<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
HANDY & HARMAN
--------------------------------------------------------------------------------
(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), or 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:
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<PAGE> 2
[HANDY & HARMAN LOGO]
R. N. DANIEL
CHAIRMAN
DEAR SHARE OWNER:
This year the Annual Meeting of Shareholders will be held on Tuesday,
May 9, at the offices of Chemical Banking Corporation, 270 Park Avenue (Third
Floor Auditorium), in New York City, beginning at 11:00 A.M. We sincerely hope
that you will be able to attend and participate in the business of the meeting.
My associates, members of the Board and other executives of the Company will
be on hand to welcome you and to talk individually with you before and after the
meeting.
Whether or not you plan to attend the meeting, you can be sure your shares
are voted as you wish by promptly dating, signing and returning your Proxy card
in the enclosed envelope.
Cordially,
R. N. DANIEL
March 31, 1995
<PAGE> 3
HANDY & HARMAN
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------
MAY 9, 1995
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Shareholders of
HANDY & HARMAN (the "Company") will be held at the offices of Chemical Banking
Corporation, 270 Park Avenue (Third Floor Auditorium), in New York, New York, on
Tuesday, May 9, 1995, at 11:00 A.M., for the purpose of (1) electing seven
directors to serve for the ensuing year and until their successors have been
duly elected and qualified, (2) ratifying the appointment of KPMG Peat Marwick
LLP, as independent auditors of the Company for 1995, (3) approving the proposed
1995 Omnibus Stock Incentive Plan, (4) voting to accept or reject a
Shareholder's Proposal with respect to executive severance contracts and (5)
transacting such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 24, 1995 as
the record date for the determination of the shareholders entitled to notice of,
and to vote at, the Annual Meeting, or any adjournment or adjournments thereof,
and only shareholders of record as of such time are entitled to vote at the
meeting.
You are cordially invited to attend the meeting. Whether or not you expect
to attend the meeting, please date, sign and return your Proxy in the enclosed
self-addressed stamped envelope.
By order of the Board of Directors,
PAUL E. DIXON
Secretary
Dated: March 31, 1995
<PAGE> 4
HANDY & HARMAN
250 PARK AVENUE, NEW YORK, NEW YORK 10177
TELEPHONE (212) 661-2400
PROXY STATEMENT
This statement is furnished in connection with the solicitation by and on
behalf of the Board of Directors (the "Board") of Handy & Harman (the "Company")
of proxies for use at the 1995 Annual Meeting of Shareholders (referred to, for
convenience, as the "Meeting") of the Company, to be held at the offices of
Chemical Banking Corporation, 270 Park Avenue (Third Floor Auditorium), in New
York, New York, on Tuesday, May 9, 1995. The date of mailing of this Proxy
Statement and the accompanying Proxy card is on or about March 31, 1995.
At the Meeting all shares represented by a properly executed and not
revoked Proxy in the accompanying form will be voted, and, where instructions
are specified, will be voted in accordance with the specification. Where
instructions are not specified, the shares represented by such Proxy will be
voted (a) FOR the election of all of the seven nominees for director named in
this Proxy Statement, (b) FOR ratification of the appointment of independent
auditors, (c) FOR approval of the proposed 1995 Omnibus Stock Incentive Plan and
(d) AGAINST the Shareholder Proposal. In addition, the Proxy will be voted in
the discretion of the proxyholders with respect to such other business as may
come properly before the Meeting.
Any Proxy may be revoked by a shareholder, by a written communication to
the Secretary of the Company prior to or at the Meeting, to the extent the Proxy
has not been voted. Sending in a signed Proxy will not affect a shareholder's
right to attend the Meeting and vote in person.
VOTING RIGHTS AND PRINCIPAL HOLDERS THEREOF
In all matters each shareholder will be entitled to one vote for each share
of Common Stock held of record at the close of business on March 24, 1995 (the
"Record Date"). At the Record Date there were 14,098,580 shares of Common Stock
outstanding. Common Stock is the only class of stock of the Company outstanding
and the only security of the Company entitled to vote at the Meeting.
As of the Record Date no person was known by the Board to be the beneficial
owner of more than 5% of the Company's outstanding Common Stock, except the
Company understands that Mario J. Gabelli, Gabelli Funds, Inc., Gamco Investors,
Inc., Gabelli & Company, Inc., Gabelli Performance Partnership and Gabelli
International Limited (each of One Corporate Center, Rye, New York 10580-1434)
may be deemed to be a group beneficially owning 2,072,800 shares or
approximately 14.5% of the Company's outstanding Common Stock. The foregoing
"group" may be considered to have sole voting and investment power with respect
to the shares beneficially owned by the group, except insofar as the voting and
investment power may be shared within the group.
As of February 15, 1995, the Officers and Directors of the Company owned
beneficially an aggregate of 454,760 shares or approximately 3.2% of the
Company's Common Stock, including 89,968 shares, or approximately 0.6% of the
Company's Common Stock which they may be deemed under the rules of the
Securities and Exchange Commission to "beneficially own," but as to which they
have disclaimed beneficial ownership.
As used in this Proxy Statement, "beneficial ownership" means the sole or
shared power to vote, or to direct the voting of, a security, or the sole or
shared investment power with respect to a security (i.e., the power to dispose
of, or to direct the disposition of, a security). In addition, for purposes of
this Proxy Statement, a person is deemed, as of any date, to have "beneficial
ownership" of any security that such person has the right to acquire within 60
days after such date. Accordingly, the shares used in computing the percentages
of Common Stock as a class include both the shares actually outstanding on the
Record Date plus 241,920 additional shares which may be acquired by Officers and
Directors of the Company within 60 days, upon the exercise of stock options. No
person who was during 1994 an Officer or Director of the Company or the
beneficial owner of more than ten percent of the Company's outstanding Common
Stock failed to file on a timely basis reports required by Section 16 of the
Securities Exchange Act of 1934, except that the Officers who were granted stock
options in September, 1994 did not file Forms 4 until November, 1994.
1
<PAGE> 5
ELECTION OF DIRECTORS
The Board has set the size of the Board at seven persons as authorized by
the By-Laws. At the Meeting, seven Directors (constituting the entire Board) are
to be elected to hold office for the ensuing year and until their respective
successors have been duly elected and qualified. Directors are elected by a
plurality of the votes cast at the Meeting. In tabulating the vote, broker
non-votes will be disregarded and will have no effect on the outcome of the
vote. All the nominees listed below were elected Directors at the 1994 Annual
Meeting of Shareholders. The following table includes information concerning the
nominees which has been furnished by the nominees:
<TABLE>
<CAPTION>
BENEFICIAL
PRINCIPAL OCCUPATION DIRECTOR STOCK
NAME OF DIRECTOR AGE AND OTHER DIRECTORSHIPS SINCE OWNERSHIP(4)
----------------------------------- -------- ------------
<S> <C> <C> <C> <C>
Clarence A. Abramson(2).......... 62 Former Vice President and Secretary 1991 3,539(6)
of Merck & Co., Inc. Director,
PolyPharm Inc. Trustee, Community
Health Law Project. Advisor,
Institute for Circadian
Physiology. Health
Industry Consultant.
Robert E. Cornelia(3)............ 62 Management Consultant. 1991 3,539(6)
Richard N. Daniel(1)............. 59 Chairman of the Board and Chief 1974 160,607(5)
Executive Officer of the Company.
Gerald G. Garbacz(3)............. 58 Former Chairman, Chief Executive 1988 5,452(6)
Officer and Director of Baker &
Taylor, Inc.
Frank E. Grzelecki(1)............ 57 President and Chief Operating 1988 92,499(5)
Officer of the Company. Director of
Zale Corp. Director of Chartwell
Re Corporation.
Gouverneur M. Nichols(1)(2)...... 76 Business Consultant. 1973 18,166(6)
Hercules P. Sotos(3)............. 61 Vice Chairman and Director of 1993 3,343(6)
Playtex Products, Inc. Director of
Sun
Pharmaceutical Co.
</TABLE>
---------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) The information set forth concerning beneficial ownership is as of February
15, 1995. At that date, each nominee individually had beneficial ownership
of less than 1% of the total number of outstanding shares of Common Stock,
except Mr. Daniel whose beneficial ownership was approximately 1.1%. The
shares set forth in the table do not include 89,968 shares owned by the wife
of a nominee, as to which the nominee has disclaimed beneficial ownership.
(5) Includes 87,500 shares which Mr. Daniel has the right to acquire upon the
exercise of stock options granted under the Company's Long-Term Incentive
Stock Option Plan, and 86,500 shares Mr. Grzelecki has the right to acquire
upon the exercise of stock options granted under that Plan. For a discussion
of such options, see "Stock Options" below.
(6) Includes 4,452 shares which Mr. Nichols may acquire, 1,343 shares which each
of Messrs. Cornelia and Sotos may acquire, and 2,091 shares which each of
Messrs. Abramson and Garbacz may acquire upon exercise of stock options
granted under the Outside Director Stock Option Plan discussed under the
caption "Compensation of Directors" below.
If any nominee should become unavailable for election for any reason, the
Proxies will be voted for the election of an alternative nominee designated by
the Board. The management of the Company has no reason to believe that any
nominee will become unavailable. If no such alternative nominee is so
designated, the membership of the Board will be reduced, pursuant to the
By-Laws, to a number equal to the number of such nominees who are available for
election.
2
<PAGE> 6
CERTAIN ADDITIONAL INFORMATION CONCERNING NOMINEES
Each nominee has been engaged in his current principal occupation for at
least the last five years, except as indicated below.
CLARENCE A. ABRAMSON -- Healthcare industry consultant since January 1994,
prior thereto Vice President and Secretary of Merck & Co., Inc. (a
pharmaceutical company) since March 1991 and prior thereto Associate General
Counsel and Secretary of Merck & Co., Inc. since May 1989.
ROBERT E. CORNELIA -- Management Consultant since 1990, prior thereto
Chairman of the Board, Chief Executive Officer and President of AT&T Nassau
Metals Corp. (a secondary metals refinery), a subsidiary of AT&T (a
telecommunications company) since prior to January 1990.
RICHARD N. DANIEL -- Chairman of the Board and Chief Executive Officer of
the Company since May 1992 and prior thereto Chairman of the Board, President
and Chief Executive Officer of the Company since prior to January 1990.
GERALD G. GARBACZ -- Formerly Chairman, Chief Executive Officer and
Director of Baker & Taylor, Inc. (a distributor of books, video and other media
materials) from March 1992 to July 1994; prior thereto Executive Vice President
of W. R. Grace & Co. (a multinational company) since prior to January 1990.
FRANK E. GRZELECKI -- President and Chief Operating Officer of the Company
since May 1992 and prior thereto Vice Chairman of the Board of the Company since
July 1989.
HERCULES P. SOTOS -- Vice Chairman and Director of Playtex Products, Inc.
(a manufacturer of health and beauty aid products) since prior to January 1990.
COMMITTEES OF THE BOARD
The Company's Board has a standing Executive Committee, a standing
Compensation Committee and a standing Audit Committee. The Company's Board does
not have a Nominating Committee.
The Executive Committee is empowered by the By-Laws to act, during the
intervals between meetings of the Board, and to exercise all powers of the Board
in the management and direction of the business of the Company except such
powers as, by law, by the Company's Certificate of Incorporation or by the
Company's By-Laws, may not be delegated to the Committee. The Executive
Committee did not meet during 1994.
The Audit Committee is empowered by the Board, under the Company's By-Laws,
to review the scope and procedures to be followed in the conduct of the audit by
the Company's independent auditors, and also to review the findings and
recommendations by the auditors resulting from the audit. The Committee also
meets with the auditors to review the adequacy of the Company's internal
controls and any significant changes in the accounting practices or audit
reporting requirements followed. The Committee also functions to approve the
professional services by the independent auditors, review the independence of
the auditors and consider the amount and relationship of the non-audit fees to
the audit fees of the auditors. The Audit Committee met three times during 1994.
The Compensation Committee whose powers are discussed within the Executive
Compensation section of this document met four times during 1994.
BOARD PARTICIPATION
The Board met nine times during 1994. One meeting was held in each month
except during July, August and November. During 1994, all of the nominees for
Director who were then Directors attended at least 75% of the meetings of the
Board and of the Committees on which they serve.
3
<PAGE> 7
EXECUTIVE COMPENSATION
The Company's Executive Compensation Program is administered by the
Compensation Committee of the Board of Directors, which is comprised of three
independent, non-employee Directors of the Company. The Compensation Committee
is empowered by the Board to review the salaries paid to the Company's Officers
each year and recommend to the Board any adjustments that it deems appropriate.
It also reviews the nature and scope of the services rendered each year by the
participants in the Management Incentive Plan of the Company and the
corresponding benefits derived by the Company from such services. Then, based on
the review of management recommendations, the Compensation Committee awards
bonuses to the participants in accordance with the Plan. The Committee also
reviews, and recommends to the Board the granting and awarding of restricted
stock under the Company's Long-Term Incentive Plan and the granting of stock
options and Stock Appreciation Rights (SAR's) under the Company's 1991 Long-Term
Incentive Stock Option Plan.
The following table provides information on the compensation provided by
the Company to the Company's Chief Executive Officer and the four most highly
paid Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION RESTRICTED
STOCK OPTIONS ALL OTHER
-------------------- AWARDS SHARES COMPENSATION
NAME & POSITION YEAR SALARY BONUS ($)(4) (#) ($)
--------------------------- ----- -------- -------- ---------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
R. N. Daniel 1994 $399,634 $280,000 $ 53,813 25,000 $ 16,387(1)
Chairman and CEO 1993 $369,621 $ 60,000 -- 37,500 $ 16,462(1)
1992 $341,667 $ 75,000 $ 19,350 -- $ 11,845(1)
F. E. Grzelecki 1994 $341,354 $240,000 $ 38,438 20,000 $ 13,828(1)
President and COO 1993 $316,342 $ 55,000 -- 32,500 $ 14,587(1)
1992 $275,000 $ 90,000 $ 19,350 -- $ 11,667(1)
J. S. McElya 1994 $177,038 $125,000 $ 33,825 5,000 $ 15,611(1)(2)
Vice President and 1993 $158,423 $ 30,000 -- 10,000 $ 16,274(1)
President of Handy & 1992 $135,615 $ 58,000 $ 12,900 -- $ 15,136(1)
Harman Automotive
Group, Inc.
P. E. Dixon 1994 $152,230 $101,000 -- 5,000 $ 3,453(1)
Vice President, General 1993 $144,577 $ 30,000 -- 10,000 $ 3,300(1)
Counsel and Secretary 1992 $ 17,178 -- -- 10,000 $ 2,250(1)
J. M. McLoone 1994 $151,192 $101,000 -- 5,000 $ 6,027(1)
Vice President -- 1993 $139,153 $ 30,000 -- 10,000 $ 6,037(1)
Financial Services 1992 $ 67,500 -- -- 10,000 $ 22,550(1)(3)
</TABLE>
---------------
(1) Company matching contributions under the 401(k) Savings Plan for Messrs.
Daniel, Grzelecki, McElya, Dixon and McLoone: (A) for 1994 were $2,250,
$2,250, $2,250, None, and $2,250, respectively, (B) for 1993 were $3,537,
$3,537, $3,024, None and $2,387, respectively, and (C) for 1992 were $1,745,
$1,917, $1,782, None and None, respectively.
The Company maintains a supplemental benefit for its Officers whereby, in
the event of the death of the Officer, prior to retirement, the Company will
credit an amount equal to two times the Officer's salary to a deferred
compensation account to be paid to his beneficiaries over a period of ten
(10) years. This program is funded by the Company purchasing individual
insurance policies on the life of each Officer. Upon retirement, the Officer
may elect to take a lump sum amount equal to the cash surrender value of the
policy or to continue the policy at his expense. The costs of this program
for Messrs. Daniel, Grzelecki, McElya, Dixon and McLoone: (A) for 1994 were
$14,137, $11,578, $3,361, $3,453, and $3,777, respectively, (B) for 1993
were $12,925, $11,050, $3,250, $3,300 and $3,650, respectively, and (C) for
1992 were $10,100, $9,750, $3,354, $2,250 and $2,550, respectively.
4
<PAGE> 8
(2) In 1992 the Company loaned Mr. McElya $40,000, secured by a series of 4
Promissory Notes for $10,000 each, to facilitate his move to Rye, New York
as a Group Vice President for Precious Metals. In December, 1994, 1993 and
1992 $10,000 of this amount was forgiven and that amount has been included
in the above tables for each year.
(3) In connection with the commencement of his employment with the Company, Mr.
McLoone received a payment of $20,000 in addition to his regular salary and
other benefits.
(4) Restricted stock was awarded during 1994 as shown. The outstanding
restricted shares and value from these awards for Messrs. Daniel, Grzelecki,
McElya, Dixon and McLoone were 1,750 shares/$26,906, 1,250 shares/$19,219,
1,100 shares/$16,913, None and None, respectively.
BASE SALARIES
As of May 1, 1994, Officer salaries were increased based on the
recommendations of the Compensation Committee. These increases reflected input
submitted by the Company's Chief Executive Officer, consideration of competitive
market data supplied by an independent compensation consulting firm, and the
Committee's assessment of the individual performance contributions of each
Officer over the past year. The base salary of each Officer is determined by the
Compensation Committee annually. While the Committee uses the benchmarks as a
reference point, a particular Officer's base salary may vary depending upon his
salary history, experience, performance and salary guidelines imposed by the
budget.
ANNUAL INCENTIVE AWARDS FOR 1994
The Company maintains the Management Incentive Plan (MIP) which is an
annual incentive program that rewards selected Officers and other key employees
each year based on their contributions to the profits of the Company. Prior to
the start of each Plan year, the Chief Executive Officer recommends those
Officers designated as Plan participants for the upcoming year. Final selection
of each participant rests with the Compensation Committee. For the 1994 fiscal
year, all Officers were selected for participation in the Plan.
The available incentive pool for Officers and selected corporate management
participants is determined by a formula that represents 7.5% of consolidated
pre-tax earnings in excess of 15% of shareholders' equity. An individual
participant's award may not exceed 100% of the participant's salary in the
fiscal year for which the Incentive Award was earned. If the excess earnings
criterion is not met, at the sole discretion of the Committee, based upon the
recommendation of the Chief Executive Officer, an amount may be provided for
Awards to participants to recognize overall effort of achieving objectives which
enhance the Company's long-term growth potential. However, any discretionary
Award may not increase an employee's total Incentive Award under this provision
to an amount in excess of 25% of the participant's base salary.
For the 1994 fiscal year corporate pre-tax earnings were in excess of the
minimum shareholders' equity requirement and Incentive Awards to Officers ranged
from 31% to 69% of base salary.
STOCK OPTIONS
The purpose of the 1991 Long-Term Incentive Stock Option Plan is to benefit
the Company by providing for the acquisition of a greater financial interest in
the Company by key employees upon whom the Company is dependent for success. The
Plan permits the granting of non-qualified stock options, at the discretion of
the Company's Board. Option grants are based on guidelines which were outlined
in a report to the Board from an independent compensation consultant. The
exercise price of each option cannot be less than 100% of the fair market value
of a share of common stock at the time the option is granted. Options become
exercisable cumulatively at the rate of 20% per year, commencing one year after
the date of grant.
The Company's employee stock option plan (the "1982 Stock Option Plan"),
covering a total of 500,000 shares of the Company's Common Stock, was approved
at the 1982 Annual Meeting of Shareholders. The 1982 Stock Option Plan permitted
the granting of incentive stock options or non-qualified stock options, or both,
in the discretion of the Company's Board, to executive Officers and other key
employees of the
5
<PAGE> 9
Company. During 1994 there were no options granted or exercised to purchase
shares of the Common Stock of the Company under the 1982 Stock Option Plan and
options may no longer be granted under that Plan.
During 1994, options were granted to the Executive Officers named below.
Stock Appreciation Rights (SAR's) may be granted under the 1991 Long-Term
Incentive Stock Option Plan, but no such rights are outstanding. Shown below, is
information concerning stock option grants to any named Executive Officer who
was granted a stock option during 1994:
STOCK OPTION GRANTS 1994
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------------------------------- ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS EXERCISE APPRECIATION FOR
OPTION/ GRANTED TO OR BASE OPTION TERM(1)
SARS EMPLOYEES IN PRICE EXPIRATION -------------------
GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
------- ------------ -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
R. N. Daniel................... 25,000 21% $16.625 09/22/04 $261,375 $662,375
F. E. Grzelecki................ 20,000 17% $16.625 09/22/04 $209,100 $529,900
J. S. McElya................... 5,000 4% $16.625 09/22/04 $ 52,275 $132,475
P. E. Dixon.................... 5,000 4% $16.625 09/22/04 $ 52,275 $132,475
J. M. McLoone.................. 5,000 4% $16.625 09/22/04 $ 52,275 $132,475
</TABLE>
---------------
(1) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the SEC and, therefore, are not intended to
forecast possible future appreciation, if any, of the Company's stock
price. No gain to the optionee is possible without an increase in stock
price which will benefit all shareholders commensurately.
The exercise price of the options granted is equal to the market value of
the shares on the date of the grant. These options become exercisable at
the cumulative rate of 20% per year on each of the first five anniversary
dates.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FOR YEAR-END OPTION/SAR VALUES
The following table provides information with respect to options exercised
by any named Executive Officer during 1994. In addition, this table provides the
number and information with respect to unexercised options to purchase shares as
of December 31, 1994:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS/SARS IN-THE-MONEY
AT OPTIONS/SARS
YEAR-END(#) AT YEAR-END($)
SHARES ------------- ----------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
------------------------------------ ----------- ----------- ------------- ----------------
<S> <C> <C> <C> <C>
R. N. Daniel........................ None None 67,500/70,000 $93,285/$123,140
F. E. Grzelecki..................... None None 66,500/62,500 $90,847/$112,169
J. S. McElya........................ None None 11,000/14,000 $29,626/$ 36,004
P. E. Dixon......................... 2,000 $ 5,875 4,000/14,000 $10,501/$ 36,379
J. M. McLoone....................... None None 6,000/14,000 $18,126/$ 39,379
</TABLE>
---------------
(1) No stock appreciation rights are outstanding.
(2) The value of the unexercised in-the-money options, is calculated by
multiplying the number of underlying shares by the difference between the
closing price of the Company's Common Stock on the New York Stock Exchange
at December 30, 1994 ($15.375) and the exercise price for these shares.
These values have not been realized.
6
<PAGE> 10
LONG-TERM INCENTIVE PLAN
The Company's Long-Term Incentive Plan is a performance-based restricted
stock Plan where every other year key executives earn the right to receive
shares of Company stock based on achievement of pre-established financial and
individual performance goals. Plan participants are selected by the Compensation
Committee and include the five highest paid Officers. An aggregate of 28,600
shares of restricted stock were awarded in 1994, including awards to Messrs.
Daniel, Grzelecki and McElya.
The Plan contains five overlapping cycles with each cycle encompassing five
fiscal years. Shares of restricted stock are awarded based on the results
attained on the selected performance measures over the first three years of a
cycle (Performance Period). The subsequent two-year time frame represents the
period when restrictions lapse and the stock is earned (Earn-out Period). Shares
are earned-out at the rate of 50% per year. Awards are made in the Spring of the
year immediately following the third year of each Performance Period. During the
Earn-out Period, the shares are held by the Company in escrow for the executive.
The executive receives dividends on the restricted stock during the two-year
Earn-out Period.
The number of restricted shares granted for each cycle is determined by a
formula that considers the executive's base salary, the market value of the
Company's stock and the executive's duties and responsibilities. The grant
guidelines were developed by an independent compensation consultant hired by the
Company.
Long-term objectives are established under the Plan which reflect both
Quantitative and Qualitative measures. Results achieved on the Quantitative
component determine 70% of the restricted share Award and results achieved on
the Qualitative component determine 30% of the Award.
The Quantitative measures include the following:
- Average Annual Return on Shareholders' Equity
- Average Annual Return on Capital
Qualitative performance measures include specific goals developed under
several categories. Each goal is also weighted according to its relative
importance to the executive's position.
At the end of each three year cycle, the Compensation Committee determines
the number of shares to be awarded to each executive based upon the actual
performance compared to the Objectives.
Based on the first three cycles completed under this Long-Term Incentive
Plan covering the seven year period from 1987 through 1994, a total of 77,900
shares of stock have been awarded net of forfeitures. The number of key
management participants in each cycle has been between 33 and 35.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OFFICER COMPENSATION POLICY
In making determinations regarding compensation, the Committee takes into
account the duties of the respective employee and their contribution to the
success of the Company. In accordance with the Rules and Regulations established
by the Securities and Exchange Commission, the Company is required to disclose
certain compensation policies and practices applicable to the Chief Executive
Officer and all other Officers regarding compensation actions taken in 1994. For
this purpose, the members of the Committee, Messrs. Cornelia, Garbacz and Sotos
have prepared this report.
The Compensation Committee supports several important policies as a
framework for administering the Executive Compensation program. THESE POLICIES
ARE DESIGNED TO 1) ALIGN THE INTERESTS OF EXECUTIVES WITH THE LONG-TERM INTEREST
OF SHAREHOLDERS, 2) PROVIDE COMPETITIVE LEVELS OF COMPENSATION THAT INTEGRATE
PAY WITH THE COMPANY'S SHORT AND LONG-TERM PERFORMANCE OBJECTIVES, AND 3)
ATTRACT, MOTIVATE AND RETAIN KEY EXECUTIVES AND STRIVE FOR FAIRNESS IN THE
APPLICATION OF PAY POLICIES ALONG WITH COMMUNICATIONS PROGRAMS TO ASSURE THAT
ALL KEY EXECUTIVES UNDERSTAND THE ADMINISTRATION PROCEDURES.
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<PAGE> 11
The Committee is mindful of the new provision of the Internal Revenue Code
which may have the effect of disallowing the Company's deduction for Executive
Compensation over $1 million in any year for each of the Executive Officers
named in the Summary Compensation table. The Committee will monitor this issue
closely and determine what actions, if any, should be taken with respect to its
Executive Compensation policies in order to preserve this deduction.
Currently, executive compensation is comprised of base salary, annual
incentive bonuses, long-term incentive opportunities in the form of
performance-based restricted stock, stock options and SAR's and supplemental
executive benefits. As an employee's responsibility level increases, total
compensation emphasizes variable pay based on performance objectives over annual
base salary.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The policies and programs described above served as the basis for
determining the compensation of the Company's Chief Executive Officer.
As of May 1, 1994, the Board increased Mr. Daniel's base salary to
$410,000, a 7.9% increase. Based upon the report of an outside executive
compensation consulting firm, the Compensation Committee determined that this
increase would move Mr. Daniel's annual salary toward the market median of Chief
Executive Officers of comparable organizations. His base salary for 1994 was
approximately 5% under the average 1993 base salaries of the Chief Executive
Officers of other group companies included below on The Stock Performance Graph.
Mr. Daniel's bonus Award of $280,000 for 1994 was determined in accordance
with the Management Incentive Plan of the Company based upon 1994 earnings which
were in excess of the net earnings requirement.
In 1994, Mr. Daniel was awarded 3,500 shares of restricted stock under the
Long-Term Incentive Plan for performance during the three-year period ended
December 31, 1993. These shares were awarded in accordance with the Qualitative
part of the Plan since he met certain Corporate objectives designed to provide
for future growth of the Company. No shares were awarded to Mr. Daniel under the
Quantitative component of the Plan since the Corporate Return on Shareholders'
Equity Objective was not achieved. One-half of the shares were earned as of
January 1, 1995 and the other half will be earned as of January 1, 1996. During
the Earn-out Period, Mr. Daniel receives all dividends paid on these shares. Mr.
Daniel received the stock option grants in 1994 indicated on the above table
entitled "Stock Option Grants 1994".
PENSIONS
The Company maintains the Handy & Harman Pension Plan, a defined benefit
pension plan, which provides benefits generally to all salaried employees. The
annual benefit for each participant that retires at Normal Retirement Age (age
65) with at least 25 years of service is equal to 50% of career average pay
minus $1,125. A proportionately reduced benefit is provided for retirement at
age 65 with less than 25 years of service. The formula is applied to earnings
averaged over the period from January 1, 1993 to retirement, with a minimum of 5
years of earnings included in the average. This definition of Average Earnings
was adopted in 1992. Prior to the Amendment, the benefit was based on the
highest consecutive five years of earnings. Plan benefits accrued prior to
October 31, 1992 are subject to annual Cost of Living Adjustments up to a
maximum of 4% per year.
Career Average Pay only includes salary, not bonuses or other incentive
compensation. The Company maintains the Supplemental Executive Retirement Plan
("SERP") to provide Corporate Officers the amount of reduction in their formula
pension benefits under the Handy & Harman Pension Plan on account of the
limitation on pay under Section 401(a)(17) of the Internal Revenue Code (which
for 1995 is $150,000), and the limitation on benefits under Section 415 of the
Internal Revenue Code (which for 1995 is $120,000). The SERP also applies the
Handy & Harman Pension Plan formula to the Career Average Pay after including
fifty percent of the amounts received under the Company's Management Incentive
Plan. Amounts received under the SERP are not subject to Cost of Living
increases.
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<PAGE> 12
The following Table shows the projected Annual Retirement Benefits payable
on a 10 year certain and for life thereafter basis to each of the individuals
listed in the Summary Compensation Table at age 65 assuming continuation of
employment to age 65. The amounts shown under Salary reflect the current rate of
salary as plan compensation for Messrs. Daniel, Grzelecki, McElya, Dixon and
McLoone of $410,000, $350,000, $200,000, $155,000 and $155,000, respectively,
and include the benefits payable under both the Handy & Harman Pension Plan and
the SERP. The amount of benefits shown under Bonus would be payable under the
SERP and assumes continuation of the amount of Bonus for 1994 shown in the
Summary Compensation Table.
EXECUTIVE PENSION BENEFITS
<TABLE>
<CAPTION>
ANNUAL RETIREMENT BENEFITS FROM:
NORMAL RETIREMENT ----------------------------------
NAME DATE (NRD) SERVICE AT NRD SALARY BONUS TOTAL
----------------------- ----------------- ----------------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
R. N. Daniel........... October 1, 2000 29 yrs. $198,250 $56,719 $254,969
F. E. Grzelecki........ July 1, 2002 13 yrs. 88,465 26,845 115,310
J. S. McElya........... September 1, 2012 38 yrs. 7 mos. 96,650 29,225 125,875
P. E. Dixon............ September 1, 2009 16 yrs. 10 mos. 50,968 15,298 66,266
J. M. McLoone.......... December 1, 2007 15 yrs. 5 mos. 46,360 13,804 60,164
</TABLE>
During 1992 the Company entered into an individual retirement agreement
with Mr. Grzelecki which provides an additional retirement benefit commencing on
July 1, 1997, or his later retirement from the Company. The amount of monthly
pension vested as of June 30, 1994 was $3,000, which increases by an additional
$1,000 each subsequent June 30 during his continued employment up to a maximum
of $6,000 per month. The pension will be paid on a 10 year certain and for life
thereafter basis. The Company has purchased an annuity policy to provide a
reserve for payment of its obligation of the $3,000 per month pension accrued at
June 30, 1994, although the Company continues to be liable for payments under
the agreement.
COMPENSATION OF DIRECTORS
Each Director of the Company, other than each Officer who was also a
Director, was compensated quarterly for all services as a Director including
regular Board attendance at the rate of $20,400 per annum, which rate has been
in effect since May 1, 1989. No extra amount is payable for Committee
participation or special assignment.
The Company carries insurance providing indemnification, under certain
circumstances, to all the Directors and Officers of the Company for claims
against them by reason of, among other things, any act or failure to act in
their capacities as Directors or Officers. The current annual premium is
$345,000, all of which is paid by the Company. No sums have been paid to any
past or present Director or Officer of the Company under this or any prior
indemnification insurance policy.
The Handy & Harman Outside Director Stock Option Plan (the "Directors
Plan") which was approved by the shareholders in 1990, provides for the granting
of options to each non-employee member of the Company's Board of Directors. The
purpose of the Directors Plan is to foster and promote the long-term financial
success of the Company and materially increase shareholder value by enabling the
Company to attract and retain the services of outstanding individuals as
Directors whose judgement, interest and special effort is essential to the
successful conduct of the Company's business and affairs.
The Directors Plan provides for the granting of options to Directors of the
Company (who are not employees of the Company) to acquire an aggregate of
100,000 shares of Common Stock of the Company. The Directors Plan provides that
annual grants of options are to be made on the first business day of each year
to purchase an amount of shares determined by dividing fifty percent of the
annual outside Directors retainer fee by the fair market value of a share of
Common Stock on the date of grant. The options are exercisable for 10 years
after the date of grant. The exercise price is one dollar per share and upon
exercise payment must be
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<PAGE> 13
made in full in cash or cash equivalents. No options may be granted after
September 28, 1999. See footnote (6) to the table following the list of nominees
for Directors under the caption "Election of Directors" above.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL AGREEMENTS
In 1986, the Company entered into agreements with each of its Officers,
including Mr. Daniel and with Mr. Grzelecki in 1989 and Mr. McElya in 1992,
which agreements provide, in general, that if, after a change in control (as
defined in the agreements) of the Company, the Officer's position, duties,
responsibilities, status with the Company, base salary, employee benefits or
location are changed in a manner materially adverse to that Officer's interest,
then he may designate such change as an event which "triggers" a 3-year period
of guaranteed employment of the Officer by the Company. In December, 1988, the
Board authorized amendments to these agreements to (i) conform the definition of
"change in control" to the broader definition contained in the Company's
employee benefit Plans and (ii) provide that the Company would reimburse the
Officers for any excise tax (and any income and excise tax due with respect to
such reimbursement) imposed on payments made to such Officers in connection with
a "Change In Control" of the Company pursuant to Section 280 G of the Internal
Revenue Code of 1986, as amended. The Company also has separate agreements with
Mr. Grzelecki providing that, when his employment by the Company ends, he would
be entitled to severance rights of one year's salary plus (i) the supplement
retirement benefit described above under the caption "Executive Pension
Benefits", (ii) medical benefits for him and his wife during their lives without
cost to them in the same manner as then currently provided for active senior
Officers of the Company, (iii) certain adjustments of the exercise periods of
outstanding stock options and (iv) subject to limitations, office space and
secretarial services for a five year period.
The Company has entered into an agreement with Mr. McElya which, in
addition to the continuation of the executive agreement described above,
provides for his participation in the Company's various compensation and benefit
plans and, in the event the Handy & Harman Automotive Group, Inc., of which he
is President, should be sold, he will receive an amount equal to his annual
salary and continuation of the Company benefits he is receiving for up to one
year unless such benefits are provided by his employer.
In 1989, the Company entered into an agreement with Mr. Daniel which
replaced the one entered into with him and the other Corporate Officers of the
Company in 1986 (the "Daniel Agreement"). The Daniel Agreement provided for a
3-year period of employment commencing on May 1, 1989 which may be extended each
May 1 for an additional year. The Daniel Agreement was extended in 1994 for an
additional year. If not so extended, the Daniel Agreement terminates at the end
of its then current term. On May 1, 1994, the Board set Mr. Daniel's base salary
at $410,000 per annum and this amount may be increased at the discretion of the
Board. He is also entitled to participate in Company Benefit Plans, including
the Management Incentive Plan, the 1988 Long-Term Incentive Plan and the
Long-Term Incentive Stock Option Plan. If the Company should terminate the
Daniel Agreement other than for cause (as defined therein) or Mr. Daniel should
terminate it for good reason (as defined therein), the Company is obligated to
pay Mr. Daniel a lump sum amount equal to the Base Salary he would receive to
the end of the then current employment period plus an amount equal to the
Management Incentive Plan payment he last received times the remaining years of
the employment period or portions thereof. He also would become entitled to
additional pension benefits under the Handy & Harman Pension Plan. In May 1993
the Daniel Agreement was amended to provide that the Company would continue to
provide Medical Benefits equivalent to those received by other Officers of the
Company through the year he reaches his 65th birthday. Thereafter he will
receive normal retiree Medical Benefits.
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<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return to the cumulative total return of the
Standard & Poor's 500 Stock Index and a peer industry group of companies. The
Company is classified in the "Metal Fabricating" industry by The Value Line
Investment Survey and in the "Precious Metals" industry group by Dow Jones. The
Company has selected as its peer industry the composite of the Companies in The
Value Line and Dow Jones groupings.
PERFORMANCE CHART
<TABLE>
<CAPTION>
MEASUREMENT PERIOD HANDY &
(FISCAL YEAR COVERED) HARMAN S&P 500 PEER GROUP
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 87.53 96.89 88.83
1991 76.98 126.42 98.80
1992 98.66 136.05 96.55
1993 103.48 149.76 138.91
1994 107.46 151.74 130.93
</TABLE>
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board has appointed the firm of KPMG Peat Marwick LLP as the
independent auditors of the Company for 1995. KPMG Peat Marwick LLP and its
predecessors have served as the Company's auditors for a number of years. KPMG
Peat Marwick LLP has advised the Company that no member of the firm has any
direct or material indirect financial interest in the Company or its
subsidiaries, other than as independent auditors. A representative of KPMG Peat
Marwick LLP is expected to be present at the Meeting with an opportunity to make
a statement if he desires to do so, and to be available to respond to
appropriate questions.
A majority of the votes cast at the Meeting is required to approve the
selection of auditors. If the shareholders do not ratify the appointment of KPMG
Peat Marwick LLP as independent auditors, the Board will consider selection of
another accounting firm.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP.
PROPOSED 1995 OMNIBUS STOCK INCENTIVE PLAN
The Board has placed on the agenda for the Meeting a proposal for the
shareholders of the Company to approve the Handy & Harman 1995 Omnibus Stock
Incentive Plan (the "Plan"). The Plan has been adopted by the Board, subject to
approval by the shareholders of the Company. The Plan will, if so approved, be
substituted in part for the Handy & Harman 1991 Long-Term Incentive Stock Option
Plan (the "1991 Plan")
11
<PAGE> 15
and, therefore, shares of Common Stock previously authorized for the granting of
stock options under the 1991 Plan but not granted prior to March 24, 1995 will
no longer be available under the 1991 Plan. Any stock options previously granted
under the 1991 Plan will remain outstanding pursuant to the terms of the 1991
Plan. If the Plan is not approved, the 1991 Plan will remain in effect in its
present form. The following summary of the Plan is qualified in its entirety by
reference to the complete text of the Plan, attached hereto as Exhibit A.
Capitalized terms used herein will, unless otherwise defined, have the meanings
assigned to them in the text of the Plan.
The Plan is intended to provide officers and other employees of the Company
and its subsidiaries with appropriate incentives and rewards to encourage them
to enter into and continue in the employ of the Company and its subsidiaries and
to acquire a proprietary interest in the long-term success of the Company.
The Plan is intended to comply with the requirements of Rule 16b-3 ("Rule
16b-3") promulgated under the Securities Exchange Act of 1934, as amended. In
addition, the Plan is intended to provide performance-based compensation so as
to be eligible for compliance with Section 162(m) ("Section 162(m)") of the
Internal Revenue Code of 1986, as amended (the "Code"). Section 162(m) denies a
deduction by an employer for certain compensation in excess of $1 million per
year paid by a publicly traded corporation to the following individuals who are
employed at the end of the employer's taxable year ("Covered Employees"): the
chief executive officer, and the four most highly compensated executive officers
(other than the chief executive officer) for whom compensation disclosure is
required under the proxy rules. Certain compensation, including compensation
based on the attainment of performance goals, is excluded from this deduction
limit if certain requirements are met. Among the requirements for compensation
to qualify for this exception is that the material terms pursuant to which the
compensation is to be paid be disclosed to and approved by the shareholders in a
separate vote prior to the payment. Accordingly, if the Plan is approved by
shareholders and the other conditions of Section 162(m) relating to
performance-based compensation are satisfied, compensation paid to Covered
Employees pursuant to the Plan will not be subject to the deduction limit of
Section 162(m).
GENERAL
The Plan authorizes an aggregate of 1,000,000 shares of Common Stock that
may be subject to awards, subject to adjustment as described below; however,
upon approval of the Plan, no future options may be granted under the 1991 Plan
and 241,400 shares of Common Stock previously available for stock options under
the 1991 Plan but not covered by outstanding stock options will no longer be
available. Accordingly, only an additional 758,600 shares of Common Stock would
be available for awards under the Plan in excess of the number of shares
currently available under the 1991 Plan. Such shares may be authorized and
unissued shares, treasury shares or shares acquired by the Company for purposes
of the Plan. Generally, shares subject to an award that remain unissued upon
expiration or cancellation of the award will be available for other awards under
the Plan. The total number of shares of Common Stock subject to awards
(including awards paid in cash but denominated as shares of Common Stock)
granted to any Participant of the Plan during any taxable year of the Company
will not exceed 300,000. In the event that the Committee determines that any
dividend or other distribution, stock split, recapitalization, reorganization,
merger or other similar corporate transaction or event affects the Common Stock
such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Participants under the Plan, then the Committee
will make such equitable changes or adjustments as it deems necessary to the
aggregate number of shares available under the Plan, the limit on individual
awards, the number of shares subject to each outstanding award, and the exercise
price of each outstanding option or stock appreciation right.
Awards under the Plan may be made in the form of (i) Incentive Stock
Options, (ii) Non-Qualified Stock Options (Incentive and Non-Qualified Stock
Options are collectively referred to as "options"), (iii) stock appreciation
rights, (iv) Restricted Stock, (v) Phantom Stock and (vi) Stock Bonuses. Awards
may be granted to such officers and other employees of the Company and its
subsidiaries (including employees who are directors) as the Committee shall in
its discretion select.
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<PAGE> 16
ADMINISTRATION
The Plan will be administered by the Compensation Committee of the Board
(the "Committee"). The Committee shall, at all times, consist of two or more
persons each of whom is an "outside director" within the meaning of Section
162(m) and a "disinterested person" within the meaning of Rule 16b-3. The
Committee is authorized, among other things, to construe, interpret and
implement the provisions of the Plan, to select the persons to whom awards will
be granted, to determine the terms and conditions of such awards and to make all
other determinations deemed necessary or advisable for the administration of the
Plan.
AWARDS UNDER THE PLAN
Stock Options. Unless the Committee expressly provides otherwise, an
option will not be exercisable prior to one year after the date of grant and
will become exercisable as to 25% of the shares subject thereto on each of the
first through fourth anniversaries of the grant. The Committee will determine
each option's expiration date; provided, however, that no incentive stock option
may be exercised more than ten years after the date of grant. The purchase price
per share payable upon the exercise of an option (the "option exercise price")
will be established by the Committee, but may be no less than the Fair Market
Value of a share of Common Stock on the date of grant. The option exercise price
is payable in cash, or, with the consent of the Committee, by surrender of
shares of Common Stock held at least six months by the Participant and having a
Fair Market Value on the date of the exercise equal to the option exercise
price, by a combination of cash and shares of Common Stock or by such other
payment method as the Committee may prescribe.
Stock Appreciation Rights. Stock appreciation rights may be granted in
connection with all or any part of, or independently of, any option granted
under the Plan. A stock appreciation right granted independently of any option
will be subject to the same vesting rules as described above for options. A
stock appreciation right granted in tandem with any stock option will be
exercisable only when and to the extent the option to which it relates is
exercisable. The grantee of a stock appreciation right has the right to
surrender the stock appreciation right and receive from the Company, in cash, an
amount equal to the excess of the Fair Market Value of a share of Common Stock
over the exercise price of the stock appreciation right for each share of Common
Stock in respect of which such stock appreciation right is being exercised.
Restricted Stock. The Committee may grant or sell restricted shares of
Common Stock to such persons, in such amounts, and subject to such terms and
conditions (including the attainment of performance goals) as the Committee
shall determine in its discretion. Awards of Restricted Stock granted to
Executive Officers of the Company will be contingent on the attainment by the
Company of one or more pre-established performance goals (the "Performance
Goals") established by the Committee. The Performance Goals may be based on the
attainment by the Company (and/or its subsidiaries or divisions if applicable)
of any one or more of the following criteria: (i) a specified percentage return
on total shareholder equity of the Company; (ii) a specified percentage increase
in earnings per share of Common Stock; (iii) a specified percentage increase in
net income of the Company; and (iv) a specified percentage increase in profit
before taxation of the Company.
Phantom Stock. The Committee may grant shares of Phantom Stock to such
persons, in such amounts, and subject to such terms and conditions (including
the attainment of performance goals) as the Committee shall determine in its
discretion. If the requirements specified by the Committee are met, the grantee
of such an award will receive a cash payment equal to the Fair Market Value of
the shares covered thereby plus the dividends that would have been paid on such
shares had they actually been outstanding following the grant date. Awards of
Phantom Stock granted to Executive Officers of the Company will be contingent on
the attainment by the Company of any one or more of the Performance Goals noted
above.
Stock Bonus. The Committee may grant bonuses comprised of shares of Common
Stock free of restrictions to such persons, in such amounts, as the Committee
shall determine in its discretion. No Executive Officer shall be eligible to
receive a Stock Bonus under the Plan unless a prior determination of eligibility
is made by the Committee.
13
<PAGE> 17
OTHER FEATURES OF THE PLAN
The Board may suspend, discontinue, revise, terminate or amend the Plan at
any time; provided, however, that shareholder approval will be obtained if and
to the extent required by Rule 16b-3, and if and to the extent that the Board
deems it appropriate to satisfy Section 162(m).
In the event of a Change in Control, all outstanding awards will become
fully vested and/or immediately exercisable.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a brief summary of the principal United States
Federal income tax consequences under current Federal income tax laws relating
to awards under the Plan. This summary is not intended to be exhaustive and,
among other things, does not describe state, local or foreign income and other
tax consequences.
Non-Qualified Stock Options. An optionee will not recognize any taxable
income upon the grant of a Non-Qualified Stock Option. The Company will not be
entitled to a tax deduction with respect to the grant of a Non-Qualified Stock
Option. Upon exercise of a Non-Qualified Stock Option, the excess of the Fair
Market Value of the Common Stock on the exercise date over the option exercise
price will be taxable as compensation income to the optionee and will be subject
to applicable withholding taxes. The Company will generally be entitled to a tax
deduction at such time in the amount of such compensation income. The optionee's
tax basis for the Common Stock received pursuant to the exercise of a
Non-Qualified Stock Option will equal the sum of the compensation income
recognized and the exercise price.
In the event of a sale of Common Stock received upon the exercise of a
Non-Qualified Stock Option, any appreciation or depreciation after the exercise
date generally will be taxed as capital gain or loss and will be long-term
capital gain or loss if the holding period for such Common Stock is more than
one year.
Incentive Stock Options. An optionee will not recognize any taxable income
at the time of grant or timely exercise of an Incentive Stock Option and the
Company will not be entitled to a tax deduction with respect to such grant or
exercise. Exercise of an Incentive Stock Option may, however, give rise to
taxable compensation income subject to applicable withholding taxes, and a tax
deduction to the Company, if the Incentive Stock Option is not exercised on a
timely basis (generally, while the optionee is employed by the Company or within
90 days after termination of employment) or if the optionee subsequently engages
in a "disqualifying disposition," as described below.
A sale or exchange by an optionee of shares acquired upon the exercise of
an Incentive Stock Option more than one year after the transfer of the shares to
such optionee and more than two years after the date of grant of the Incentive
Stock Option will result in any difference between the net sale proceeds and the
exercise price being treated as long-term capital gain (or loss) to the
optionee. If such sale or exchange takes place within two years after the date
of grant of the Incentive Stock Option or within one year from the date of
transfer of the Incentive Stock Option shares to the optionee, such sale or
exchange will generally constitute a "disqualifying disposition" of such shares
that will have the following results: any excess of (i) the lesser of (a) the
Fair Market Value of the shares at the time of exercise of the Incentive Stock
Option and (b) the amount realized on such disqualifying disposition of the
shares over (ii) the option exercise price of such shares, will be ordinary
income to the optionee, subject to applicable withholding taxes, and the Company
will be entitled to a tax deduction in the amount of such income. Any further
gain or loss after the date of exercise generally will qualify as capital gain
or loss and will not result in any deduction by the Company.
Restricted Stock. A grantee will not recognize any income upon the receipt
of Restricted Stock unless the holder elects under Section 83(b) of the Code,
within thirty days of such receipt, to recognize ordinary income in an amount
equal to the Fair Market Value of the Restricted Stock at the time of receipt,
less any amount paid for the shares. If the election is made, the holder will
not be allowed a deduction for amounts subsequently required to be returned to
the Company. If the election is not made, the holder will generally recognize
ordinary income, on the date that the restrictions to which the Restricted Stock
are subject are removed, in an amount equal to the Fair Market Value of such
shares on such date, less any amount paid for
14
<PAGE> 18
the shares. At the time the holder recognizes ordinary income, the Company
generally will be entitled to a deduction in the same amount.
Generally, upon a sale or other disposition of Restricted Stock with
respect to which the holder has recognized ordinary income (i.e., a Section
83(b) election was previously made or the restrictions were previously removed),
the holder will recognize capital gain or loss in an amount equal to the
difference between the amount realized on such sale or other disposition and the
holder's basis in such shares. Such gain or loss will be long-term capital gain
or loss if the holding period for such shares is more than one year.
Other Awards. The grant of a stock appreciation right or Phantom Stock
award will not result in income for the grantee or in a tax deduction for the
Company. Upon the settlement of such a right or award, the grantee will
recognize ordinary income equal to the aggregate value of the payment received,
and the Company generally will be entitled to a tax deduction in the same
amount. A Stock Bonus generally will result in compensation income for the
grantee, and a tax deduction for the Company, equal to the Fair Market Value of
the shares of Common Stock granted.
Inasmuch as awards under the Plan will be granted at the sole discretion of
the Committee and that performance goal criteria may vary from year to year and
from Participant to Participant, benefits under the Plan are not determinable.
Compensation paid and other benefits granted for the 1994 fiscal year are set
forth above in the section entitled "Executive Compensation" commencing on page
4.
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote at the Meeting is required to approve the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE HANDY & HARMAN
1995 OMNIBUS STOCK INCENTIVE PLAN.
SHAREHOLDER PROPOSAL RE
GOLDEN PARACHUTE RESOLUTION
William Steiner of 4 Radcliff Drive, Great Neck, New York 11024, who has
stated that he has owned shares of the Company's Stock with a market value of at
least $1,000 continuously for the preceding year, has asked that the following
resolution, which he intends to introduce at the Annual Meeting and the reasons
in support of the resolution be set forth in this Proxy Statement:
"RESOLVED, that the shareholders recommend that the board of directors
adopt a policy against entering into future agreements with officers and
directors of this corporation which provide compensation contingent on a change
of control of the corporation, unless such compensation agreements are submitted
to a vote of the shareholders and approved by a majority of shares present and
voting on the issue."
SUPPORTING STATEMENT
PREPARED BY WILLIAM STEINER
"Lucrative severance contracts awarded to senior corporate executives which
provide compensation contingent on a change of control, usually through a merger
or acquisition of the corporation, are known as "golden parachutes". These
contracts are awarded without shareholder approval.
The practice of providing these large cash awards to a small group of
senior corporate managers without shareholder approval has been a subject of
public outcry. In 1988, the U.S. Senate in emphasizing the potential conflict of
interest between management and shareholders created by these agreements voted
ninety-eight to one to require shareholder approval of golden parachutes which
exceed three times annual compensation.
Although final action was not taken, it is clear to me that the
overwhelming vote in favor of the measure reflects public sentiment against
golden parachutes. A shareholder vote would allow the corporation's owners to
decide for themselves whether golden parachutes are in their best interests.
15
<PAGE> 19
As a founding member of the Investors Rights Association of America it is
clear to me that requiring a shareholder vote is necessary to address the
conflicts of interest between management and shareholders that arise in the
awarding of golden parachutes.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS RESOLUTION PROPOSED
BY MR. STEINER.
OTHER BUSINESS
Management knows of no other business which will be presented for
consideration at the Meeting. However, if any other business is properly brought
before the Meeting or any adjournment thereof, the persons appointed as Proxy
Agents in the accompanying Proxy will vote thereon in accordance with their best
judgement.
SHAREHOLDER PROPOSALS FOR 1996
Shareholders intending to nominate director candidates for election at the
1996 Annual Meeting or to bring any other matter before the 1996 Annual Meeting
must deliver written notice, including specified information, to the Secretary
of the Company not less than 50 days nor more than 75 days prior to the 1996
Annual Meeting, provided that if less than 65 days' notice or prior public
disclosure of the date of the 1996 Annual Meeting is given or made to
shareholders, shareholders must deliver written notice to the Secretary not
later than the close of business on the 15th day following the day on which such
notice of the date of the 1996 Annual Meeting was mailed or such public
disclosure was made. Any matter proposed to be brought before the 1996 Annual
Meeting must be timely noticed to the Company as discussed above.
In addition, proposals by shareholders which are intended to be considered
for inclusion in the Company's proxy statement and proxy card for the 1996
Annual Meeting must be received by the Secretary of the Company in writing not
later than December 1, 1995. The inclusion of any proposal will be subject to
applicable rules of the Securities and Exchange Commission.
SOLICITATION OF PROXIES
The Company will bear the cost of soliciting Proxies for the Meeting. The
Company has retained Georgeson & Company Inc., Wall Street Plaza, New York, New
York to assist it in the solicitation of proxies from brokers, banks and other
institutional holders. It is estimated that the fees for the services of that
firm will be $9,000, and the Company will also reimburse that firm for its
reasonable out-of-pocket expenses incurred in connection with providing the
services. In addition to solicitation by mail and by Georgeson & Company Inc.,
the Proxies may be solicited by Officers and regular employees of the Company
personally or by telephone, telecopier or telegraph. The Company will reimburse
banks, brokers and other nominees,
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custodians and fiduciaries for their reasonable direct and indirect expenses
incurred in forwarding proxy material to beneficial owners and seeking
authorization for the execution of Proxies.
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
By order of the Board of Directors,
PAUL E. DIXON
Secretary
Dated: March 31, 1995
10-K REPORT
Upon written request, the Company will provide, without charge, a copy of
its Annual Report on Form 10-K, including the financial statements and the
financial statement schedules thereto, but without Exhibits, as filed with the
Securities and Exchange Commission, for the fiscal year ended December 31, 1994.
Copies of the Exhibits will be furnished at the Company's cost for the
reproduction, postage and handling thereof. Letters requesting the 10-K Report
should be addressed to the Corporate Secretary, Handy & Harman, 250 Park Avenue,
New York, N.Y. 10177.
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EXHIBIT A
HANDY & HARMAN
1995 OMNIBUS STOCK INCENTIVE PLAN
1. ESTABLISHMENT AND PURPOSE.
There is hereby adopted the Handy & Harman 1995 Omnibus Stock Incentive
Plan (the "Plan"). The Plan shall be the successor to the Handy & Harman
Long-Term Incentive Stock Option Plan (the "Predecessor Plan"). Upon adoption of
the Plan by the Board of Directors and approval of the Plan by stockholders of
Handy & Harman, no further awards shall be made under the Predecessor Plan. If
the Plan is not approved by the stockholders of Handy & Harman, the Predecessor
Plan shall remain in full force and effect. This Plan is intended to promote the
interests of the Company and the stockholders of Handy & Harman by providing
officers and other employees of the Company (including directors who are also
employees of the Company) with appropriate incentives and rewards to encourage
them to enter into and continue in the employ of the Company and to acquire a
proprietary interest in the long-term success of the Company.
2. DEFINITIONS.
As used in the Plan, the following definitions apply to the terms indicated
below:
(a) "Agreement" shall mean the written agreement between Handy &
Harman and a Participant evidencing an Incentive Award.
(b) "Board of Directors" shall mean the Board of Directors of Handy &
Harman.
(c) "Cause," when used in connection with the termination of a
Participant's employment by the Company, shall mean (i) the willful and
continued failure by the Participant substantially to perform his duties
and obligations to the Company (other than any such failure resulting from
his incapacity due to physical or mental illness) or (ii) the willful
engaging by the Participant in misconduct which is materially injurious to
the Company. For purposes of this Section 2(c), no act, or failure to act,
on a Participant's part shall be considered "willful" unless done, or
omitted to be done, by the Participant in bad faith and without reasonable
belief that his action or omission was in the best interest of the Company.
The Committee shall determine whether a termination of employment is for
Cause.
(d) "Change in Control" shall mean any of the following occurrences:
(i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company or any corporation owned, directly or indirectly, by the
stockholders of Handy & Harman in substantially the same proportions as
their ownership of stock of Handy & Harman), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Handy & Harman representing 25%
or more of the combined voting power of Handy & Harman's then
outstanding securities;
(ii) during any period of not more than two consecutive years (not
including any period prior to the adoption of the Plan), individuals who
at the beginning of such period constitute the Board of Directors and
any new director (other than a director designated by a person who has
entered into an agreement with Handy & Harman to effect a transaction
described in clause (i), (iii) or (iv) of this Section) whose election
by the Board of Directors or nomination for election by Handy & Harman's
stockholders was approved by a vote of at least two-thirds ( 2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a
majority thereof;
(iii) the stockholders of Handy & Harman approve a merger or
consolidation of Handy & Harman with any other corporation, other than
(A) a merger or consolidation which would
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result in the voting securities of Handy & Harman outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than 70% of the combined voting power of the
voting securities of Handy & Harman or such surviving entity outstanding
immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of Handy & Harman
(or similar transaction) in which no "person" (as hereinabove defined)
acquires more than 50% of the combined voting power of Handy & Harman's
then outstanding securities; or
(iv) the stockholders of Handy & Harman approve a plan of complete
liquidation of Handy & Harman or an agreement for the sale or
disposition by Handy & Harman of all or substantially all of Handy &
Harman's assets.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(f) "Committee" shall mean the Compensation Committee of the Board of
Directors. The Committee shall consist of two or more persons each of whom
is an "outside director" within the meaning of Section 162(m) of the Code
and a "disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act.
(g) "Company" shall mean, collectively, Handy & Harman and each of its
subsidiaries now held or hereinafter acquired.
(h) "Company Stock" shall mean the common stock of Handy & Harman, par
value $1.00 per share.
(i) "Disability" shall mean: (1) any physical or mental condition that
would qualify a Participant for a disability benefit under the long-term
disability plan maintained by the Company and applicable to him; or (2)
when used in connection with the exercise of an Incentive Stock Option
following termination of employment, disability within the meaning of
Section 22(e)(3) of the Code.
(j) "Effective Date" shall mean the date upon which this Plan is
adopted by the Board of Directors.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(l) "Executive Officer" shall have the meaning set forth in Rule 3b-7
promulgated under the Exchange Act.
(m) The "Fair Market Value" of a share of Company Stock, as of a date
of determination, shall mean (i) the closing sales price per share of
Company Stock on the national securities exchange on which such stock is
principally traded for the last preceding date on which there was a sale of
such stock on such exchange, or (ii) if the shares of Company Stock are not
listed or admitted to trading on any such exchange, the closing price as
reported by the Nasdaq Stock Market for the last preceding date on which
there was a sale of such stock on such exchange, or (iii) if the shares of
Company Stock are not then listed on the Nasdaq Stock Market, the average
of the highest reported bid and lowest reported asked prices for the shares
of Company Stock as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System for the last preceding date on
which there was a sale of such stock in such market, or (iv) if the shares
of Company Stock are not then listed on a national securities exchange or
traded in an over-the-counter market or the value of such shares not
otherwise determinable, such value as determined by the Committee in good
faith.
(n) "Handy & Harman" shall mean Handy & Harman, a New York
corporation.
(o) "Incentive Award" shall mean an Option, Tandem SAR, Stand-Alone
SAR, Restricted Stock grant, Phantom Stock grant or Stock Bonus granted
pursuant to the terms of the Plan.
(p) "Incentive Stock Option" shall mean an Option that is an
"incentive stock option" within the meaning of Section 422 of the Code.
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(q) "Issue Date" shall mean the date established by Handy & Harman on
which certificates representing shares of Restricted Stock shall be issued
by Handy & Harman pursuant to the terms of Section 10(e).
(r) "Non-Qualified Stock Option" shall mean an Option that is not an
Incentive Stock Option.
(s) "Option" shall mean an option to purchase shares of Company Stock
granted pursuant to Section 7.
(t) "Participant" shall mean an employee of the Company to whom an
Incentive Award is granted pursuant to the Plan, and, upon his death, his
successors, heirs, executors and administrators, as the case may be.
(u) "Phantom Stock" shall mean the right, granted pursuant to Section
11, to receive in cash the Fair Market Value of a share of Company Stock.
(v) "Plan" shall mean this Handy & Harman 1995 Omnibus Stock Incentive
Plan, as amended from time to time.
(w) "Predecessor Plan" shall mean the Handy & Harman Long-Term
Incentive Stock Option Plan.
(x) "Restricted Stock" shall mean a share of Company Stock which is
granted pursuant to the terms of Section 10 hereof and which is subject to
the restrictions set forth in Section 10(c).
(y) "Rule 16b-3" shall mean the Rule 16b-3 promulgated under the
Exchange Act.
(z) "Section 162(m)" shall mean Section 162(m) of the Code and the
regulations promulgated thereunder.
(aa) "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
(ab) "Stand-Alone SAR" shall mean a stock appreciation right granted
pursuant to Section 9 which is not related to any Option.
(ac) "Stock Bonus" shall mean a bonus payable in shares of Company
Stock granted pursuant to Section 12.
(ad) "Subsidiary" shall mean a "subsidiary corporation" within the
meaning of Section 424(f) of the Code.
(ae) "Tandem SAR" shall mean a stock appreciation right granted
pursuant to Section 8 which is related to an Option.
(af) "Vesting Date" shall mean the date established by the Committee
on which a share of Restricted Stock or Phantom Stock may vest.
3. STOCK SUBJECT TO THE PLAN.
(a) Shares Available for Awards.
The maximum number of shares of Company Stock reserved for issuance under
the Plan shall be 1,000,000 shares (subject to adjustment as provided herein).
Such shares may be authorized but unissued Company Stock or authorized and
issued Company Stock held in the Handy & Harman's treasury or acquired by Handy
& Harman for the purposes of the Plan. The Committee may direct that any stock
certificate evidencing shares issued pursuant to the Plan shall bear a legend
setting forth such restrictions on transferability as may apply to such shares
pursuant to the Plan.
The grant of a Tandem SAR shall not reduce the number of shares of Company
Stock with respect to which Incentive Awards may be granted pursuant to the
Plan. Upon the exercise of any Incentive Award granted in tandem with any other
Incentive Awards, such related Awards shall be cancelled to the extent of
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the number of shares of Company Stock as to which the Incentive Award is
exercised and, notwithstanding the foregoing, such number of shares shall no
longer be available for Incentive Awards under the Plan.
(b) Individual Limitation.
The total number of shares of Company Stock subject to Incentive Awards
(including Incentive Awards payable in cash but denominated as shares of Company
Stock, i.e., Stand-Alone SARs and Phantom Stock), awarded to any employee during
any tax year of the Company, shall not exceed 300,000 shares. Determinations
under the preceding sentence shall be made in a manner that is consistent with
Section 162(m).
(c) Adjustment for Change in Capitalization.
In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Company Stock, or other property),
recapitalization, Company Stock split, reverse Company Stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Company Stock such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants under the Plan, then the
Committee shall make such equitable changes or adjustments as it deems necessary
or appropriate to any or all of (i) the number and kind of shares of Company
Stock which may thereafter be issued in connection with Incentive Awards, (ii)
the number and kind of shares of Company Stock issued or issuable in respect of
outstanding Incentive Awards, and (iii) the exercise price, grant price, or
purchase price relating to any Incentive Award; provided that, with respect to
Incentive Stock Options, such adjustment shall be made in accordance with
Section 424 of the Code.
(d) Re-use of Shares.
The following shares of Company Stock shall again become available for
Incentive Awards; any shares subject to an Incentive Award that remain unissued
upon the cancellation, surrender, exchange or termination of such award for any
reason whatsoever; any shares of Restricted Stock forfeited; and any shares in
respect of which a stock appreciation right is settled for cash.
4. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Committee. The Committee shall have
the authority in its sole discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Incentive Awards; to determine the persons to
whom and the time or times at which Incentive Awards shall be granted; to
determine the type and number of Incentive Awards to be granted, the number of
shares of Stock to which an Award may relate and the terms, conditions,
restrictions and performance criteria relating to any Incentive Award; to
determine whether, to what extent, and under what circumstances an Incentive
Award may be settled, cancelled, forfeited, exchanged, or surrendered (provided
that in no event shall the foregoing be construed to permit the repricing of an
Option (whether by amendment, cancellation and regrant or otherwise) to a lower
exercise price); to make adjustments in the performance goals in recognition of
unusual or non-recurring events affecting the Company or the financial
statements of the Company (to the extent in accordance with Section 162(m), if
applicable), or in response to changes in applicable laws, regulations, or
accounting principles; to construe and interpret the Plan and any Incentive
Award; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of Agreements; and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
The Committee may, in its absolute discretion, without amendment to the
Plan, (i) accelerate the date on which any Option or Stand-Alone SAR granted
under the Plan becomes exercisable, waive or amend the operation of Plan
provisions respecting exercise after termination of employment or otherwise
adjust any of the terms of such Option or Stand-Alone SAR, and (ii) accelerate
the Vesting Date or Issue Date, or waive any
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condition imposed hereunder, with respect to any share of Restricted Stock or
Phantom Stock or otherwise adjust any of the terms applicable to such share.
No member of the Committee shall be liable for any action, omission or
determination relating to the Plan, and the Company shall indemnify and hold
harmless each member of the Committee and each other director or employee of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Committee) arising out of any action, omission or
determination relating to the Plan, unless, in either case, such action,
omission or determination was taken or made by such member, director or employee
in bad faith and without reasonable belief that it was in the best interests of
the Company.
5. ELIGIBILITY.
The persons who shall be eligible to receive Incentive Awards pursuant to
the Plan shall be such employees of the Company (including officers of the
Company, whether or not they are directors of Handy & Harman) as the Committee
shall select from time to time. Directors who are not employees or officers of
the Company shall not be eligible to receive Incentive Awards under the Plan.
6. AWARDS UNDER THE PLAN; AGREEMENT.
The Committee may grant Options, Tandem SARs, Stand-Alone SARs, shares of
Restricted Stock, shares of Phantom Stock and Stock Bonuses, in such amounts and
with such terms and conditions as the Committee shall determine, subject to the
provisions of the Plan.
Each Incentive Award granted under the Plan (except an unconditional Stock
Bonus) shall be evidenced by an Agreement which shall contain such provisions as
the Committee may in its sole discretion deem necessary or desirable. By
accepting an Incentive Award, a Participant thereby agrees that the award shall
be subject to all of the terms and provisions of the Plan and the applicable
Agreement.
7. OPTIONS.
(a) Identification of Options.
Each Option shall be clearly identified in the applicable Agreement as
either an Incentive Stock Option or a Non-Qualified Stock Option.
(b) Exercise Price.
Each Agreement with respect to an Option shall set forth the amount (the
"option exercise price") payable by the grantee to the Company upon exercise of
the Option. The option exercise price per share shall be determined by the
Committee but shall in no event be less than the Fair Market Value of a share of
Company Stock on the date the Option is granted.
(c) Term and Exercise of Options.
(1) Unless the applicable Agreement provides otherwise, an Option shall
become cumulatively exercisable as to 25 percent of the shares covered thereby
on each of the first, second, third and fourth anniversaries of the date of
grant. The Committee shall determine the expiration date of each Option;
provided, however, that no Incentive Stock Option shall be exercisable more than
10 years after the date of grant. Unless the applicable Agreement provides
otherwise, no Option shall be exercisable prior to the first anniversary of the
date of grant.
(2) An Option may be exercised for all or any portion of the shares as to
which it is exercisable, provided, that no partial exercise of an Option shall
be for an aggregate exercise price of less than $1,000. The partial exercise of
an Option shall not cause the expiration, termination or cancellation of the
remaining portion thereof.
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(3) An Option shall be exercised by delivering notice to Handy & Harman's
principal office, to the attention of its Secretary, no less than one business
day in advance of the effective date of the proposed exercise. Such notice shall
be accompanied by the applicable Agreement, shall specify the number of shares
of Company Stock with respect to which the Option is being exercised and the
effective date of the proposed exercise and shall be signed by the Participant
or other person then having the right to exercise the Option. Such notice may be
withdrawn at any time prior to the close of business on the business day
immediately preceding the effective date of the proposed exercise. Payment for
shares of Company Stock purchased upon the exercise of an Option shall be made
on the effective date of such exercise by one or a combination of the following
means: (i) in cash, by certified check, bank cashier's check or wire transfer;
(ii) subject to the approval of the Committee, in shares of Company Stock owned
by the Participant for at least six months prior to the date of exercise and
valued at their Fair Market Value on the effective date of such exercise; or
(iii) subject to the approval of the Committee, by such other provision as the
Committee may from time to time authorize. Any payment in shares of Company
Stock shall be effected by the delivery of such shares to the Secretary of Handy
& Harman, duly endorsed in blank or accompanied by stock powers duly executed in
blank, together with any other documents and evidences as the Secretary of Handy
& Harman shall require.
(4) Certificates for shares of Company Stock purchased upon the exercise of
an Option shall be issued in the name of the Participant or other person
entitled to receive such shares, and delivered to the Participant or such other
person as soon as practicable following the effective date on which the Option
is exercised.
(d) Limitations on Incentive Stock Options.
(1) To the extent that the aggregate Fair Market Value of shares of Company
Stock with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year under the Plan and any
other stock option plan of the Company (or any Subsidiary) shall exceed
$100,000, or such higher value as may be permitted under Section 422 of the
Code, such Options shall be treated as Non-Qualified Stock Options. Such Fair
Market Value shall be determined as of the date on which each such Incentive
Stock Option is granted.
(2) No Incentive Stock Option may be granted to an individual if, at the
time of the proposed grant, such individual owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company or any Subsidiary unless (i) the exercise price of such Incentive Stock
Option is at least 110 percent of the Fair Market Value of a share of Company
Stock at the time such Incentive Stock Option is granted and (ii) such Incentive
Stock Option is not exercisable after the expiration of five years from the date
such Incentive Stock Option is granted.
(e) Effect of Termination of Employment.
(1) Unless the applicable Agreement provides otherwise, in the event that
the employment of a Participant with the Company shall terminate for any reason
other than Cause, Disability or death (i) Options granted to such Participant,
to the extent that they are exercisable at the time of such termination, shall
remain exercisable until the date that is three months after such termination,
on which date they shall expire, and (ii) Options granted to such Participant,
to the extent that they were not exercisable at the time of such termination,
shall expire at the close of business on the date of such termination. The
three-month period described in this Section 7(e)(1) shall be extended to one
year in the event of the Participant's death during such three-month period.
Notwithstanding the foregoing, no Option shall be exercisable after the
expiration of its term.
(2) Unless the applicable Agreement provides otherwise, in the event that
the employment of a Participant with the Company shall terminate on account of
the Disability or death of the Participant (i) Options granted to such
Participant, to the extent that they were exercisable at the time of such
termination, shall remain exercisable until the first anniversary of such
termination, on which date they shall expire, and (ii) Options granted to such
Participant, to the extent that they were not exercisable at the time of such
termination, shall expire at the close of business on the date of such
termination; provided, however, that no Option shall be exercisable after the
expiration of its term.
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(3) In the event of the termination of a Participant's employment for
Cause, all outstanding Options granted to such Participant shall expire at the
commencement of business on the date of such termination.
(f) Acceleration of Exercise Date Upon Change in Control.
Upon the occurrence of a Change in Control, each Option granted under the
Plan and outstanding at such time shall become fully and immediately exercisable
and shall remain exercisable until its expiration, termination or cancellation
pursuant to the terms of the Plan.
8. TANDEM SARS.
The Committee may grant in connection with any Option granted hereunder one
or more Tandem SARs relating to a number of shares of Company Stock less than or
equal to the number of shares of Company Stock subject to the related Option. A
Tandem SAR may be granted at the same time as, or, in the case of a Non-
Qualified Stock Option, subsequent to the time that, its related Option is
granted.
(a) Benefit Upon Exercise.
The exercise of a Tandem SAR with respect to any number of shares of
Company Stock shall entitle the Participant to a cash payment, for each such
share, equal to the excess of (i) the Fair Market Value of a share of Company
Stock on the exercise date over (ii) the option exercise price of the related
Option. Such payment shall be made as soon as practicable after the effective
date of such exercise.
(b) Term and Exercise of Tandem SAR.
(1) A Tandem SAR shall be exercisable only if and to the extent that its
related Option is exercisable.
(2) The exercise of a Tandem SAR with respect to a number of shares of
Company Stock shall cause the immediate and automatic cancellation of its
related Option with respect to an equal number of shares. The exercise of an
Option, or the cancellation, termination or expiration of an Option (other than
pursuant to this Section 8(b)(2)), with respect to a number of shares of Company
Stock shall cause the automatic and immediate cancellation of any related Tandem
SARs to the extent that the number of shares of Company Stock remaining subject
to such Option is less than the number of shares subject to such Tandem SARs.
Such Tandem SARs shall be cancelled in the order in which they become
exercisable.
(3) A Tandem SAR may be exercised for all or any portion of the shares as
to which it is exercisable; provided, that no partial exercise of a Tandem SAR
shall be for an aggregate exercise price of less than $1,000. The partial
exercise of a Tandem SAR shall not cause the expiration, termination or
cancellation of the remaining portion thereof.
(4) No Tandem SAR shall be assignable or transferable otherwise than
together with its related Option.
(5) A Tandem SAR shall be exercised by delivering notice to Handy &
Harman's principal office, to the attention of its Secretary, no less than one
business day in advance of the effective date of the proposed exercise. Such
notice shall be accompanied by the applicable Agreement, shall specify the
number of shares of Company Stock with respect to which the Tandem SAR is being
exercised and the effective date of the proposed exercise and shall be signed by
the Participant or other person then having the right to exercise the Option to
which the Tandem SAR is related. Such notice may be withdrawn at any time prior
to the close of business on the business day immediately preceding the effective
date of the proposed exercise.
9. STAND-ALONE SARS.
(a) Exercise Price.
The exercise price per share of a Stand-Alone SAR shall be determined by
the Committee at the time of grant, but shall in no event be less than the Fair
Market Value of a share of Company Stock on the date of grant.
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(b) Benefit Upon Exercise.
The exercise of a Stand-Alone SAR with respect to any number of shares of
Company Stock shall entitle the Participant to a cash payment, for each such
share, equal to the excess of (i) the Fair Market Value of a share of Company
Stock on the exercise date over (ii) the exercise price of the Stand-Alone SAR.
Such payments shall be made as soon as practicable.
(c) Term and Exercise of Stand-Alone SARs.
(1) Unless the applicable Agreement provides otherwise, a Stand-Alone SAR
shall become cumulatively exercisable as to 25 percent of the shares covered
thereby on each of the first, second, third and fourth anniversaries of the date
of grant. The Committee shall determine the expiration date of each Stand-Alone
SAR. Unless the applicable Agreement provides otherwise, no Stand-Alone SAR
shall be exercisable prior to the first anniversary of the date of grant.
(2) A Stand-Alone SAR may be exercised for all or any portion of the shares
as to which it is exercisable; provided, that no partial exercise of a
Stand-Alone SAR shall be for an aggregate exercise price of less than $1,000.
The partial exercise of a Stand-Alone SAR shall not cause the expiration,
termination or cancellation of the remaining portion thereof.
(3) A Stand-Alone SAR shall be exercised by delivering notice to Handy &
Harman's principal office, to the attention of its Secretary, no less than one
business day in advance of the effective date of the proposed exercise. Such
notice shall be accompanied by the applicable Agreement, shall specify the
number of shares of Company Stock with respect to which the Stand-Alone SAR is
being exercised, and the effective date of the proposed exercise, and shall be
signed by the Participant. The Participant may withdraw such notice at any time
prior to the close of business on the business day immediately preceding the
effective date of the proposed exercise.
(d) Effect of Termination of Employment.
The provisions set forth in Section 7(e) with respect to the exercise of
Options following termination of employment shall apply as well to such exercise
of Stand-Alone SARs.
(e) Acceleration of Exercise Date Upon Change in Control.
Upon the occurrence of a Change in Control, any Stand-Alone SAR granted
under the Plan and outstanding at such time shall become fully and immediately
exercisable and shall remain exercisable until its expiration, termination or
cancellation pursuant to the terms of the Plan.
10. RESTRICTED STOCK.
(a) Issue Date and Vesting Date.
At the time of the grant of shares of Restricted Stock, the Committee shall
establish an Issue Date or Issue Dates and a Vesting Date or Vesting Dates with
respect to such shares. The Committee may divide such shares into classes and
assign a different Issue Date and/or Vesting Date for each class. If the grantee
is employed by the Company on an Issue Date (which may be the date of grant),
the specified number of shares of Restricted Stock shall be issued in accordance
with the provisions of Section 10(e). Provided that all conditions to the
vesting of a share of Restricted Stock imposed pursuant to Section 10(b) are
satisfied, and except as provided in Section 10(g), upon the occurrence of the
Vesting Date with respect to a share of Restricted Stock, such share shall vest
and the restrictions of Section 10(c) shall lapse.
(b) Conditions to Vesting.
At the time of the grant of shares of Restricted Stock, the Committee may
impose such restrictions or conditions to the vesting of such shares as it, in
its absolute discretion, deems appropriate.
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(c) Restrictions on Transfer Prior to Vesting.
Prior to the vesting of a share of Restricted Stock, no transfer of a
Participant's rights with respect to such share, whether voluntary or
involuntary, by operation of law or otherwise, shall be permitted. Immediately
upon any attempt to transfer such rights, such share, and all of the rights
related thereto, shall be forfeited by the Participant.
(d) Dividends on Restricted Stock.
The Committee in its discretion may require that any dividends paid on
shares of Restricted Stock shall be held in escrow until all restrictions on
such shares have lapsed.
(e) Issuance of Certificates.
(1) Reasonably promptly after the Issue Date with respect to shares of
Restricted Stock, Handy & Harman shall cause to be issued a stock certificate,
registered in the name of the Participant to whom such shares were granted,
evidencing such shares; provided, that Handy & Harman shall not cause such a
stock certificate to be issued unless it has received a stock power duly
endorsed in blank with respect to such shares. Each such stock certificate shall
bear the following legend:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED
HEREBY ARE SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS (INCLUDING
FORFEITURE PROVISIONS AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE
HANDY & HARMAN 1995 OMNIBUS STOCK INCENTIVE PLAN AND AN AGREEMENT ENTERED
INTO BETWEEN THE REGISTERED OWNER OF SUCH SHARES AND HANDY & HARMAN. A COPY
OF THE PLAN AND AGREEMENT IS ON FILE IN THE OFFICE OF THE SECRETARY OF
HANDY & HARMAN, 250 PARK AVENUE, NEW YORK, NEW YORK 10177.
Such legend shall not be removed until such shares vest pursuant to the terms
hereof.
(2) Each certificate issued pursuant to this Section 10(e), together with
the stock powers relating to the shares of Restricted Stock evidenced by such
certificate, shall be held by Handy & Harman unless the Committee determines
otherwise.
(f) Consequences of Vesting.
Upon the vesting of a share of Restricted Stock pursuant to the terms
hereof, the restrictions of Section 10(c) shall lapse. Reasonably promptly after
a share of Restricted Stock vests, Handy & Harman shall cause to be delivered to
the Participant to whom such shares were granted, a certificate evidencing such
share, free of the legend set forth in Section 10(e).
(g) Effect of Termination of Employment.
(1) Subject to such other provision as the Committee may set forth in the
applicable Agreement, and to the Committee's amendment authority pursuant to
Section 4, upon the termination of a Participant's employment for any reason
other than Cause, any and all shares to which restrictions on transferability
apply shall be immediately forfeited by the Participant and transferred to, and
reacquired by, Handy & Harman; provided that if the Committee, in its sole
discretion, shall within thirty (30) days after such termination of employment
notify the Participant in writing of its decision not to terminate the
Participant's rights in such shares, then the Participant shall continue to be
the owner of such shares subject to such continuing restrictions as the
Committee may prescribe in such notice. In the event of a forfeiture of shares
pursuant to this section, Handy & Harman shall repay to the Participant (or the
Participant's estate) any amount paid by the Participant for such shares. In the
event that Handy & Harman requires a return of shares, it shall also have the
right to require the return of all dividends paid on such shares, whether by
termination of any escrow arrangement under which such dividends are held or
otherwise.
(2) In the event of the termination of a Participant's employment for
Cause, all shares of Restricted Stock granted to such Participant which have not
vested as of the date of such termination shall immediately be returned to Handy
& Harman, together with any dividends paid on such shares, in return for which
Handy & Harman shall repay to the Participant any amount paid by the Participant
for such shares.
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(h) Effect of Change in Control.
Upon the occurrence of a Change in Control, all outstanding shares of
Restricted Stock which have not theretofore vested shall immediately vest and
all restrictions on such shares shall immediately lapse.
(i) Special Provisions Regarding Awards.
Notwithstanding anything to the contrary contained herein, Restricted Stock
granted pursuant to this Section 10 to Executive Officers shall be based on the
attainment by Handy & Harman or the Company (or a Subsidiary or division of
Handy & Harman if applicable) of performance goals pre-established by the
Committee, based on one or more of the following criteria: (i) the attainment of
a specified percentage return on total stockholder equity of the Company; (ii)
the attainment of a specified percentage increase in earnings per share of
Company Stock; (iii) the attainment of a specified percentage increase in net
income of the Company; and (iv) the attainment of a specified percentage
increase in profit before taxation of Handy & Harman or the Company (or a
Subsidiary or division of Handy & Harman if applicable). Each such performance
criteria shall be evaluated in accordance with generally accepted accounting
principles. Such shares of Restricted Stock shall be released from restrictions
only after the attainment of such performance measures have been certified by
the Committee.
11. PHANTOM STOCK.
(a) Vesting Date.
At the time of the grant of shares of Phantom Stock, the Committee shall
establish a Vesting Date or Vesting Dates with respect to such shares. The
Committee may divide such shares into classes and assign a different Vesting
Date for each class. Provided that all conditions to the vesting of a share of
Phantom Stock imposed pursuant to Section 11(c) are satisfied, and except as
provided in Section 11(d), upon the occurrence of the Vesting Date with respect
to a share of Phantom Stock, such share shall vest.
(b) Benefit Upon Vesting.
Upon the vesting of a share of Phantom Stock, the Participant shall be
entitled to receive in cash, within 30 days of the date on which such share
vests, an amount equal to the sum of (i) the Fair Market Value of a share of
Company Stock on the date on which such share of Phantom Stock vests and (ii)
the aggregate amount of cash dividends paid with respect to a share of Company
Stock during the period commencing on the date on which the share of Phantom
Stock was granted and terminating on the date on which such share vests.
(c) Conditions to Vesting.
At the time of the grant of shares of Phantom Stock, the Committee may
impose such restrictions or conditions to the vesting of such shares as it, in
its absolute discretion, deems appropriate.
(d) Effect of Termination of Employment.
(1) Subject to such other provision as the Committee may set forth in the
applicable Agreement, and to the Committee's amendment authority pursuant to
Section 4, shares of Phantom Stock that have not vested, together with any
dividends credited on such shares, shall be forfeited upon the Participant's
termination of employment for any reason other than Cause.
(2) In the event of the termination of a Participant's employment for
Cause, all shares of Phantom Stock granted to such Participant which have not
vested as of the date of such termination shall immediately be forfeited,
together with any dividends credited on such shares.
(e) Effect of Change in Control.
Upon the occurrence of a Change in Control, all outstanding shares of
Phantom Stock which have not theretofore vested shall immediately vest.
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<PAGE> 31
(f) Special Provisions Regarding Awards.
Notwithstanding anything to the contrary contained herein, Phantom Stock
granted pursuant to this Section 11 to Executive Officers shall be based on the
attainment by Handy & Harman or the Company (or a Subsidiary or division of
Handy & Harman if applicable) of performance goals pre-established by the
Committee, based on one or more of the following criteria: (i) the attainment of
a specified percentage return on total stockholder equity of the Company; (ii)
the attainment of a specified percentage increase in earnings per share of
Company Stock from continuing operations; (iii) the attainment of a specified
percentage increase in net income of the Company; and (iv) the attainment of a
specified percentage increase in profit before taxation of Handy & Harman or the
Company (or a Subsidiary or division of Handy & Harman if applicable). Each such
performance criteria shall be evaluated in accordance with generally accepted
accounting principles. No cash payment in respect of any Phantom Stock award
will be paid to an Executive Officer until the attainment of the respective
performance measures have been certified by the Committee.
12. STOCK BONUSES.
In the event that the Committee grants a Stock Bonus, a certificate for the
shares of Company Stock comprising such Stock Bonus shall be issued in the name
of the Participant to whom such grant was made and delivered to such Participant
as soon as practicable after the date on which such Stock Bonus is payable.
Executive Officers shall be eligible to receive Stock Bonus grants hereunder
only after a determination of eligibility is made by the Committee, in its sole
discretion.
13. RIGHTS AS A STOCKHOLDER.
No person shall have any rights as a stockholder with respect to any shares
of Company Stock covered by or relating to any Incentive Award until the date of
issuance of a stock certificate with respect to such shares. Except as otherwise
expressly provided in Section 3(c), no adjustment to any Incentive Award shall
be made for dividends or other rights for which the record date occurs prior to
the date such stock certificate is issued.
14. NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO INCENTIVE AWARD.
Nothing contained in the Plan or any Agreement shall confer upon any
Participant any right with respect to the continuation of employment by the
Company or interfere in any way with the right of the Company, subject to the
terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the
Participant.
No person shall have any claim or right to receive an Incentive Award
hereunder. The Committee's granting of an Incentive Award to a participant at
any time shall neither require the Committee to grant any other Incentive Award
to such Participant or other person at any time or preclude the Committee from
making subsequent grants to such Participant or any other person.
15. SECURITIES MATTERS.
(a) Handy & Harman shall be under no obligation to effect the registration
pursuant to the Securities Act of any interests in the Plan or any shares of
Company Stock to be issued hereunder or to effect similar compliance under any
state laws. Notwithstanding anything herein to the contrary, Handy & Harman
shall not be obligated to cause to be issued or delivered any certificates
evidencing shares of Company Stock pursuant to the Plan unless and until Handy &
Harman is advised by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authority and the requirements of any securities exchange on which
shares of Company Stock are traded. The Committee may require, as a condition of
the issuance and delivery of certificates evidencing shares of Company Stock
pursuant to the terms hereof, that the recipient of such shares make such
covenants, agreements and representations, and that such certificates bear such
legends, as the Committee, in its sole discretion, deems necessary or desirable.
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<PAGE> 32
(b) The transfer of any shares of Company Stock hereunder shall be
effective only at such time as counsel to Handy & Harman shall have determined
that the issuance and delivery of such shares is in compliance with all
applicable laws, regulations of governmental authority and the requirements of
any securities exchange on which shares of Company Stock are traded. The
Committee may, in its sole discretion, defer the effectiveness of any transfer
of shares of Company Stock hereunder in order to allow the issuance of such
shares to be made pursuant to registration or an exemption from registration or
other methods for compliance available under federal or state securities laws.
The Committee shall inform the Participant in writing of its decision to defer
the effectiveness of a transfer. During the period of such deferral in
connection with the exercise of an Option, the Participant may, by written
notice, withdraw such exercise and obtain the refund of any amount paid with
respect thereto.
16. WITHHOLDING TAXES.
Whenever cash is to be paid pursuant to an Incentive Award, the Company
shall have the right to deduct therefrom an amount sufficient to satisfy any
federal, state and local withholding tax requirements related thereto.
Whenever shares of Company Stock are to be delivered pursuant to an
Incentive Award, the Company shall have the right to require the Participant to
remit to the Company in cash an amount sufficient to satisfy any federal, state
and local withholding tax requirements related thereto. With the approval of the
Committee, a Participant may satisfy the foregoing requirement by electing to
have the Company withhold from delivery shares of Company Stock having a value
equal to the amount of tax to be withheld. Such shares shall be valued at their
Fair Market Value on the date of which the amount of tax to be withheld is
determined (the "Tax Date"). Fractional share amounts shall be settled in cash.
Such a withholding election may be made with respect to all or any portion of
the shares to be delivered pursuant to an Incentive Award.
17. NOTIFICATION OF ELECTION UNDER SECTION 83(B) OF THE CODE.
If any Participant shall, in connection with the acquisition of shares of
Company Stock under the Plan, make the election permitted under Section 83(b) of
the Code (i.e., an election to include in gross income in the year of transfer
the amounts specified in Section 83(b)), such Participant shall notify the
Company of such election within 10 days of filing notice of the election with
the Internal Revenue Service, in addition to any filing and a notification
required pursuant to regulation issued under the authority of Code Section
83(b).
18. NOTIFICATION UPON DISQUALIFYING DISPOSITION UNDER SECTION 421(B) OF THE
CODE.
Each Agreement with respect to an Incentive Stock Option shall require the
Participant to notify the Company of any disposition of shares of Company Stock
issued pursuant to the exercise of such Option under the circumstances described
in Section 421(b) of the Code (relating to certain disqualifying dispositions),
within 10 days of such disposition.
19. AMENDMENT OR TERMINATION OF THE PLAN.
The Board of Directors may, at any time, suspend or terminate the Plan or
revise or amend it in any respect whatsoever; provided, however, that
stockholder approval shall be required if and to the extent required by Rule
16b-3 or by any comparable or successor exemption under which the Board of
Directors believes it is appropriate for the Plan to qualify, or if and to the
extent the Board of Directors determines that such approval is appropriate for
purposes of satisfying Section 162(m) or 422 of the Code. Incentive Awards may
be granted under the Plan prior to the receipt of such stockholder approval but
each such grant shall be subject in its entirety to such approval and no award
may be exercised, vested or otherwise satisfied prior to the receipt of such
approval. Nothing herein shall restrict the Committee's ability to exercise its
discretionary authority pursuant to Section 4, which discretion may be exercised
without amendment to the Plan. No action hereunder may, without the consent of a
Participant, reduce the Participant's rights under any outstanding Incentive
Award.
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<PAGE> 33
20. TRANSFERS UPON DEATH; NONASSIGNABILITY.
Upon the death of a Participant, outstanding Incentive Awards granted to
such Participant may be exercised only by the executor or administrator of the
Participant's estate or by a person who shall have acquired the right to such
exercise by will or by the laws of descent and distribution. No transfer of an
Incentive Award by will or the laws of descent and distribution shall be
effective to bind the Company unless the Committee shall have been furnished
with (a) written notice thereof and with a copy of the will and/or such evidence
as the Committee may deem necessary to establish the validity of the transfer
and (b) an agreement by the transferee to comply with all the terms and
conditions of the Incentive Award that are or would have been applicable to the
Participant and to be bound by the acknowledgements made by the Participant in
connection with the grant of the Incentive Award.
During a Participant's lifetime, the Committee may permit the transfer,
assignment or other encumbrance of an outstanding Option or outstanding shares
of Restricted Stock unless (y) such Option is an Incentive Stock Option and the
Committee and the Participant intend that it shall retain such status, or (z)
the award is meant to qualify for the exemptions available under Rule 16b-3,
nontransferability is necessary under Rule 16b-3 in order for the award to so
qualify and the Committee and the Participant intend that it shall continue to
so qualify. Notwithstanding the foregoing, subject to any conditions as the
Committee may prescribe, a Participant may, upon providing written notice to the
Secretary of Handy & Harman, elect to transfer any or all Options granted to
such Participant pursuant to the Plan to members of his or her immediate family,
including, but not limited to, children, grandchildren and spouse or to trusts
for the benefit of such immediate family members or to partnerships in which
such family members are the only partners; provided, however, that no such
transfer by any Participant may be made in exchange for consideration.
21. EXPENSES AND RECEIPTS.
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Incentive Award will be used for
general corporate purposes.
22. FAILURE TO COMPLY.
In addition to the remedies of the Company elsewhere provided for herein,
failure by a Participant (or beneficiary) to comply with any of the terms and
conditions of the Plan or the applicable Agreement, unless such failure is
remedied by such Participant (or beneficiary) within ten days after notice of
such failure by the Committee, shall be grounds for the cancellation and
forfeiture of such Incentive Award, in whole or in part, as the Committee, in
its absolute discretion, may determine.
23. EFFECTIVE DATE AND TERM OF PLAN.
The Plan became effective on the Effective Date, but the Plan (and any
grants of Incentive Awards made prior to stockholder approval of the Plan) shall
be subject to the requisite approval of the stockholders of Handy & Harman. In
the absence of such approval, such Incentive Awards shall be null and void.
Unless earlier terminated by the Board of Directors, the right to grant
Incentive Awards under the Plan will terminate on the tenth anniversary of the
Effective Date. Incentive Awards outstanding at Plan termination will remain in
effect according to their terms and the provisions of the Plan.
24. APPLICABLE LAW.
Except to the extent preempted by any applicable federal law, the Plan will
be construed and administered in accordance with the laws of the State of New
York, without reference to the principles of conflicts of law.
25. PARTICIPANT RIGHTS.
No Participant shall have any claim to be granted any award under the Plan,
and there is no obligation for uniformity of treatment for Participants. Except
as provided specifically herein, a Participant or a transferee of
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<PAGE> 34
an Incentive Award shall have no rights as a stockholder with respect to any
shares covered by any award until the date of the issuance of a Company Stock
certificate to him for such shares.
26. UNFUNDED STATUS OF AWARDS.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant pursuant to an Incentive Award, nothing contained in the Plan or any
Agreement shall give any such Participant any rights that are greater than those
of a general creditor of the Company.
27. NO FRACTIONAL SHARES.
No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan. The Committee shall determine whether cash, other Incentive Awards,
or other property shall be issued or paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.
28. BENEFICIARY.
A Participant may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Participant, the executor or administrator of the Participant's
estate shall be deemed to be the grantee's beneficiary.
29. INTERPRETATION.
The Plan is designed and intended to comply with Rule 16b-3 promulgated
under the Exchange Act and, with Section 162(m) of the Code, and all provisions
hereof shall be construed in a manner to so comply.
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<PAGE> 35
HANDY & HARMAN
P PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING MAY 9, 1995
R
The undersigned, revoking all prior proxies, hereby appoints Richard N.
O Daniel, Gerald G. Garbacz and Gouverneur M. Nichols, or any of them acting
in the absence of the others, with full power of substitution, the true and
X lawful proxy agents of the undersigned, to attend the 1995 Annual Meeting
of Shareholders of HANDY & HARMAN called to be held at 11:00 A.M., on May
Y 9, 1995 and any adjournments thereof and thereat to vote the shares of
stock of said Company standing in the name of the undersigned with all the
powers the undersigned would possess if personally present at said Meeting,
all in accordance with and as more fully described in the Proxy Statement
for said Meeting.
Election of Directors. Nominees: Comments (change of Address)
C.A. Abramson, R.E. Cornelia, ----------------------------
R.N. Daniel, G.G. Garbacz,
F.E. Grzelecki, G.M. Nichols, ----------------------------
H.P. Sotos.
----------------------------
----------------------------
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card)
You are encouraged to specify your choices by marking -------------
the appropriate boxes, SEE REVERSE SIDE, but you need SEE REVERSE
not mark any boxes if you wish to vote in accordance SIDE
with the Board of Directors' recommendations. The -------------
Proxy Agents cannot vote your shares unless you sign
and return this card.
<PAGE> 36
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR election of directors and
FOR proposals 2 and 3 and AGAINST proposal 4.
/X/ Please mark your votes as this
---------------- ----------------------- ---------------
COMMON DIVIDEND REINVESTMENT 401K
The Board of Directors recommends a vote FOR proposals 2 and 3 and AGAINST
proposal 4.
FOR WITHHELD
1. Election of / / / /
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
-----------------------------------------------------------
2. Ratification of the FOR AGAINST ABSTAIN
appointment of KPMG / / / / / /
Peat Marwick LLP,
as auditors.
3. Approving 1995 FOR AGAINST ABSTAIN
Omnibus Stock / / / / / /
Incentive Plan
4. Shareholder FOR AGAINST ABSTAIN
Proposal / / / / / /
5. In their discretion, / / Change of
upon such other business Address/Comments
as may properly come on Reverse Side.
before the Meeting.
Receipt of the 1994 Annual Report to Shareholders and the Notice of Meeting and
Proxy Statement with respect to the aforesaid Meeting is hereby acknowledged.
SIGNATURE(S) DATE , 1995
---------------------------------- --------------------
NOTE: Please date and sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full name as such.
