit proxies from individuals, brokers,
banks, bank nominees and other institutional holders. CPT and J&L have requested
banks, brokerage houses and other custodians, nominees and fiduciaries to
forward all solicitation materials to the beneficial owners of the shares they
hold of record. CPT and J&L will reimburse these record holders for their
reasonable out-of-pocket expenses. The entire expense of seeking the proxies is
being borne by CPT and J&L.
REVOCATION OF PROXIES
If the Annual Meeting is adjourned, for whatever reason, the proposals
described herein shall be considered and voted upon by stockholders at the
subsequent "adjourned meeting" (as such term is used in Section 222 of the
DGCL), if any.
You may revoke your proxy at any time prior to its exercise by attending the
Annual Meeting and voting in person (although attendance at the Annual Meeting
will not in and of itself constitute revocation of a proxy), by giving notice of
revocation of your proxy at the Annual Meeting, or by delivering a written
notice of revocation or a duly executed proxy relating to the matters to be
considered at the Annual Meeting and bearing a later date to CPT, c/o D.F. King
& Co., Inc., at 77 Water Street, New York, New York 10005 or the Secretary of
the Company at 17th Street and 2nd Avenue, Huntington, West Virginia 25703. CPT
requests that stockholders who send a revocation of their proxy to the Company
send a copy of such revocation to CPT. Unless revoked in the manner set forth
above, proxies in the form enclosed will be voted at the Annual Meeting in
accordance with your instructions.
INFORMATION AND DOCUMENTS INCORPORATED BY REFERENCE
Schedule I of this Proxy Statement sets forth information regarding Shares
held by certain beneficial owners, directors and executive officers of the
Company and is based on the Company's Proxy Statement.
The Company's Proxy Statement furnished to stockholders provides information
concerning, among other things: (1) the ownership of the Company's securities by
the Company's directors, officers and principal stockholders; (2) the members of
the Company's Board of Directors and the compensation and other benefits
received by the Company's directors and executive officers; (3) meetings and
committees of the Board of Directors of the Company; (4) the ratification of the
reappointment of the Company's independent accountants; and (5) certain other
matters relevant to this proxy solicitation. CPT and J&L hereby incorporate by
reference all such information contained in the Company's Proxy Statement. The
Company's Annual Report to Stockholders contains certain detailed financial
information regarding the Company and stockholders are referred thereto for
additional information. The Company's Poison Pill Rights Agreement and a summary
of its provisions as filed in the Company's Report on Form 8-K dated March 13,
1997, is hereby incorporated by reference.
CPT and J&L will, without charge, provide copies of the information
incorporated by reference from the Company's Proxy Statement and Form 8-K
incorporated herein by reference upon request made to CPT at 1430 Broadway, 13th
Floor, New York, New York 10018, Attention: William L. Remley or by telephone at
212-391-1392.
CPT and J&L and their respective officers and directors assume no
responsibility for the accuracy or completeness of any information herein which
is based on, or incorporated by reference to, the Company's Proxy Statement or
the Company's March 13th Report on Form 8-K.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINEES FOR 1998 ANNUAL MEETING
The Company's Proxy Statement provides that it is contemplated that the
Company's 1998 Annual Meeting of Stockholders will be held on or about May 15,
1998. Stockholders of the Company who intend
11
<PAGE>
to submit proposals or submit nominees for the election of Directors at the next
Annual Meeting of Stockholders must submit such proposals to the Company not
earlier than February 14, 1998 nor later than March 16, 1998. Stockholder
proposals should be submitted to Steel of West Virginia, Inc., P.O. Box 2547,
Huntington, West Virginia 25726, Attention: Mark G. Meikle, Vice President,
Treasurer and Chief Financial Officer.
YOUR VOTE IS IMPORTANT!!
PLEASE SIGN, DATE AND RETURN THE BLUE PROXY CARD TODAY. IF YOU HAVE ALREADY
SENT A PROXY TO THE BOARD OF DIRECTORS OF THE COMPANY, YOU MAY REVOKE THAT PROXY
AND VOTE FOR THE J&L PROPOSAL AND AGAINST THE BOARD'S PROPOSALS BY SIGNING,
DATING AND MAILING THE ENCLOSED BLUE PROXY CARD. WHETHER OR NOT YOU HAVE ALREADY
SENT A PROXY TO THE BOARD OF DIRECTORS OF THE COMPANY, WE URGE YOU TO VOTE FOR
THE J&L PROPOSAL AND AGAINST THE BOARD'S PROPOSALS BY SIGNING, DATING AND
MAILING THE ENCLOSED BLUE PROXY CARD.
IF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK OR NOMINEE,
ONLY THEY CAN VOTE SUCH SHARES AND ONLY UPON RECEIPT OF YOUR SPECIFIC
INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND GIVE INSTRUCTIONS FOR SUCH SHARES TO BE VOTED IMMEDIATELY.
CPT AND J&L BELIEVE THAT YOU CAN HELP TO MAXIMIZE STOCKHOLDER VALUE BY
SIGNING THE ENCLOSED BLUE PROXY CARD AND RETURNING IT PROMPTLY TO CPT IN THE
ENCLOSED ENVELOPE.
REMEMBER, ONLY YOUR LATEST DATED PROXY COUNTS.
Dated: April 30, 1997
Sincerely,
CPT HOLDINGS, INC.
J&L STRUCTURAL, INC.
If you have any questions regarding how to vote your Shares, please call our
proxy solicitor:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
(212) 269-5550
(CALL COLLECT)
OR
CALL TOLL-FREE (800) 735-3529
12
<PAGE>
SCHEDULE I
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of March 25, 1997, the beneficial
ownership of the Company's Common Stock of each person who owns more than 5% of
the Company's issued and outstanding Common Stock based on the Company's Proxy
Statement.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS(7)
- - -------------------------------------------------------------------------------- -------------------- -----------
<S> <C> <C>
FMR Corp........................................................................ 909,800(1) 15.19
82 Devonshire Street
Boston, Massachusetts 02109
Heartland Advisors, Inc......................................................... 590,000(2) 9.85
790 North Milwaukee Street
Milwaukee, WI 53202
Putnam Investments, Inc......................................................... 546,700(3) 9.12
One Post Office Square
Boston, Massachusetts 02109
Robert L. Bunting, Jr........................................................... 534,380(4) 8.92
c/o Steel of West Virginia, Inc.
17th Street and 2nd Avenue
Huntington, West Virginia 25703
Dimensional Fund Advisors, Inc.................................................. 406,600(5) 6.79
1299 Ocean Avenue
Santa Monica, California 90401
Wachovia Corporation............................................................ 320,000(6) 5.34
301 North Main Street
Winston-Salem, NC 27150-3099
</TABLE>
(1) Fidelity Management & Research Company ("Fidelity"), 82 Devonshire Street,
Boston, Massachusetts 02109, a wholly-owned subsidiary of FMR Corp. and an
investment adviser registered under Section 203 of the Investment Advisors
Act of 1940, is the beneficial owner of 733,000 shares (12.23%) of Common
Stock as a result of acting as investment advisor to various investment
companies registered under Section 8 of the Investment Company Act of 1940.
The ownership of one investment company, Fidelity Low-Priced Stock Fund,
amounted to 733,000 shares (12.23%) of Common Stock outstanding. Fidelity
Low-Priced Stock Fund has its principal business office at 82 Devonshire
Street, Boston, Massachusetts 02109. Edward C. Johnson 3d, FMR Corp.,
through its control of Fidelity, and the Funds each has sole power to
dispose of the 733,000 shares owned by the Funds. Neither FMR Corp. nor
Edward C. Johnson 3d, Chairman of FMR Corp., has the sole power to vote or
direct the voting of the shares owned directly by the Fidelity Funds, which
power resides with the Funds' Board of Trustees. Fidelity carries out the
voting of the shares under written guidelines established by the Funds'
Board of Trustees. Fidelity Management Trust Company, 82 Devonshire Street,
Boston, Massachusetts 02109, a wholly-owned subsidiary of FMR Corp. and a
bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934,
is the beneficial owner of 176,800 shares (2.95%) of Common Stock as a
result of its serving as investment manager of the institutional account(s).
Edward C. Johnson 3d and FMR Corp. through its control of Fidelity
Management Trust Company, has sole voting and dispositive power over 176,800
shares of Common Stock owned by the institutional account(s) as reported
above. Members of the Edward C. Johnson 3d family and trusts for their
benefit are the predominant owners of Class B shares of Common Stock of FMR
Corp., representing approximately 49% of the voting power of FMR Corp. Mr.
Johnson 3d owns 12.0% and Abigail P Johnson owns 24.5% of the aggregate
outstanding voting stock of FMR Corp. Mr. Johnson 3d is chairman of FMR
Corp. and Abigail P. Johnson is a director of FMR Corp.
<PAGE>
The Johnson family group and all other Class B shareholders have entered
into a shareholder's voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Accordingly,
through their ownership of voting Common Stock and the execution of the
shareholder's voting agreement, members of the Johnson family may be deemed,
under the Investment Company Act of 1940 to form a controlling group with
respect to FMR Corp. The information set forth herein is based on a Schedule
13G dated February 14, 1997 filed by FMR Corp. with the Securities and
Exchange Commission.
(2) Heartland Advisors, Inc. ("Heartland"), an investment advisor registered
under Section 203 of the Investment Advisors Act of 1940, is the beneficial
owner of 590,000 shares of Common Stock held in investment advisory
accounts. Heartland has sole voting and dispositive power over the shares it
owns, but various persons have the right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale of, the
securities. The information set forth herein is based on a Schedule 13G
filed with the Securities and Exchange Commission.
(3) Putnam Investments, Inc. ("Putnam") is a wholly-owned subsidiary of Marsh &
McLennan Companies, Inc. ("M&MC") and wholly owns two registered investment
advisers: Putnam Investment Management, Inc. and the Putnam Advisory
Company, Inc., which are deemed to be beneficial owners of the shares set
forth in the table above. Neither Putnam nor M&MC has any power to vote or
dispose of, or direct the voting or disposition of, any of the shares set
forth in the table above, which were acquired by the afore-named investment
advisors for investment purposes for advisory clients. The information set
forth herein is based on a Schedule 13G dated January 27, 1997 filed by
Putnam with the Securities and Exchange Commission, which filing Putnam
states should not be deemed an admission of beneficial ownership.
(4) Of this amount, 233,710 shares are held in a trust for the benefit of Mr.
Bunting's wife, Nancy L. Bunting, and 237,557 shares are held in a trust for
the benefit of Mr. Bunting. Mr. and Mrs. Bunting are co-trustees of each of
said trusts. This amount includes 8,000 shares that Mr. Bunting has the
right to acquire through the exercise of options.
(5) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 406,600 shares set forth
in the table above, 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, for all of which Dimensional
Fund Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares. The information set forth herein is
based on a Schedule 13G dated February 5, 1997 filed by Dimensional with the
Securities and Exchange Commission.
(6) Wachovia Corporation ("Wachovia"), a holding company, is the beneficial
owner of 320,000 shares of Common Stock held by Wachovia Bank of North
Carolina, N.A., Wachovia Bank of Georgia, N.A., and Wachovia Bank of South
Carolina, N.A., as trustees. Wachovia has sole voting and dispositive power
over such shares. The information set forth herein is based on a Schedule
13G dated February 14, 1997 filed by Wachovia with the Securities and
Exchange Commission, which filing Wachovia states should not be deemed an
admission of beneficial ownership.
(7) Includes 85,500 shares deemed outstanding that may be acquired through the
exercise of options.
S-2
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
DIRECTORS
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY OWNED AS
OF
NAME MARCH 25, 1997 PERCENT OF CLASS(5)
- - ---------------------------------------------------------------------- ---------------------- ---------------------
<S> <C> <C>
Robert L. Bunting, Jr................................................. 534,380(2) 8.92
Timothy R. Duke....................................................... 23,140(3) *
Stephen A. Albert..................................................... 4,000(4) *
Albert W. Eastburn(1)................................................. 8,934(4) *
Daniel N. Pickens(1).................................................. 6,391(4) *
Paul E. Thompson(1)................................................... 5,391(4) *
All directors and executive officers as a group....................... 582,236(2)(3)(4) 9.27
</TABLE>
- - ------------------------
* Less than one percent.
(1) Member of the Compensation and Benefits Committee and the Audit Committee.
(2) Of this amount, 233,710 shares are held in a trust for the benefit of Mr.
Bunting's wife, Nancy L. Bunting, and 237,577 shares are held in a trust for
the benefit of Mr. Bunting. Mr. and Mrs. Bunting are co-trustees of each of
said trusts. This amount includes 8,000 shares that Mr. Bunting has the
right to acquire through the exercise of options.
(3) This amount includes 6,000 shares that may be acquired through the exercise
of options.
(4) This amount includes 4,000 shares that may be acquired by each of Messrs.
Albert, Eastburn, Pickens and Thompson through the exercise of options.
(5) Includes 85,500 shares deemed outstanding that may be acquired through the
exercise of options.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY OWNED AS
OF
NAME MARCH 25, 1997 PERCENT OF CLASS(2)
- - ---------------------------------------------------------------------- ----------------------- -------------------------
<S> <C> <C>
Larry E. Gue.......................................................... 10,140(1) *
Mark G. Meikle........................................................ 3,000(1) *
T. Elton North........................................................ 3,000(1) *
</TABLE>
- - ------------------------
* Less than one percent.
(1) This amount includes 3,000 shares that may be acquired through the exercise
of options.
(2) Includes 85,500 shares deemed outstanding that may be acquired through the
exercise of options.
S-3
<PAGE>
APPENDIX A
PROXY
SOLICITED BY CPT HOLDINGS, INC. AND J&L STRUCTURAL, INC.
IN OPPOSITION TO THE BOARD OF DIRECTORS OF STEEL OF WEST VIRGINIA, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 15, 1997.
The undersigned hereby appoints Richard L. Kramer, William L. Remley and
Howell A. Breedlove or any of them, with full power of substitution, as proxies
and hereby authorizes them to represent and to vote, as designated below, all
shares of Common Stock of Steel of West Virginia, Inc. which the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on May 15,
1997 and any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 7 AND AGAINST
PROPOSALS 2, 3 AND 4. IF NO DIRECTION IS MADE ON PROPOSALS 1 AND 5, THIS PROXY
WILL BE CONSIDERED A NON-VOTE AND NOT BE COUNTED ON THOSE PROPOSALS.
(Please mark with an "X" in the appropriate boxes)
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS
<S> <C>
/ / FOR all nominees listed (except as marked to the contrary
below)
<CAPTION>
1.
<S> <C>
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
</TABLE>
Stephen A. Albert, Robert L. Bunting, Jr., Timothy R. Duke, Albert W. Eastburn,
Daniel N. Pickens, Paul E. Thompson
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR MY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
<TABLE>
<S> <C>
CPT AND J&L RECOMMEND A VOTE AGAINST PROPOSALS 2, 3 AND 4.
2. PROPOSAL TO APPROVE THE AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO AUTHORIZE 13,000,000 ADDITIONAL SHARES
OF COMMON STOCK.
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED ON OTHER SIDE)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(CONTINUED FROM OTHER SIDE)
3. PROPOSAL TO APPROVE THE AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO AUTHORIZE 2,000,000 SHARES OF
PREFERRED STOCK.
/ / FOR / / AGAINST / / ABSTAIN
4. PROPOSAL TO APPROVE THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO PROVIDE THAT STOCKHOLDER ACTION MAY BE
TAKEN ONLY AT A MEETING OF THE STOCKHOLDERS.
/ / FOR / / AGAINST / / ABSTAIN
5. PROPOSAL TO RATIFY THE REAPPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS.
/ / FOR / / AGAINST / / ABSTAIN
6. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING
AND ANY ADJOURNMENTS THEREOF.
/ / FOR / / AGAINST / / ABSTAIN
CPT AND J&L RECOMMEND A VOTE FOR PROPOSAL 7.
7. PROPOSAL TO APPROVE A NON-BINDING, PRECATORY RESOLUTION REQUESTING THAT THE BOARD NEGOTIATE IN GOOD FAITH WITH POTENTIAL
BIDDERS IN AN EFFORT TO NEGOTIATE THE SALE OF THE COMPANY.
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. WHEN SHARES ARE HELD
BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY-IN-FACT, EXECUTOR,
ADMINISTRATOR, TRUSTEE, OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
COMPANY, PLEASE SIGN IN FULL CORPORATE NAME BY THE PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AN AUTHORIZED
PERSON.
PLEASE RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<TABLE>
<CAPTION>
Signature Dated:
<S> <C>
Signature if held jointly
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Title
</TABLE>
