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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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HANDY & HARMAN
(NAME OF SUBJECT COMPANY)
HANDY & HARMAN
(NAME OF PERSON(S) FILING STATEMENT)
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COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
410306104
(CUSIP NUMBER OF CLASS OF SECURITIES)
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PAUL E. DIXON, ESQ.
SENIOR VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
HANDY & HARMAN
250 PARK AVENUE
NEW YORK, NEW YORK 10177
(212) 661-2400
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICE AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
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With a Copy to:
MILTON G. STROM, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022-3897
(212) 735-3000
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Handy & Harman, a New York corporation
("Handy & Harman"), and the address of the principal executive offices of Handy
& Harman is 250 Park Avenue, New York, New York 10177. The title of the class of
equity securities to which this statement relates is the common stock, par value
$1.00 per share, of Handy & Harman (the "Common Stock"), including the
associated Common Stock Purchase Rights (the "Rights" and, together with the
Common Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of
January 26, 1989, and as amended on April 25, 1996 and October 22, 1996 (the
"Rights Agreement"), between Handy & Harman and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent.
ITEM 2. TENDER OFFER OF THE BIDDER.
This Schedule 14D-9 relates to a tender offer by HN Acquisition Corp., a
New York corporation (the "Purchaser") and wholly owned subsidiary of WHX
Corporation, a Delaware corporation ("Parent" or "WHX"), disclosed in a Tender
Offer Statement on Schedule 14D-1, dated December 16, 1997 (the "Schedule
14D-1"), under which the Purchaser is offering to purchase any and all Shares at
a price of $30 per Share, net to the seller in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated December 16, 1997,
and the related Letter of Transmittal (which, as amended from time to time,
together constitute the "WHX Offer"). None of Parent, the Purchaser or any of
their affiliates is affiliated with Handy & Harman, and the WHX Offer was not
solicited by Handy & Harman.
As set forth in the Schedule 14D-1, the principal executive offices of the
Purchaser and Parent are located at 110 East 59th Street, New York, New York
10022.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and address of Handy & Harman, which is the person filing this
Schedule 14D-9, are set forth in Item 1 above.
(b) Reference is made to the information contained under the captions
"Executive Compensation," "Annual Incentive Awards for 1996," "Stock Options,"
"Long-Term Incentive Plan," "Pensions," "Compensation of Directors" and
"Employment Contracts and Termination of Employment and Change in Control
Agreements" in Handy & Harman's Proxy Statement, dated April 2, 1997, relating
to Handy & Harman's 1997 Annual Meeting of Shareholders. Except as described in
this Schedule 14D-9 or on pages 5 through 12 of Handy & Harman's Proxy
Statement, which pages are filed as Exhibit 4 to this Schedule 14D-9 and
incorporated herein by reference, to the knowledge of Handy & Harman, as of the
date hereof, there are no material contracts, agreements, arrangements or
understandings, or any actual or potential conflicts of interest between Handy &
Harman or its affiliates and (i) its executive officers, directors or affiliates
or (ii) Parent, the Purchaser or their respective executive officers, directors
or affiliates.
Reference is also made to Handy & Harman's 1988 Long-Term Incentive Plan
(the "Stock Plan"), Handy & Harman's Long-Term Incentive Stock Option Plan (the
"ISO Plan") and Handy & Harman's 1995 Omnibus Stock Incentive Plan (the "Option
Plan"), attached hereto as Exhibits 12, 21 and 23, respectively, and
incorporated herein by reference. Each of these plans provides that in the event
of a change in control of Handy & Harman (as defined in each plan), any
restrictions on restricted stock then held by a participant shall lapse and all
options then held by a participant shall vest and become immediately exercisable
and shall remain exercisable until its expiration, termination or cancellation
pursuant to the terms of the applicable plan.
Reference is further made to Handy & Harman's supplemental executive
retirement plan (the "SERP"), attached as Exhibit 24 hereto and incorporated
herein by reference. In the event of a change in control of Handy & Harman (as
defined in the SERP), each participant shall be 100% vested in the amount of the
benefits due to him or her, and Handy & Harman shall contribute the aggregate
amount of all such benefits to a grantor trust established by Handy & Harman. At
its May 1995 meeting, the Handy & Harman Board resolved to amend the SERP to
provide that upon termination of a participant's employment, such participant
can elect to receive a lump sum payment in the amount of his or her benefits,
calculated on the same basis as under the Handy & Harman Pension Plan (the
"Pension Plan"), except that the interest rate reflected in the calculation
would be 80% of the applicable interest rate used in the Pension Plan. The Board
also resolved to amend the SERP to
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provide that upon a change in control of Handy & Harman, (i) Handy & Harman
shall pay, out of the grantor trust, a lump sum to each participant in the
amount of each such participant's benefits calculated on the same basis as the
Pension Plan; provided, however, that the lump sum factor reflecting 80% of the
interest rate would be applied to the full amount of the pension determined
under the SERP before the offset for the Pension Plan, which would then be
reduced by the lump sum payment, as determined under the Pension Plan,
reflecting 100% of the interest rate, (ii) with respect to any participant who
had not yet attained the age of 60 and thus would not be eligible for an early
retirement pension, the lump sum value of the full amount of pension would
reflect commencement of the full amount of accrued pension starting at age 60,
and (iii) if any lump sum payment made to a participant under the SERP is
subject to the excise tax provisions of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), Handy & Harman will reimburse such
participant such that the net amount retained by the participant shall equal the
lump sum payment without regard to such excise tax. A copy of the amendment to
the SERP is attached hereto as Exhibit 25 and incorporated herein by reference.
In 1996, Handy & Harman entered into an employment agreement with Mr.
Robert D. LeBlanc, President of Handy & Harman (the "LeBlanc Agreement"), which
provided for a two-and-a-half year period of employment, commencing on November
11, 1996, as Executive Vice President of Handy & Harman (Mr. LeBlanc was
appointed President of Handy & Harman in July 1997). Mr. LeBlanc received a
signing bonus of $85,000, and will receive a salary under the contract of
$300,000 per annum, which amount may be increased only at the discretion of the
Board. Mr. LeBlanc is entitled to participate in the Handy & Harman Management
Incentive Plan (the "Bonus Plan"), the Stock Plan and the Option Plan, as well
as in the SERP, the Executive Post-Retirement Life Insurance Program (the "Life
Insurance Program") and in all of Handy & Harman's employee benefit plans. If
Handy & Harman should terminate the LeBlanc Agreement other than for cause or
disability (each as defined therein) or death, Handy & Harman would continue to
pay Mr. LeBlanc's salary for the longer of twelve months and the remaining life
of the agreement. Mr. LeBlanc would also continue to participate in the SERP,
the Life Insurance Program and in all other Handy & Harman employee benefit
plans for the remainder of the employment period. The LeBlanc Agreement is
attached as Exhibit 18 hereto and is incorporated herein by reference. If Mr.
LeBlanc receives payments under the LeBlanc Agreement, he would not be entitled
to receive any payments under the Supplemental Agreement (as hereinafter
defined).
In May 1997, Handy & Harman entered into an agreement (the "Supplemental
Agreement") with Mr. LeBlanc, providing that if, any time within two years
following a change in control of Handy & Harman (as defined in the Supplemental
Agreement), Handy & Harman terminates Mr. LeBlanc's employment (other than for
Disability or Cause, as such terms are defined in the Supplemental Agreement),
or if Mr. LeBlanc terminates his employment for Good Reason (as defined in the
Supplemental Agreement), Mr. LeBlanc will be entitled to receive a lump sum cash
payment equal to one year's base salary, and to receive, for twelve months
following his termination of employment, life, medical and dental insurance
benefits substantially similar to those which he was receiving immediately prior
to the notice of termination given with respect to such termination. The
Supplemental Agreement, attached as Exhibit 27 hereto and incorporated herein by
reference, also provides that if any payment made to Mr. LeBlanc under the
Supplemental Agreement is subject to the excise tax provisions of Section 4999
of the Code, Handy & Harman will reduce such payment to the extent necessary to
avoid such payment being subject to such excise tax.
In May 1997, Handy & Harman also entered into agreements (the "Change in
Control Agreements"), a form of which is attached as Exhibit 28 hereto and is
incorporated herein by reference, with each of Paul E. Dixon, Senior Vice
President, General Counsel and Secretary of Handy & Harman, Dennis C. Kelly,
Controller of Handy & Harman, and Robert F. Burlinson, Vice President and
Treasurer of Handy & Harman (each, an "Executive"), providing that if, any time
within two years following a change in control of Handy & Harman (as defined in
the Change in Control Agreements), Handy & Harman terminates the Executive's
employment (other than for Disability or Cause, as such terms are defined in the
Change in Control Agreements) or if the Executive terminates his employment for
Good Reason (as defined in the Change in Control Agreements), the Executive will
be entitled to receive a lump sum cash payment equal to one year's base salary,
and to receive, for twelve months following the Executive's termination of
employment, life, medical and dental insurance benefits substantially similar to
those which the Executive was receiving immediately prior to the notice of
termination given with respect to such termination. Each agreement also provides
that if any payment made to the Executive under the Executive's Change in
Control Agreement is subject to the excise tax provisions of Section 4999 of the
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Code, Handy & Harman will reduce such payment to the extent necessary to avoid
such payment being subject to such excise tax.
In 1992, Handy & Harman developed a supplemental executive plan (the
"Supplemental Plan") for the purpose of providing a further means by which it
may retain and encourage the productive efforts of Mr. Frank E. Grzelecki, the
current Vice Chairman of Handy & Harman. The Supplemental Plan, attached as
Exhibit 19 hereto and incorporated herein by reference, provides for the accrual
and immediate vesting of a monthly pension in the amount of $1000 per month, to
be paid for life commencing on the later of July 1, 1997 and Mr. Grzelecki's
separation from service with Handy & Harman. Under the Supplemental Plan, Handy
& Harman is required to create a grantor trust and, from time to time,
contribute amounts to accumulate an appropriate reserve against its obligations
thereunder.
At its May 1997 meeting, the Handy & Harman Board of Directors resolved to
implement a Long-Term Health Care Plan (the "Health Care Plan"), under which
Handy & Harman will provide annual premiums to each officer (and his or her
spouse) selected for participation by the Board's Compensation Committee in
order to purchase a health care policy covering such officer (and spouse), such
premiums to be paid for the life of each policyholder. In order to be eligible
for participation, an officer must have at least five (5) years of service with
Handy & Harman and have reached age 55. At the September 1997 meetings of the
Compensation Committee and the Board of Directors, the Compensation Committee
and the Board of Directors determined that following a change in control of
Handy & Harman, the Health Care Plan may not be terminated for those persons who
are eligible to participate in the Health Care Plan prior to the change in
control.
Effective as of February 1, 1995, Handy & Harman implemented the Life
Insurance Program, attached as Exhibit 26 hereto and incorporated herein by
reference, whereby each executive officer designated by the Compensation
Committee and determined to be insurable to the satisfaction of the insurance
provider shall be provided with two life insurance policies on such executive
officer's life (the "Insured Executive"). Each Insured Executive shall have one
life insurance policy on his or her life during the time that he or she is
employed by Handy & Harman (the "Pre-Retirement Policy"), which Pre-Retirement
Policy shall be in an amount equal to four (4) times the Insured Executive's
annual base salary in effect from time to time, and a second life insurance
policy on his or her life (the "Post-Retirement Policy"), which Post-Retirement
Policy shall be in an amount equal to two (2) times the Insured Executive's
annual base salary. Upon the Insured Executive's death while employed with Handy
& Harman, Handy & Harman shall pay to the designated beneficiary a lump sum cash
payment in the amount of the Pre-Retirement Policy, and upon Retirement (as
defined in the Handy & Harman Pension Plan) by the Insured Executive, Handy &
Harman shall transfer to such Insured Executive the ownership rights in such
Insured Executive's Post-Retirement Policy and, to the extent such transfer
results in federal, state or local income taxes to the Insured Executive, Hardy
& Harman will gross up such Insured Executive for such taxes.
At the September 1997 meetings of the Compensation Committee and the Handy
& Harman Board of Directors, the Compensation Committee and Board determined to
amend the Life Insurance Program to provide that if any payments made or the
value of any benefits provided to a participant under the Life Insurance Program
are subject to the excise tax provisions of Section 4999 of the Code, Handy &
Harman will reimburse such participant such that the net amount retained by the
participant shall equal the payment or the value of the benefit due to such
participant without regard to such excise tax. The Compensation Committee and
Board further determined to amend the Life Insurance Program to provide that
upon a change in control of Handy & Harman (as defined in the Life Insurance
Program) the Post-Retirement Policy may not be terminated and that Handy &
Harman shall transfer to each Insured Executive the ownership rights in each
such Insured Executive's Post-Retirement Policy.
In 1986, Handy & Harman entered into an agreement with Mr. Robert M.
Thompson, a form of which is attached as Exhibit 10 hereto and incorporated
herein by reference, providing that if, after a change in control of Handy &
Harman (as defined in the agreement), Mr. Thompson's position, duties,
responsibilities, status with Handy & Harman, base salary, employee benefits or
location are changed in a manner materially adverse to Mr. Thompson's interest,
then he may designate such change as an event which "triggers" a three-year
period of guaranteed employment by Handy & Harman. In December 1988, the Board
authorized amendments to the agreement to: (i) conform the definition of "change
in control" to the broader definition contained in Handy &
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Harman's employee benefit plans; and (ii) provide that Handy & Harman would
reimburse Mr. Thompson for any excise tax (and any income and excise tax due
with respect to such reimbursement) imposed on payments made to him in
connection with a change in control of Handy & Harman pursuant to Section 280G
of the Code.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(A) AND (B). AS MORE FULLY DESCRIBED BELOW, THE HANDY & HARMAN BOARD OF
DIRECTORS RECOMMENDS THAT HANDY & HARMAN SHAREHOLDERS REJECT THE WHX OFFER AND
NOT TENDER THEIR SHARES PURSUANT TO THE WHX OFFER.
Background.
On December 15, 1997, Ronald LaBow, Chairman of WHX, telecopied, without
any prior contact with Handy & Harman, the following unsolicited letter to
Richard N. Daniel, Chairman and Chief Executive Officer of Handy & Harman:
December 15, 1997
Richard N. Daniel, Chairman
Handy & Harman
250 Park Avenue
New York, New York 10177
Dear Mr. Daniel:
I will be calling you later this morning to discuss WHX's interest in
acquiring your company for $30.00 per share in cash. As you recognize this offer
represents a very attractive premium to the company's current and historic
market price. I hope we can have an amicable and productive dialogue on the
merits of this offer and the benefits which a combination of our companies would
bring to your senior management team, employees at large and the company's
shareholders. We also look forward to having an opportunity to discuss this
offer directly with your Board of Directors.
Attached for your information is a press release which we will be issuing
later today. It outlines our plan to commence an any and all cash tender offer
tomorrow at $30.00 per share, subject to a number of conditions including
approval by your Board of Directors under the Shareholder Rights Plan and the
Business Combination statute (Section 912) of the New York law. The tender offer
will not be subject to financing. The complete details of the tender offer will
be set forth in a filing to be made on Tuesday with the SEC.
I am available to meet with you or your representatives to discuss this
matter at your earliest convenience.
Very truly yours,
/s/ Ronald LaBow
Ronald LaBow
Chairman
On December 18, 1997, the Board of Directors of Handy & Harman held a
meeting at which the Board reviewed with Handy & Harman management and Goldman,
Sachs & Co., Handy & Harman's financial advisor ("Goldman Sachs"), and Skadden,
Arps, Slate, Meagher & Flom LLP, Handy & Harman's legal advisor
("Skadden Arps"), the WHX Offer and its terms and conditions. In addition,
Skadden Arps reviewed the legal responsibilities and duties of the Handy &
Harman Board in light of the WHX Offer.
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On December 23, 1997, the Handy & Harman Board of Directors held a meeting
at which the Board of Directors again reviewed the WHX Offer and its terms and
conditions with Handy & Harman management and Skadden Arps. The Board of
Directors reviewed Handy & Harman's business strategy and the strategic
repositioning of Handy & Harman which had occurred during the last two years and
considered the potential for benefits both with and without a merger with WHX.
At such meeting, Goldman Sachs presented its financial analysis of the WHX Offer
and reviewed the reaction of the financial markets to the WHX Offer and
potential implications for Handy & Harman and its shareholders. After lengthy
discussions, and presentations from Goldman Sachs, Skadden Arps and Handy &
Harman's senior management, the Board of Directors determined that the best
means for providing value to its shareholders was for Handy & Harman to continue
to pursue its strategic initiatives and business plans and not to be sold at
this time. The Handy & Harman Board of Directors unanimously concluded that,
given projected earnings and the strategic repositioning of Handy & Harman over
the last two years, the WHX Offer is inadequate and not in the best interests of
Handy & Harman and its shareholders. In particular, the Board of Directors
determined that Handy & Harman's current strategic initiatives and business
plans offer the potential for greater benefits for Handy & Harman's shareholders
than the WHX Offer, based on, among other things, greater opportunities for
business expansion, revenue and earnings growth, and potential acquisitions in
the markets in which Handy & Harman operates. A copy of a letter to shareholders
communicating the Board of Directors' recommendation and a form of press release
announcing such recommendation are filed as Exhibits 1 and 2 hereto,
respectively, and are incorporated herein by reference.
ACCORDINGLY, THE HANDY & HARMAN BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT HANDY & HARMAN'S SHAREHOLDERS REJECT THE WHX OFFER AND NOT TENDER THEIR
SHARES PURSUANT TO THE WHX OFFER.
Factors Considered.
In reaching the conclusions stated above, the Handy & Harman Board of
Directors took into account a variety of factors, including but not limited to
the following:
1. The Board of Directors' familiarity with the financial condition,
results of operations, prospects, business opportunities and current
strategies of Handy & Harman and the Board of Directors' confidence in
Handy & Harman's management and belief that the WHX Offer does not reflect
the fair value of Handy & Harman. Specifically, the Board of Directors
believed that the recent trading prices of the Shares, as well as the WHX
Offer, failed to reflect:
(a) Handy & Harman's leading and innovative position in the
marketplace for many of its products.
(b) The estimated overfunding of Handy & Harman's pension plans by
approximately $125 million as of December 16, 1997 (or $10.43 per
Share); in that regard, the Board noted that WHX has an underfunded
pension plan and that its unsolicited acquisition proposal may have been
prompted by a desire on the part of WHX to solve its own problems with
respect to its underfunded pension plan and its potential inability to
meet its pension obligations, and the potential adverse effect of the
WHX Offer on current and retired employees of Handy & Harman.
(c) The fact that Handy & Harman's precious metals inventory
(consisting primarily of gold and silver) is included on Handy &
Harman's balance sheet under the last-in, first-out ("LIFO") method of
accounting at $24.2 million as of December 15, 1997 and, as such, does
not reflect the fair market value of such inventory, which fair market
value amounted to approximately $131.2 million on that date (or $9 per
share before taxes); the Handy & Harman Board further considered the
fact that while silver prices have increased in recent weeks, gold is
currently trading at depressed prices compared to historical prices.
(d) The expected revenue and earnings growth based on Handy &
Harman's strategic initiatives and business plans and the competitive
positions of Handy & Harman in the markets in which it operates.
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2. Presentations by Handy & Harman's management as to the prospects
for future growth and profitability.
3. Handy & Harman's prospects for future growth and expansion, based
on the strategic repositioning of Handy & Harman, including the recent sale
of its U.S. precious metal refinery business and the acquisition of Olympic
Manufacturing Group.
4. The opinion of Goldman Sachs, Handy & Harman's financial advisor,
after reviewing with the Board of Directors of Handy & Harman many of the
factors referred to herein and other financial criteria used in assessing
the WHX Offer, that the WHX Offer is inadequate.
5. The disruptive effect of the WHX Offer on Handy & Harman's
employees, suppliers and customers.
6. The Board of Directors' belief that the marketplace and numerous
Handy & Harman shareholders do not yet fully appreciate and recognize the
benefits already achieved, and still to be achieved, as a result of the
strategic repositioning of Handy & Harman over the last two years, and its
belief that Handy & Harman is just beginning to realize for its
shareholders the values that may be unlocked as a result of Handy &
Harman's recent actions.
7. The Board of Directors' belief that the WHX Offer will deprive
Handy & Harman's shareholders (other than WHX) of the future growth in
revenue, net income, cash flow and stock price appreciation that are just
beginning to result from Handy & Harman's strategic repositioning and
operational improvements.
8. The fact that since the public announcement of the WHX Offer,
Handy & Harman has received several unsolicited inquiries from third
parties who expressed a potential interest in pursuing a transaction with
Handy & Harman.
9. The historical market prices and trading information for the
Shares.
10. The numerous conditions to which the WHX Offer is subject,
including conditions which are in the discretion of WHX, and the fact that
the WHX Offer is not subject to any minimum number of Shares being
tendered.
11. The Board of Directors' commitment to acting in the best interests
of Handy & Harman's shareholders.
In light of the numerous factors evaluated in connection with its
consideration of the WHX Offer, the Handy & Harman Board of Directors determined
that the WHX Offer is not in the best interests of Handy & Harman's
shareholders.
The foregoing discussion of the information and factors considered by the
Handy & Harman Board of Directors is not intended to be exhaustive but includes
all material factors considered by the Handy & Harman Board of Directors. In
reaching its determination to recommend rejection of the WHX Offer, the Handy &
Harman Board of Directors did not assign any relative or specific weights to the
foregoing factors, and individual directors may have given differing weights to
different factors.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Goldman Sachs was retained, pursuant to the terms of a letter agreement,
dated as of December 18, 1997 (the "Letter Agreement"), to serve as Handy &
Harman's exclusive financial advisor with respect to the WHX Offer, the possible
purchase of all or a portion of the stock or assets of Handy & Harman, a Company
Transaction (as defined below) or the sale of Handy & Harman by way of tender
offer, merger or otherwise. Goldman Sachs also agreed to render an opinion as to
the fairness of the financial consideration to be received by shareholders of
Handy & Harman or Handy & Harman, as the case may be, in connection with the
sale of 50% or more of the outstanding Shares.
Handy & Harman has agreed to pay Goldman Sachs a fee of $500,000 in cash on
the date the Letter Agreement is executed. Handy & Harman has also agreed to pay
Goldman Sachs a fee, in connection with any transaction in which at least 20% of
the outstanding Shares are acquired by WHX or any other person or group,
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including Handy & Harman, in one or a series of transactions by means of a
tender offer or merger, private or open market purchases of Shares or otherwise,
equal to $3,200,000 plus 3.5% of the amount by which the aggregate value of all
such transactions exceeds $30.00 times the number of Shares acquired in all such
transactions. If at least 50% of the outstanding Shares is acquired by WHX or
any other person or group, including Handy & Harman, the aggregate value will be
determined as if such acquisition were of 100% of the Shares (including
contingently issuable shares). Handy & Harman has also agreed to pay Goldman
Sachs a fee if Handy & Harman or any other entity formed or owned in substantial
part or controlled by Handy & Harman or one or more members of senior management
of Handy & Harman or any employee benefit plan of Handy & Harman or any of its
subsidiaries (a "Related Entity") effects a transaction or series of
transactions not covered by the second sentence of this paragraph in which (i)
at least 20% of the aggregate market value of Handy & Harman as of December 18,
1997 is transferred to the shareholders of Handy & Harman through (A) a merger
with, purchase of assets by, or other combination with, a Related Entity, (B) a
reclassification of stock, (C) a purchase of stock, (D) a distribution of cash,
securities or other assets (including, without limitation, a distribution of all
or a portion of stock in one or more of its subsidiaries), (E) a plan of partial
liquidation or (F) any similar transactions or combinations of the foregoing and
(ii) the public shareholders of Handy & Harman retain an equity interest in
Handy & Harman or, if Handy & Harman does not survive in the transactions
described above, in the surviving entity (a "Company Transaction"), equal to
$3,200,000 plus 3.5% of the amount by which the aggregate value of the Company
Transaction, defined as the per Share value in cash, securities and other assets
received by the shareholders of Handy & Harman (including Shares continued to be
held by the shareholders) times the number of Shares included in the Company
Transaction, exceeds $30.00 times the number of Shares included in the Company
Transaction. In the event that a transaction of the types described in either
the preceding sentence or the second sentence of this paragraph is not
consummated by any of March 30, 1998, June 30, 1998, September 30, 1998,
December 30, 1998, March 30, 1999, June 30, 1999, September 30, 1999 or December
30, 1999, Handy & Harman will pay to Goldman Sachs a financial advisory fee of
$337,500 on each such date, as applicable. In the event that Handy & Harman
sells, distributes or liquidates all or a portion of the assets of Handy &
Harman, including any pension-related assets, or sells or distributes securities
of Handy & Harman, whether such distribution is made by dividend or otherwise,
and no fee has become payable or been paid to Goldman Sachs with respect to a
transaction pursuant to the second and fourth sentence of this paragraph, then
Handy & Harman shall pay, or cause to be paid, a fee to Goldman Sachs based upon
the aggregate value of such transaction in accordance with the schedule
specified in the Letter Agreement. Such fee will range from 3.0% of the
aggregate value of the transaction if such aggregate value is $50 million or
less to .6% of the aggregate value of the transaction if such aggregate value is
$1 billion or more. The initial $500,000 fee payable on execution of the Letter
Agreement and any fees payable in the event no transaction is consummated by
certain specified dates (as described above) which have been previously paid
will be credited against any fee payable to Goldman Sachs in connection with any
transaction described in the second, fourth or sixth sentence of this paragraph.
Handy & Harman has also agreed to reimburse Goldman Sachs for its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of its
counsel, and to indemnify Goldman Sachs for certain liabilities arising out of
actions taken under the Letter Agreement.
In the ordinary course of its business, Goldman Sachs or its affiliates may
actively trade or otherwise effect transactions in the securities of Handy &
Harman and WHX for its own account and for the account of its customers and,
accordingly, may at any time hold long or short positions in such securities.
Goldman Sachs has provided investment banking services to Handy & Harman
from time to time in the past for which it has received customary compensation.
Handy & Harman has also retained Kekst & Company as public relations
advisor and Georgeson & Company Inc. to provide other services to Handy & Harman
in connection with the WHX Offer. Handy & Harman will pay Kekst & Company and
Georgeson & Company Inc. reasonable and customary fees for their services,
reimburse them for their reasonable out-of-pocket expenses and provide customary
indemnities.
Except as disclosed herein, neither Handy & Harman nor any person acting on
its behalf currently intends to employ, retain or compensate any other person to
make solicitations or recommendations to security holders on its behalf
concerning the WHX Offer.
7
<PAGE>
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) To the extent currently known to Handy & Harman, no transactions in the
Shares have been effected during the past 60 days by Handy & Harman or, to the
best of Handy & Harman's knowledge, by any executive officer, director,
affiliate or subsidiary of Handy & Harman, except that on December 15, 1997,
prior to learning of the WHX Offer, Frank E. Grzelecki, Handy & Harman's Vice
Chairman, sold 1000 Shares at $22 1/8 per Share, and except that ordinary course
purchases of Shares have been made for the accounts of participating employees,
including executive officers, pursuant to Handy & Harman's 401(k) Plan and
Employee Stock Purchase Plan. Handy & Harman is currently verifying its response
to this Item 6(a), and will update its response if other information comes to
its attention.
(b) To the extent currently known to Handy & Harman, no executive officer,
director, affiliate or subsidiary of Handy & Harman currently intends to tender,
pursuant to the WHX Offer, any Shares which are held of record or beneficially
owned by such person or to otherwise sell any such Shares.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth in this Schedule 14D-9, Handy & Harman is not
engaged in any negotiation in response to the WHX Offer that relates to or would
result in (i) an extraordinary transaction, such as a merger or reorganization,
involving Handy & Harman or any subsidiary of Handy & Harman; (ii) a purchase,
sale or transfer of a material amount of assets by Handy & Harman or any
subsidiary of Handy & Harman; (iii) a tender offer for or other acquisition of
securities by or of Handy & Harman; or (iv) any material change in the present
capitalization or dividend policy of Handy & Harman.
Notwithstanding the foregoing, the Handy & Harman Board could in the future
engage in negotiations in response to the WHX Offer that could have one of the
effects specified in the preceding sentence, and the Handy & Harman Board has
determined that disclosure with respect to the parties to, and the possible
terms of, any transactions or proposals of the type referred to in the preceding
paragraph might jeopardize any discussions or negotiations that Handy & Harman
might conduct. Accordingly, the Handy & Harman Board has adopted a resolution
instructing management not to disclose the possible terms of any such
transactions or proposals, or the parties thereto, unless and until an agreement
in principle relating thereto has been reached or, upon the advice of counsel,
as may be required by law.
(b) To the best of Handy & Harman's knowledge, there are currently no
transactions, board resolutions, agreements in principle or signed contracts in
response to the WHX Offer, other than as described herein, that relate to or
would result in one or more of the matters referred to in Item 7(a).
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
By-law Amendment.
At the December 23, 1997 meeting of the Handy & Harman Board of Directors,
the Board amended Article I, Section 1 of Handy & Harman's By-laws to allow the
Board flexibility to set the date of the annual shareholders meeting, as opposed
to fixing such date on the second Tuesday in May. A copy of the Amendment to
Handy & Harman's By-laws is filed herewith as Exhibit 3.
Section 912 of the New York Business Corporation Law.
Section 912 of the New York Business Corporation Law ("Section 912")
regulates certain business combinations, including mergers, of a New York
corporation, such as Handy & Harman, with a person that has, individually or
with or through its affiliates or associates, acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding voting stock of
such corporation (an "Interested Shareholder").
Section 912 provides that no New York corporation may engage in any
business combination with any Interested Shareholder of such corporation for a
period of five years following the date on which such Interested Shareholder
becomes an Interested Shareholder (a "Stock Acquisition Date") unless such
business combination or the purchase of stock made by such Interested
Shareholder on such Interested Shareholder's Stock Acquisition
8
<PAGE>
Date is approved by the board of directors of such corporation prior to such
Interested Shareholder's Stock Acquisition Date.
If neither Parent nor the Purchaser (alone or in concert with others)
becomes the beneficial owner of at least 20% of the outstanding Shares, Section
912 would not be applicable to the Purchaser's proposed acquisition of Handy &
Harman.
Shareholder Rights Plan.
Each Right issued pursuant to the Rights Agreement entitles the holder
thereof to purchase from Handy & Harman one Share at an exercise price of $58
per Share (the "Purchase Price"), subject to adjustment, upon the occurrence of
a "Distribution Date." A Distribution Date will be deemed to occur upon the
earlier of (i) 10 business days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has become an
Interested Shareholder or (ii) 10 business days (or such later date as may be
determined by the Board of Directors) following the commencement of a tender
offer or exchange offer that would result in a person becoming an Acquiring
Person.
In the event that a person becomes an Acquiring Person (except pursuant to
an offer for all outstanding Shares that the Board of Directors of Handy &
Harman determines to be fair to and in the best interests of Handy & Harman and
its shareholders), each holder of a Right will thereafter have the right to
receive, upon exercise, the number of Shares for which such Right was
exercisable immediately prior to the first occurrence of such event at an
adjusted per share purchase price of 10% of the then current market price per
Share. Notwithstanding any of the foregoing, following the occurrence of the
event set forth in the preceding sentence, all Rights that are or (under certain
circumstances specified in the Rights Agreement) were beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable
following the occurrence of the event set forth above until such time as the
Rights are no longer redeemable by Handy & Harman in accordance with the terms
of the Rights Agreement.
In the event that, at any time following the date that a person becomes an
Acquiring Person, (i) Handy & Harman is acquired in a merger or other business
combination transaction in which Handy & Harman is not the surviving corporation
(other than a merger which follows an offer described in the preceding
paragraph), or (ii) more than 50% of Handy & Harman's assets or earning power is
sold or transferred, each holder of a Right (except Rights that previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the exercise price of the Right.
At the December 23, 1997 meeting of the Handy & Harman Board of Directors,
the Board resolved to delay any Distribution Date under the Rights Agreement,
that arises solely by virtue of the lapse of time following the public
announcement of the WHX Offer, until such time as the Board or any authorized
committee thereof shall designate, by subsequent resolution duly adopted by the
Board or such committee thereof.
For a more complete description of the Rights Agreement, see Handy &
Harman's Form 8-A, dated February 3, 1989, and Handy & Harman's Form 8-A/A,
dated May 21, 1996, and Handy & Harman's Form 8-A/A, dated October 24, 1996,
each as filed with the Securities and Exchange Commission.
Change in Control Provisions in Bank Debt.
Handy & Harman is party to a Revolving Credit Agreement, dated as of
September 29, 1997 (the "Credit Agreement"), with certain financial institutions
as lenders and The Bank of Nova Scotia as Administrative Agent. Under the Credit
Agreement, an "Event of Default" will occur if there is a "Change in Control",
which would be deemed to occur if any person, or two or more persons acting in
concert, acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of 30% or more of the outstanding shares of voting stock of Handy
& Harman. Unless waived, the occurrence of an Event of Default (i) prohibits
Handy & Harman from borrowing additional money under the Credit Agreement and
(ii) permits certain of the lenders under the Credit Agreement to declare all or
any portion of the outstanding borrowings under the Credit Agreement to be due
and payable.
9
<PAGE>
The Note Agreements relating to Handy & Harman's $125,000,000 7.31% Senior
Notes due 2001 (the "Notes"), each dated as of April 17, 1997, by and between
Handy & Harman and the purchasers listed therein (collectively, the "Note
Agreements"), do not contain any "change of control" provisions. However, under
the Note Agreements, an Event of Default will occur if (i) Handy & Harman is in
default in the performance or compliance with any term of any evidence of any
debt (other than debt under the Note Agreements) with an outstanding principal
amount of at least $5,000,000 or any other condition exists, and as a
consequence of such default or condition, such debt becomes due and payable
before its stated maturity or (ii) Handy & Harman becomes obligated to purchase
or repay any debt (other than debt under the Note Agreements) before its
regularly scheduled dates of payment in an aggregate outstanding principal
amount of at least $5,000,000 (unless Handy & Harman simultaneously offers to
purchase a proportionate amount of Notes).
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------
<S> <C>
1 Letter to Shareholders, dated December 24, 1997.*
2 Text of Press Release issued by Handy & Harman, dated December 24,
1997.
3 Amendment to By-laws of Handy & Harman, as approved by the Handy &
Harman Board of Directors on December 23, 1997.
4 Excerpted Sections of Handy & Harman's Proxy Statement, dated
April 2, 1997, relating to Handy & Harman's Annual Meeting of
Shareholders.
5 Handy & Harman 1982 Stock Option Plan.
6 Amendment to Handy & Harman 1982 Stock Option Plan.
7 Handy & Harman Management Incentive Plan--Corporate Group
Participants, as amended and restated on December 15, 1994.
8 Subsidiary, Division, Group or Unit Management Incentive Plan, as
amended and restated on December 15, 1994.
9 Handy & Harman Deferred Fee Plan for Directors, as amended and
restated on December 15, 1994, effective as of January 1, 1995.
10 Form of Executive Agreement entered into with Handy & Harman's
executive officers in September 1986.
11 Amendments to the Form of Executive Agreement approved in
December 1988.
12 Handy & Harman 1988 Long-Term Incentive Plan.
13 Amendment to Handy & Harman 1988 Long-Term Incentive Plan approved
in December 1988.
14 Amendment to Handy & Harman 1988 Long-Term Incentive Plan approved
in June 1989.
15 Agreement dated as of May 1, 1989 between Handy & Harman and
Richard N. Daniel.
16 Amendment to Agreement dated as of May 1, 1989 between Handy &
Harman and Richard N. Daniel approved by the Handy & Harman
Board of Directors on May 11, 1993.
17 Amendment to Agreement dated as of May 1, 1989 between Handy &
Harman and Richard N. Daniel approved by the Handy & Harman
Board of Directors on September 28, 1995.
18 Employment Agreement dated as of October 22, 1996 by and between
Handy & Harman and Robert D. LeBlanc.
19 Handy & Harman Supplemental Executive Plan.
20 Handy & Harman Outside Director Stock Option Plan.
21 Handy & Harman Long-Term Incentive Stock Option Plan.
22 Amended and Restated Agreement, dated as of November 3, 1995, by
and between Handy & Harman and Frank E. Grzelecki.
23 Handy & Harman 1995 Omnibus Stock Incentive Plan.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------
<S> <C>
24 Handy & Harman Supplemental Executive Retirement Plan adopted and
established effective September 28, 1989 and amended and
restated as of January 1, 1995.
25 First Amendment to the Supplemental Executive Retirement Plan,
effective January 1, 1995.
26 Handy & Harman Executive Post-Retirement Life Insurance Program.
27 Supplemental Agreement, dated as of May 14, 1997, by and between
Handy & Harman and Robert D. LeBlanc.
28 Form of Change in Control Agreement, dated May 14, 1997, entered
into with Handy & Harman's executive officers.
</TABLE>
- ------------------
* Included in copies of the Schedule 14D-9 mailed to shareholders.
11
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 24, 1997
HANDY & HARMAN
By: /S/ PAUL E. DIXON
----------------------------
Paul E. Dixon
Senior Vice President,
General Counsel and Secretary
12
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------ -----------
99.1 Letter to Shareholders, dated December 24, 1997.
99.2 Text of Press Release issued by Handy & Harman, dated
December 24, 1997.
99.3 Amendment to By-laws of Handy & Harman, as approved by the Handy &
Harman Board of Directors on December 23, 1997.
99.4 Excerpted Sections of Handy & Harman's Proxy Statement, dated April
2, 1997, relating to Handy & Harman's Annual Meeting of
Shareholders.
99.5 Handy & Harman 1982 Stock Option Plan.
99.6 Amendment to Handy & Harman 1982 Stock Option Plan.
99.7 Handy & Harman Management Incentive Plan--Corporate Group
Participants, as amended and restated on December 15, 1994.
99.8 Subsidiary, Division, Group or Unit Management Incentive Plan, as
amended and restated on December 15, 1994.
99.9 Handy & Harman Deferred Fee Plan for Directors, as amended and
restated on December 15, 1994, effective as of January 1, 1995.
99.10 Form of Executive Agreement entered into with Handy & Harman's
executive officers in September 1986.
99.11 Amendments to the Form of Executive Agreement approved in December
1988.
99.12 Handy & Harman 1988 Long-Term Incentive Plan.
99.13 Amendment to Handy & Harman 1988 Long-Term Incentive Plan approved
in December 1988.
99.14 Amendment to Handy & Harman 1988 Long-Term Incentive Plan approved
in June 1989.
99.15 Agreement dated as of May 1, 1989 between Handy & Harman and
Richard N. Daniel.
5
<PAGE>
99.16 Amendment to Agreement dated as of May 1, 1989 between Handy & Harman
and Richard N. Daniel approved by the Handy & Harman Board of
Directors on May 11, 1993.
99.17 Amendment to Agreement dated as of May 1, 1989 between Handy & Harman
and Richard N. Daniel approved by the Handy & Harman Board of
Directors on September 28, 1995.
99.18 Employment Agreement dated as of October 22, 1996 by and between
Handy & Harman and Robert D. LeBlanc.
99.19 Handy & Harman Supplemental Executive Plan.
99.20 Handy & Harman Outside Director Stock Option Plan.
99.21 Handy & Harman Long-Term Incentive Stock Option Plan.
99.22 Amended and Restated Agreement, dated as of November 3, 1995, by
and between Handy & Harman and Frank E. Grzelecki.
99.23 Handy & Harman 1995 Omnibus Stock Incentive Plan.
99.24 Handy & Harman Supplemental Executive Retirement Plan adopted and
established effective September 28, 1989 and amended and restated
as of January 1, 1995.
99.25 First Amendment to Supplemental Executive Retirement Plan, effective
January 1, 1995.
99.26 Handy & Harman Executive Post-Retirement Life Insurance Program.
99.27 Supplemental Agreement, dated as of October 22, 1996, by and between
Handy & Harman and Robert D. LeBlanc.
99.28 Form of Change in Control Agreement, dated May 14, 1997, entered into
with Handy & Harman's executive officers.
6
<PAGE>
[LOGO] HANDY & HARMAN
250 Park Avenue, New York, NY 10177 o Telephone (212) 661-2400
Richard N. Daniel
Chairman
Chief Executive Officer
December 24, 1997
Dear Fellow Shareholders:
On December 16, 1997, WHX Corporation announced that its wholly owned
subsidiary, HN Acquisition Corp., commenced an unsolicited tender offer for any
and all outstanding shares of common stock of Handy & Harman at $30 per share in
cash.
AFTER CAREFUL CONSIDERATION, YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY
DETERMINED THAT WHX'S OFFER IS INADEQUATE, IS NOT IN THE BEST INTERESTS OF HANDY
& HARMAN AND ITS SHAREHOLDERS AND DOES NOT ADEQUATELY REFLECT THE VALUE OR
PROSPECTS OF THE COMPANY. ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
REJECT WHX'S OFFER AND NOT TENDER ANY OF YOUR HANDY & HARMAN SHARES TO WHX.
Handy & Harman's Board of Directors, assisted by Goldman, Sachs & Co., its
financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP, its legal
advisor, has reviewed WHX's offer at length, and considered the potential for
benefits both with and without a merger with WHX. The Board of Directors
determined that the best means for providing value to its shareholders is for
Handy & Harman to take full advantage of the strategic repositioning that the
Company has undergone over the last two years and for Handy & Harman not to be
sold at this time. As Handy & Harman has been transformed, we have demonstrated
that we are willing and able to use every creative strategic means to build
shareholder value, including divestitures, acquisitions, share buybacks and new
product initiatives.
In reaching its determination and recommendation, the Board of Directors
took into account a variety of factors, including:
-- The Board of Directors' belief that the marketplace and numerous
Handy & Harman shareholders do not yet fully appreciate and recognize the
benefits already achieved, and still to be achieved, as a result of the
strategic repositioning of Handy & Harman over the last two years and its
belief that Handy & Harman is just beginning to realize for its
shareholders the values that may be unlocked as a result of Handy &
Harman's recent actions.
-- Handy & Harman's leading and innovative position in the marketplace
for many of its products.
-- The opinion of Goldman, Sachs & Co., Handy & Harman's financial
advisor, after reviewing with the Board of Directors many of the factors
referred to herein and other financial criteria used in assessing the WHX
offer, that the WHX offer is inadequate.
-- The Board of Directors' belief that the WHX offer will deprive
Handy & Harman's shareholders (other than WHX) of the future growth in
revenues, net income, cash flows and stock price appreciation that are just
beginning to result from Handy & Harman's strategic repositioning and
operational improvements.
-- The Board of Directors' familiarity with the financial condition,
results of operations, business opportunities, prospects and current
strategies and business plans of Handy & Harman.
-- The disruptive effect of WHX's offer on Handy & Harman's employees,
suppliers and customers.
-- The Board of Directors' commitment to acting in the best interests
of the Handy & Harman shareholders.
<PAGE>
A more detailed description of the reasons for your Board of Directors'
recommendation and the factors considered by the Board is contained in the
enclosed Schedule 14D-9. We urge you to read it carefully and in its entirety so
that you will be fully informed as to the Board of Directors' recommendation.
Your Board of Directors is convinced that continuing to actively pursue our
strategic goals while remaining independent at this time is the best way to
maximize value for all of Handy & Harman's shareholders. Your Board of Directors
and I greatly appreciate your continued support and encouragement.
Sincerely,
/s/ R.N. Daniel
R.N. Daniel
Chairman of the Board and
Chief Executive Officer
<PAGE>
Contact: Adam Weiner
Kekst & Company
212-521-4800
HANDY & HARMAN BOARD REJECTS WHX TENDER OFFER
New York, NY, December 24, 1997 -- Handy & Harman (NYSE: HNH) announced today
that its Board of Directors voted unanimously to recommend that shareholders
reject the unsolicited tender offer by WHX Corporation (NYSE: WHX) and not
tender any of their shares pursuant to the offer. In recommending that
shareholders reject the offer, Handy & Harman's Board considered a variety of
factors, including the Board's belief that the WHX offer does not reflect the
true value of Handy & Harman in light of the Company's recent strategic
repositioning and business and financial prospects, and the Board's familiarity
with the financial condition, business opportunities and current business plans
of Handy & Harman. In reaching its conclusion the Board also considered the
opinion of Goldman, Sachs & Co., Handy & Harman's financial advisor, that the
$30.00 per share price offered by WHX is inadequate.
Richard N. Daniel, Chairman and Chief Executive Officer of Handy & Harman,
stated: "The Handy & Harman Board is and always has been committed to acting in
the best interests of Handy & Harman's shareholders. Handy & Harman has been
implementing a carefully conceived strategic repositioning of the Company over
the past two years. This effort is just beginning to unlock value for our
shareholders, as evidenced by our share price increase this year, prior to WHX's
unsolicited proposal."
The Board believes that the Company's current business plan creates value for
shareholders that exceeds the WHX proposal. The benefits of the transformation
of Handy & Harman from its historical base as a refiner and fabricator of
precious metals to a diversified manufacturer of increasingly higher margin
engineered materials and systems components for specialized industrial
applications have not been fully reflected in the market, and they certainly are
not reflected in WHX's financially inadequate offer. We have demonstrated that
we are willing and able to use every creative strategic means to build
shareholder value, including divestitures, acquisitions, share buybacks and new
product initiatives.
<PAGE>
"In making its offer at this time, WHX is trying to acquire Handy & Harman at an
inadequate price that does not reflect Handy & Harman's future prospects. This
would deprive Handy & Harman's shareholders of the future growth in revenue, net
income, cash flow and stock price appreciation that they deserve," Mr. Daniel
stated.
Frank E. Grzelecki, Vice Chairman of Handy & Harman, stated: "WHX's offer for
Handy & Harman, like its previous offers for Teledyne, Inc. and Dynamics
Corporation of America, is yet another of its opportunistic attempts to acquire
a company that is undervalued in the marketplace. We believe WHX's unsolicited
and conditional proposal was prompted not by business logic but by a desire of
WHX to solve its own underfunded pension plan problems by taking advantage of
Handy & Harman's carefully and prudently managed pension plan, which assures the
long-term financial security of the plan participants. In addition, WHX is
trying to gain access to our precious metals inventory, which is undervalued on
our balance sheet."
A detailed discussion of the rationale for the Handy & Harman Board of
Directors' recommendation is contained in Handy & Harman's
Solicitation/Recommendation Statement on Schedule 14D-9, which is being filed
today with the Securities and Exchange Commission and will be mailed to
shareholders shortly.
Handy & Harman is a diversified industrial manufacturing company with operations
in materials engineering and specialty manufacturing. Handy & Harman's products
include electronic components, specialty fasteners, engineered materials,
specialty wire and tubing and fabricated precious metals. Handy & Harman was
founded in 1867 and is headquartered in New York.
# # #
<PAGE>
AMENDMENT TO BY-LAWS OF HANDY & HARMAN
(As approved by the Board of Directors on December 23, 1997)
Article I, Section 1, is hereby amended so that the first paragraph
thereof shall read in its entirety as follows:
"Section 1. Annual Meetings. The annual meeting of
shareholders of the corporation shall be held annually, at such place
and hour and on such date as the board of directors in its discretion
may fix, for the election of directors and for the transaction of such
other business as may properly come before the meeting."
Filed with the Secretary of the Corporation on December 23, 1997.
/s/ Paul E. Dixon
------------------------
Paul E. Dixon, Secretary
of the Corporation
<PAGE>
EXCERPTED SECTIONS OF HANDY & HARMAN'S
PROXY STATEMENT RELATED TO ITS 1997
ANNUAL MEETING OF SHAREHOLDERS
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 1995 Omnibus
Stock Incentive Plan.
The following table provides information on the compensation
provided by the Company to the Company's Chief Executive Officer and the five
most highly paid Executive Officers:
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------------
ANNUAL COMPENSATION RESTRICTED
------------------- STOCK OPTION
AWARDS SHARES ALL OTHER COM-
NAME & POSITION YEAR SALARY BONUS ($)(3) (#) PENSATION ($)
------------------------------- ---------- ------------- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. N. Daniel 1996 $470,000 $170,000 $208,069 50,000 $ 7,834(1)
Chairman and CEO 1995 $423,862 $215,000 - 30,000 $ 6,186(1)
1994 $399,634 $280,000 $ 53,813 25,000 $16,387(1)
F. E. Grzelecki 1996 $410,000 $150,000 $178,956 40,000 $ 6,186(1)
President and COO 1995 $363,860 $190,000 - 25,000 $ 5,008(1)
1994 $341,354 $240,000 $ 38,438 20,000 $13,828(1)
P. E. Dixon, Vice 1996 $179,000 $ 70,000 $ 57,369 15,000 $ 3,195(1)
President, General 1995 $164,346 $ 80,000 - 15,000 $ 1,995(1)
Counsel & Secretary 1994 $152,230 $101,000 - 5,000 $ 3,453(1)
J. M. McLoone(2), Vice 1996 $164,000 $ 60,000 $ 46,238 5,000 $ 3,241(1)
President -- Corporate 1995 $160,885 $ 70,000 - 10,000 $ 3,068(1)
Development & Planning 1994 $151,192 $101,000 - 5,000 $ 6,027(1)
S. B. Mudd(3), Vice 1996 $155,139 $ 45,000 $ 56,513 5,000 $ 4,847(1)
President and Treasurer 1995 $149,923 $ 70,000 - 5,000 $ 4,428(1)
1994
$143,923 $ 92,000 $ 18,450 2,000 $ 8,215(1)
</TABLE>
- --------------------------------
(1) Company matching contributions under the 401(k) Savings Plan for Messrs.
Daniel, Grzelecki, Dixon, Mcloone, and Mudd: (A) for 1996 were $2,250,
$2,250, $2,250, $2,250 and $2,250, (B) for 1995 were $2,250, $2,250,
$1,282, $2,250, and $2,250 respectively, and (C) for 1994 were $2,250,
$2,250, None, $2,250, and $2,250, respectively.
The Company maintains a supplemental life insurance program for its
Officers providing a variable, appreciable life insurance policy on each
participant in an amount equal to four times annual base salary up to
retirement and two times such annual base salary after retirement. Such
program replaces a predecessor benefit plan whereby, in the event of the
death of the Officer, prior to retirement, the Company credited 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 years. This program
was funded by the Company purchasing individual insurance policies on the
life of each Officer. The costs of this program for Messrs. Daniel
Grzelecki, Dixon, McLoone, and Mudd: (A) for 1996 were $5,584, $3,936,
$945, $991, and $2,597, respectively, (B) for 1995 were $3,936, $2,758,
$713, $818, and $2,178, respectively, and the costs of the predecessor
program: (C) for 1994 were $14,137, $11,578, $3,453, $3,777, and $5,956,
respectively.
(2) Employment of Mr. McLoone as Vice President -- Corporate Development &
Planning of Handy & Harman ceased on March 3, 1997.
2
<PAGE>
(3) Mr. Mudd retired as the Vice President and Treasurer of Handy & Harman on
January 31, 1997.
BASE SALARIES
Officer salaries were increased based on the recommendations
of the Compensation Committee and of an outside independent report. These
increases reflected input submitted by the Company's Chief Executive Officer 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 1996
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 1996 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
seven and one half percent of consolidated pre-tax earnings in excess of 15
percent of shareholders' equity. An individual participant's award may not
exceed 100 percent 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 percent of the participant's base salary.
For the 1996 fiscal year, corporate pre-tax earnings were in
excess of the minimum shareholders' equity requirement and Incentive Awards to
Officers ranged from 14 percent to 39 percent of base salary.
3
<PAGE>
STOCK OPTIONS
HANDY & HARMAN 1995 OMNIBUS STOCK INCENTIVE PLAN
(SUCCESSOR TO THE HANDY & HARMAN LONG-TERM INCENTIVE
STOCK OPTION PLAN ADOPTED IN 1991)
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.
After incorporating remaining "shares available for option"
from the predecessor plan, the combined number of shares subject to award under
this Plan adopted at the 1995 Annual Meeting of Shareholders shall not exceed
1,000,000 shares of Common Stock. The Compensation Committee of the Board of
Directors may grant options, stock appreciation rights (tandem or stand alone),
shares of restricted or phantom stock and stock bonuses, in such amounts and
with such terms and conditions as the Compensation Committee shall determine,
subject to the provisions of the Plan. Commencing one year after the date of
grant, each option becomes exercisable cumulatively at the rate of 25 percent
per year (20 percent for predecessor plan awarded options) and will expire ten
years from the date such options were granted. Transactions under this successor
Plan and the predecessor plan (1994 and prior) are summarized below:
<TABLE>
<CAPTION>
SHARES
AVAILABLE SHARES UNDER OPTION
FOR ------------------------------
OPTION SHARES RANGE OF PRICE
-------- -------- ----------------
<S> <C> <C> <C>
Balance, January 1, 1994.................. 348,200 648,000 $ 9.625-15.3125
Options granted........................... (118,000) 118,000 $13.75 -16.1625
Options exercised......................... - (27,000) $ 9.625-12.625
Options expired........................... 23,000 (23,000) $12.625
-------- -------- -----------------
Balance, December 31, 1994................ 253,200 716,000 $ 9.625-16.625
Increase in shares subject to award....... 746,800
Options granted........................... (162,000) 162,000 $15.125-15.438
Options exercised......................... - (22,800) $ 9.625-12.937
Options expired........................... 28,200 (28,200) $11.313-16.625
-------- -------- -----------------
Balance, December 31, 1995................ 866,200 827,000 $ 9.625-16.625
Options granted........................... (260,000) 260,000 $17.75 -18.625
Options exercised......................... - (78,500) $ 9.625-16.625
Options................................... 48,800 (48,800) $12.625-16.625
-------- -------- -----------------
Balance, December 31, 1996................. 655,000 959,700 $ 9.625-18.625
======== ======== ================
</TABLE>
4
<PAGE>
During 1996 options to purchase 260,000 shares of Common Stock
were awarded and, as of December 31, 1996 options to purchase 959,700 shares of
Common Stock were outstanding and no SAR's had been issued. The exercise price
of each option cannot be less than 100 percent of the fair market value of a
share of common stock at the time the option is granted.
The Company's 1991 Long-Term Incentive Stock Option Plan,
which covered a maximum of 1,000,000 shares of the Company's Common Stock, was
approved at the 1991 Annual Meeting of Shareholders. Such plan permitted the
grant of non-qualified stock options and SAR's. Outstanding shares under option
for this plan were incorporated into the successor Handy & Harman 1995 Omnibus
Stock Incentive Plan, as stated above.
During 1996, options were granted to the Executive Officers
named below. SAR's may be granted under the 1995 Omnibus Stock Incentive 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 1996:
STOCK OPTION GRANTS 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZ-
INDIVIDUAL GRANTS ABLE VALUE AT
------------------------------------------------------- ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
OPTIONS PRICE APPRECIATION
OPTION/ GRANTED TO EXERCISE FOR OPTION TERM(1)
SARS EMPLOYEES IN OR BASE EXPIRATION ------------------------------
GRANTED FISCAL YEAR PRICE ($/SH) DATE 5% 10%
------------ ----------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
R. N. Daniel..................... 50,000 19% $17.75 09/26/06 $558,000 $1,414,500
F. E. Grzelecki.................. 40,000 15% $17.75 09/26/06 $446,400 $1,131,600
P. E. Dixon...................... 15,000 6% $17.75 09/26/06 $167,400 $ 424,350
J. M. McLoone.................... 5,000 2% $17.75 09/26/06 $ 55,800 $ 141,450
S. B. Mudd....................... 5,000 2% $17.75 09/26/06 $ 55,800 $ 141,450
</TABLE>
(1) The dollar amounts under these columns are the result of calculations
at the 5% and 10% rates set by the Securities and Exchange Commission
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 25% per year on each of the first
four anniversary dates.
5
<PAGE>
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 1996. In addition, this
table provides the number and information with respect to unexercised options to
purchase shares as of December 31, 1996:
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF EXERCISED
UNEXERCISED IN-THE-MONEY(2)
OPTIONS/SARS(1) OPTIONS/SARS
AT 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 140,000/102,500 $466,731/$135,007
F. E. Grzelecki................ None None 133,750/83,750 $448,323/$114,350
P. E. Dixon.................... 6,000 $28,377 11,350/31,650 $ 37,407/$40,595
J. M. McLoone.................. None None 18,500/21,500 $ 78,566/$49,565
S. B. Mudd..................... None None 23,850/11,150 $109,382/$15,432
</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 31, 1996 ($17.50) and the exercise price for these
shares. These values have not been realized.
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 62,750 shares of restricted stock were awarded in 1996, including
awards to Messrs. Daniel, Grzelecki, Dixon, McLoone and Mudd.
The Plan establishes 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 percent per year. Awards are
made in the Spring of the year immediately following the third year of each
Performance
6
<PAGE>
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 percent of the restricted share Award and
results achieved on the Qualitative component determine 30 percent of the Award.
The Quantitative measures include the following:
- Average Annual Return on Shareholders' Equity
- Average Annual Operating Income
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 four cycles completed under this Long-Term
Incentive Plan covering the nine year period from 1987 through 1996, a total of
138,050 shares of stock have been awarded net of forfeitures. The number of key
management participants in each cycle has been between 20 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
7
<PAGE>
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 1996. For this
purpose, the members of the Committee, Messrs. Cornelia, Abramson 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, 3)
ATTRACT, MOTIVATE AND RETAIN KEY EXECUTIVES AND 4) STRIVE FOR FAIRNESS IN THE
APPLICATION OF PAY POLICIES ALONG WITH COMMUNICATIONS PROGRAMS TO ASSURE THAT
ALL KEY EXECUTIVES UNDERSTAND THE ADMINISTRATION PROCEDURES.
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 one million dollars 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.
During 1996 the Board did not increase Mr. Daniel's base
salary and remained at the same level as in 1995; namely, $470,000. Based on
performance, total compensation considerations and an outside independent report
on salary levels of Chief Executive Officers of comparable organizations, the
Compensation Committee, therefore, determined that Mr. Daniel's annual salary
was competitive at its current rate.
Mr. Daniel's bonus Award of $170,000 for 1996 was determined
in accordance with the Management Incentive Plan of the Company based upon 1996
earnings, which were in excess of the net earnings requirement.
8
<PAGE>
Mr. Daniel received the stock option grants in 1996
indicated on the above table entitled "Stock Option Grants 1996."
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 percent
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 five 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 four percent 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 1997 is $160,000), and the limitation on benefits under
Section 415 of the Internal Revenue Code (which for 1997 is $125,000). The SERP
also applies the Handy & Harman Pension Plan formula to the Career Average Pay
after including 25 percent of the amounts received under the Company's
Management Incentive Plan for services in 1995 and subsequently (50 percent for
services prior to 1995). Amounts received under the SERP are not subject to Cost
of Living Increases.
The following Table shows the projected Annual Retirement
Benefits, payable on the basis of ten years of certain payments and thereafter
for life, to each of the individuals listed in the Summary Compensation Table at
age 65 assuming continuation of employment to age 65 (except for Mr. McLoone, as
discussed above, footnote (2) on page 6). The amounts shown under Salary reflect
the current rate of salary as plan compensation for Messrs. Daniel, Grzelecki,
Dixon, McLoone and Mudd of $470,000, $410,000, $179,000, $164,000, and $160,000,
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 1996
shown in the Summary Compensation Table (except for Mr. McLoone, who is not
eligible for a benefit under the SERP).
9
<PAGE>
EXECUTIVE PENSION BENEFITS
<TABLE>
<CAPTION>
ANNUAL RETIREMENT BENEFITS FROM:
NORMAL RETIREMENT SERVICE AT ------------------------------------------------------
NAME DATE (NRD) NRD SALARY BONUS TOTAL
- ---------------------------------- ------------------- ------------------ ----------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
R. N. Daniel..................... October 1, 2000 29 yrs. $217,000 $26,956 $243,956
F. E. Grzelecki.................. July 1, 2002 13 yrs. 99,385 12,090 111,475
P. E. Dixon...................... September 1, 2009 16 yrs. 10 mos. 57,622 6,198 63,820
J. M. McLoone.................... December 1, 2007 15 yrs. 5 mos. 14,695 0 14,695
S. B. Mudd....................... January 31, 1997 22 yrs. 3 mos. 64,236 8,882 73,118
</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, 1996, was $5,000, 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 provides for benefits on the basis of
a ten year certain payment and for life thereafter. The Company has purchased an
annuity policy to provide a reserve for payment of its obligation of the $5,000
per month pension accrued at June 30, 1996, 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 $23,400 per annum, which rate
has been in effect since May 1, 1995. 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
$239,400, 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 as Directors of
outstanding individuals whose judgement, interest and special effort are
essential to the successful conduct of the Company's business and affairs.
10
<PAGE>
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 50 percent
of the annual retainer fee of each outside Director by the fair market value of
a share of Common Stock on the date of grant. The options are exercisable for
ten years after the date of grant. The exercise price is one dollar per share
and upon exercise payment must be 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
The Company has entered into agreements with Mr. Daniel in
1986 and Mr. Grzelecki in 1989 providing 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 three-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 280G of
the Internal Revenue Code of 1986, as amended.
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 three year period of employment commencing on May 1, 1989, which may be (and
was) extended May 1 of each year 1992-1996 for an additional three-year term. If
not so extended, the Daniel Agreement terminates at the end of its then current
term. Effective October 1, 1995, the Board set Mr. Daniel's base salary at
$470,000 per annum and this amount may be increased at the discretion of the
Board. He is also entitled to participate in the Company Benefit Plans,
including the Management Incentive Plan and the Omnibus Stock Incentive Stock
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. The Company has also agreed to an amendment to the
Daniel Agreement providing that,
11
<PAGE>
when his employment by the Company ends for whatever reason (other than for
cause as defined therein), he would be entitled to 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.
The Company entered into a new Amended and Restated Agreement
with Mr. Grzelecki providing that, when his employment by the Company ends, he
will be entitled to severance rights of one year's salary payable over a five
year period, unless accelerated; plus: (i) the supplemental 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 four year period.
12
<PAGE>
HANDY & HARMAN
1982 STOCK OPTION PLAN
1. Purpose. The purpose of the 1982 Stock Option Plan (the "Plan") is
to benefit Handy & Harman and its subsidiaries (the "Company") by providing for
the acquisition of a greater personal and financial interest in the Company by
key employees upon whom the Company is dependent for success.
2. Participants. Options shall be granted under the Plan to key
employees of the Company, including directors of the Company who are also
salaried officers, who perform services of special importance to the management,
operation and development of the Company.
3. Administration of the Plan. The Plan shall be administered by a
Committee (the "Committee") appointed by and responsible to the Board of
Directors. The Committee shall consist of not less than three directors who
shall not be eligible to participate in the Plan while members of the Committee.
It shall have the power to select optionees, to establish the number of shares
and the other terms applicable to each option, to construe the provisions of the
Plan, and to adopt rules and regulations governing the administration of the
Plan.
The Committee shall have the authority to amend the Plan without the
necessity of obtaining further approval of the stockholders, unless such
approval is required by law.
4. Effective Date and Termination of the Plan. The effective date of
the Plan shall be February 1, 1982, and the Plan shall terminate on January 1,
1992, or at such earlier time as the Board of Directors may determine. Any
option outstanding under the Plan at the time of its termination shall remain in
effect until it shall have been exercised or shall have expired or otherwise
terminated pursuant to the provisions of the Plan.
5. Stock Subject to Options. The number of shares to be subject to
options hereunder shall not exceed 500,000 shares of the Common Stock, $1.00 par
value, of the Company ("Common Stock"), subject to adjustment as provided in
Section II hereof. Any shares subjected to an option under the Plan, which
option expires or is terminated unexercised as to such shares, may again be
subjected to an
<PAGE>
option under the Plan. The Committee may require the surrender of outstanding
options as a condition precedent to the grant of new options under the Plan.
6. Payment of Purchase Price. The purchase price of each share acquired
pursuant to the exercise of any option shall be paid in full at the time of such
purchase, and a certificate representing shares so purchased shall be delivered
to the persons entitled thereto. The Committee shall have the sole discretion to
determine at the time of grant of the option the form (cash, shares of Common
Stock, or a combination thereof) in which payment of the purchase price may be
made.
7. Types of Options. Options granted under the Plan shall be in the
form of (i) incentive stock options as defined in Section 422A of the Internal
Revenue Code, and (ii) options not qualifying under such section ("nonqualified
options").
8. Terms and Conditions of Incentive Stock Options. An incentive stock
option granted under the Plan shall contain such terms and conditions as are
determined by the Committee, subject to the following provisions:
(a) Such option by its terms shall not be exercisable after the
expiration of ten years from the date such option is granted.
(b) The option price shall not be less than 100 percent of the fair
market value of the Common Stock at the time such option is granted.
(c) Such option by its terms shall not be transferable by the optionee
otherwise than by will or the laws of descent and distribution and shall be
exercisable, during his lifetime, only by him.
(d) If the optionee's employment by the Company shall terminate for any
reason other than death, the option shall terminate three months after the date
the optionee ceases to be an employee of the Company (one year after such date
if the optionee was disabled within the meaning of Section 105(d)(4) of the
Internal Revenue Code on such date), or on the option's expiration date if
earlier.
(e) No option shall be granted after ten years from the effective date
of the Plan, as set forth in Section 4.
(f) No option shall be granted to any individual who, at the time of
the proposed grant, owns Common Stock possessing more than ten percent of the
voting
2
<PAGE>
power of all classes of stock of the Company or any of its subsidiary
corporations unless (i) the option price of such option is, at the time of the
grant, at least 110 percent of the fair market value of the Common Stock subject
thereto and (ii) such option is by its terms not exercisable after more than
five years from the date of grant.
(g) Each new incentive stock option by its terms shall not be
exercisable while there is outstanding any incentive stock option which was
granted, before the granting of such new option, to a participant to purchase
Common Stock of the Company or stock of any parent or subsidiary corporation. An
option shall be deemed outstanding for purposes of this subsection (g) until
such option or a related stock appreciation right is exercised in full or
expires by reason of lapse of time.
(h) The aggregate fair market value of Common Stock (determined as of
the date each incentive stock option is granted) for which any employee may be
granted incentive stock option in any calendar year under the Plan (or any other
plan of the Company or a parent or subsidiary thereof) shall not exceed $100,000
(the "$100,000 Annual Limit") plus the amount of any "Unused Limit Carryover"
(as hereinafter defined) available for such year. If the aggregate fair market
value of Common Stock subject to incentive stock options granted to an optionee
in a calendar year after 1980 is less than the $100,000 Annual Limit, one-half
of the difference (the "Unused Limit Carryover") may be carried forward and
taken into account in each of the three succeeding calendar years, but only to
the extent that such Unused Limit Carryover has not been used in prior calendar
years. The amount of incentive stock options granted during any calendar year
shall be treated as first using up the $100,000 Annual Limit and then using up
any available Unused Limit Carryovers in the order of the calendar years in
which such Unused Limit Carryovers arose.
9. Terms and Conditions of Nonqualified Options. A nonqualified option
granted under the Plan shall be subject to the provisions of subsections (a),
(b), (c) and (e) of Section 8 hereof, and such other terms and conditions as are
determined by the Committee.
10. Stock Appreciation Rights. Stock appreciation rights may be granted
by the Committee in connection with any stock option at the time of grant of
such option. Stock appreciation rights shall be subject to the following terms
and conditions and to such other terms and conditions, not inconsistent with
the Plan, as the Committee shall determine:
3
<PAGE>
(a) Stock appreciation rights shall be exercisable, in whole
or in part, at such time or times and to the extent that the option to which
they relate shall be exercisable, and shall expire simultaneously with the
option to which they relate.
(b) Upon exercise of a stock appreciation right, the related
option or portion thereof shall be surrendered to the Company in exchange for
payment by the Company of shares of Common Stock (at the fair market value
thereof) or cash or a combination thereof in an amount equal to the excess of
the aggregate fair market value of the shares subject to the option or portion
thereof being surrendered over the aggregate option price thereof; provided,
however, that fractional shares shall not be issued. Any option, to the extent
surrendered, shall thereupon cease to be exercisable.
(c) The Committee shall have the sole discretion to determine
the form in which payment (i.e., cash, shares of Common Stock, or any
combination thereof) will be made.
(d) Stock appreciation rights shall be transferable only when
the options to which they relate are transferable, and under the same
conditions.
(e) A stock appreciation right may be exercised only when the
market price of Common Stock exceeds the option price of the option to which the
stock appreciation right relates.
11. Adjustment in Event of Recapitalization of the Company. In the
event of a reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure or shares of the Company, the Board of
Directors shall make an appropriate adjustment in the number and the kind of
shares that may be subjected to options under the Plan and the number and kind
of shares covered by options granted, and in the option price.
4
<PAGE>
Amendment to the Handy & Harman 1982 Stock Option Plan
1. A new Section 12 is added to read as follows:
"12. Change in Control. (a) Notwithstanding anything in the Plan
to the contrary, upon a Change in Control of the Company, all outstanding
options granted under the Plan shall become immediately exercisable.
(b) For purposes of this Section, a Change in Control of the Company
shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (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 the Company in
substantially the same proportions as their ownership of stock of the Company),
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the Company's then outstanding
securities;
(ii) during any period of two consecutive years (not
including any period prior to the execution of this amendment to 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 the Company 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 the Company'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 the Company approve a
merger or consolidation of the Company with any other corporation; other than
(A) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than
<PAGE>
70% of the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation or
(B) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no "person" (as hereinabove defined)
acquires more than 50% of the combined voting power of the Company's then
outstanding securities; or
(iv) the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets."
<PAGE>
HANDY & HARMAN
MANAGEMENT INCENTIVE PLAN
CORPORATE GROUP PARTICIPANTS
The name of this Plan is "The Handy & Harman Management Incentive Plan
- - Corporate Group Participants". The purpose of this Plan is to promote the
interests of the stockholders of the Company and to provide incentive to those
officers and management employees who can contribute to the profits of the
Company. Effective as of January 1, 1994, the Plan is amended and restated with
respect to any and all Incentive Awards earned beginning in the 1994 Fiscal Year
(except as set forth in the Regulations) as follows:
SECTION I. - Definitions.
The terms herein used will have the following definitions:
a. The term "Plan" means The Handy & Harman Management Incentive
Plan - Corporate Group Participants, as amended from time to
time.
b. The term "Company" means Handy & Harman, a New York corpora-
tion.
c. The term "Board of Directors" means the Board of Directors of
the Company.
d. The term "Salary" shall mean the highest rate of basic
compensation, expressed as an annual rate, paid to a
Participant during the Fiscal Year.
e. The term "Employee" means any person who is a regular, full
time and active employee of the Company, including officers
and directors, and who is paid by the Company on a salary
basis, but excluding any person who is a regular and full time
employee of a subsidiary or
<PAGE>
division of the Company having a separate Management Incentive
Plan.
f. The term "Participant" means any person selected to
participate in the Plan for any Fiscal Year.
g. The term "Corporate Group Participant" means any Participant
who is designated by the Committee to participate in the
Corporate Group Incentive Plan Provisions for any Fiscal Year.
h. The term "Committee" means the Management Incentive Committee
or the Incentive Awards Committee provided for in Section II.
i. The term "Incentive Award" means an award under the Plan to a
Participant, and either paid currently or paid on a deferred
basis.
j. The term "Incentive Plan Provisions" means monies out of the
Net Earnings or Consolidated Net Earnings of the Company, as
the case may be, for any Fiscal Year, which are made available
for distribution as Incentive Awards as the result of the
operation of this Plan or any Subsidiary, Division, Group or
Unit Management Incentive Plan.
k. The term "Fiscal Year" shall mean the fiscal year of the
Company, January 1 to December 31.
SECTION II. - The Committee.
a. The Compensation Committee of the Board of Directors shall
comprise the "Management Incentive Committee" or the
"Incentive Awards Committee". The Committee shall have full
power and authority to interpret and administer the Plan in
accordance with the terms of the Plan and the Regulations (as
defined herein).
b. The Committee shall select one of its members as Chairman and
shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a
quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced
to writing and signed by a majority of the members of the
Committee shall be as fully effective as if it had
2
<PAGE>
been made by a majority vote at a meeting of the Committee
duly called and held. The members of the Committee may receive
such compensation for their services as the Board of Directors
may determine.
SECTION III. - Regulations.
The Board of Directors shall have the power to adopt rules and
regulations (the "Regulations") not inconsistent with the provisions of the
Plan, governing the selection and eligibility of Participants of the Plan, and
for the administration of the Plan and to alter, amend or revoke any Regulation
so adopted.
SECTION IV. - Participants.
Participants in the Plan shall be limited to those Employees selected
by the Committee in accordance with the Regulations.
SECTION V. - Determination of Incentive Plan Provision.
The amount of the Incentive Plan Provisions for Corporate Group
Participants shall be seven and one-half percent (7.5%) of the Consolidated Net
Earnings in excess of fifteen percent (15%) of Shareholders Equity, or such
lesser percentages of Consolidated Net Earnings in excess of fifteen percent
(15%) of Shareholders Equity, as may be fixed and determined by the Committee in
accordance with the Regulations.
The term "Consolidated Net Earnings" means, for the purpose of
computing the amount which may be fixed and determined by the Committee as the
Corporate Group Incentive Plan Provision, the consolidated earnings of the
Company and its subsidiaries for such Fiscal Year, exclusive of LIFO adjustments
and before deducting taxes based upon income and the amount of any Incentive
Plan Provisions for such Fiscal Year, as reported to the President of the
Company by the Company's independent auditors.
The term "Shareholders Equity" means, for the purpose of computing the
amount which may be fixed and determined by the Committee as the Corporate Group
Incentive Plan Provision for any Fiscal Year, the sum of items 1-3 below, less
the sum of items 4-6 below, as of the close of business of the preceding Fiscal
Year
3
<PAGE>
as shown by the Consolidated Balance Sheet of the Company and its subsidiaries
for such preceding Fiscal Year as prepared by the Company's independent
auditors.
1. Common Stock of the Company outstanding.
2. Capital Surplus.
3. Retained Earnings.
4. Treasury Stock.
5. Foreign Currency Translation Adjustments.
6. Unearned Compensation.
SECTION VI. - Report of Chief Executive.
As soon as possible after the close of each Fiscal Year, the Chief
Executive Officer of the Company shall determine and report in writing to the
Committee the Consolidated Net Earnings of the Company and its subsidiaries for
such Fiscal Year and the maximum amount of the Corporate Group Incentive Plan
Provision available for such fiscal year out of the Consolidated Net Earnings as
reported. The Committee shall rely upon and be bound by such report.
SECTION VII. - Incentive Awards.
a. Upon the fixing of the formula for determining the amount of
the Corporate Group Incentive Plan Provision, the Committee
may allot, in such manner as it may determine in accordance
with the Regulations, such shares or percentages of the
amounts available in the Incentive Plan Provision to each of
the Participants as it may select from those designated to
participate in the Incentive Plan Provisions. At the sole
discretion of the Committee, based upon the recommendation
of the Chief Executive Officer of the Company, an Incentive
Plan Provision may be determined for Incentive Awards to
recognize outstanding overall effort applied to the
enhancement of the long-term growth potential of the
Company. The total amount of the Incentive Plan Provision
which may be made available for Incentive Awards under the
preceding sentence shall not exceed 25% of the aggregate of
4
<PAGE>
the salaries of Participants to whom Incentive Awards are
granted under the preceding sentence.
b. The Committee's selection of the Participants to whom
Incentive Awards shall be made and its determination of the
amounts and method of payment of such Incentive Awards shall
be final.
c. No Participant shall receive an Incentive Award greater than
100% of the Participant's Salary in the Fiscal Year for
which the Incentive Award was earned.
SECTION VII. - Expenses; Forfeitures of Incentive Awards.
a. All expenses incurred by the Committee in interpreting and
administering the Plan shall be charged against Plan
reserves.
b. The amount of any Incentive Award forfeited by a Participant
shall be retained by the Company and shall not be
re-credited to the Incentive Plan Provision.
SECTION VIII. - Termination of Plan.
The Board of Directors may suspend or discontinue the Plan
at any time.
SECTION IX. Effective Date.
This Plan shall become effective in accordance with the resolution of
the Board of Directors or the preamble hereto.
5
<PAGE>
EXHIBIT A
HANDY & HARMAN
MANAGEMENT INCENTIVE PLAN
CORPORATE GROUP PARTICIPANTS
ELECTION NOTICE
As provided in the Handy & Harman Management Incentive Plan - Corporate
Group Participants, as amended and restated (the "Plan"), I hereby elect to
defer payment of all or a portion of any Incentive Award for the year 19__ in
the following manner:
Amount of Deferral (fill in one)
$-----------------
(amount)
or
------------------%
(percentage)
Payment Option: The compensation deferred is to be paid to me in (choose
one):*
_______ one lump sum.
- ------------------------------------
* If you have previously elected a Payment Option and Retirement Date,
your prior election will apply and you need not complete these
Sections. If you wish to change either or both of your Payment Option
and Retirement Date, you may do so (subject to the terms and conditions
of the Plan and Regulations).
6
<PAGE>
_______ quarter-annual installments (choose 3-20 years). Payments
begin on the first day of next calendar quarter following
Retirement Date.
Retirement Date: If the lump sum payment option is chosen, the lump sum
is to be paid on (choose one):*
_______ the last day of the month in which I become age 65.
_______ _________, 19__ (some other date which must be
after the earlier of (i) three years from the date
of this election, or (ii) your termination of
employment with the Company).
Date:
-------------------------- -------------------------
(Signature)
-------------------------
(Print Name)
7
<PAGE>
EXHIBIT B
HANDY & HARMAN
MANAGEMENT INCENTIVE PLAN
CORPORATE GROUP PARTICIPANTS
INVESTMENT ELECTION
I hereby direct that amounts credited to my Account under the Handy &
Harman Management Incentive Plan - Corporate Group Participants, as amended and
restated, be invested as follows:
% Pooled Account - Company selected investment manager
- -----
% T. Rowe Price International Stock Fund
- -----
% T. Rowe Price Prime Reserve Fund
- -----
% T. Rowe Price GNMA Fund
- -----
% T. Rowe Price Capital Appreciation Fund
- -----
% T. Rowe Price Spectrum Growth Fund
- -----
% T. Rowe Price Stable Value Fund
- -----
100% Total
- -----
Future deferrals will be allocated as shown above or a different
allocation of the Reserve Account may be selected by notifying the committee in
writing. No more than four changes may be made in any calendar year.
Date:
--------------------- ---------------------------
(Signature)
-------------------------
(Print Name)
8
<PAGE>
EXHIBIT C
HANDY & HARMAN
MANAGEMENT INCENTIVE PLAN
CORPORATE GROUP PARTICIPANTS
DESIGNATION OF BENEFICIARY(IES)
In accordance with the provisions of the Handy & Harman Management
Incentive Plan - Corporate Group Participants, as amended and restated (the
"Plan"), I hereby designate the person (or persons) named below my beneficiary
(or beneficiaries) to receive any amounts in my deferred compensation account
in the event of my death, hereby revoking all prior designations of
beneficiary(ies), if any, made by me under the Plan.
NAME ADDRESS
Date:
--------------------------- -------------------------
(Signature)
-------------------------
(Print Name)
9
<PAGE>
SUBSIDIARY, DIVISION, GROUP OR UNIT
MANAGEMENT INCENTIVE PLAN
The name of this Plan is "Subsidiary, Division, Group or Unit
Management Incentive Plan." The purpose of this Plan is to promote the interests
of Subsidiary, Division, Group or Unit (the "Company") and to provide incentive
to those Officers and management employees who can contribute to the profits of
the Company. Effective as of January 1, 1994, the Plan is amended and restated
with respect to any and all Incentive Awards earned beginning in the 1994 Fiscal
Year (except as otherwise set forth in the Regulations) as follows:
SECTION I. DEFINITIONS
The terms herein used will have the following definitions:
A. The term "Plan" means this Management Incentive Plan.
B. The term "Salary" shall mean the highest rate of basic
compensation, expressed as an annual rate, paid to a Participant
during the fiscal year.
C. The term "Employee" means any person who is a regular and full
time and active employee of the Company, or of any wholly-owned
subsidiary thereof, including Officers and Directors, and who is
paid on salary basis.
D. The term "Participant" means any person selected to participate
in the Plan for any fiscal year.
E. The term "Committee" means the Incentive Awards Committee provided
for in Section II.
F. The term "Incentive Award" means an award under the Plan to a
Participant, and either paid currently or paid on a deferred basis.
G. The term "Incentive Plan Provision" means monies which are made
available for distribution as Incentive Awards as the result of
the operation of the Plan.
H. The term "Fiscal Year" shall mean the fiscal year of the Company,
January 1 to December 31.
I. The term "Operating Profit" shall be the amount reported in the
audited financial statements in accordance with Generally
Accepted Accounting Principals (GAAP) and shall exclude (i)
interest (except interest
<PAGE>
charged on precious metals which are used by the business, and not
included in the assets of the business), (ii) provision for
payments of Management Incentive Plan (MIP) bonuses, and (iii)
other income and deduction items approved for exclusion by the
President of Handy & Harman. Examples of items which may be
excluded in this category are as follows:
a. Gain or loss on sale of fixed assets.
b. Timing differences and special reserves.
c. Windfall profits from settlement of an insurance
claim.
J. The term "Capital Employed" shall mean total assets of
the business minus non-interest bearing debt. This is
also the same as Shareholders' Equity plus interest
bearing debt which includes the Cash Management Ac-
counts.
K. The term "Return on Capital" shall mean annual Operat-
ing Profit divided by monthly average Capital Employed.
SECTION II. THE COMMITTEE
The Board of Directors of Handy & Harman, the Parent Company, shall
appoint a Committee, who shall be Directors of Handy & Harman, to be known as
the "Incentive Awards Committee." The Committee shall have full power and
authority to interpret and administer the Plan in accordance with the terms of
the Plan and the Regulations (as hereinafter defined). The Committee shall
select one of its members as Chairman and shall hold its meetings at such times
and places as it may determine. A majority of its members shall constitute a
quorum. All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by a
majority of the members of the Committee shall be as fully effective as if it
had been made by a majority vote at a meeting of the Committee duly called and
held. The members of the Committee may receive such compensation for their
services as the Board of Directors of Handy & Harman may determine.
SECTION III. REGULATIONS
The Board of Directors of Handy & Harman shall have the power to
adopt rules and regulations (the "Regulations") not inconsistent with the
provisions of the Plan, governing the selection and eligibility of the
Participants of the Plan, and for the administration of the Plan and to alter,
amend or revoke any Regulation so adopted.
2
<PAGE>
SECTION IV. PARTICIPANTS
Participants in the benefits of the Plan shall be limited to those
Employees selected by the Committee in accordance with the Regulations.
SECTION V. DETERMINATION OF INCENTIVE PLAN PROVISION
The Incentive Plan Provision shall consist of two parts, hereinafter
referred to as "Part A" and "Part B," respectively. Although most Participants
will be included in both the A & B portion of the Plan at the discretion of the
President of the Company, some individuals will only participate in either the A
or B portion. The maximum amount made available for distribution as Incentive
Awards under the respective Parts shall be determined as follows:
A. DETERMINATION OF PART A
1. Operating Profit and Return on Capital Goals shall
be established for the Company for such fiscal
year by the beginning of such year, or as soon
thereafter as is possible.
2. Upon approval of the Operating Profit and Return
on Capital Goals by the President of Handy & Harman
such Goals shall be the basis for calculating
the Incentive Plan Provision under Part A, by
utilizing the Operating Profit and Return on Capi-
tal of the Company for such fiscal year and apply-
ing the formula set forth in Appendix A attached
hereto. The Incentive Plan Award under Part A in
accordance with the Chart listed as Appendix A
will be calculated in two steps:
(a) The percent of Operating Profit Goal
achieved (75% of A).
(b) The percent of Return on Capital Goals
achieved (25% of A).
These two, calculated separately and added to-
gether, will represent the Provision under Part A.
3. The amount of the Incentive Plan Provision deter-
mined under this Part A shall not exceed a sum
equal to 4% of the Company's Operating Profit for
such fiscal year, notwithstanding the fact that
the calculation made pursuant to sub-section 2,
above, may produce a greater sum.
3
<PAGE>
4. In the event that the President of Handy & Harman
approves an Operating Goal for a fiscal year which
projects a net operating loss, he may submit to
the Committee as soon as possible after the end of
the fiscal year a recommendation for the determi-
nation of an appropriate Incentive Plan Provision
under Part A for such fiscal year. The Committee
shall consider such recommendation and establish
such Incentive Plan Provision, if any, as it may
deem appropriate and proper under the circum-
stances, without regard to the limitations stated
in sub-section 3 of this Section or by the formula
set forth in Appendix A.
B. DETERMINATION OF PART B
At the sole discretion of the Committee based upon the
recommendation of the President of Handy & Harman, an
Incentive Plan Provision may be determined under this
Part B for Incentive Awards to recognize outstanding
overall effort applied to the enhancement of the long-
term growth potential of the Company. The total amount
of the Incentive Plan Provision which may be made
available for Incentive Awards under this Part B shall
not exceed 25% of the aggregate of the salaries of
Participants to whom Incentive Awards are granted under
this Part B.
C. Except as provided in paragraph D, below, the total
amount of the Incentive Plan Provision, whether deter-
mined under Part A, Part B or both of such Parts, shall
not exceed a sum equal to 7% of the Company's Operating
Profit for such fiscal year, notwithstanding the fact
that the calculations made pursuant to the above provi-
sions of this Section may produce a greater sum.
D. In the extraordinary circumstance where the President
of Handy & Harman determines that an exceptionally high
level of performance in the area of achievement of
long-term future growth potentia1 for the Company has
been accomplished during a fiscal year, the Committee
may determine an amount of Incentive Plan Provision to
be made available for Incentive Awards to the Partici-
pants responsible for such achievement under Part B,
notwithstanding the limitation set forth in paragraph
C, above.
E. No Participant shall receive an Incentive Award that
exceeds 75% of his Salary for the Fiscal Year for which
the Incentive Award was earned.
4
<PAGE>
SECTION VI. REPORT TO INCENTIVE AWARD COMMITTEE
As soon as possible after the close of the Fiscal Year, the
President of Handy & Harman shall report, in writing, to the Committee (i) the
Operating Profit (or Loss) of the Company for such fiscal year, and (ii) the
determination of the Incentive Plan Provision for such fiscal year under Part A,
made in accordance with the procedure set forth above. The President shall
also include in such report any recommendation as to Incentive Awards to be made
available pursuant to Part B, with such supporting information as may be deemed
appropriate to enable the Committee to make its determination of an Incentive
Plan Provision under said Part B. The Committee may rely upon the factual
information set forth in such report.
SECTION VII. INCENTIVE AWARDS
A. Upon the receipt of the Report referred to in Section
VI containing the determination of the amount of the
Incentive Plan Provision under Part A for the Fiscal
Year, an amount not exceeding such amount may be allot-
ted by the Committee as Incentive Awards under Part A
for such fiscal year to such Employees as it may select
as Participants.
B. The Committee may determine an amount of Incentive Plan
Provision to be made available as Incentive Awards
under Part B, pursuant to the recommendation of the
President of Handy & Harman. Any such amount shall be
allotted by the Committee as Incentive Awards to such
Employees as it may select as Participants.
C. The Committee's selection of the Participants to whom
Incentive Awards shall be made in accordance with the
Plan and the Regulations and its determination of the
amounts and method of payment of such Incentive Awards
shall be final.
SECTION VIII. FORFEITURE OF INCENTIVE AWARDS
The amount of any Incentive Award forfeited by a
Participant shall be retained by the Company and shall not be re-
credited to the Incentive Plan Provision.
SECTION IX. TERMINATION OF PLAN
The Board of Directors of Handy & Harman may suspend or
discontinue the Plan at any time.
5
<PAGE>
SECTION X. EFFECTIVE DATE
This Plan shall become effective in accordance with the
resolution of the Board of Directors of Handy & Harman or the
preamble hereto.
* * *
6
<PAGE>
APPENDIX A
MANAGEMENT INCENTIVE PLAN
FORMULA FOR DETERMINATION OF
INCENTIVE PLAN PROVISION UNDER
PART A
INCENTIVE PLAN PROVISION
(APPLICABLE % OF TOTAL OF
PARTICIPANTS' SALARIES)
<TABLE>
<CAPTION>
PERCENT OF
GOAL ACHIEVED OPERATING PROFIT RETURN ON
------------- ---------------- CAPITAL
---------
<S> <C> <C>
Less than - 80% 0 0
Over 80% - 82% 1.50% .50%
" 82% - 84% 2.25% .75%
" 84% - 86% 3.00% 1.00%
" 86% - 88% 5.25% 1.75%
" 88% - 90% 7.50% 2.50%
" 90% - 92% 9.00% 3.00%
" 92% - 94% 11.25% 3.75%
" 94% - 96% 12.75% 4.25%
" 96% - 98% 15.00% 5.00%
" 98% - 100% 17.25% 5.75%
" 100% - 102% 18.00% 6.00%
" 102% - 104% 18.75% 6.25%
" 104% - 106% 19.50% 6.50%
" 106% - 108% 21.00% 7.00%
" 108% - 110% 21.75% 7.25%
" 110% - 112% 23.25% 7.75%
" 112% - 114% 24.00% 8.00%
" 114% - 116% 24.75% 8.25%
" 116% - 118% 26.25% 8.75%
" 118% - 120% 27.00% 9.00%
" 120% - 122% 27.75% 9.25%
" 122% - 124% 29.25% 9.75%
" 124% - 126% 30.00% 10.00%
" 126% - 128% 30.75% 10.25%
" 128% - 130% 31.50% 10.50%
" 130% 32.25% 10.75%
</TABLE>
7
<PAGE>
MANAGEMENT INCENTIVE PLAN
RULES AND REGULATIONS
Set forth below are the Rules and Regulations under which the
Management Incentive Plan is to be administered. The terms used herein
are as defined in the Plan.
1. Participation in the Plan shall be limited to officers and
those employees holding positions as heads of major depart-
ments or operational functions, or who perform other impor-
tant duties, and who can contribute substantially to the
Company's profitability and growth.
2. An Incentive Award granted to a Participant shall be based
upon the relative contribution made by the Participant
during the Fiscal Year toward total corporate earnings and
growth. If a Participant's work performance has been unsat-
isfactory, no Incentive Award will be made to that Partici-
pant for the fiscal year.
3. Not all officers need be selected as Participants. The
selection of an employee as a Participant one year does not
require selection of that employee as a Participant in
subsequent years.
4. At the beginning of each fiscal year the President of the
Company shall submit to the Corporate Group Vice President
of Handy & Harman (or the person holding the equivalent
position) a written list of his recommendations as to the
employees who should be selected as Participants in the Plan
for that year. The Corporate Group Vice President shall
review such list with the President of Handy & Harman,
following which an approved list of recommendations shall be
submitted to the Committee in writing.
5. Upon receipt of such list of approved recommendations from
the President of Handy & Harman, Participants shall be
selected for such year by the Committee. Participants shall
be notified in writing by the President of the Company of
their selection as Participants for that fiscal year.
6. At the end of each fiscal year, the President of the Company
shall submit to the Corporate Group Vice President of Handy
& Harman (or the person holding the equivalent position) a
written list of his recommendations as to the amount of
Incentive Award each Participant should receive for that
fiscal year. The Corporate Group Vice President shall
review such list with the President of Handy & Harman,
following which an approved list of recommendations shall be
submitted to the Committee in writing.
8
<PAGE>
7. As soon as possible following receipt of the report of the
President of Handy & Harman showing the determination of the
Incentive Plan Provision under Part A of Section V of the
Plan for the fiscal year and the list of approved recommen-
dations as to the amount of Incentive Award for each Partic-
ipant, the Committee shall fix and determine the portion or
percentage of the available amount in the Incentive Plan
Provision to be allotted as Incentive Awards under said Part
A to the respective Participants for such fiscal year.
8. In the event that the President of Handy & Harman shall
submit to the Committee a recommendation that an Incentive
Plan Provision should be determined under Part B of Section
V of the Plan for the fiscal year, the Committee may, in its
sole discretion, fix and determine the amount of such Incen-
tive Plan Provision under said Part B and the portion or
percentage of the available amount in such Incentive Plan
Provision to be allotted as Incentive Awards for such fiscal
year to the respective Participants.
9. Incentive Awards which are less than 10% of the Partici-
pant's annual salary rate shall be paid in cash in full.
Incentive Awards which are 10% or more of the Participant's
annual salary rate may either be paid in cash in full, or on
a deferred basis in accordance with the terms of these
Regulations.
10. Except as otherwise provided herein, for all or any portion
of an Incentive Award to be paid to a Participant, the
Participant (a) must be an Employee of the Company, or of a
wholly-owned subsidiary thereof, or (b) must have retired
under the Company's retirement plan as of the date the
Incentive Award, or portion thereof, is payable. Incentive
Awards, or portions thereof, shall not be made or paid to
individuals who resign from their position with the Company,
or whose employment is terminated by the Company, or by a
wholly-owned subsidiary thereof, prior to the date the
Incentive Award, or portion thereof, is payable, unless
otherwise provided herein or determined by the Committee.
11. In the event of the death of a Participant, all unpaid
portions of Incentive Awards shall be considered payable,
and shall be paid (a) to the Participant's estate, or (b) as
provided herein, or (c) to or among such relatives (by blood
or marriage) of the deceased Participant as the Committee
may determine, in its sole discretion.
12. No excess of the Plan Provision, over and above the total of
the Incentive Awards approved by the Committee for such
year, shall be carried forward to a following fiscal year.
9
<PAGE>
13. Unless deferred as provided herein, Incentive Awards for any
Fiscal Year shall be paid as directed by the Committee on or
after February 1st, but not later than March 15th of the
following year. Any Incentive Award, or portion thereof,
which is to be paid on a deferred basis shall be placed in
the Reserve Account (as hereinafter defined) of the Partici-
pant pursuant to the terms hereof.
14. The Committee shall keep minutes of its actions and shall
report all action taken to the Board of Directors of Handy &
Harman.
15. A Participant may elect to defer all or any portion of his
or her Incentive Award for a Fiscal Year (subject to Section
9 of these Regulations), by giving written notice to the
Committee specifying: (1) the amount to be deferred; (2) an
election of payment in either a single lump sum or annual
installments, as provided in Section 17 (each, a "Payment
Option"); and (3) a Retirement Date (as hereinafter de-
fined), which, in the case of a lump sum distribution, must
be no earlier than the earlier of (a) three years after the
date of such election or (b) the Participant's termination
of employment with the Company. A form of notice is at-
tached as Exhibit A. Any such election shall be made by the
Participant prior to the end of the Fiscal Year with respect
to which such Incentive Award is to be earned. Separate
deferral elections may be made with respect to Incentive
Awards attributable to different Fiscal Years; provided,
however, that a single Payment Option and a single Retire-
ment Date shall apply to amounts deferred by a Participant
hereunder. Such election may be revoked by the Participant,
and a new election of a Payment Option and/or a Retirement
Date may be made, provided that such new election shall be
null and void and of no force and effect unless (1) such new
election is made at least one year prior to the Partici-
pant's termination of employment with the Company, (2) in
the event the new election involves a revocation of an
annual installment Payment Option and the election of a lump
sum distribution Payment Option, the newly elected Retire-
ment Date is at least three years after the date of the new
election, and (3) in the event the new election involves a
change in the Retirement Date applicable to a previous lump
sum distribution election, (a) the new election is made at
least one year prior to the Retirement Date previously in
effect and (b) the new Retirement Date is at least three
years after the date of the new election. If more than one
election notice has been filed, the election in the most
recent valid notice shall control. An amount equal to the
portion of any Incentive Award so deferred shall be credited
to the Participant on the Company's books in a reserve
account (the "Reserve Account"). Deferred amounts credited
to a Participant's Reserve Account shall, except as other-
10
<PAGE>
wise provided in Section 16, 17, 21, 22, 23 or 26 hereof,
commence to be paid on the last day of the month in which
the Participant becomes age 65, or on such other date as the
Participant shall designate in his or her election hereunder
(the "Retirement Date").
16. Notwithstanding anything to the contrary herein, the Commit-
tee, in its sole discretion and in accordance with rules as
it may prescribe, may permit distribution of all or any
portion of deferred amounts in the case of the Participant's
hardship and may determine to cause distributions on the
Retirement Date to be made in a lump sum.
17. Except as otherwise provided herein, deferred amounts cred-
ited to the Participant's Reserve Account shall be paid in
one of the following Payment Options, as elected by the
Participant:
(a) Lump-Sum Distribution. The Participant may elect to
receive the value of his or her Reserve Account in a
lump sum distribution.
(b) Annual Installments. The Participant may elect to
receive the value of his or her Reserve Account in
quarter-annual installments over a period of between
three and twenty years, as elected by the Participant.
The first payment shall be made on the first day of the
next calendar quarter following the Retirement Date and
shall be equal to the amount credited to the Partici-
pant in the Reserve Account as of the date of such
payment, divided by the total number of payments to be
made; and the succeeding installment payments, in
amounts equal to the amount credited to the Participant
in the Reserve Account as of the date of payment divided
by the number of remaining installment payments
to be made, shall continue to be made thereafter at
quarter-annual intervals until the last such payment,
equal to the entire amount then credited to the
Participant in the Reserve Account, is made.
Amounts so paid shall be subtracted as
paid from the amount credited to
the Participant in the Reserve Account.
18. The Committee shall appoint a committee of three, which may
include the Participant, to administer the Participants'
Reserve Accounts and any of the Company's funds invested in
connection therewith. The Company or Handy & Harman may
create a grantor trust (within the meaning of section 671 of
the Internal Revenue Code of 1986, as amended (the "Code")),
for this purpose to which it shall from time to time con-
tribute amounts equal to the amounts deferred hereunder.
Such trust shall conform to the terms of the model trust as
described in the Internal Revenue Service Revenue Procedure
11
<PAGE>
92-64 (I.R.B. 1992-33). Payment of benefits from such trust
shall, to that extent, discharge the Company's obligations
under this Plan. The Participant shall elect that amounts
credited to his or her Reserve Account be invested in one or
more investment funds which shall be made available for such
purposes under such trust or otherwise. A form of such
investment election is attached as Exhibit B. The Partici-
pant may amend his or her investment election no more than
four times per calendar year, subject to any restrictions
which the committee may impose from time to time. Notwith-
standing the existence of any such trust or other funding
vehicle, it is expressly understood that neither the Partic-
ipant nor his or her beneficiary (the "Beneficiary") shall
have any present or future interest in the funds so in-
vested, which, together with the dividend and interest
income thereon and any capital gains realized with respect
thereto, shall constitute assets of the Company or Handy &
Harman, as the case may be. It is further understood that
neither the Plan nor these Regulations create any fund or
trust for the benefit of the Participant or his or her
Beneficiary, that the Company's obligation hereunder is
limited to the contractual obligation to make payments to
the Participant or to his or her Beneficiary as provided
herein, and that with respect to such payments the rights of
the Participant or his or her Beneficiary shall be those of
an unsecured creditor of the Company. Amounts equal to the
dividend or interest income from such investments shall be
added to the amount credited to the Participant in the
Reserve Account as such income is earned or reported to the
committee by the investment manager. Amounts equal to
unrealized gains and losses with respect to such investments
shall be added to or subtracted from the amount so credited
as such gains and losses are realized or reported, as the
case may be. The corporation income tax on any income
earned by funds so invested shall be paid by the Company and
shall not be a charge against the Participant's Reserve
Account.
19. The amount credited to the Participant in the Reserve Ac-
count on any date for which a computation is made shall be
equal to the sum of (i) the cash credited to such account at
the opening of business on such date as provided in Section
18 hereof, plus (ii) the closing market value of the securi-
ties, if any, in which the Company's (or Handy & Harman's)
funds are invested in connection with such account, as
hereinabove provided, as of the close of business on the
last business day prior to the date of computation. If any
portion of such funds are deposited with a bank in a discre-
tionary investment management account, the amount credited
to the Participant on any computation date shall include an
amount equal to the value on such date, or on the preceding
day, of the investments in such account, as verified by the
12
<PAGE>
bank in a quarterly summary value statement issued in its
capacity as investment manager. If funds invested in con-
nection with the Reserve Accounts of two or more Partici-
pants are commingled in an account for any investment pur-
pose, the amount credited to the Participant in the Reserve
Account shall include an amount equal to a proportionate
share of the value of such account.
20. The Participant shall file with the Company a Beneficiary
statement designating an individual or the Participant's
estate as Beneficiary. If no Beneficiary statement is
filed, the Beneficiary shall be the Participant's estate.
If more than one Beneficiary statement has been filed, the
Beneficiary designated in the Beneficiary statement bearing
the most recent date shall be the Beneficiary. A form of
designation of Beneficiary is attached as Exhibit C.
21. If the Participant's employment with the Company shall
terminate before the Retirement Date due to:
(a) permanent and total disability which prevents the
Participant from engaging in any occupation for wage or
profit; or
(b) physical or mental disability which prevents the Par-
ticipant from performing his duties in a manner satis-
factory to the Company,
the amount credited to the Participant in the Reserve Ac-
count as of the date of the disability shall be distributed,
commencing as of such date, based on the Payment Option then
in effect with respect to the Participant. For the purpose
of this paragraph, a determination by the Board of Directors
of Handy & Harman that such disability exists shall be
conclusive.
22. In the event the Participant shall die before the Retirement
Date and while employed by the Company, the amount credited
to the Participant in the Reserve Account as of the date of
the Participant's death shall be distributed to the Benefi-
ciary, if an individual, based on the Payment Option then in
effect with respect to the Participant. If the Beneficiary
is the Participant's estate, the amount credited to the
Participant in the Reserve Account as of the date of the
Participant's death shall be paid to the Participant's
estate in one lump sum.
If distribution is being made to a Participant in install-
ments (as provided in Section 17 hereof) and such Partici-
pant dies before all installment payments have been made,
the amount credited to the Participant in the Reserve Ac-
count as of the date of the Participant's death shall be
13
<PAGE>
distributed to the Beneficiary, if an individual, by contin-
uation of the remaining installment payments. If the Bene-
ficiary is the Participant's estate, the amount credited to
the Participant in the Reserve Account as of the date of the
Participant's death shall be paid to the Participant's
estate in one lump sum.
If distribution is being made to a Beneficiary in install-
ments and such Beneficiary dies before all installment
payments have been made, the amount credited to the Partici-
pant in the Reserve Account as of the date of the Benefi-
ciary's death shall be paid to the estate of the Beneficiary
in one lump sum.
23. In the event that the Participant's employment with the
Company shall terminate before the Retirement Date for
reasons other than death or disability, the Reserve Account
shall be credited as hereinabove provided with an amount
equal to all or a portion of the Incentive Award, if any,
made for the year of such termination. In the event of such
termination, the Reserve Account shall continue to be admin-
istered, and payments with respect thereto shall be made, as
otherwise provided herein. In the event that, following
such termination, the Participant shall die, whether before
or after the Retirement Date, distribution shall be made,
commencing as soon as practicable following the Partici-
pant's death, to the Participant's Beneficiary, if an indi-
vidual, in accordance with the Payment Option then in effect
with respect to the Participant or, if the Beneficiary is
the Participant's estate, in a lump sum. In the event that
the Beneficiary shall die prior to the complete distribution
of the Reserve Account, the amount credited to the Reserve
Account as of the date of the Beneficiary's death shall be
paid to the estate of the Beneficiary in one lump sum.
24. The Company's obligation hereunder to make payments to the
Participant with respect to amounts credited to the Partici-
pant in the Reserve Account shall terminate forthwith if,
prior to or following his termination from the Company, the
Participant shall without the prior written consent of the
Company, directly or indirectly engage in any business which
is substantially similar to the business of the Company,
either as a proprietor, stockholder, partner, officer,
employee, consultant or otherwise, provided that the owner-
ship of less than two percent (2%) of the stock in any
corporation engaged in a business which is similar to that
of the Company shall not be deemed the occurrence of such an
event.
25. Neither the Participant, his or her spouse, nor any Benefi-
ciary shall have the power to transfer, assign, anticipate,
mortgage or otherwise encumber in advance any of the bene-
14
<PAGE>
fits payable hereunder, nor shall said benefits be subject
to seizure for the payment of any debts or judgments of any
of them, or be transferable by operation of law in the event
of bankruptcy, insolvency or otherwise of the Participant,
his or her spouse or Beneficiary.
26. Notwithstanding anything to the contrary provided herein, a
Participant may, with the consent of the Company, continue
in active employment after the Retirement Date. In such
event, the Committee may defer the start of the payments
provided for in Section 15 until the first day of the next
calendar quarter following the Participant's termination of
employment. If this is done, appropriate adjustments may be
made in the amounts payable or in the number of installment
payments (if applicable), to take into account the effect of
the delay.
27. Deferral elections made pursuant to the terms and conditions
of these Regulations shall supersede any prior elections in
effect under applicable Deferred Compensation Agreements
between a Participant and the Company with respect to
amounts earned in respect of Fiscal Years prior to 1994. In
the absence of any deferral election by a Participant in
respect of the 1994 Fiscal Year, such Participant shall
nevertheless make a new deferral election hereunder with
respect to such pre-1994 amounts, which election shall
supersede such prior elections.
15
<PAGE>
EXHIBIT A
SUBSIDIARY, DIVISION, GROUP OR UNIT
MANAGEMENT INCENTIVE PLAN
ELECTION NOTICE
As provided in the Subsidiary, Division, Group or Unit Management
Incentive Plan, as amended and restated (the "Plan"), I hereby
elect to defer payment of all or a portion of any Incentive Award
for the year 19__ in the following manner:
Amount of Deferral (fill in one)
$______________________
(amount)
or
_____________________%
(percentage)
Payment Option: The compensation deferred is to be paid to me in (choose
one): (1)
________ one lump sum.
________ quarter-annual installments (choose 3-20 years).
Payments begin on first day of next calendar quarter
following Retirement Date.
Retirement Date: If the lump sum payment option is chosen, the lump sum is to
be paid on (choose one):*
________ the last day of the month in which I become age 65.
________________, 19_ (some other date which must be after the earlier of (i)
three years from the date of this election, or (ii) your termination of
employment with the Company).
Date: ------------------------------
(Signature)
------------------------------
(Print Name)
- ---------------
(*) If you have previously elected a Payment Option and Retire-
ment Date, your prior election will apply and you need not com-
plete these Sections. If you wish to change either or both of
your Payment Option and Retirement Date, you may do so (subject
to the terms and conditions of the Plan and Regulations).
16
<PAGE>
EXHIBIT B
SUBSIDIARY, DIVISION, GROUP OR UNIT
MANAGEMENT INCENTIVE PLAN
INVESTMENT ELECTION
I hereby direct that amounts credited to my Account under the Subsidiary,
Division, Group or Unit Management Incentive Plan, as amended and restated, be
invested as follows:
_____% Pooled Account - Company selected investment manager
_____% T. Rowe Price International Stock Fund
_____% T. Rowe Price Prime Reserve Fund
_____% T. Rowe Price GNMA Fund
_____% T. Rowe Price Capital Appreciation Fund
_____% T. Rowe Price Spectrum Growth Fund
_____% T. Rowe Price Stable Value Fund
100% Total
Future deferrals will be allocated as shown above or a
different allocation of the Reserve Account may be selected by
notifying the committee in writing. No more than four changes
may be made in any calendar year.
Date: -----------------------
(Signature)
-----------------------
(Print Name)
17
<PAGE>
EXHIBIT C
SUBSIDIARY, DIVISION, GROUP OR UNIT
MANAGEMENT INCENTIVE PLAN
DESIGNATION OF BENEFICIARY(IES)
In accordance with the provisions of the Subsidiary, Division, Group or
Unit Management Incentive Plan, as amended and restated (the "Plan"), I hereby
designate the person (or persons) named below my beneficiary (or beneficiaries)
to receive any amounts in my deferred compensation account in the event of my
death, hereby revoking all prior designations of beneficiary(ies), if any, made
by me under the Plan.
--------------------------
Name
--------------------------
--------------------------
--------------------------
Address
Date: --------------------------
(Signature)
--------------------------
(Print Name)
18
<PAGE>
Handy & Harman
DEFERRED FEE PLAN FOR DIRECTORS
(As amended and restated as of January 1, 1995)
Section 1. Effective Date. The effective date of the Handy &
Harman Deferred Fee Plan for Directors (the "Plan") is December 1, 1980.
Effective as of January 1, 1995, the Plan is amended and restated with respect
to any and all fees earned beginning in the 1995 Fiscal Year as follows:
Section 2. Eligibility. Any member of the Board of Directors
(the "Board") of Handy & Harman (the "Company") who is not an officer or other
employee of the Company is eligible to participate in the Plan.
Section 3. Deferred Compensation Account. A deferred
compensation account (the "Account") shall be established for each director who
elects to participate in the Plan.
Section 4. Amount of Deferral. A participant may elect to
defer receipt of all or any part of the compensation payable to the participant
for serving on the Board or committees of the Board. An amount equal to the
compensation deferred shall be credited to the participant's Account on the date
such compensation would otherwise be payable.
Section 5. Time and Period of Election to Participate. An
election to participate in the Plan shall be effective when made as to
compensation not then earned and shall continue until the participant terminates
his participation in the Plan as provided in Section 7, except that compensation
earned before January 1, 1981 may not be deferred under the Plan.
Section 6. Manner of Election to Participate. A participant
shall elect to participate in the Plan by giving written notice to the Company
specifying: (1) the amount to be deferred; (2) an election of payment in either
a single lump sum or annual installments, as provided in Section 10 (each, a
"Payment Option"); and (3) a Retirement Date (as hereinafter defined), which, in
the case of a lump sum distribution, must be no earlier than the earlier of (a)
three years after the date of such election or (b) the participant's termination
of service as a director. A form of notice
<PAGE>
is attached as Exhibit A. Such election may be revoked by the participant, and a
new election of a Payment Option and/or a Retirement Date may be made, provided
that such new election shall be null and void and of no force and effect unless
(1) such new election is made at least one year prior to the participant's
termination from service as a director, (2) in the event the new election
involves a revocation of an annual installment Payment Option and the election
of a lump sum distribution Payment Option, the newly elected Retirement Date is
at least three years after the date of the new election, and (3) in the event
the new election involves a change in the Retirement Date applicable to a
previous lump sum distribution election, (a) the new election is made at least
one year prior to the Retirement Date previously in effect and (b) the new
Retirement Date is at least three years after the date of the new election.
Deferred amounts credited to a participant's Account shall commence to be paid
on such a date as the participant shall designate in his or her deferral
election hereunder or, in the case of installment payments under Section 10
hereof, the commencement date specified in such Section (the applicable
commencement date being referred to herein as the "Retirement Date"). A single
Payment Option and a single Retirement Date shall apply to all amounts deferred
by a participant hereunder. If more than one election notice has been filed,
the election in the most recent valid notice shall control. Notwithstanding such
elections, the Board, in its sole discretion, may determine to make
distributions in cases of hardship and may determine to cause distributions on
the Retirement Date to be made in a lump sum.
Section 7. Termination of Election. A participant may
terminate his participation in the Plan by written notice to the Company. If
participation in the Plan is terminated ("Termination"), an amount equal to the
compensation earned by the terminating participant before Termination which has
not been credited to the terminating participant's Account shall be credited to
such Account. A Termination shall not affect payment of amounts credited to any
Account; such amounts may be paid only as provided in Section 10.
Section 8. Value of Accounts. The value of each participant's
Account shall include amounts credited under Section 4 (deferred compensation)
adjusted for realized and unrealized income or loss resulting from investments
made under Section 9, and less the amount of any payments made under Section 10.
The corporation income tax on any income earned by funds so invested shall be
paid by the Company and shall not be a charge against the participant's Account.
Section 9. Management of Accounts. The Board shall appoint a
committee of three, which may include the participant, to administer the
participant's
2
<PAGE>
Account and any of the Company's funds invested in connection therewith. The
Company may create a grantor trust (with the meaning of section 671 of the
Internal Revenue Code of 1986, as amended (the "Code")) for this purpose to
which it shall from time to time contribute amounts equal to the amounts
deferred hereunder. Such trust shall conform to the terms of the model trust as
described in the Internal Revenue Service Revenue Procedure 92-64 (I.R.B.
1992-33). Payment of benefits from such trust shall, to that extent, discharge
the Company's obligation under this Plan. The participant shall elect that
amounts credited to his or her Account be invested in one or more investment
funds which shall be made available for such purposes under such trust or
otherwise. A form of such investment election is attached as Exhibit B. The
participant may amend his or her investment election no more than four times per
calendar year, subject to any restrictions which the committee may impose from
time to time. Notwithstanding the existence of any such trust or other funding
vehicle, it is expressly understood that neither the participant nor his or her
beneficiary shall have any present or future interest in the funds so invested,
which, together with the dividend and interest income thereon and any capital
gains realized with respect thereto, shall constitute assets of the Company. It
is further understood that this Plan creates no fund or trust for the benefit of
the participant or his or her beneficiary, that the Company's obligation
hereunder is limited to the contractual obligation to make payments to the
participant or to his or her beneficiary as provided herein, and that with
respect to such payments the rights of the participant or his beneficiary shall
be those of an unsecured creditor of the Company.
Section 10. Payment of Deferred Compensation. Except as
otherwise provided herein, payments shall be made from a participant's Account,
in accordance with one of the following Payment Options, as elected by the
participant:
(i) Lump Sum Distribution. The participant may elect to
receive the value of his or her Account in a lump sum
distribution.
(ii) Annual Installments. If annual installments are
elected, amounts credited to the participant's
Account shall be paid in annual installments over a
period of between three and twenty years, as elected
by the participant. The first payment shall be made
on January 15 of the first calendar year following
the participant's termination of service as a member
of the Board and shall be equal to the value of
participant's Account as
3
<PAGE>
of the date of such first payment divided by the
total number of payments to be made. Subsequent
installment payments shall be made on each January
15 thereafter; each such subsequent installment
payment shall be equal to the value of the
participant's Account as of the date of such
subsequent installment payment divided by the number
of installment payments (including such subsequent
installment payment) remaining to be made.
Except as provided in Section 12, all payments made from a
participant's Account shall be paid to the participant. Notwithstanding the
foregoing provisions of this Section 10, if amounts become payable to an estate
of a participant or of a beneficiary pursuant to Section 11 or 12, an amount
equal to the value of the participant's Account on the date of the death
occasioning payments to such estate shall be paid in one lump sum within 60 days
after the date of such death.
Section 11. Determination of Beneficiary. A participant shall
designate a beneficiary by giving written notice to the Company. If more than
one beneficiary designation notice has been filed, the beneficiary (or
beneficiaries) designated in the most recent notice shall control. A form of
designation of beneficiary is attached as Exhibit C.
If no beneficiary is designated, the beneficiary shall be the
participant's estate. If a designated beneficiary fails to survive the
participant, such beneficiary shall be replaced by the participant's estate as
beneficiary. If there is no sufficient evidence that the participant and such
designated beneficiary have died otherwise than simultaneously, for purposes of
the Plan the participant shall be deemed to have survived the designated
beneficiary.
If a designated beneficiary who has survived the participant
shall die, such beneficiary's estate shall replace the beneficiary as
beneficiary.
Section 12. Death of Participant. If a participant dies before
all payments under Section 10 to which he is or might become entitled under the
Plan have been made, all payments made under Section 10 after his death shall be
paid to the beneficiary (or beneficiaries) determined under Section 11.
4
<PAGE>
Section 13. Participant's Right Unsecured. The obligation of
the Company hereunder is supported only by the general assets of the Company; no
provisions of the Plan shall be construed to give any participant or beneficiary
at any time a security interest in any Account or any other asset in trust with
the Company for the benefit of any participant or beneficiary.
Section 14. Statement of Accounts. Statements will be sent to
participants during February, May, August and November of each year as to the
value of their Accounts as the last day of the preceding calendar quarter.
Section 15. Assignability. No right to receive payments
hereunder shall be transferable or assignable by a participant or a beneficiary,
except by will or by the laws of descent and distribution.
Section. 16. Participation in Other Plans. Nothing in this
Plan will affect any right which a participant may otherwise have to participate
in, or under, any other retirement plan or agreement which the Company may now
or hereafter have.
Section 17. Amendment. This Plan may at any time or from time
to time be amended, modified or terminated by the Board. No amendment,
modification or termination shall, without the consent of a participant,
adversely affect such participant's accruals in his Account.
5
<PAGE>
EXHIBIT A
HANDY & HARMAN
DEFERRED FEE PLAN FOR DIRECTORS
ELECTION NOTICE
As provided in the Handy & Harman Deferred Fee Plan for
Directors, as amended and restated as of January 1, 1995 (the "Plan"), I hereby
elect to participate in the Plan and to defer payment of compensation hereafter
earned by me for services on the Board of Directors of Handy & Harman and
committees thereto in the following manner:
Amount of Deferral (fill in one)
$_____________ per year
(amount)
or
______________% per year
(percentage)
Payment Option: The compensation deferred is to be paid to me in
(choose one):*
_____________ one lump sum.
_____________ annual installments {chose 3-20 years}.
Retirement Date: If the lump sum payment option is chosen, the
lump sum is to be paid on (choose one):*
- --------
* If you have previously elected a Payment Option and Retirement Date,
your prior election will apply and you need not complete these
Sections. If you wish to change either or both of your Payment Option
and Retirement Date, you may do so (subject to the term and conditions
of the Plan).
6
<PAGE>
________ the January 15 of the calendar year following
the termination of my services as a member of
the Board of Directors.
________ _________, 19___ (some other date, more than three years after
the date of this election).
Date:____________________ __________________________
(Signature)
--------------------------
(Print Name)
7
<PAGE>
EXHIBIT B
HANDY & HARMAN
DEFERRED FEE PLAN FOR DIRECTORS
INVESTMENT ELECTIONS
I hereby direct that amounts credited to my Account under the
Handy & Harman Deferred Fee Plan for Directors, as amended and restated as of
January 1, 1995, be invested as follows:
_____% Pooled Account - Company select investment manager
_____% T. Rowe Price International Stock Fund
_____% T. Rowe Price Prime Reserve Fund
_____% T. Rowe Price GNMA Fund
_____% T. Rowe Price Capital Appreciation Fund
_____% T. Rowe Price Spectrum Growth Fund
_____% T. Rowe Price Stable Value Fund
100% Total
Future deferrals will be allocated as shown above or a
different allocation of the Account may be selected by notifying the committee
in writing. No more than four changes may be made in any calendar year.
Date:____________________ __________________________
(Signature)
--------------------------
(Print Name)
8
<PAGE>
EXHIBIT C
HANDY & HARMAN
DEFERRED FEE PLAN FOR DIRECTORS
DESIGNATION OF BENEFICIARY (IES)
In accordance with the provisions of the Handy & Harman
Deferred Fee Plan For Directors, as amended and restated as of January 1, 1995
(the "Plan"), I hereby designate the person (or persons) named below my
beneficiary (or beneficiaries) to receive any amounts in my deferred
compensation account in the event of my death, hereby revoking all prior
designations of beneficiary (ies), if any, made by me under the Plan.
NAME ADDRESS
Dated:____________________ __________________________
(Signature)
--------------------------
(Print Name)
9
<PAGE>
EXECUTIVE AGREEMENT
Agreement dated as of September 2, 1986 between Handy & Harman, a New
York corporation ("Company") and __________________ ("Executive").
WHEREAS, Executive has been employed by Company continuously for many
years and has rendered valuable services to Company; and
WHEREAS, Company desires to continue to benefit from Executive's
knowledge and experience as a full-time executive employee and considers such
employment a vital element in protecting and enhancing the best interests of the
Company, and Executive desires to continue in full-time employment with the
Company.
NOW THEREFORE, in consideration of the continued employment of Executive
by Company, the continued service by Executive to Company, and the mutual
covenants contained herein, the parties agree as follows:
1. Employment. Subject to the right of the Company to take any and all
action of the kind specified in Section 3(a) through (h) prior to the
acquisition of 25% or more of the outstanding shares of Company stock as
specified in Section 3, the Company shall continue to employ Executive in his
current capacity as Vice President-Precious Metals and Executive shall continue
to serve to the best of his ability in such capacity, devoting substantially all
his business time thereto.
2. Compensation. Executive's compensation shall consists of:
(a) A base annual salary at an annual rate at least equal to
Executive's base annual salary on the date of this Agreement and as
the same
<PAGE>
may be increased from time to time by Company's board of directors
("Base Salary").
(b) Such additional incentive or bonus compensation
("Incentive Pay") which may be granted to Executive specifically or to
which Executive now or hereafter may be entitled under any plan or
arrangement maintained by Company for its executive or managerial
employees including Company's Management Incentive Plan, or for
employees generally, provided that, for purposes of this Section 2
only, Executive shall not be entitled, except in the sole discretion
of Company's board of directors, to future awards under the Company's
existing stock option plans and any other plan involving stock options
or the purchase of Company shares (collectively, such stock option and
share purchase plans are herein referred to as the "Non-Continuing
Benefits").
(c) All benefits to which Executive shall be entitled in or
under any and all pension plans ("Pension Benefits"), and in or under
any and all employee benefit plans and group life insurance, group
health insurance and group accident insurance programs ("Fringe
Benefits"), maintained by Company for its executive or managerial
employees.
(d) Reimbursement for all reasonable expenses ("Expense
Reimbursement") incurred by Executive in connection with the
performance of duties for the Company, such Expense Reimbursement to
be made in a manner consistent with the policy of Company in force at
the time of such Expense Reimbursement.
(e) Such number of days vacation per year ("Vacation") as
Company granted to Executive in the calendar year 1985 and as Company
shall hereafter grant to its executive or managerial employees without
any
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loss of Base Salary, Incentive Pay, Pension Benefits, Fringe Benefits
or Expense Reimbursement to which the Executive is entitled.
3. Trigger Events. If 25% or more of the outstanding shares of Company
stock having voting power to elect a majority of the board of directors of the
Company shall after the date of this Agreement be acquired by one or more
persons, firms, corporations or other entities acting alone or as a coordinated
group, and thereafter, without the express prior written consent of Executive,
any of the following events shall occur, such event shall be deemed a Trigger
Event:
(a) There shall be a material diminution in Executive's
position, duties, responsibilities and status with Company as the same
are in effect on the date of this Agreement or as the same may be
increased in the future.
(b) Executive's reporting responsibilities, titles or
offices in effect on the date of this Agreement or as the same may be
increased in the future shall be materially reduced.
(c) Executive shall be removed from or shall not be
re-elected to the position referred to in paragraph 1, provided that
this Section 3(c) shall not be deemed to include termination of
Executive's employment for "cause" (defined below) or as a result of
Executive's substantial disability, death or retirement pursuant to a
Company-sponsored retirement plan. For all purposes of this Agreement,
"cause" shall mean (i) willful malfeasance in office, or (ii)
misconduct by Executive that is demonstrably materially injurious to
the Company monetarily or otherwise.
(d) Executive's Base Salary shall be reduced.
(e) Except for awards under any Non-Continuing Benefit, the
Company shall fail to continue in effect any Company plan providing
for
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Incentive Pay, Pension Benefits, Fringe Benefits or Expense
Reimbursement in effect on the date of this Agreement without adopting
a replacement plan or plans which is or are, in the aggregate, no less
favorable to Executive than those Executive enjoys at the date of this
Agreement.
(f) Company's principal executive offices shall be moved to
a location outside New York County or Westchester County, New York, or
Fairfield County, Connecticut.
(g) Company shall require Executive to be based anywhere
other than at Company's principal executive offices or at the location
where Executive is based at the date of this Agreement, or if
Executive consents to such required move, Company fails to reimburse
Executive for moving expenses and any difference between the sale
price of his old principal residence and the purchase price of his new
principal residence in connection with such move.
(h) The number of days per years allowed for Executive's
Vacation is reduced.
(i) Company breaches any provision of this Agreement.
(j) Any successor to Company fails to assume this Agreement.
4. Specified Trigger Event. Upon the occurrence of a Trigger Event,
Executive, at his sole option, may within 90 days after the date of such Trigger
Event, by notice to Company designate such Trigger Event as a Specified Trigger
Event. Failure of Executive to designate any Trigger Event as a Specified
Trigger Event shall not affect, or constitute a waiver of, the right of
Executive to designate any subsequent Trigger Event of the same or a different
nature as a
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Specified Trigger Event, it being understood that only one Trigger Event may be
designated as a Specified Trigger Event.
5. Guarantee. In order to protect Company against the loss of key
management executives, if any Trigger Event should occur and be designated by
Executive as a Specified Trigger Event within the 90 day period specified in
Section 4, the Company shall continue to employ Executive for a period of three
years from the first day of the calendar month following the date of the
Specified Trigger Event (the "Employment Period"). During the Employment Period,
Executive shall be entitled to receive, and Company guarantees to pay to
Executive, the same Base Salary, Incentive Pay, Pension Benefits, Fringe
Benefits, Expense Reimbursement and Vacation as Executive was entitled to
receive immediately before the Specified Trigger Event.
6. Termination of Employment. If, on or after the date of a Specified
Trigger Event and before the end of the subsequent Employment Period, (x)
Company shall terminate Executive's employment for any reason other than for
"cause" or (y) Executive shall elect to terminate his employment, then in either
event, after the date of termination of Executive's employment (the "Termination
Date"), Company shall:
(a) Pay Executive, his estate or beneficiaries in a lump sum
by the fifth business day after the Termination Date:
(i) an amount equal to Executive's Base Salary
from the Termination Date to the end of the Employment
Period, plus
(ii) an amount equal to (A) the Incentive Pay that
Executive became entitled to receive for the most recent
calendar year for which Executive was actually awarded
Incentive Pay multiplied by (B) the number of years or
portions thereof (computed on the basis
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of a 365 day year) from the beginning of the calendar year
in which the Termination Date falls to the end of the
Employment Period.
(b) Pay Executive on the date Executive begins to receive
retirement benefits (in addition to any Pension Benefits to which
Executive shall be entitled on the Termination Date) an amount equal
to the then present value of the actuarially determined difference
between the aggregate retirement benefits actually to be received by
Executive and those that would have been received had Executive been
employed until the end of the Employment Period at a Base Salary equal
to the Base Salary in effect immediately before the date of the
Specified Trigger Event.
(c) Continue for the benefit of Executive all Fringe
Benefits to which Executive shall be entitled immediately before the
date of the Specified Trigger Event (or substantially equivalent
insurance and benefit coverage) from such date until the end of the
Employment Period.
7. Agreements and Policy Statements. Executive shall execute or
re-execute each of the following agreements and policy statements of the
Company:
"Policy Statement on Integrity in the Conduct of the
Company's Business"
"Agreement Concerning Inventions and Confidential
Information"
"Antitrust Compliance Policy of Handy & Harman and
Subsidiaries"
During the period of time coincidental with the Employment Period, Executive
shall not enter into any business directly or indirectly in which the Company or
any of its then subsidiaries is engaged at the time of the Termination Date.
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8. Disputes. Any dispute hereunder as to the existence of "cause" or of a
Trigger Event shall be submitted to arbitration in accordance with New York law
and the procedures of the American Arbitration Association.
9. Merger of Company. If Company shall emerge into or consolidate with
another corporation, or transfer or sell all or substantially all of its assets
to another corporation or other entity, Company shall require, as a condition to
such transaction, that such successor corporation or entity assume the
obligations of Company hereunder. This Agreement shall thereupon be binding upon
and inure to the benefit of the successor corporation or other entity which
shall be obligated to perform all of the terms and conditions hereof, whether or
not such successor expressly assumes such obligations.
10. Assignability. This Agreement is personal in nature and neither
Executive nor Company shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder, except (i) as
provided in Section 9 and (ii) as Executive's right to receive payments
hereunder may extend to his estate and beneficiaries as provided in Section 6.
Executive's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
except for a transfer of any such right by will or by the laws of descent or
distribution. The foregoing shall not prevent Executive from assigning ownership
of or an interest in or designating beneficiaries of, any insurance policy or
benefit plan except as may be prohibited by the terms thereof.
11. Governing Law. This Agreement shall in all respect be construed and
enforced in accordance with, and governed by, the laws of the State of New York,
irrespective of the location of Executive's residence or principal place of
employment.
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12. Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall as to such jurisdiction be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in any such jurisdiction.
Unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which renders
any provision hereof invalid or unenforceable in any respect.
13. Notices and Consents. All notices and consents given by a party
pursuant to this Agreement shall be in writing and shall be delivered by hand
against receipt or sent by certified mail, return receipt requested, to the
other party at the following addresses:
If to Company:
Handy & Harman
850 Third Avenue
New York, NY 10022
Attention: Secretary
If to Executive:
[ ]
[ ]
[ ]
or to such other address as either party shall give to the other by a notice.
14. Sole Agreement; Changes. This instrument contains the entire
agreement between the parties. It may not be changed orally; it may only be
changed by a written agreement or instrument signed by both parties.
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IN WITNESS WHEREOF, the parties thereto have executed this Agreement as
of the date first above written.
HANDY & HARMAN
By
---------------------------------
President
Executive
------------------------------------
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Amendments to the Form of Executive Agreement between
the Company and its Corporate Officers
1. Section 1 is amended to read as follows:
"1. Employment. Subject to the right of the Company to take any and all
action of the kind specified in Section 3(a)-(h) prior to a Change in Control of
the Company as defined in Section 8, the Company shall continue to employ
Executive in his current capacity as [Vice President-Precious Metals] and
Executive shall continue to serve to the best of his ability in such capacity,
devoting substantially all his business time thereto."
2. The first paragraph of Section 3 is amended to read as follows:
"2. Trigger Events. If after the date of this Agreement, a Change in
Control of the Company as defined in Section 8 occurs, and thereafter, without
the express prior written consent of the Executive, any of the following events
shall occur, such event shall be deemed a Trigger Event:"
3. Sections 7, 8, 9, 10, 11, 12, 13 and 14 are redesignated Sections 9, 10, 11,
12, 13, 14, 15 and 16 including all conforming amendments.
4. A new Section 7 is added to read as follows:
7. Tax Gross-Up Payment
If any payments under this Agreement or any other payments or benefits
received or to be received by the Executive (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company, or
any person affiliated with the Company), (the "Severance Payments"), will be
subject to the tax (the "Excise Tax") imposed by section 4999 of the Code (or
any similar tax that may hereafter be imposed), the Company shall pay at the
time specified below, an additional amount (the "Gross-Up Payment") such that
the net amount retained by the Executive, after deduction of any Excise Tax on
the Severance Payments and any federal, state and local income tax and Excise
Tax upon the payment provided for by this Section 7, shall be equal to the
Severance Payments. For purposes of determining whether any of the Severance
Payments will be subject to the Excise Tax and the
<PAGE>
amount of such Excise Tax, (a) all Severance Payments shall be treated as
"parachute payments" within the meaning of section 280G(2) of the Code, and all
"excess parachute payments" within the meaning of section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to the Executive
such Severance Payments (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
section 280G(b)(4) of the Code in excess of the base amount within the meaning
of section 280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax, (b) the amount of the Severance Payments which shall be treated as subject
to the Excise Tax shall be equal to the lesser of (1) the total amount of the
Severance Payments or (2) the amount of excess parachute payments within the
meaning of section 280G(b)(1) (after applying clause (a), above), and (c) the
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors in accordance with the
principles of section 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income taxes at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Executive's employment, the Executive shall repay to the
Company at the time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to such reduction
(plus the portion of the Gross-Up Payment attributable to the Excise Tax and
federal and state and local income tax imposed on the Gross-Up Payment being
repaid by the Executive if such repayment results in a reduction in Excise Tax
and/or a federal and state and local income tax deduction) plus interest on the
amount of such repayment at the rate provided in section 1274(2)(B) of the Code.
In the event that the Excise Tax is determined to exceed the amount taken into
account hereunder at the time of the termination of the Executive's employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional gross-up payment in respect of such excess (plus any interest payable
with respect to such excess) at the time that the amount of such excess is
finally determined. Any payment to be made to the Executive under this paragraph
shall be payable within five (5) days of his Termination Date.
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<PAGE>
5. A new Section 8 is added to read as follows:
"8. Change in Control. For purposes of this Agreement, "Change in
Control" means the occurrence of one of the following:
(a) any "person", as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (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 the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities;
(b) during any period of two consecutive years (not including any
period prior to the execution of this amendment to the Executive Agreement),
individuals who at the beginning of such period constitute the Board of
Directors of the Company (the "Board"), and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (a), (c) or (d) of this
Section) whose election by the Board or nomination for election by the Company'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;
(c) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation; other than (i) a merger or
consolidation which would result in the voting securities of the Company
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 the Company or such surviving entity outstanding immediately after
such merger or consolidation or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 50% of the combined voting
power of the Company's then outstanding securities; or
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(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets."
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HANDY & HARMAN
Long-Term Incentive Plan
SECTION 1 - Purpose and Term of Plan
The Long-Term Incentive Plan is designed to attract and retain
the services of selected key employees who are in a position to make a material
contribution to the successful operation of the business of Handy & Harman or
one or more of its subsidiaries. Awards under the Plan shall be made to selected
Participants in the form of shares of Restricted Stock. The Plan shall become
effective on January 1, 1988, subject to approval by the shareholders of Handy &
Harman. No awards may be made under the Plan subsequent to December 31, 1997.
SECTION 2 - Definitions
For the purposes of the Plan, the following terms shall have
the following meanings:
(a) "Board of Directors" means the Board of Directors of the
Corporation.
(b) "Change in Control" means the occurrence of one of the
following:
(x) A change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or, if Item
6(e) is no longer in effect, any regulation issued by the
Securities and Exchange Commission which serves similar
purposes; or
(y) Any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the 1934 Act) is or becomes a beneficial
owner, directly or indirectly, of securities of the
Corporation representing twenty-five
<PAGE>
percent (25%) or more of the combined voting power of the
Corporation's then outstanding securities.
(c) "Code" means the U.S. Internal Revenue Code,
as amended.
(d) "Committee" means the Compensation Committee
of the Board of Directors or such other committee as may be designated by the
Board of Directors.
(e) "Corporation" means Handy & Harman, a New York
corporation.
(f) "Common Stock" means the common stock, $1.00 par
value, of the Corporation.
(g) "Disability" means a physical or mental
impairment sufficient to make the individual eligible for benefits under the
Long-Term Disability Plan of the Corporation, so long as such impairment also
constitutes a disability within the meaning of Section 105(d)(4) of the Code.
(h) "Participant" means a key employee of the
Corporation or a Subsidiary who has been selected by the Committee to
participate in the Plan, including directors of the Corporation who are also
salaried officers of the Corporation.
(i) "Plan" means the Long-Term Incentive
Plan of Handy & Harman, as amended from time to time.
(j) "Restricted Period" means the period of years
selected by the Committee pursuant to Section 4.2.
(k) "Restricted Stock" means the Common Stock which
has been awarded to a Participant subject to the restrictions referred to in
Section 4, so long as such restrictions are in effect.
(l) "Retirement" means normal or early retirement
under the terms of a pension plan of the Corporation or a Subsidiary or
voluntary termination of employment; PROVIDED, HOWEVER, that in either case, the
Committee must have given its prior consent to treat the individual's
termination of employment as a retirement.
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(m) "Subsidiary" means any corporation or other legal entity,
domestic or foreign, more than 50 percent of the voting power of which is owned
or controlled, directly or indirectly, by the Corporation.
SECTION 3 - General Provisions
3.1 The Committee shall from time to time:
(a) Designate those persons to be granted awards under the
Plan.
(b) Determine the performance conditions under which awards of
Restricted Stock will be made.
(c) Communicate the performance conditions to the Partici-
pants in a timely manner.
(d) Determine the number of shares of Common Stock which shall
be granted to each such person.
(e) Determine the Restricted Period with respect to the awards
and any other conditions relating to the awards as it may deem appropriate,
consistent with the provisions of the Plan.
3.2 Participants shall be selected by the Committee from among
the key employees of the Corporation and its subsidiaries who are in a position
to have a material impact on the results of the operations of the Corporation
and its Subsidiaries in future years.
3.3 (a) Shares of Common Stock which may be issued under the
Plan may be either treasury shares or authorized and unissued shares of Common
Stock.
(b) Any shares of Common Stock returned to the Corporation as
the result of the forfeiture of Restricted Stock shall again be available for
award under the terms of the Plan.
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(c) Subject to Section 7.6, the aggregate number of shares of
Common Stock that may be awarded under the Plan is 400,000.
3.4 In making any determination as to Participants to whom
awards of Restricted Shares may be made and as to the number of Restricted
Shares to be allocated to any Participant, the Committee shall take into account
the duties of the respective Participants, their contribution to the success of
the Corporation and its Subsidiaries over a period specified by the Committee
but more than one (1) year and such other factors as the Committee may deem
relevant in connection with accomplishing the purposes of the Plan.
SECTION 4 - Restricted Stock
4.1 An award of Restricted Stock shall entitle a Participant
to receive, on the date or dates designated by the Committee, the number or
shares of Common Stock selected by the Committee. Restricted Stock awards shall
be expressly subject to the terms and conditions described in this Section 4.
4.2 During the Restricted Period selected by the Committee,
shares of Restricted Stock awarded to the Participant may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as hereinafter provided.
Except for such restrictions, the Participant, as owner of such shares, shall
have all the rights of a shareholder, including (but not limited to) the right
to receive all dividends paid on such shares (subject to the provisions of
Sections 7.6 and 7.7) and the right to vote such shares.
4.3 In the event of a Change in Control of the Corporation
during the Restricted Period, all restrictions imposed on the Restricted Stock
under Section 4.2 shall be removed and the Participant shall be the owner of
such shares free of any restrictions.
4.4 If a Participant ceases to be an employee of the
Corporation or its Subsidiaries during the Restricted Period for any reason
other than death, Disability or Retirement, all shares of Restricted Stock
theretofore awarded to him which are still subject to the restrictions imposed
by Section 4.2 shall upon such termination of employment be forfeited and
returned to the Corporation.
4.5 If a Participant ceases to be an employee of the
Corporation or its Subsidiaries during the Restricted Period by reason of death,
Disability or Retirement, shares of Restricted Stock shall become free of the
restrictions imposed by
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Section 4.2 to the extent determined by the Committee in its sole discretion and
the Corporation will deliver to him or his beneficiary, as the case may be,
within sixty (60) days, such shares of Common Stock pursuant to Section 4.8. Any
shares of common Stock which do not become free of restrictions shall be
forfeited and returned to the Corporation.
4.6 Each Participant awarded shares of Restricted Stock shall
enter into an Agreement with the Corporation in a form specified by the
Committee, agreeing to the terms and conditions of the award and such other
matters as the Committee shall in its sole discretion determine. Failure by the
Participant to comply with the provisions of the Agreement shall cause the
shares of Restricted Stock to be forfeited and returned to the Corporation.
4.7 Each certificate issued in respect of shares of Restricted
Stock awarded under the Plan shall be registered in the name of the Participant,
shall be deposited by him with the corporation together with a stock power
endorsed in blank and shall bear the following (or similar) legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) contained in Section 4 of
the Long-Term Incentive Plan of Handy & Harman and an
Agreement entered into between the registered owner and Handy
& Harman."
4.8 When the restrictions imposed by Section 4.2 or other
similar restrictions expire, terminate or have otherwise been satisfied with
respect to one or more shares of Restricted Stock, the Corporation shall deliver
to the Participant (or his legal representative, beneficiary or heir) a
certificate or certificates representing one share of Common Stock for each such
share of Restricted Stock deposited with it by the Participant pursuant to
Section 4.7. Such certificate or certificates shall not bear the legend referred
to in Section 4.7. At that time, the Agreement referred to in Section 4.6, as it
relates to such shares, shall be terminated.
SECTION 5 - Administration
5.1 The Plan shall be administered by the Committee, which
shall be composed of such members (not less than three) of the Board of
Directors as shall be appointed from time to time by the Board. At all times the
Committee shall be composed of directors, no member of which shall be eligible
to be a Participant. Any
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<PAGE>
member of the Committee may resign at any time. The Board of Directors may
remove any member of the Committee at any time and may fill any vacancy in the
Committee.
5.2 Subject to the provisions of the Plan, the Committee shall
have exclusive power to select the key employees who shall be Participants and
to determine the amount of, or method of determining, the awards to be made to
each such Participant.
5.3 The Committee's interpretation of the Plan or of any award
granted pursuant thereto shall be final and binding on all Participants.
5.4 The Committee shall have the authority to establish, adopt
or revise such rules or regulations relating to the Plan as it may deem
necessary or advisable for the operation and administration of the Plan.
5.5 The Committee shall appoint a secretary thereof who will
be responsible for maintaining records of the minutes of meetings of the
Committee and other actions of the Committee throughout the term of the Plan and
continuing thereafter while any shares of Restricted Stock are outstanding.
SECTION 6 - Amendment or Termination
6.1 Upon recommendation by the Committee, the Board of
Directors may amend any provision of the Plan or any agreement thereunder at any
time; provided, however, that no such amendment may increase the number of
shares of Common Stock as indicated in section 3.3 which may be awarded under
the Plan, change the class of employees eligible to participate in the Plan, or
materially increase the benefits accruing to Participants of the Plan, unless
such amendment is approved by the holders of a majority of the outstanding
shares of Common Stock entitled to vote.
6.2 The Board of Directors shall also have the right to
terminate the Plan at any time. If the Plan is terminated, any awards of
Restricted Stock made prior to the date of termination shall not be affected and
shall continue in effect in accordance with the provisions of the Plan,
including the provisions relating to the authority of the Committee to
administer and interpret the Plan.
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Except with the consent of the Participant, no amendment,
suspension or termination shall impair the rights of any Participant in any
Common Stock awarded to such Participant under the Plan.
6.3 The Committee may refrain from designating any
Participants or from making any awards at any time during the term of the Plan,
but such action shall not be deemed a termination of the Plan. No Participant or
officer shall have any claim or right to be granted awards under the Plan.
SECTION 7 - Miscellaneous
7.1 The fact that a key employee has been designated as a
Participant shall not confer on him any right to be retained in the employ of
the Corporation or one or more of its subsidiaries, or to continue to be
designated as a Participant.
7.2 No award under the Plan shall be taken into account in
determining a Participant's compensation for the purposes of any group life
insurance or other employee benefit or pension plan of the Corporation or a
Subsidiary.
7.3 The Plan shall not be deemed an exclusive method of
providing incentive compensation for the officers and employees of the
Corporation and its Subsidiaries, nor shall it preclude the Board of Directors
from authorizing or approving other forms of incentive compensation.
7.4 All expenses and costs in connection with the operation of
the Plan shall be borne by the Corporation.
7.5 Restricted Stock awarded pursuant to the Plan shall not be
transferable by the Participant other than by will or the laws of descent and
distribution.
7.6 In the event of any change in the outstanding shares of
Common Stock in the Corporation by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change other than a Change in Control, the maximum
aggregate number and class of shares from which awards of Restricted Stock may
be granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any new shares of Restricted Stock
which are issued to a Participant will continue to be subject to the same
restrictions that were in force prior to any such change.
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<PAGE>
7.7 The Corporation shall be entitled to withhold from any
awards made under the Plan the amount of taxes the Corporation deems necessary
to satisfy any applicable Federal, state and local income tax withholding
obligations arising from the award or to make other appropriate arrangements
with Participants to satisfy such obligations.
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Amendment to the Handy & Harman Long-Term Incentive Plan
1. Subsection 2(b) is amended to read as follows:
"(b) "Change in Control" means the occurrence of one of the following:
(i) any "person", as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than the
Corporation, any trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or any corporation owned, directly or
indirectly, by the stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities;
(ii) during any period of two consecutive years (not including any period
prior to the execution of this amendment to 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 the Corporation 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 the Corporation'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 the Corporation approve a merger or
consolidation of the Corporation with any other corporation; other than (A) a
merger or consolidation which would result in the voting securities of the
Corporation 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 the Corporation or such surviving entity outstanding immediately
after such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Corporation (or similar transaction) in
which no "person" (as hereinabove defined) acquires more than 50% of the
combined voting power of the Corporation's then outstanding securities; or
<PAGE>
(iv) the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition
by the Corporation of all or substantially all of the Corporation's assets."
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RESOLVED, that a new sentence be added to Section 4.3 of the Company's
Long-Term Incentive Plan reading as follows:
In the event of a Change in Control of the Corporation subsequent to
shares of Common Stock being allocated to a Participant but prior to
such shares being granted as Restricted Stock, such shares of Common
Stock shall be deemed to have been earned by the Participant and
certificates representing such shares of Common Stock shall be
delivered to the Participant in accordance with Section 4.8.
<PAGE>
AGREEMENT
AGREEMENT, dated as of May 1, 1989 between Handy & Harman, a
New York corporation, having its executive offices at 850 Third Avenue, New
York, New York 10022 (the "Company"), and Richard N. Daniel, residing at
Briarcliff Manor, New York (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by the Company as
Chairman of the Board, President and Chief Executive Officer;
WHEREAS, the Company and the Executive desire to enter into an
agreement relating to the continued employment of the Executive by the Company;
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to accept employment with the Company and agrees to
serve, upon the terms and conditions herein contained, as the Company's
Chairman, President and Chief Executive Officer.
<PAGE>
1.2 The term of employment under this Agreement shall commence
on May 1, 1989 and, subject to the terms hereof, shall continue through April
30, 1992; provided, however, that commencing in May 1990 and each May thereafter
the term of this Agreement may be extended by the Board of Directors of the
Company for one additional year. If not so extended, this Agreement shall
terminate at the end of the then current 3-year term. Such term of employment is
referred to hereinafter as the "Employment Term."
1.3 The Executive shall serve as Chief Executive Officer of
the Company and shall have such duties, responsibilities and authority as are
generally associated with such position. Throughout the period of his employment
hereunder, the Executive shall devote his best efforts and substantially all his
business time and services to the business and affairs of the Company except for
vacations, illness or incapacity, but nothing in this Agreement shall preclude
the Executive from (i) devoting reasonable periods required for (A) serving as a
director or member of a committee of any organization or company (other than
with respect to activities set forth in (C) below) involving no conflict of
interest with the Company provided that he is such a director or member as of
the date hereof or such directorship or membership has been approved by the
Board of Directors of the Company, (B) delivering lectures and fulfilling
speaking engagements, and (C) engaging in charitable and
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community activities provided that such activities do not materially interfere
with the performance of his duties hereunder or (ii) investing Executive's
assets in other companies so long as such investments do not require the
Executive's services or active management.
2. SALARY
2.1 The Executive shall be entitled to receive a base salary
at a rate of $300,000 per annum payable in accordance with the Company's payroll
policy from time to time in effect.
2.2 The Company may, in its sole discretion, increase the
Executive's base salary (the "Base Salary").
3. INCENTIVES
3.1 The Executive shall be eligible to receive awards on the
terms specified in the Company's Management Incentive Plan and the Company's
Long-Term Incentive Plan or any successor plans (the "Plans").
3.2 The Company may, in its sole discretion, grant awards to
the Executive in addition to those awards granted in Section 3.1.
4. TERMINATION
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4.1 In the event that the Executive's employment is terminated
by the Company (other than for Cause as hereinafter defined) or the Executive
terminates his employment for Good Reason, as hereinafter defined, prior to the
end of the Employment Term, then in either event, after the date of termination
of Executive's employment (the "Termination Date"), Company shall:
(a) Pay the Executive, his estate or beneficiaries in a
lump sum by the fifth business day after the Termination Date:
(i) an amount equal to the Executive's Base Salary
from the Termination Date to the end of the Employment Period,
plus
(ii) an amount equal to (A) the Incentive Pay that
the Executive became entitled to receive for the most recent
calendar year for which the Executive was actually awarded
under the Company's Management Incentive Plan multiplied by
(B) the number of years or portions thereof (computed on the
basis of a 365 day year) from the beginning of the calendar
year in which the Termination Date falls to the end of the
Employment Period.
(b) In addition to any Pension Benefits to which the
Executive is entitled under the Handy & Harman Pension Plan for
Salaried Employees and any supplemental executive retirement plan of
the Company or any successor plans thereto, pay the Executive a lump
sum amount, in cash, equal
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to the actuarial equivalent of the excess of (x) the retirement pension
(determined as a straight life annuity commencing at age 65) which the
Executive would have accrued under the terms of such Plans (without
regard to any amendment to such Plans made subsequent to a Change in
Control and on or prior to the Termination Date, which amendment
adversely affects in any manner the computation of retirement benefits
thereunder), determined as if the Executive had accumulated (after the
Termination Date) additional months of service credit thereunder until
the end of the Employment Term at the Executive's highest annual rate
of compensation during the twelve (12) months immediately preceding the
Termination Date, and (y) the retirement pension (determined as a
straight life annuity commencing at age sixty-five (65) which the
Executive had then accrued pursuant to the provisions of such Plans.
For purposes of this Section 4.1(b), "actuarial equivalent" shall be
determined using the same methods and assumptions utilized under such
Plans immediately prior to the Termination Date.
(c) Arrange to provide the Executive with life,
disability, accident and health insurance benefits substantially
similar to those which the Executive is receiving immediately prior to
the event which gave rise to the Executives termination until the end
of the Employment Period. Benefits otherwise receivable by the
Executive pursuant to this Section 4.1(c) shall be
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reduced to the extent comparable benefits are actually received by the
Executive during such period following the Executives termination of
employment and any such benefits actually received by the Executive
shall be reported to the Company.
(d) Transfer to the Executive all right, title and
interest to any Company car being used by Executive immediately prior
to the event giving rise to the Executive's termination.
4.2 In the event that the Executive's employment is terminated
by the Company (other than for Cause as hereinafter defined) or the Executive
terminates his employment for Good Reason, as hereinafter defined, prior to the
end of the Employment Term, the Executive shall, until the end of the Employment
Term, be entitled to be provided with office space, secretarial services and all
other benefits and entitlements which are afforded to senior executives of the
Company at the time of Executive's termination of employment.
4.3 Change in Control. For purposes of this Agreement, "Change
in Control" means the occurrence of one of the following:
(a) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (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
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owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 25% or more of the combined voting power of
the Company's then outstanding securities;
(b) during any period of two consecutive years (not
including any period prior to the execution of this amendment to the
Executive Agreement), individuals who at the beginning of such period
constitute the Board of Directors of the Company (the "Board"), and any
new director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in clause (a), (c) or (d) of this Section) whose election by
the Company'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;
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation; other than (i)
a merger or consolidation which would result in the voting securities
of the
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Company 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 the Company or such surviving
entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 50% of the
combined voting power of the Company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
5. DEATH OR PERMANENT DISABILITY
5.1 In the event the Executive becomes totally and permanently
disabled (as defined in the Company's Pension Plan for Salaried Employees as in
effect on the date hereof ("Permanent Disability")) prior to the end of the
Employment Term, the Executive shall continue to receive compensation equal to
the Executive's then current Base Salary until the end of the Employment Term;
provided, however, that any such payments shall be reduced by any disability
benefits
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<PAGE>
actually paid during such period to the Executive under the Company's Pension
Plan for Salaried Employees or other Company plan. The Executive shall also be
entitled to continued participation in the medical plans of the Company
available generally to disabled corporate office salaried employees.
Notwithstanding the foregoing in this Section 5.1, any medical
coverage provided to the Executive under this Section 5.1 shall be secondary to
any similar coverage provided to the Executive by any successor employer, so
that the Executive will only be reimbursed for medical costs under this
Agreement to the extent he is not reimbursed for such costs by a successor
employer.
5.2 In the event of the Executives death during the Employment
Term, the Executive's estate or designated beneficiaries shall continue to
receive compensation equal to the Executives then current Base Salary until the
end of the Employment Term; provided, however, that any such payments shall be
reduced by any survivor benefits payable during such period to the Executives
estate or any designated beneficiary under the Company's Pension Plan for
Salaried Employees, calculated on the assumption that such benefits will be paid
over the longest period for payment of survivor benefits permitted under the
Company's Pension Plan for Salaried Employees and the U.S. Internal Revenue
Code.
5.3 Any termination by the Company on account of the
Executives Permanent Disability shall be communicated by a Notice of Disability
Termination.
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For purposes of this Agreement, a "Notice of Disability Termination" shall mean
a written notice which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under Section 5.1. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of Disability
Termination.
6. TERMINATION FOR GOOD REASON
6.1 The Executive may terminate his employment hereunder for
Good Reason at any time during the Employment Term. For purposes of this
Agreement, "Good Reason" shall mean any of the following (without the Executives
express prior written consent):
(a) There shall be a material diminution in the
Executive's position, duties, responsibilities and status with Company
as the same are in effect on the date of this Agreement or as the same
may be increased in the future.
(b) The Executive's reporting responsibilities, titles
or offices in effect on the date of this Agreement or as the same may
be increased in the future shall be materially reduced.
(c) The Executive shall be removed from or shall not be
re-elected to the position referred to in Section 1.1, provided that
this Section
10
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6.1(c) shall not be deemed to include termination of Executive's
employment for Cause or as a result of the Executive's substantial
disability, death or retirement pursuant to a Company sponsored
retirement plan.
(d) The Executive's Base Salary shall be reduced.
(e) Except for awards under Section 3.2, the Company
shall fail to continue in effect any Company plan providing for
Incentive Pay, Pension Benefits, Fringe Benefits or Expense
Reimbursement in effect on the date of this Agreement without adopting
a replacement plan or plans which is or are, in the aggregate, no less
favorable to the Executive than those the Executive enjoys at the date
of this Agreement.
(f) Company's principal executive offices shall be
moved to a location outside New York County or Westchester County, New
York, or Fairfield County, Connecticut.
(g) Company shall require the Executive to be based
anywhere other than at Company's principal executive offices or if the
Executive consents to such required move, Company fails to reimburse
the Executive for moving expenses and any difference between the sale
price of his old principal residence and the purchase price of his new
principal residence in connection with such move.
11
<PAGE>
(h) The number of days per year allowed for the
Executives Vacation is reduced.
(i) Company breaches any provision of this Agreement.
(j) Any successor to Company fails to assume this
Agreement.
(k) Any purported termination of the Executives
employment which is not effected pursuant to a notice of termination
satisfying the requirements of Sections 5 or 7 of this Agreement,
and, for purposes of this Agreement, no such purported termination
shall be effective.
6.2 Any purported termination of the Executive's employment
pursuant to Section 6.1 shall be communicated by written Notice of Termination
for Good Reason. "Notice of Termination for Good Reason" shall mean a notice
indicating the specific termination provision in Section 6.1 relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
7. DISCHARGE FOR CAUSE
7.1 The Company shall have the right to terminate the
employment of the Executive for Cause. If the Company exercises such right, its
obligation under this Agreement to make any further payments to the Executive
shall thereupon cease and terminate. As used herein, the term "Cause" shall be
limited to (a) action by the
12
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Executive involving willful malfeasance having a material adverse effect on the
Company, (b) substantial and continuing refusal by the Executive in willful
breach of this Agreement to perform the duties ordinarily performed by a chief
executive officer (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such actual or anticipated
failure following a Change in Control of the Company after the issuance of a
Notice of Termination for Good Reason by the Executive after a written demand
for substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties), or (c) the
Executive being convicted of a felony; provided that any such action or refusal
by the Executive shall not constitute "Cause" if, in good faith, the Executive
believed such action or refusal to be in or not opposed to the best interests of
the Company, or if the Executive shall be entitled, under applicable law or the
Certificate of Incorporation or By-Laws of the Company, to be indemnified with
respect to such action or refusal. Termination of the Executive pursuant to
Section 7 shall be communicated by a Notice of Termination. For purposes of this
Agreement a "Notice of Termination" shall mean delivery to the Executive of a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Company's Board of Directors at a
meeting of the Board called and held for the purpose (after reasonable notice to
the
13
<PAGE>
Executive and reasonable opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board prior to such vote), finding
that in the good faith opinion of the Board the Executive was guilty of conduct
set forth in the third sentence of this Section 7 and specifying the particulars
thereof in detail. For purposes of this Agreement, no such purported termination
of the Executive's employment shall be effective without such Notice of
Termination.
8. EXPENSES
8.1 The Executive is authorized to incur reasonable expenses
for promoting the business of the Company including expenses for travel and
similar items. The Company will reimburse the Executive for all such expenses
upon presentation by the Executive from time to time of an itemized account of
such expenditures in accordance with the Company's procedures in effect at the
commencement of the Employment Term.
9. EMPLOYEE BENEFITS
9.1 In addition to the Plans as specified in Section 3.1, the
Executive shall be included to the extent eligible thereunder under any and all
plans providing benefits for its senior executives.
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<PAGE>
9.2 The Executive shall be included in all incentive, profit
sharing, bonus, stock option, or other similar or comparable plans applicable to
senior executives of the Company in accordance with the terms thereof.
10. NO OBLIGATION TO MITIGATE DAMAGES - NON-COMPETE
10.1 The Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the termination of his employment
hereunder or otherwise.
10.2 In the event that the Executive should terminate his
employment other than for Good Reason and subsequently directly or indirectly
enters into competition with the Company prior to the end of the Employment Term
the Executive shall not be entitled to any payments pursuant to this Agreement
(and shall return any payments so made) after such termination of his
employment.
11. TAX GROSS-UP PAYMENT
11.1 If any payments under this Agreement or any other
payments or benefits received or to be received by the Executive (whether
pursuant to the terms of
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this Agreement or any other plan, arrangement or agreement with the Company)
(the "Severance Payments"), will be subject to the tax (the "Excise Tax")
imposed by section 4999 of the Internal Revenue Code (the "Code") (or any
similar tax that may hereafter be imposed), the Company shall pay at the time
specified below, an additional amount (the "Gross-Up Payment") such that the net
amount retained by the Executive, after deduction of any Excise Tax on the
Severance Payments and any federal, state and local income tax and Excise Tax
upon the payment provided for by this Section 11, shall be equal to the
Severance Payments. For purposes of determin ing whether any of the Severance
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(a) all Severance Payments shall be treated as "parachute payments" within the
meaning of section 28OG(2) of the Code, and all "excess parachute payments"
within the meaning of section 28OG(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to the Executive such Severance payments (in
whole or in part) do not constitute parachute payments, or such excess parachute
payments (in whole or in part) represent reasonable compensation for services
actually rendered within the meaning of section 28OG(b)(4) of the Code in excess
of the base amount within the meaning of section 28OG(b)(3) of the Code, or are
otherwise not subject to the Excise Tax, (b) the amount of the Severance Pay-
ments which shall be treated as subject to the Excise Tax shall be equal to the
lesser
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of (1) the total amount of the Severance Payments or (2) the amount of excess
parachute payments within the meaning of section 28OG(b)(1) (after applying
clause (a), above), and (c) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Company's independent auditors in
accordance with the principles of section 28OG(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence on the Termination Date, net of
the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of termination of the Executive's employment, the Executive shall
repay to the Company at the time that the amount of such reduction in Excise Tax
is finally determined the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to the Excise
Tax and federal and state and local income tax imposed on the Gross-Up Payment
being repaid by the Executive if such repayment results in a reduction in Excise
Tax and/or a federal and state and local income tax deduction) plus interest on
the amount of such repayment at the rate provided in section
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1274(2)(B) of the Code. In the event that the Excise Tax is determined to exceed
the amount taken into account hereunder at the time of the termination of the
Executives employment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional gross-up payment in respect of such excess
(plus any interest payable with respect to such excess) at the time that the
amount of such excess is finally determined. Any payment to be made to the
Executive under this Section shall be payable within five (5) days of his
Termination Date.
12. NOTICES
12.1 All notices or communications hereunder shall be in
writing, addressed as follows:
To the Company:
Handy & Harman
850 Third Avenue
New York, New York 10022
Attention: The Secretary
To the Executive:
Richard N. Daniel
91 Hawthorn Place
Briarcliff Manor, NY 10510
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<PAGE>
Any such notice or communication shall be sent by certified or registered mail,
return receipt requested, postage prepaid, addressed as above (or to such other
address as such party may designate in writing from time to time), and the
actual date of receipt, as shown by the receipt therefor, shall determine the
time at which notice was given.
13. SEPARABILITY; LEGAL FEES
13.1 If any provision of this Agreement shall be declared to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. The Company shall pay all legal fees and other
fees and expenses which the Executive may incur in obtaining compensation or
other benefits under this Agreement; provided, however, that the Company shall
not pay such fees and expenses if the Company prevails against the Executive
unless there shall have been a Change in Control prior to the Executive's
termination.
14. ASSIGNMENT
14.1 This Agreement shall be binding upon and inure to the
benefit of the heirs and representatives of the Executive and the assigns and
successors of the
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Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Executive or by the Company.
15. ENTIRE AGREEMENT
15.1 This Agreement represents the entire agreement of the
parties and shall supersede any and all previous contracts, arrangements or
understandings between the Company and the Executive with respect to the subject
matter hereof. No provision of this Agreement shall be construed to limit any
rights which the Executive may have under any of the Company's benefit plans.
The Agreement may be amended at any time by mutual written agreement of the
parties hereto.
16. GOVERNING LAW
16.1 This Agreement shall be construed, interpreted, and
governed in accordance with the laws of the State of New York.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed and the Executive has hereunto set his hand, as of the 1st day
of May, 1989.
Dated: Sept. 28, 1989 HANDY & HARMAN
ATTEST: By: _______________________
Group Vice President
/s/ George P. Ekern /s/ R.N. Daniel
- ---------------------------- ------------------------
Secretary Executive
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SECRETARY'S CERTIFICATE
I, PAUL E. DIXON, being the duly elected and acting Secretary of Handy
& Harman, a New York corporation (hereinafter the "Company") DO HEREBY CERTIFY
that the following is a true and complete copy of certain resolutions which were
duly adopted by the Board of Directors of this Company, at a Meeting which was
duly called and held on the 11th day of May 1993, and at which a quorom was
present and acting throughout, AND I DO FURTHER CERTIFY that said resolutions
have not been rescinded or amended and remain in full force and effect at the
date hereof:
RESOLVED, that in order for the Company to continue to benefit
from the knowledge and experience of Richard N. Daniel, Chairman of the
Board and Chief Executive Officer of the Company, and in the best
interests of the Company, the Agreement dated as of May 1, 1989 for the
employment of Mr. Daniel for a 3-year period, be, and it hereby is,
extended for an additional year pursuant to Section 1.2 thereof so that
the term of employment thereunder shall continue through April 30,
1996; and further
RESOLVED, that the Agreement between Richard N. Daniel and
Handy & Harman dated May 1, 1989, be amended in part by adding to
Section 4. Termination, a paragraph (e) on page 6 to read as follows:
"(e) From the end of the Employment Period, the Company will continue
to provide Medical Benefits equivalent to those received by other
Officers of the Company through the year in which the Executive reaches
his 65th Birthday. Thereafter, the Executive will be eligible for the
normal retiree benefits."
IN WITNESS WHEREOF I have hereunto affixed my signature and the seal of
the Company this 19th day of May 1993.
/s/ Paul E. Dixon
-----------------
Secretary
<PAGE>
WHEREAS, Richard N. Daniel (the "Executive") and Handy & Harman (the
"Company") have entered into an Employment Agreement (the "Agreement") dated as
of May 1, 1989; and
WHEREAS, the Board of Directors of the Company deems it advisable for
the Company to amend the Agreement in certain respects; and
WHEREAS, the Executive and the Company have mutually agreed to amend
certain provisions of Agreement as provided herein.
NOW, THEREFORE, in consideration of the Executive's performance of
valuable services for the Company, and for other good and valuable
consideration, the parties hereto agree to amend the Agreement, effective as of
the date hereof, as follows:
1. Section 7A is hereby added to the Agreement to read in its entirety as
follows:
"7A. MEDICAL BENEFIT UPON ANY TERMINATION In the case that the
Executive's employment with the Company terminates at any time, for any
reason [other than for Cause], whether the basis for such action is
instituted by the Company or the Executive, then notwithstanding any
other provision of this Agreement to the contrary and in lieu of any
other post-termination medical benefits provided to the Executive
hereunder, the Executive shall become entitled to continued medical
benefits for himself and his spouse for their respective lives (the
"Medical Benefit"). From and after the date of the Executive's
termination of employment, the Company shall provide the Medical Benefit,
without cost to the Executive and his spouse, over the lives of both the
Executive and his spouse. Such Medical Benefit shall be provided on a
basis no less favorable to the Executive and his spouse than the medical
coverage provided to active senior executive officers of the Company as
of the date of execution of this Agreement; any future improvements in
medical benefits adopted by the Company for active senior executive
officers will be deemed to be in effect for the Executive and his spouse
pursuant to the Medical Benefit, without cost to the Executive or his
spouse, on the date of effectiveness of such future improvements for
active senior officers of the Company.
<PAGE>
2. Section 14.2 is hereby added to the Agreement to read in its entirety
as follows:
"The obligations of the Company under this Agreement shall be binding
upon any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company."
All other provisions of the Agreement shall remain in full force and
effect.
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EMPLOYMENT AGREEMENT
This Agreement (the "Agreement"), dated as of October 22,
1996, will confirm that Handy & Harman, a New York corporation (the "Company")
has offered, and you have accepted, the position of Executive Vice President of
the Company.
1. The initial term of your employment shall be from November
11, 1996 through May 11, 1999, subject to earlier termination pursuant to the
provisions set forth below; provided, however, that at no time during the
initial term or thereafter shall the term of this agreement be less than one
year.
2. You agree to use your best efforts to promote the interest
of the Company, and devote your full business time and energies to the business
and affairs of the Company. You agree to perform such services as are customary
to your position and as shall from time to time be assigned to you by the
President and Chief Operating Officer of the Company.
3. Your annual base salary shall be no less than $300,000,
less applicable federal, state and local tax deductions, payable in accordance
with the Company's customary payroll practices. Any increases in your annual
salary shall be in the sole discretion of the Company's Board of Directors.
<PAGE>
4. (a) You shall be eligible to participate in the following
compensation plans that may be offered from time to time by the Company, in
accordance with the terms and provisions of such plans and subject to the
discretion of the Compensation Committee of the Company's Board of Directors
(the "Committee"): the Handy & Harman Management Incentive Plan (the "Bonus
Plan"), the Handy & Harman Long-Term Incentive Plan (the "Stock Plan") and the
Handy & Harman 1995 Omnibus Stock Incentive Plan (the "Option Plan"), in each
case as described below.
(b) You shall be eligible to participate in the
Bonus Plan beginning in respect of the 1997 plan year; provided, however,
that any bonus amounts payable thereunder are contingent upon the Company's
attainment of performance goals established by the Committee in its sole
discretion and further, provided, that your maximum annual bonus opportunity
shall not exceed 100% of your annual base salary.
(c) You shall be eligible to participate in the
Stock Plan beginning in respect of the 1997 through-1999 cycle; provided,
however, that any awards granted and any amounts payable thereunder are
contingent upon the Company's attainment of performance goals established by the
Committee in its sole discretion and further, provided, that your level of
participation shall be 40% of your annual base salary (as in effect on January
1, 1997).
2
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(d) You shall be granted, effective as of.
the date of your employment, options (the "Options") to purchase 50,000 shares
of common stock of the Company. The Options shall (i) be granted under, and
subject to the terms of, the Omnibus Stock Option Plan, (ii) be nonqualified
options (i.e., not incentive stock options), (iii) have a ten-year term (subject
to earlier termination as provided in the Option Plan and the form of grant
agreement thereunder), (iv) vest and become exercisable with respect to 25i of
the shares of common stock subject thereto on each of the first four
anniversaries of the date of grant and (v) have an exercise price per share of
common stock equal to the fair market value of the common stock as of the date
of grant.
5. (a) You shall be eligible to participate in all Company
employee benefit plans and programs which are made generally available to
salaried employees of the Company, in accordance with the terms and provisions
of such plans. With respect to such plans and programs, you shall not be subject
to any eligibility waiting periods, except for any waiting period under any
pension benefit plan intended to be qualified under Section 401(a) of the
Internal Revenue Code.
(b) You shall be eligible to participate in the
Handy & Harman Supplemental Executive Retirement Plan and the Handy & Harman
Executive Life Insurance and Post-Retire-
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ment Life Insurance Program, in each case in accordance with the terms and
provisions of such plans.
6. (a) The Company shall reimburse you for all reasonable
business expenses incurred by you in accordance with the Company's policy on
reimbursement for business expenses as then in effect.
(b) The Company shall reimburse you for initiation
fees and annual membership fees with respect to your membership in a
country club selected by you; provided, however, that your selection of a
country club shall be subject to the approval of the Company.
(c) You agree to permanently relocate your primary
place of residence to the Westchester County area as soon as practicable
after the date hereof. The Company shall promptly reimburse you for (i) all
normal moving costs involved in relocating your family's belongings and
household furnishings, (ii) the real estate brokerage commission (up to a
maximum of 6% of the sales price) in connection with the sale of your current
house and (iii) any legal fees and other customary closing costs in connection
with the sale of such house and the purchase of a house in the Westchester
County area (collectively, the "Moving Expenses"). In the event your current
house is not sold by the time you purchase a home in the Westchester County
area, if required, the Company will provide you with a bridge loan for the
purpose of enabling you to purchase a house in the Westchester County
4
<PAGE>
area, which loan shall (i) bear interest at applicable Federal rates, (ii) be
for a term of not more than one year, and (iii) have such other terms, including
principal amount, as the Company and you shall reasonably agree.
(d) The Company shall pay to you a cash signing bonus
(the "Signing Bonus") in an amount equal to (i) $140,000, less (ii) the
amount of bonus paid to you by your former employer in respect of the 1996
calendar year, less (iii) applicable federal, state and local tax deductions.
You shall promptly notify the Company of any and all amounts received by
you from your former employer and provide the Company with satisfactory
evidence of the amount you receive in respect of such 1996 bonus. The Company
shall pay the Signing Bonus to you as soon as practicable following receipt
of such satisfactory evidence.
(e) The Company shall reimburse you for the reasonable
cost of obtaining temporary housing for a period of not more than six months
following the date hereof; provided, however, that such costs are subject
to the approval of the Company.
(f) You and your spouse shall be entitled to receive
post-retirement health insurance benefits from the Company under the
Company's Post-Retirement Medical Plan in effect for employees of the Company
prior to 1992 on such terms and conditions in place for other employees covered
by the Plan.
5
<PAGE>
(g) You shall be provided with a Company owned automobile
in accordance with the Company's existing policies and procedures in place for
other executive officers of the Company.
7. (a) The Company may terminate your employment at any time,
without prior notice, for any of the following reasons: (i) your engaging in
conduct which is materially injurious to the Company, its subsidiaries or
affiliates, or any of their respective customer or supplier relationships,
monetarily or otherwise; (ii) your engaging in any act of fraud,
misappropriation or embezzlement or any act which would constitute a felony
(other than minor traffic violations); or (iii) your material breach of this
Agreement.
(b) If, as a result of your incapacity due to physical or
mental illness, you shall have been absent from the full-time performance of
your duties hereunder for a period of time (at least 60 days within any 12
consecutive months excluding vacation time actually used in accordance with the
Company's policy thereon) which the Company determines, in its reasonable
discretion, to have had an adverse impact on the Company, your employment may be
terminated by the Company, upon written notice in accordance with paragraph 10
hereof without further notice.
(c) The Company, in its sole discretion, may terminate
your employment at any time for any reason other
6
<PAGE>
than those stated in paragraphs 7(a) or 7(b) upon thirty days prior written
notice.
8. (a) If your employment is terminated by the Company
pursuant to paragraph 7(a), you shall receive your salary through the date of
termination and the Company shall have no further obligations to you under this
Agreement.
(b) If your employment is terminated by the
Company pursuant to paragraph 7(b) or by your death, you or your personal
representative, guardian, or the representative of your estate shall continue to
receive your salary for a period of 12 months payable in accordance with the
Company's customary payroll practices. However, your salary shall be offset by
any payments you receive pursuant to the Company's disability plans and
programs. Thereafter, the Company shall have no further obligations under this
Agreement to you, your estate, personal representative, guardian, or your
beneficiaries.
(c) If your employment is terminated by the Company
pursuant to paragraph 7(c), you shall continue to receive your salary
through the end of the term or for a period of 12 months, whichever is longer,
payable in accordance with the Company's customary payroll practices. You shall
also continue to participate in the Company's employee benefit plans and
programs in accordance with paragraph 5 hereof, to the extent permissible under
the terms of such plans and programs, through the end of the term, provided
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<PAGE>
that following your termination of employment you shall no longer accrue any
vacation benefits. Thereafter, the Company shall have no further obligations to
you under this Agreement.
(d) During the period you are receiving any
payments or benefits under paragraphs 8(b) 8(c), you agree to promptly notify
the Company upon your acceptance of any other employment. During any such
employment (i) you shall not receive the salary provided hereunder; provided,
however, that if your salary pursuant to such employment is less than the salary
provided hereunder, you shall receive the differential and (ii) upon your
eligibility for any medical benefits or insurance by your new employer you
shall no longer be eligible to participate in any of the Company's benefit plans
and arrangements.
9. Simultaneous herewith, you are executing the
Non-Competition Agreement annexed hereto.
10. Any notices required by this Agreement shall be in writing
and shall be deemed to have been given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, as follows:
if to you:
Mr. Robert D. LeBlanc
4 Totten Drive
Bridgewater, New Jersey 08807
8
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if to the Company:
555 Theodore Fremd Avenue
Rye, New York 10580
Attention: Paul E Dixon, Esq.
Vice President
and General Counsel
or to such other address as either party may furnish to the other in writing in
accordance with this paragraph. Notices of change of address shall only be
effective upon receipt.
11. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to its conflict
of laws principles.
12. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, arrangements and understandings among the
Company and you with respect to such subject matter. This Agreement can be
modified only by a writing signed by both you and the Company. If any provision
of this Agreement shall be held to be void or unenforceable, the remainder of
this Agreement shall nevertheless remain in full force and effect. This
Agreement shall inure to the benefit of and be binding upon the Company's
successors and assigns.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
HANDY & HARMAN
By: /s/ Frank E. Grzelecki
-------------------------------
Name: Frank E. Grzelecki
Title: President & Chief
Operating Officer
Agreed to this 25 day
of October, 1996
/s/ Robert D. LeBlanc
- ---------------------
10
<PAGE>
HANDY & HARMAN
SUPPLEMENTAL EXECUTIVE PLAN
Purpose. The purpose of this Supplemental Executive Plan (the
"Plan") is to provide a further means whereby Handy & Harman (the "Company") may
retain and encourage the productive efforts of Frank E. Grzelecki (the
"Executive"), President and Chief Operating Officer of the Company, who renders
valuable service to the Company and its subsidiaries, and contributes toward the
Company's continued growth and success.
Benefit Accrual. Commencing on June 30, 1992, and on each June
30th thereafter, until and including June 30, 1997, so long as the Executive is
in active employment as a full-time employee as of such date, the Executive
shall accrue and be vested in a monthly pension benefit in the amount of $1,000,
with a maximum monthly accrual of $6,000.
Benefit Commencement. The Executive's benefit shall commence
on the later of July 1, 1997, or the Executive's separation from service with
the Company as a full-time employee.
Form of Payment. The Executive's benefit shall be paid monthly
for the remainder of the Executive's life; provided, however, that if the
Executive dies prior to receiving 120 monthly payments, payments shall be paid
to the Executive's beneficiary until a total of 120 monthly payments have been
made to the Executive and his beneficiary.
Death Benefit. If the Executive dies prior to commencement of
payment under the Plan (whether or not the Executive was employed with the
Company at the time of death), benefits accrued as of the June 30 coincident
with or preceding the Executive's death shall be paid to the Executive's
beneficiary for 120
<PAGE>
months. Such payments shall commence on the first day of the month immediately
following the Executive's death.
Grantor Trust. The Company shall create a grantor trust
(within the meaning of section 671 of the Internal Revenue Code of 1986, as
amended, hereinafter the "Code") in connection with the adoption of the Plan to
which it shall from time to time contribute amounts to accumulate an appropriate
reserve against its obligations hereunder. Such trust and any assets held by
such trust to assist the Company in meeting its obligations under the Plan shall
conform to the terms of the model trust as described in the Internal Revenue
Service Revenue Procedure 92-64 (I.R.B. 1992-33). Notwithstanding the creation
of such trust, the benefits hereunder shall be a general obligation of the
Company. Payment of benefits from such trust shall, to that extent, discharge
the Company's obligations under this Plan. The Executive shall have only a
contractual right as a general creditor of the Company to the amounts, if any,
payable hereunder and such right shall not be secured by any assets of the
Company or the trust.
No Right to Company Assets. The Plan is intended to be
unfunded for purposes of the Code and Title I of the Employee Retirement Income
Security Act of 1974, as amended, and the Executive shall not acquire, by reason
of the Plan, any right in or title to any assets, funds or property of the
Company whatsoever, including, without limiting the generality of the foregoing,
any specific funds or assets which the Company may set aside in anticipation of
a liability hereunder, nor in or to any policy or policies of insurance on the
life of the Executive owned by the Company.
No Employment Rights. Nothing herein shall constitute a
contract of continuing employment or in any manner obligate the Company to
continue the service of the Executive or obligate the Executive to continue in
the service of the
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<PAGE>
Company, and nothing herein shall be construed as fixing or regulating the
compensation paid to the Executive.
No Third Party Rights. Nothing in the Plan or any trust
established pursuant to the Plan shall be construed to create any rights
hereunder in favor of the beneficiary of the Executive prior to the Executive's
death or in favor of any other person (other than the Company and the Executive)
or to limit the Company's right to amend or terminate the Plan in any manner,
subject to the consent of the Executive, notwithstanding that such amendment or
termination might result in the Executive's beneficiary receiving no benefits
under the Plan.
Nonassignability. No rights or payments under the Plan shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, whether voluntary or involuntary, and
no attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber
or charge the same shall be valid, nor shall any such benefit or payment be in
any way liable for or subject to levy, garnishment, attachment, execution or
other legal or equitable process. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration for the payment of any
debts, judgments or separate maintenance owed by the Executive or any other
person, nor be transferable by operation of law in the event of the Executive's
or any other person's bankruptcy or insolvency.
Withholding. To the extent required by law, the Company shall
be entitled to withhold from any payments due hereunder any federal, state and
local taxes required to be withheld in connection with such payment.
Validity. In the event any provision of the Plan is held
invalid, void or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provision of the Plan.
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<PAGE>
Applicable Law. The Plan shall be governed and construed in
accordance with the laws of the State of New York.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this HANDY & HARMAN
SUPPLEMENTAL EXECUTIVE PLAN to be executed by its duly authorized officers and
its corporate seal to be hereunto affixed on the 11th day of November, 1992.
Attest: ______________________ HANDY & HARMAN
[Seal] By: /s/ R. N. Daniel
------------------------------
Its: Chairman and Chief Executive Officer
5
<PAGE>
HANDY & HARMAN
OUTSIDE DIRECTOR STOCK OPTION PLAN
SECTION 1.
Purpose
1.1 The purpose of the HANDY & HARMAN OUTSIDE DIRECTOR STOCK
OPTION PLAN (the "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 Outside Directors
whose judgment, interest, and special effort is essential to the successful
conduct of its operations.
SECTION 2.
Definitions
2.1. Definitions. Whenever used herein, the following terms
shall have the respective meanings set forth below:
(a) "Annual Award" means an Option for the number of
shares of Stock determined pursuant to Section 5.
(b) "Annual Retainer Fee" means the annual fee payable
to an Outside Director for services as a member of the Board, but
exclusive of any fees paid for services as a member of a committee of
the Board, for attending meetings or for other special services proved
to the Company.
(c) "Board" means the Board of Directors of the
Company.
<PAGE>
(d) "Company" means Handy & Harman, a New York
corporation, and any successor thereto.
(e) "Disability means total disability, which if the
Outside Director were an employee of the Company, would be treated as a
total disability under the terms of the Company's long-term disability
plan for employees, as in effect from time to time.
(f) "Fair Market Value" on any date means the closing
price of the Stock as reported by the consolidated tape of the New York
Stock Exchange (or on such other recognized quotation system on which
the trading prices of the stock are quoted at the relevant time) on
such date. In the event that there are no Stock transactions reported
on such tape (or such other system) on such date, Fair Market Value
shall mean the closing price on the immediately preceding date on which
Stock transactions were so reported.
(g) "Option" means the right to purchase Stock at a
stated price for a specified period of time.
(h) "Outside Director" means any member of the Board
who is not an employee of the Company or of any of its subsidiaries.
(i) "Stock" means the common stock of the Company, par
value $1.00 per share.
2.2. Gender and Number. Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.
SECTION 3.
Eligibility and Participation
Each Outside Director shall participate in the plan.
2
<PAGE>
SECTION 4.
Stock Subject to Plan
4.1. Number. The total number of shares of Stock subject to
Awards under the Plan may not exceed 100,000 shares, subject to adjustment
pursuant to Section 4.3. The shares to be delivered under the Plan may consist,
in whole or in part, of treasury Stock or authorized but unissued Stock, not
reserved for any other purpose.
4.2. Cancelled, Terminated, or Forfeited Awards. Any shares of
Stock subject to an Option which for any reason is cancelled or terminated
without the issuance of any Stock shall again be available for Awards under the
Plan.
4.3. Adjustment in Capitalization. In the event of any Stock
dividend or Stock split, recapitalization (including, without limitation, the
payment of an extraordinary dividend), merger, consolidation, combination,
spin-off, distribution of assets to stockholders, exchange of shares, or other
similar corporate change, the aggregate number of shares of Stock available for
issuance hereunder or subject to Options and the respective exercise prices of
outstanding Option may be appropriately adjusted by the Board, whose
determination shall be conclusive; provided, however, that any fractional shares
resulting from any such adjustment shall be disregarded.
SECTION 5.
Stock Options
5.1. Grant of Options.
(a) Annual Awards. During each calendar year during the
term of the Plan, each Outside Director shall be granted an Annual
Award on
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<PAGE>
the first business day of the year; provided, however, that for 1990
such award shall be subject to the approval of the Plan by the
stockholders of the Company.
(b) Number of Shares. Each Outside Director shall be
granted an Annual Award covering the number of shares of Stock which
are equal to the number of whole shares determined by dividing (i)
fifty percent (50%) of the amount of the Outside Director's Annual
Retainer Fee by (ii) the Fair Market Value of a share of Stock of the
date of grant.
(c) Option Agreement. Each Option shall be evidenced by
an Option agreement that shall specify the exercise price, the term of
the Option, and the number of shares of Stock to which the Option
pertains.
5.2. Option Price. Options granted pursuant to Section 5.1(a)
as an Annual Award shall have an exercise price equal to One Dollar ($1.00) per
share of stock.
5.3. Exercise of Options. Options awarded under the Plan
shall be fully and immediately exercisable. Each Option shall be exercisable for
10 years after the date on which it is granted.
5.4. Payment. Options may be exercised by written notice of
exercise accompanied by payment in full of the Option price in cash or cash
equivalents, including by personal check. As soon as practicable after receipt
of such written exercise notice and full payment of the Option price, the
Company shall deliver to the Outside Director a certificate or certificates
representing the acquired shares of stock.
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<PAGE>
SECTION 6.
Termination of Duties as a Director
6.1. Termination of Duties Due to Retirement. In the event an
Outside Director's membership on the Board ceases on or after he has attained
age 72, any Options then held by such Outside Director may be exercised at any
time prior to the expiration of the term of the Options or within three (3)
years following his cessation of Board membership, whichever period is shorter.
6.2. Termination of Duties Due to Death or Disability. In the
event an Outside Director's membership on the Board ceases by reason of his
death or Disability, any Options then held by such Outside Director may be
exercised by the Outside Director or his legal representative at any time prior
to the expiration date of the terms of the Options or within one (1) year
following his cessation of Board membership, whichever period is shorter.
6.3. Termination of Duties for Any Other Reason. In the event
an Outside Director's membership on the Board ceases for any reason other than
one described in Section 6.1 or Section 6.2, any Options then held by such
Outside Director shall be cancelled.
6.4. Services as an Employee. If an Outside Director becomes
an employee of the Company or of any of its subsidiaries, the Outside Director
shall be treated as continuing in service for purposes of this Plan, but shall
not be eligible to receive future grants while an employee. If the Outside
Director's services as an employee terminate without his again becoming an
Outside Director, the provisions of this Section 6 shall apply as though such
termination of employment were the termination of the Outside Director's
membership on the Board.
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<PAGE>
SECTION 7.
Amendment, Modification, and Termination of Plan
The Board at any time may terminate or suspend the Plan, and from
time to time may amend or modify the Plan, but any amendment that materially
increases the benefits to be provided to Outside Directors shall be subject to
approval by the Company's stockholders. No amendment, modification, or
termination of the Plan shall in any manner adversely affect any Option
theretofore granted under the Plan, without the consent of the Outside Director.
SECTION 8.
Miscellaneous Provisions
8.1. Nontransferability of Awards. No options may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. All rights with respect
to Options granted to an Outside Director shall be exercisable during his
lifetime only by him.
8.2. Beneficiary Designation. Each Outside Director may from
time to time name any beneficiary or beneficiaries (who may be named
contingently or successively) by whom any Option granted under the Plan is to be
exercised in case of his death. Each designation will revoke all prior
designations by such Outside Director and will be effective only when filed by
the Outside Director during his lifetime in writing with the Secretary of the
Company. In the absence of any such designation, Options outstanding at the time
of an Outside Director's death shall be exercised by the Outside Director's
surviving spouse, if any, or otherwise by his estate.
8.3. No Guarantee of Membership. Nothing in the Plan shall
confer upon an Outside Director the right to remain a member of the Board.
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<PAGE>
8.4. Requirements of Law. The granting of Options and the
issuance of shares of Stock upon the exercise of Options shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
8.5. Administration. The Plan shall, to the maximum extent
possible, be self-effectuating. Any determinations necessary or advisable for
the administration and interpretation of the Plan in order to carry out its
provisions and purposes shall be made by the Company.
8.6. Term of Plan. The Plan shall be effective upon its
adoption by the Board, subject to approval by the Company's stockholders at
their next annual meeting. The Plan shall continue in effect, unless sooner
terminated pursuant to Section 7, until the tenth anniversary of the date on
which it is adopted by the Board.
8.7. Governing Law. The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State of
New York.
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<PAGE>
HANDY & HARMAN
LONG-TERM INCENTIVE
STOCK OPTION PLAN
1. Purpose. The purpose of the Handy & Harman Long-Term Incentive Stock
Option Plan (the "Plan") is to benefit Handy & Harman and its subsidiaries (the
"Company') by providing for the acquisition of a greater personal and financial
interest in the Company by key employees upon whom the Company is dependent for
success.
2. Administration of the Plan. The Plan shall be administered by a
Committee (the "Committee") appointed by and responsible to the Board of
Directors of the Company (the "Board"). The Committee shall consist of not less
than three directors who are "disinterested persons" within the meaning of Rule
16b-3 promulgated under the Securities and Exchange Act of 1934, as amended, or
any successor provision ("Rule 16b-3").
The Committee has and may exercise such powers and authority of the
Board as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. The Committee has authority in its
discretion to determine the key employees to whom and the time or times at which
options or stock appreciation rights (together, "Awards") may be granted and the
number of shares of Common Stock applicable to each such Award. Each Award will
be evidenced by a written instrument and may include any terms and conditions
consistent with the Plan, as the Committee may determine. The Committee also has
authority to interpret the Plan, to determine the terms and provisions of the
respective agreements and to make all other determinations necessary or
advisable for Plan administration. The Committee shall interpret the Plan and
Awards hereunder in accordance and consistent with the principles set forth in
Rule 16b-3. The Committee has authority to prescribe, amend, and rescind rules
and regulations relating to the Plan. All interpretations, determinations and
actions by the Committee will be final, conclusive and binding upon parties. Any
action of the Committee with respect to the administration of the Plan shall be
taken pursuant to a majority vote or by the unanimous written consent of its
members.
<PAGE>
No member of the Board or the Committee will be liable for any action
or determination made in good faith by the Board or the Committee with respect
to the Plan or any Award under it.
3. Participants. Options shall be granted under the Plan to those key
employees of the Company who are approved by the Committee, including directors
of the Company who are also salaried officers, who perform services of special
importance to the management, operation and development of the Company.
4. Effective Date and Termination of the Plan. The effective date of
the Plan shall be February 28, 1991, and the Plan shall terminate on February
27, 2001, or at such earlier time as the Board of Directors may determine. Any
option or stock appreciation right outstanding under the Plan at the time of its
termination shall remain in effect until it shall have been exercised or shall
have expired or otherwise terminated pursuant to the provisions of the Plan.
5. Stock Subject to Options. The number of shares to be subject to
Awards hereunder shall not exceed 1,000,000 shares of the Common Stock, $1.00
par value, of the Company ("Common Stock"), subject to adjustment as provided in
Section 10 hereof. Any shares subject to an Award under the Plan, which Award
expires or is terminated unexercised as to such shares, may again be subjected
to an Award under the Plan. The Committee may require the surrender of
outstanding Awards as a condition precedent to the grant of new Awards under the
Plan.
6. Payment of Purchase Price. The purchase price of each share acquired
pursuant to the exercise of any option shall be paid in full at the time of such
purchase, and a certificate representing shares so purchased shall be delivered
to the persons entitled thereto. The Committee shall have the sole discretion to
determine at the time of grant of the option the form (cash, shares of Common
Stock, or a combination thereof) in which payment of the purchase price may be
made.
7. Types of Options. It is intended that no options granted under the
Plan shall qualify as an incentive stock option as defined in Section 422 of the
Internal Revenue Code.
8. Terms and Conditions of Options. Each option granted under the Plan
shall contain such terms and conditions, not inconsistent with the Plan, as are
determined by the Committee, subject to the following provisions:
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(a) Such option by its terms shall not be exercisable after
the expiration of ten years from the date such option is granted.
(b) Each option shall become exercisable (commencing one year
after the date of grant) cumulatively at the rate of 20% per year.
(c) The option price shall not be less than 100 percent of the
fair market value of the Common Stock at the time such option is
granted. The term "fair market value" shall mean the average of the
highest price and the lowest price at which the Common Stock shall have
been sold on the New York Stock Exchange on the date of the grant of
such option. In the event that any such option shall be granted on a
date on which there were no such sales on such Exchange, the fair
market value on such date shall be deemed to be the average of such
highest price on the immediately preceding day on which there were such
sales.
(d) Such option by its terms shall not be transferable by the
optionee otherwise than by will or the laws of descent and distribution
and shall be exercisable, during his lifetime, only by him.
(e) No option shall be granted after ten years from the
effective date of the Plan, as set forth in Section 4.
9. Stock Appreciation Rights. Stock appreciation rights may be granted
by the Committee in connection with any option at the time of grant of such
option. Stock appreciation rights shall be subject to the following terms and
conditions and to such other terms and conditions, not inconsistent with the
Plan, as the Committee shall determine:
(a) The number of stock appreciation rights granted to a
participant may not exceed 100% of the number of shares that such
participant is entitled to purchase pursuant to the related option.
(b) Stock appreciation rights shall be exercisable, in whole
or in part, at such time or times and to the extent that the option to
which they relate shall be exercisable, and shall expire simultaneously
with the option to which they relate.
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<PAGE>
(c) Upon exercise of a stock appreciation right, the related
option or portion thereof shall be surrendered to the Company in
exchange for payment by the Company of shares of Common Stock (valued
at their fair market value on the date of exercise of the stock
appreciation right) or cash or a combination thereof in an amount equal
to the excess of the aggregate fair market value of the shares subject
to the option or portion thereof being surrendered (valued on the date
of exercise of the stock appreciation right) over the aggregate option
price thereof; provided, however, that fractional shares shall not be
issued. Any option, to the extent surrendered, shall thereupon cease to
be exercisable.
(d) The Committee shall have the sole discretion to determine
the form in which payment (i.e., cash, shares of Common Stock, or any
combination thereof) will be made.
(e) Stock appreciation rights shall be transferable only when
the options to which they relate are transferable, and under the same
conditions.
(f) A stock appreciation right may be exercised only when the
market price of Common Stock exceeds the option price of the option to
which the stock appreciation right relates.
10. Adjustment in the Event of Recapitalization of the Company. Subject
to Section 11, if the outstanding shares of Common Stock of the Company are
increased, decreased or exchanged for a differing number or kind of shares or
other securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all the
property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock, or other securities, an appropriate and
proportionate adjustment may be in (i) the maximum number and kind of shares
provided in Section 5, (ii) the number and kind of shares or other securities
subject to the then-outstanding Awards, and (iii) the price for each share or
other unit of any other securities subject to then-outstanding Awards without
change in the aggregate purchase price or value as to which such options remain
exercisable or subject to restrictions.
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<PAGE>
11. Change in Control. (a) Notwithstanding anything in the Plan to the
contrary, upon a Change in Control of the Company, all outstanding options
granted under the Plan shall become immediately exercisable.
(b) For purposes of this Section, a Change in control of the Company
shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (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 the
Company in substantially the same proportions as their ownership of
stock of the Company), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding securities;
(ii) during any period of 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 the Company 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 the Company'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 the Company approve a merger or
consolidation of the Company with any other corporation; other than (A)
a merger or consolidation which would result in the voting securities
of the Company 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 the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires
5
<PAGE>
more than 50% of the combined voting power of the company's then
outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
12. General Provisions. (a) Nothing in the Plan or in any instrument
executed pursuant to the Plan will confer upon any participant any right to
continue in the employ of the Company or affect the right of the company to
terminate the employment of any participant at any time with or without cause.
(b) No shares of Common Stock will be issued or transferred pursuant to
the exercise of an option or stock appreciation right unless and until all
then-applicable requirements imposed by federal and state securities and other
laws, rules and regulations and by any regulatory agencies having jurisdiction,
and by any stock exchanges upon which the Common Stock may be listed, have been
fully met. As a condition precedent to the issuance of shares pursuant to the
grant or exercise of an option or stock appreciation right, the Company may
require the participant to take any reasonable action to meet such requirements.
(c) No participant and no beneficiary or other person claiming under or
through such participant will have any right, title or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
option or stock appreciation right except as to such shares of Common Stock, if
any, that have been issued or transferred to such participant.
(d) The Company may make such provisions as it deems appropriate to
withhold any taxes the Company determines it is required to withhold in
connection with the exercise of any option or stock appreciation right. The
Company may require the participant to satisfy any relevant tax requirements
before authorizing any issuance of Common Stock to the participant.
13. Amendment and Termination of Plan; Amendment of Incentive Awards.
The Board or the Committee will have the power, in its discretion, to amend,
suspend or terminate the Plan at any time. Except as provided in Section 10 of
the Plan, no such amendment will, without approval of the shareholders of the
Company (i) change the class of persons eligible to receive options or stock
appreciation rights under the Plan, (ii) materially increase the benefits
accruing to participants under the
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<PAGE>
Plan, (iii) increase the number of shares of common stock subject to the Plan,
or (iv) transfer the administration of the Plan to any person who is not a
"disinterested person" under Rule 16b-3.
No amendment, suspension or termination of the Plan shall, without the
consent of the participant, impair or adversely affect any right or obligation
under any Award previously granted under the Plan.
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<PAGE>
AMENDED AND RESTATED AGREEMENT
AGREEMENT, dated as of November 3, 1995 by and between Handy & Harman,
a New York corporation (the "Company") and Frank E. Grzelecki (the "Executive").
WHEREAS, the Company and the Executive entered into a Letter Agreement
dated as of May 23, 1989, as amended (the "Agreement"), an Executive Agreement
dated as of July 1, 1989, as amended (the "Executive Agreement") and an Amended
Agreement dated as of September 22, 1994 (the Amended Agreement"); and
WHEREAS, the Amended Agreement provides that when the Executive's
employment with the Company ends, whether the basis for such action being
instituted on the part of the Company or the Executive, the Executive shall
become entitled to the payment of severance benefits for one year in an amount
equal to the Executive's annual salary at the date of termination (the
"Severance Payment"); to full employee benefits coverage for one year (the
"Severance Benefits"); to continued medical benefits for himself and his spouse
until eligibility for Medicare (the "Medical Benefit"); and to certain
retirement benefits as indicated in an Agreement dated May 12, 1992; and
<PAGE>
WHEREAS, the Company considers its relationship with the Executive a
vital element in protecting and enhancing the best interests of the Company and
wishes to benefit from the Executive's substantial knowledge and experience by
extending its relationship with the Executive, and the Executive desires to
continue such relationship with the Company.
NOW, THEREFORE, in consideration of the foregoing, the Company
and the Executive agree as follows:
1. The Company and the Executive agree that this document,
being entered into this day, shall replace both the Agreement and the Amended
Agreement upon its execution and which shall provide for the payment of an
amount equal to the Severance Payment, such payment to be made in installments
over a five-year period. Notwithstanding any provision to the contrary herein,
the Executive (or his beneficiary) may, upon written notice to the Company, call
for the acceleration of the Severance Payment. Upon such written notice, the
Company shall pay to the Executive (or his beneficiary) a lump sum amount equal
to the remaining balance of the Severance Payment; and
(i) In the case of the death of the Executive during the
five-year period, the remainder of the Severance Payment shall be paid
to his beneficiary; and
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<PAGE>
(ii) The Executive shall remain entitled to the Supplemental
Retirement Benefits as provided by amendment to the Agreement, dated as
of May 12, 1992, subject to the terms and conditions provided in such
amendment and in the Agreement, which provisions are incorporated by
reference in this Agreement as attached hereto as Exhibit A (a
Certified Copy of the Resolutions of the Board of Directors of Handy &
Harman dated May 12, 1992) to this Agreement; and
(iii) From and after the date of the Executive's termination
of employment, the Company shall provide the Medical Benefit, without
cost to the Executive and his spouse, over the lives of both the
Executive and his spouse. Such Medical Benefit shall be provided on a
basis no less favorable to the Executive and his spouse than the
medical coverage provided to active senior executive officers of the
Company as of the date of execution of this Agreement; any future
improvements in medical benefits adopted by the Company for active
senior executive officers will be deemed to be in effect for the
Executive and his spouse pursuant to the Medical Benefit, without cost
to the Executive or his spouse, on the date of effectiveness of such
future improvements for active senior executive officers of the
Company; and
(iv) The Company shall take all actions necessary and
appropriate to cause all outstanding options to remain outstanding and
continue to vest
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<PAGE>
and become exercisable pursuant to the terms of the original grant,
subject to the terms of the applicable stock option plan and the
applicable stock option agreement. In addition, the Company shall
extend the post exercise period for the Executive's options granted
under the 1991 Long-Term Incentive Stock Option Plan to no less than
one year from the effective [termination-retirement] date of the
Executive or for the term of the Consulting Agreement, referenced in
paragraph numbered 2 on page 4 of this Agreement, whichever period is
longer, but not beyond the original term of such option.
(v) The Executive shall be entitled to appropriate office
space and related expenses, off of the premises of the Company's
headquarters in Rye, New York, along with appropriate secretarial
services for the four-year period following severance of employment;
which expenses shall not exceed $3,000 per month.
2. The Company and the Executive may enter into a Consulting
Agreement (the "Consulting Agreement"), a copy of which is attached hereto as
Exhibit B.
3. The obligations of the Company under this Agreement shall
be binding upon any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company.
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<PAGE>
IN WITNESS WHEREOF, the Company and the Executive have caused
this Amendment to be duly executed all as of November 3, 1995.
HANDY & HARMAN
By /s/ Paul E. Dixon
-----------------------------
Paul E. Dixon
/s/ Frank E. Grzelecki
-----------------------------
Frank E. Grzelecki
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<PAGE>
EXHIBIT A
SECRETARY'S CERTIFICATE
I, PAUL E. DIXON, being the duly elected and acting Secretary
of Handy & Harman, a New York corporation (hereinafter the "Company") DO HEREBY
CERTIFY that the attached is a true and complete copy of certain resolutions
duly adopted by the Board of Directors of this Company at a meeting which was
duly called and held on the 12th day of May 1992, and at which a quorum was
present and acting throughout, AND I DO FURTHER CERTIFY that said resolutions
have not been rescinded or amended and remain in full force and effect at the
date hereof:
IN WITNESS WHEREOF I have hereunto affixed my signature and
the seal of the Company this 3rd day of November 1995.
/s/ Paul E. Dixon
--------------------------------
Secretary
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<PAGE>
RESOLUTION APPROVED BY BOARD OF DIRECTORS
May 12, 1992
RESOLVED, that the agreement dated May 23, 1989, between the
Company and F. E. Grzelecki be amended by adding the following provisions
thereto, subject to the advice of tax counsel with final provisions being
mutually agreed to by both parties:
Supplemental Retirement Benefits: In addition to the benefits provided under the
Handy & Harman Pension Plan, the Supplemental Executive Retirement Plan, and the
Retiree benefits under the Handy & Harman Health Care Benefit Plan, the Company
will provide the following Supplemental Retirement Benefits:
1. Upon the completion of each year of service, the Company will
purchase an annuity to provide a supplemental monthly pension
in an amount equal to $1,000 times the number of years of
service since July 1, 1991 provided, however, that the total
may not exceed $6,000. These monthly payments shall begin July
1, 1997 or upon your separation from the Company as a full
time employee, whichever comes last, and shall continue for
your lifetime with the further provision that in the event of
your death such monthly payments shall be made to your
beneficiary until a total of 120 monthly payments have been
made.
2. The Company will continue to provide Medical Benefits
equivalent to those received by other Officers of the Company
until you become eligible for Medicare. This coverage will be
available if you continue employment until July 1, 1992. Your
monthly premium contribution will be the same as other
Officers of the Company. It is important that you and your
spouse enroll for Medicare Parts A and B as soon as you become
eligible since at that time the benefit described above will
cease and you will be eligible for the normal retiree
benefits. These Retiree Benefits are integrated with Medicare
and, therefore, the Plan benefits will only cover expenses
which are not paid by Medicare. Your monthly cost after you
become Medicare eligible will be the same as other Retirees.
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<PAGE>
EXHIBIT B
CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of ___________________ between
Handy & Harman, a New York corporation (the "Company") and Frank E.
Grzelecki (the "Executive").
WHEREAS, the Company and the Executive desire to enter into a
consulting upon the retirement of the Executive; and
WHEREAS, it is recognized that the Consulting Agreement would
be to the benefit of the Company and the Executive.
NOW, THEREFORE, in consideration of the foregoing the
following terms and conditions shall apply:
1. This Agreement will become effective the day following the
retirement date of the Executive whose written notice of said date will be
communicated to the Company to the attention of the Chairman or Secretary at
250 Park Avenue, New York, New York 10177.
2. In furtherance of this Agreement the Company agrees to
provide a consulting fee equal to $30,000 (the "Annual Fee"), and expenses
incurred with respect to this Agreement. The Annual Fee will be payable in
monthly installments until such time that the Executive terminates his
consultant status or accepts full-time employment elsewhere, and expenses will
be reimbursed, in compliance with the Company's policies, to the Executive.
<PAGE>
3. As part of this Agreement, the Executive agrees to provide
services to the Company for two days each month for a total of 24 days each
year. If the Executive consults or serves in a capacity other than as a Director
of the Company for more than 24 days in any one-year period, then the payments
for the additional days would be made on a pro rata basis for each year.
4. The Company and the Executive may terminate this Agreement
on not less than thirty days written notice, if by the Company to the Executive,
if by the Executive to the Company at 250 Park Avenue, New York, New York 10177
with attention to the Chairman or the Secretary.
5. The Executive shall enter into a noncompetition agreement
substantially in the form of noncompetition agreements between the Company and
other executive officers of the Company, which shall be negotiated by the
parties in good faith and which shall provide that, among other things, (i) the
Executive shall not enter into an employment or consulting arrangement with any
other competing company; and (ii) the Executive shall maintain the
confidentiality of proprietary information of the Company.
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<PAGE>
IN WITNESS WHEREOF, the Company and the Executive have caused
this Amendment to be duly executed all as of _____________, 1994.
HANDY & HARMAN
By:_____________________________
________________________________
Frank E. Grzelecki
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<PAGE>
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
<PAGE>
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 &
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<PAGE>
Harman with any other corporation, other than (A) a merger or
consolidation which would 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 substantial ly
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 con-
3
<PAGE>
nection 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.
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<PAGE>
(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.
(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.
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<PAGE>
(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
6
<PAGE>
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 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 Incen tive 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
7
<PAGE>
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
8
<PAGE>
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 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 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
9
<PAGE>
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
10
<PAGE>
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.
(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
11
<PAGE>
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
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<PAGE>
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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<PAGE>
(3) In the event of the termination of a Participant's
employment for Cause, all out standing 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.
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<PAGE>
(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
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<PAGE>
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.
(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
16
<PAGE>
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 anytime 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.
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<PAGE>
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.
(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.
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<PAGE>
(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 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.
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<PAGE>
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 reaquired 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
20
<PAGE>
Participant which have not vested as of the date of such
termination shall immediately be returned to Handy &
Harman, to gether 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.
(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.
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<PAGE>
(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 cred-
22
<PAGE>
ited 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.
(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.
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<PAGE>
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 Securi-
24
<PAGE>
ties 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.
(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.
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<PAGE>
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
26
<PAGE>
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.
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.
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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 &
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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 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.
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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.
0190500.01-New YorkS5A
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<PAGE>
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Supplemental Executive Retirement Plan (the "Supplemental
Plan") was adopted and established, effective September 28, 1989 by Handy &
Harman, a New York corporation (the "Company"), for Eligible Executives who
participate in the Handy & Harman Pension Plan (the "Pension Plan") which
Pension Plan is intended to satisfy the requirements of the Internal Revenue
Code of 1986, as amended (the "Code"). The Supplemental Plan is hereby amended
and restated, effective as of January 1, 1995.
1. PURPOSE. The Supplemental Plan shall provide for the
payment of supplementary retirement benefits to compensate an Eligible Executive
for the amount of the reduction, if any, in his benefits under the Pension Plan
on account of (i) the application of Section 401(a)(17) or Section 415 of the
Code, or (ii) the exclusion from "pay," as defined in Section 3.1 of the Pension
Plan of amounts received under the Company's Management Incentive Plan ("MIP").
2. PARTICIPATION. As used in the Supplemental Plan, the term
"Eligible Executive" shall mean any corporate officer of the Company who
participates in the Pension Plan. Subject to the provisions of Section 10
hereof, no corporate officer shall receive any benefits hereunder prior to the
time such officer shall have become eligible for Early Retirement, Normal
Retirement or eligible for
<PAGE>
Disability Retirement under the Pension Plan after the effective date herein and
shall have been an Officer of the Company for Five (5) years.
3. RETIREMENT BENEFITS. The benefit payable under the
Supplemental Plan shall be an amount equal to the excess, if any, of (a) over
(b), where:
(a) equals the initial benefit which would be payable pursuant
to the Pension Plan determined without regard to the limits of
Section 401(a)(17) or Section 415 of the Code and including
within the definition of "pay" under the Pension Plan fifty
percent (50%) of the amounts awarded to the Eligible Executive
pursuant to the MIP; and
(b) equals the initial benefit payable under the Pension Plan.
Benefits under the Supplemental Plan shall commence at the
same time, shall be payable in the same manner (except such benefits shall not
be adjusted for cost of living increases under the Pension Plan), and shall
continue on a coterminous basis with the benefits paid to the Eligible
Executive under the Pension Plan. Benefits hereunder, if any, shall be paid to
the Eligible Executive or in the event of the Eligible Executive's death, to the
surviving spouse or such other beneficiary of
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the Eligible Executive to whom payments under the Pension Plan are made
following the death of the Eligible Executive.
4. SOURCE OF BENEFITS. The benefits payable under the
Supplemental Plan shall be paid exclusively from the Company's general assets.
In this regard, the Company may create a grantor trust (within the meaning of
Section 671 of the Code) in connection with the Supplemental Plan to which it
shall from time to time contribute amounts to accumulate an appropriate reserve
against its obligations hereunder. Such trust and any assets held by such trust
to assist the Company in meeting its obligations under the Supplemental Plan
shall conform to the terms of the model trust as described in the Internal
Revenue Service Procedure 92-64 (I.R.B. 1992-33). Notwithstanding the creation
of such trust, the benefits hereunder shall be a general obligation of the
Company. Payment of benefits from such trust shall, to that extent, discharge
the Company's obligations under this Supplemental Plan. Eligible Executives
shall have only a contractual right as general creditors of the Company to the
amounts, if any, payable hereunder and such right shall not be secured by any
assets of the Company or the trust.
5. CONSTRUCTION. The Company intends the Supplemental Plan to
be exempt from Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), as a benefit plan which is unfunded and is maintained by
an employer primarily for the purpose of providing deferred compensation for a
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<PAGE>
select group of management or highly compensated employees, and any ambiguities
in construction shall be resolved in favor of interpretations which will
effectuate such intention. The Supplemental Plan shall be governed by and
construed in accordance with the laws of the State of New York to the extent
such laws are not preempted by ERISA.
6. ADMINISTRATION OF THE SUPPLEMENTAL PLAN. The Supplemental
Plan shall be administered by the Compensation Committee of the Board of
Directors of the Company (the "Committee"). The Committee shall have authority
to make, amend, interpret and enforce all appropriate rules and regulations for
the administration of the Supplemental Plan and decide or resolve any and all
questions including interpretations of the Supplemental Plan as may arise in
connection with the Supplemental Plan. The Committee shall designate from time
to time those eligible for inclusion in the Supplemental Plan. The Committee may
employ agents and delegate to them such administrative duties as it sees fit and
may consult with counsel who may be counsel to the Company. The decision or
action of the Committee in respect of any question arising out of or in
connection with the administration, interpretation and application of the
Supplemental Plan and the rules and regulations thereunder shall be final and
conclusive and binding upon all persons having any interest therein.
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<PAGE>
7. TERMINATION, SUSPENSION OR AMENDMENT. The Board of
Directors of the Company in its sole discretion may terminate, suspend or amend
the Supplemental Plan at any time or from time to time, in whole or in part;
provided, however, that no such termination, suspension or amendment shall
adversely affect the benefits of any corporate officer of the company who is
vested or eligible for Disability Retirement under the Pension Plan and has been
an Officer of the Company for Five (5) years.
8. EFFECTIVE DATE. The effective date of the Supplemental Plan
shall be September 28, 1989, as amended December 13, 1993, and as amended and
restated as of January 1, 1995.
9. GENERAL CONDITIONS. No interest of any person and no
benefit payable hereunder shall be assigned as security for a loan and any such
purported assignment shall be null, void and of no effect. No such interest or
benefit shall be subject in any manner, either voluntarily or involuntarily, to
anticipation, sale, transfer, assignment or encumbrance by or through any person
and any such purported action shall be null, void and of no effect.
No Eligible Executive and no other person shall have any legal
or equitable right or interest in the Supplemental Plan which are not expressly
granted hereunder. Participation hereunder does not give any person any right to
be retained
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<PAGE>
in the service of the Company or to continue in its employ, the right and power
of the Company to dismiss or discharge any executive is expressly reserved.
10. ACCELERATION OF PAYMENTS. In the event a "change in
control" of the Company as hereinafter defined shall occur, the Actuarial
Equivalent (as defined in the Pension Plan) of the amount of the benefits
hereunder shall be determined for each Eligible Executive and for each other
executive who is a corporate officer of the Company. The aggregate amount of all
such Actuarial Equivalents shall be paid into a grantor trust (which may include
the grantor trust referred to in Section 4 hereof) established by the Company
for payment to such Eligible Executives and other executives in accordance with
the terms of such trust fund. For purposes of the Supplemental Plan, a "change
in control" shall occur if
(a) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (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 the
Company in substantially the same proportions as their ownership of
stock in the Company), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act),
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<PAGE>
directly or indirectly, of securities of the Company representing 25%
or more of the combined voting power of the Company's then outstanding
securities;
(b) during any period of two consecutive years (not including
any period prior to the adoption of the Supplemental Plan), individuals
who at the beginning of such period constitute the Board of Directors
of the Company, and any new director (other than a director designated
by a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (c) or (d) of this
Section) whose election by the Company'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;
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation; other than
(i) a merger or consolidation which would result in the voting
securities of the Company 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
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<PAGE>
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as hereinabove defined)
acquires more than 50% of the combined voting power of the Company's
then outstanding securities; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
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<PAGE>
Preamble to the Resolution on the
Supplemental Executive Retirement Plan
Resolution to be adopted by the Board of Directors of Handy & Harman to add two
lump sum payment provisions to the Supplemental Executive Retirement Plan (the
"Supplemental Plan"). Under one provision the executive can elect a lump sum
payment to be paid at termination of employment. This would be calculated on the
same basis as under the qualified pension plan except that the interest rate
reflected in the calculation would be 80% of the applicable interest rate under
the qualified pension plan. The second provision would be an automatic lump sum
payment upon change in control. This would be calculated in a similar manner as
for the voluntary election at termination of employment except for two
differences. One of these differences is to apply the lump sum factor reflecting
80% of the interest rate to the full amount of pension determined under the
Supplemental Plan (i.e. before offset for the qualified pension plan), which
would then be reduced by the lump sum payment as determined under the qualified
pension plan reflecting 100% of the interest rate. The other difference would
apply to participants who are less than age 60 and therefore are not yet
eligible for an early retirement pension. For these participants the lump sum
value of the full amount of pension would reflect commencement of the full
amount of accrued pension starting at age 60. The payment upon change in control
would be increased by the amounts of excise tax payable.
FIRST AMENDMENT TO THE
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1995)
(THE "SUPPLEMENTAL PLAN")
The Handy & Harman Supplemental Executive Retirement Plan is amended effective
January 1, 1995 in the following respects:
1) The second paragraph of Section 3 of the Supplemental Plan is hereby
amended to add the following introductory phrase:
"Except as provided in Section 11,"
2) A new Section 11 is hereby added to the Supplemental Plan to read as
follows:
<PAGE>
"11. Lump Sum Option. A participant who has a valid lump sum payment
election in effect at his termination of employment date will receive
his benefits under the Supplemental Plan in a lump sum payment within
the 30 day period following his termination of employment date. The
payment will be made as soon as practical thereafter. A lump sum
payment election will be valid if approved by Trustees or if it has
been in effect for at least 12 months and is on a form authorized by
the Committee.
The amount of the lump sum payment will be equal to the monthly pension
that is the excess of (a) over (b) as described in Section 3 multiplied
by the applicable lump sum factor. The applicable lump sum factor shall
be the same factor as determined for single sum amounts in Section 1.1
of the Pension Plan except that the applicable interest rate reflected
in the calculation for the Supplemental Plan will be equal to 80% of
the applicable interest rate for the Pension Plan."
3) The part of the present Section 10 of the Supplemental Plan up to
subpara graph (a) is hereby amended to read as follows:
"10. Acceleration of Payments. In the event a "change in control" of
the Company (as hereinafter defined) shall occur, the lump sum payment
(as hereinafter defined) of the amount of benefits hereunder shall be
determined for each Eligible Executive and for each other executive who
is a corporate officer of the Company, and each such person shall be
deemed to be 100% vested.
The aggregate amount of all such lump sum payments shall be paid into a
grantor trust (which may include the grantor trust referred to in
Section 4 hereof) established by the Company for payment to such
Eligible Executives and other executives in accordance with the terms
of such trust fund. Such amount to be paid shall be reduced by the
estimated value of the assets in such grantor trusts at the time of the
payment with respect to the persons reflected in the lump sum amounts.
Such amount shall be paid to the trusts immediately upon the occurrence
of the change in control.
Each participant will receive the amount of lump sum payment calculated
on his behalf within 30 days of the change in control. The lump sum
payment to
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<PAGE>
each participant under this Supplemental Plan shall be equal to the
excess of (i) over (ii), where:
(i) equals the lump sum payment on behalf of the amount of monthly
pension described in subsection (a) of Section 3 of this
Supplemental Plan, where such amount is determined as for a
lump sum payment in Section 1.1 of the Pension Plan except
that the interest rate for the Supplemental Plan will be equal
to 80% of the applicable interest rate for the Pension Plan,
and further provided that the single sum payment will assume
that the pension will commence on the first day of the month
following the participants's 60th birthday (current age if
older), and
(ii) equals the lump sum payment on behalf of the amount of monthly
pension described in subsection (b) of Section 3 of this
Supplemental Plan as determined under Section 1.1 of the
Pension Plan.
4) Section 10 of the Supplemental Plan is hereby amended to add the
following paragraph to at the end of the present Section 10:
"In addition to the lump sum payment described above, the Company shall
reimburse each participant who receives such a lump sum payment for any
excise tax (and any income and excise tax due with respect to such
reimbursement) imposed on such lump sum payments in connection with
the change in control of the Company pursuant to Section 280G of the
Internal Revenue Code of 1986, as amended. The basis for such
reimbursement calculation shall be consistent with similar calculations
described in change in control agreements of the Company."
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<PAGE>
Handy & Harman
Executive Post-Retirement Life Insurance Program
1. Establishment and Purpose. Handy & Harman (the "Company")
hereby establishes the Handy & Harman Executive Post-Retirement Life Insurance
Program (the "Program"), effective as of February 1, 1995. The purpose of the
Program is to benefit the Company and its stockholders by providing incentive to
eligible key employees of the Company to remain employed with the Company until
their retirement by providing life insurance benefits at the Company's expense.
2. Eligibility. The Program is available to those executive
officers of the Company ("Participants") who are (i) designated by the
Compensation Committee of the Board of Directors of the Company (the
"Committee") as eligible for participation in the Company's Supplemental
Executive Retirement Plan (the "SERP"), and (ii) determined to be insurable to
the satisfaction of the Program's then current insurance provider.
Notwithstanding anything contained herein to the contrary, it is contemplated
that a Participant may elect to irrevocably assign all benefits and rights
arising hereunder to a trust established by such Participant (an "Insurance
Trust") and, in such case, certain benefits and rights arising hereunder
attributed to a Participant shall be construed as benefit and rights attributed
to such Insurance Trust.
3. Life Insurance Benefit. (a) The Company shall cause to be
maintained a variable appreciable life insurance policy (the "Pre-Retirement
Policy") on the life of each participant in an amount (the "Pre-Retirement
Benefit") equal to four (4) times the Participant's annual base salary as in
effect from time to time ("Annual Base Salary"). The Beneficiary (as defined
below) of each participant with respect to whom the Company's obligations have
not ceased under Section 4 hereof shall be entitled to receive (as soon as
practicable following the Participant's death) a lump-sum cash payment equal to
the Pre-Retirement Benefit. All amounts contributed by the Company towards the
funding of the Pre-Retirement Policy shall, at all times, be determined on an
actuarially sound basis.
(b) The Company shall cause to be maintained an adjustable
life insurance policy (the "Post-Retirement Policy") on the life of each
Participant in an amount (the "Post-Retirement Benefit") equal to two (2) times
the Participant's Annual Base Salary. Until the Participant's Retirement (as
defined below), the "Company shall have all of the ownership rights in the
Post-Retirement Policy and shall be designated the beneficiary of the
Post-Retirement Benefit. As soon as
<PAGE>
practicable following the Participant's Retirement, the Company shall transfer
its ownership rights (including, without limitation, the right to designate a
beneficiary) in the Post-Retirement Policy to each Participant (or, an Insurance
Trust, if applicable) with respect to whom the Company's obligations have not
ceased under Section 5 hereof, in accordance with the terms and conditions
contained in Section 5 hereof. All amounts contributed by the Company towards
the funding of the Post-Retirement Policy shall, at all times, be determined on
an actuarially sound basis.
4. Conditions to Receipt of the Pre-Retirement Benefit. (a)
The Company shall have no obligation to maintain the Pre-Retirement Policy or to
provide the Pre-Retirement Benefit in respect of any participant who separates
from service with the Company, for any reason whatsoever, effectively
immediately following such separation from service with the Company.
(b) The Company shall have the right to condition the payment
of the Pre-Retirement Benefit and continued participation in the Program on the
annual payment to the Company of an amount equal to the "economic benefit"
received by such Participant, calculated in accordance with U.S. Department of
Treasury regulations, in respect of the Pre-Retirement Policy. The payment of
such economic benefit portion by the Participant (or, an Insurance Trust, if
applicable) to the Company shall be made pursuant to procedures established by
the Company. Upon the receipt of the economic benefit portion by the Company,
the Company may pay to such Participant additional compensation in an amount
equal to the economic benefit portion.
5. Conditions to Receipt of the Post-Retirement Benefit. (a)
The Company shall have no obligation to maintain the Post-Retirement Policy or
to provide the Post-Retirement benefit under the Program in respect of any
participant who separates from service with the Company, for any reason
whatsoever, prior to such Participant's Retirement (as such term is defined in
the Handy & Harman Pension Plan or any successor plan thereto.). Notwithstanding
the foregoing, (i) if a Participant separates from service with the Company
prior to Retirement and is vested in the SERP at such time, the Company shall
transfer to such Participant (or, an Insurance Trust, if applicable) its
ownership rights in the Post-Retirement Policy (including, without limitation,
the right to designate a beneficiary) effective upon such separation from
service; provided, however, that the Company may, in its sole discretion,
require such Participant (or an Insurance Trust, if applicable) to pay to the
Company an amount equal to the cash surrender value of such Post-Retirement
Policy as a condition precedent to such transfer, and (ii) if a Participant
separates
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<PAGE>
from service with the Company prior to Retirement and is not then vested in the
SERP, the Company shall have no further obligations to such Participant but may,
in its sole discretion, provide such participant (or, an Insurance Trust, if
applicable) with the option to receive a transfer from the Company of its
ownership rights in the Post-Retirement Policy (including, without limitation,
the right to designate a beneficiary); provided, however, that the payment to
the Company of an amount equal to the cash surrender value of the
Post-Retirement Policy shall be a condition precedent to such transfer. Upon a
transfer described in this paragraph (a), the Company shall have no obligation
to pay premiums on the Post-retirement Policy and shall have no further
obligations to the Participant under the Program.
(b) In the event that a Participant separates from service
with the Company after Retirement, the Company shall transfer its ownership
rights in the Post-Retirement Policy (including, without limitation, the right
to designate a beneficiary) to such Participant (or, an Insurance Trust, if
applicable). Upon a transfer described in this paragraph (b), to the extent that
such transfer shall cause the Participant to incur additional federal, state or
local income taxes, the Company shall pay to such Participant an amount (the
"Tax Reimbursement") such that the net amount of the Tax Reimbursement retained
by such Participant after deduction of any federal, state and local taxes
attributable to (i) the transfer of the Post-Retirement Policy from the Company
to the Participant (or, an Insurance Trust, if applicable) and (ii) the payment
of the Tax Reimbursement by the Company to the Participant, shall equal zero.
Upon a transfer described in this paragraph (b) but subject to Section 6 hereof,
the Company shall continue to make all required premium payments on the
Post-Retirement Policy on behalf of the Participant. Any and all determinations
to be made in calculating the Tax Reimbursement shall be made by the Company, in
its sole discretion.
6. Amendment and Termination of the Program. The Company,
through its Board of Directors, shall maintain at all times complete authority
to terminate the Program or amend or modify the provisions thereof at any time;
provided, that any such termination, modification or amendment which will
adversely affect the rights of a Participant shall become effective no less than
two years after notice of such termination, modification or amendment is
provided to such affected Participant; further, provided, that any purported
termination of the Program shell be effective only to the extent that it
equivalently affects the rights of each respective Participant, similarly
situated, whether or not actively employed with the Company at such time; and
further, provided, that this Section 6 may not be deleted
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<PAGE>
or amended in any manner without the consent of each Participant who is then
actively employed with the Company.
The Company's authority includes the right to discontinue the
PreRetirement and Post-Retirement Benefits at any time. In the event that any
Participant shall no longer remain a Participant, for any reason whatsoever,
including, without limitation, by reason of a termination of the Program (i) the
Company shall not cause to maintain any policy issued in respect of such
Participant pursuant to the Program unless such former Participant (or, an
Insurance Trust, if applicable) remains entitled, at all times, to designate the
Beneficiary of such policy, (ii) the Company shall borrow the maximum amount
under the Pre-Retirement Policy and such policy (net of any outstanding loans
thereof) shall be transferred to the Participant (or, an Insurance Trust, if
applicable), (iii) if the former Participant was then Retired, the Company shall
cease making premium payments on the Post-Retirement Policy, and (iv) if the
former Participant was not then Retired, the Company shall transfer its
ownership rights (including, without limitation, the right to designate a
beneficiary) in the Post-Retirement Policy to such former Participant (or, an
Insurance Trust, if applicable) and such former Participant shall be entitled
to receive from the Company the Tax Reimbursement determined in accordance with
Section 5(b) hereof.
7. Named Fiduciary and Plan Administrator. Paul E. Dixon, R.N.
Daniel and Stephen B. Mudd are hereby designated the "Named Fiduciaries". The
Named Fiduciaries (i) shall be responsible for the management, control and
administration of the Program and (ii) may allocate to others certain aspects of
the management and operational responsibilities of the Program, including the
employment of advisors and the delegation of any ministerial duties to
qualified individuals. Additional information concerning the Program may be
obtained upon written or oral request from Stephen B. Mudd (the "Plan
Administrator"), Handy & Harman, 250 Park Avenue, New York, New York 10177,
telephone number (212) 309-0682.
8. Claims Procedure. Claims for Benefits may be filed on forms
provided by the Plan Administrator. If a claim for the Benefit is wholly or
partially denied, the Beneficiary shall receive written notice explaining the
reason for the denial and the Program provision on which it was based. The
Beneficiary shall also be notified of any additional material or information
necessary to submit to perfect the claim and the reasons such information is
necessary. In order to appeal a denial of a claim, the Beneficiary may request
review of the claim by submitting written application not later than 60 days
after receiving written notification of the claim
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<PAGE>
denial. The Beneficiary may also review pertinent documents and submit issues
and comments in writing. These requests should be sent to the Plan
Administrator. They will be reviewed within 60 days after the Plan
Administrator's receipt of such request and a decision will be communicated to
the Beneficiary in writing not later than 120 days after receipt of such
request.
9. No Right to Continued Employment. Nothing in the Program or
any other agreement entered into pursuant hereto shall confer upon any
Participant the right to continue in the employ of the Company or to be entitled
to any remuneration or benefits not set forth in the Program or such other
agreement or to interfere with or limit in any way the right of the Company to
terminate such Participant's employment.
10. Interpretation. The Company shall at all times have the
sole authority, in its absolute discretion, to adopt, amend and rescind such
rules and regulations as, in its opinion, may be advisable in the administration
of the Program, to construe and interpret the Program, and to make all other
determinations deemed necessary or advisable for the administration of the
Program. All decisions, determinations and interpretations of the Company shall
be final and binding on all Participants, Beneficiaries and other interested
parties.
11. Beneficiary. A Participant (or, an Insurance Trust, if
applicable) may select a beneficiary (the "Beneficiary") by filing with the
Plan Administrator 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; provided that the Participant (or, an Insurance Trust, if
applicable) may elect to irrevocably designate the Beneficiary. Except in the
case of an irrevocable designation of a Beneficiary, if no Beneficiary survives
the Participant, the executor or administrator of the Participant's estate or,
in the case where the participant has assigned all benefits and rights arising
hereunder to an Insurance Trust, the then trustee of such Insurance Trust, as
the case may be, shall be deemed to be the Beneficiary.
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<PAGE>
SUPPLEMENTAL AGREEMENT
----------------------
Notwithstanding the terms and conditions set forth in an Employment Agreement
(the "Agreement") dated October 22, 1996 between you and Handy & Harman ("H&H),
the terms and conditions stated herein are intended to supplement that Agreement
by adding Change of Control provisions and not to duplicate or enhance the
compensation recited therein. Further, at any time that you are receiving
payments under provisions of paragraph 8 of the Agreement, those terms and
conditions will apply and this Supplemental Agreement will not be in effect or
enforceable by you.
WHEREAS, H&H desires to retain the services of Robert D. LeBlanc in the event
of a Change of Control (as defined herein) of H&H;
NOW THEREFORE, in consideration of the agreements and provisions set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows.
1. Term of Agreement. This Agreement shall commence on the date hereof and shall
continue in effect thereafter, unless, not later than any September 30, H&H
shall have given notice that it will not extend this Agreement beyond the
ensuing December 31; provided, further, that, notwithstanding any such notice by
H&H to terminate, if a change of control shall have occurred during the term of
this Agreement, this Agreement shall continue in effect for a period of
twenty-four (24) months beyond the date on which the change of control occurs.
2. Change of Control of H&H. No benefits shall be payable unless there is a
change of control (Change of Control) of H&H. A Change of Control shall be
deemed to have occurred if:
(a) 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 H&H in substantially the same proportions as their
ownership of stock of H&H), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of H&H representing 25% or more of the combined voting
power of H&H's then outstanding securities;
(b) during any period of not more than two (2) 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 H&H to effect a transaction
described in clause (a), (c) or (d) of this Section) whose election by
the Board of Directors or nomination for election by H&H's
<PAGE>
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;
(c) the stockholders of H&H approve a merger or consolidation of H&H
with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of H&H 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 H&H or such surviving entity outstanding
immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of H&H (or
similar transaction) in which no "person" (as hereinabove defined)
acquires more than 50% of the combined voting power of H&H's then
outstanding securities; or
(d) the stockholders of H&H approve a plan of complete liquidation of
H&H or an agreement for the sale or disposition by H&H of all or
substantially all of H&H's assets.
3. Termination Following Change of Control. If any of the events described in
Section 2 above constituting a Change of Control shall have occurred, you shall
be entitled to the benefits provided in Section 4 hereof upon termination of
your employment with H&H during the two (2) year period following the Change of
Control unless such termination is (A) a result of your death or retirement, or
(B) your resignation for other than Good Reason, or (C) your being terminated by
H&H for Disability or for Cause.
(a) Cause. For purposes of this Agreement, "Cause" shall mean your
willful breach of duty in the course of your employment, or your
habitual neglect of your employment duties.
(b) Disability. For purposes of this Agreement, "Disability" shall mean
your absence from your duties with H&H for three hundred sixty-five
(365) consecutive days as a result of your physical or mental illness.
(c) Good Reason. You shall be entitled to terminate your employment for
Good Reason. For the purpose of this Agreement, "Good Reason" shall
mean the occurrence of any of the following circumstances:
(i) the assignment to you of any duties inconsistent
with your status as an Executive Vice President (or any higher
position to which you have been promoted at the time) or as a
substantial diminution in the nature or status of your
responsibilities from
2
<PAGE>
those in effect immediately prior to the Change of Control;
(ii) as a reduction in your annual base salary as in
effect on the date of the Change of Control;
(iii) the relocation of the office in which you are
located prior to the Change of Control to a location more than
sixty (60) miles from New York City, except for required
travel on the business of H&H to an extent substantially
consistent with your present business travel obligations;
(iv) or pursuant to an action taken by H&H you are
selectively excluded from a compensation, bonus, stock option
or stock ownership plan otherwise in existence at the time of
the Change of Control or thereafter put into effect for the
benefit of others in a similar situation;
(v) except as a required by law, the failure by H&H
to continue to provide you with benefits at least as favorable
as those enjoyed by you under the employee benefit and welfare
plans of H&H in which you were participating at the time of
the Change of Control or the taking of any action by H&H which
would materially reduce any of the benefits enjoyed by you at
the time of the Change of Control;
(vi) the failure of H&H to obtain a satisfactory
agreement from any successor to assume and agree to perform
this Agreement, as contemplated in Section 5 hereof; or
(vii) any purported termination of your employment
not effected pursuant to a Notice of Termination satisfying
the requirements of Section 3(d) below; for purposes of this
Agreement, no such purported termination shall be effective.
Your continued employment shall not constitute consent to, or as a waiver of
rights with respect to, any circumstance constituting Good Reason hereunder.
(d) Notice of Termination. Any termination of your employment by H&H or
by you shall be communicated by written Notice of Termination to the
other party hereto in accordance with Section 7 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice
indicating the specific termination provision in this Agreement relied
upon and setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of your employment under the
provision so indicated.
3
<PAGE>
(e) Date of Termination, Etc. "Date of Termination" shall mean thirty
(30) days after the date specified in the Notice of Termination.
4. Compensation Upon Termination. Following a Change of Control of H&H, as
defined herein, upon termination of your employment by (a) H&H other than for
Cause or (b) by you for Good Reason, you shall be entitled to the following
benefits:
(a) H&H shall pay you a severance payment (the "Severance Payment")
equal to one years' full base salary at your highest rate in effect
during the twelve (12) months preceding the date on which the Notice of
Termination is given;
(b) For a twelve (12) month period after termination of your
employment, H&H shall arrange to provide you with life, medical and
dental insurance benefits substantially similar to those which you are
receiving or entitled to receive immediately prior to the Notice of
Termination, unless you are eligible to receive such benefits from as a
subsequent employer or as a spouse's employer;
(c) H&H shall pay you the Severance Payment no later than the fifth
(5th) day following the Date of Termination;
5. Successors; Binding Agreement. H&H will require any successor to all or
substantially all of the business and/or assets of H&H to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
H&H is required to perform it. Failure of H&H to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle you to compensation from H&H in the same amount
and on the same terms as you would be entitled to if you had terminated your
employment for Good Reason following a Change of Control of H&H, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. All references to H&H
shall be deemed to include its successors.
(a) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you die
while any amount is payable to you hereunder, all such amounts shall be
paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there is no such designee, to your
estate.
6. Section 280G - Excise Tax Limitation. Notwithstanding other provisions of
this Agreement, in the event of a change of control, as defined in paragraph 2
(a) (b) (c) and (d) herein, payments would only be made to you to the extent
that they are deductible by H&H and not subject to the excise tax provisions of
Section 280G of the Internal Revenue Code.
4
<PAGE>
7. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to H&H shall be directed to the attention of the Office of the
Vice President and General Counsel of H&H, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
8. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by both parties. No waiver by either party at any time of any breach
by the other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or any prior or subsequent time. No agreements or
representations, oral or written, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York. All references to sections of the Code shall be deemed also to refer to
any successor provisions to such sections. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state or
local law.
9. Validity. This invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first written above.
Handy & Harman
/s/ Robert D. LeBlanc /s/ Frank E. Grzelecki
- --------------------------- ---------------------------
by: Robert D. LeBlanc by: Frank E. Grzelecki
Dated as of this 14th day of May, 1997
5
<PAGE>
AGREEMENT
---------
Agreement is made this 14th day of May, 1997 between Handy & Harman ("H&H")
and _____________.
WHEREAS, _____________ is employed by H&H; and
WHEREAS, H&H desires to retain the services of ______________ in the event
of a Change of Control (as defined herein) of H&H;
NOW THEREFORE, in consideration of the agreements and provisions set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows.
1. Term of Agreement. This Agreement shall commence on the date hereof and shall
continue in effect thereafter, unless, not later than any September 30, H&H
shall have given notice that it will not extend this Agreement beyond the
ensuing December 31; provided, further, that, notwithstanding any such notice by
H&H to terminate, if a change of control shall have occurred during the term of
this Agreement, this Agreement shall continue in effect for a period of
twenty-four (24) months beyond the date on which the change of control occurs.
2. Change of Control of H&H. No benefits shall be payable unless there is a
change of control (Change of Control) of H&H. A Change of Control shall be
deemed to have occurred if:
(a) 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 H&H in substantially the same proportions as their
ownership of stock of H&H), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of H&H representing 25% or more of the combined voting
power of H&H's then outstanding securities;
(b) during any period of not more than two (2) 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 H&H to effect a transaction
described in clause (a), (c) or (d) of this Section) whose election by
the Board of Directors or nomination for election by H&H'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;
<PAGE>
(c) the stockholders of H&H approve a merger or consolidation of H&H
with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of H&H 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 H&H or such surviving entity outstanding
immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of H&H (or
similar transaction) in which no "person" (as hereinabove defined)
acquires more than 50% of the combined voting power of H&H's then
outstanding securities; or
(d) the stockholders of H&H approve a plan of complete liquidation of
H&H or an agreement for the sale or disposition by H&H of all or
substantially all of H&H's assets.
3. Termination Following Change of Control. If any of the events described in
Section 2 above constituting a Change of Control shall have occurred, you shall
be entitled to the benefits provided in Section 4 hereof upon termination of
your employment with H&H during the two (2) year period following the Change of
Control unless such termination is (A) a result of your death or retirement, or
(B) your resignation for other than Good Reason, or (C) your being terminated by
H&H for Disability or for Cause.
(a) Cause. For purposes of this Agreement, "Cause" shall mean your
willful breach of duty in the course of your employment, or your
habitual neglect of your employment duties.
(b) Disability. For purposes of this Agreement, "Disability" shall mean
your absence from your duties with H&H for three hundred sixty-five
(365) consecutive days as a result of your physical or mental illness.
(c) Good Reason. You shall be entitled to terminate your employment for
Good Reason. For the purpose of this Agreement, "Good Reason" shall
mean the occurrence of any of the following circumstances:
(i) the assignment to you of any duties inconsistent
with your status as an Executive Vice President (or any higher
position to which you have been promoted at the time) or as a
substantial diminution in the nature or status of your
responsibilities from those in effect immediately prior to the
Change of Control;
(ii) as a reduction in your annual base salary as in
effect on the date of the Change of Control;
(iii) the relocation of the office in which you are
located prior to
<PAGE>
the Change of Control to a location more than sixty (60) miles
from New York City, except for required travel on the business
of H&H to an extent substantially consistent with your present
business travel obligations;
(iv) or pursuant to an action taken by H&H you are
selectively excluded from a compensation, bonus, stock option
or stock ownership plan otherwise in existence at the time of
the Change of Control or thereafter put into effect for the
benefit of others in a similar situation;
(v) except as a required by law, the failure by H&H
to continue to provide you with benefits at least as favorable
as those enjoyed by you under the employee benefit and welfare
plans of H&H in which you were participating at the time of
the Change of Control or the taking of any action by H&H which
would materially reduce any of the benefits enjoyed by you at
the time of the Change of Control;
(vi) the failure of H&H to obtain a satisfactory
agreement from any successor to assume and agree to perform
this Agreement, as contemplated in Section 5 hereof; or
(vii) any purported termination of your employment
not effected pursuant to a Notice of Termination satisfying
the requirements of Section 3(d) below; for purposes of this
Agreement, no such purported termination shall be effective.
Your continued employment shall not constitute consent to, or as a waiver of
rights with respect to, any circumstance constituting Good Reason hereunder.
(d) Notice of Termination. Any termination of your employment by H&H or
by you shall be communicated by written Notice of Termination to the
other party hereto in accordance with Section 7 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice
indicating the specific termination provision in this Agreement relied
upon and setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of your employment under the
provision so indicated.
(e) Date of Termination, Etc. "Date of Termination" shall mean thirty
(30) days after the date specified in the Notice of Termination.
4. Compensation Upon Termination. Following a Change of Control of
H&H, as defined
<PAGE>
herein, upon termination of your employment by (a) H&H other than for Cause or
(b) by you for Good Reason, you shall be entitled to the following benefits:
(a) H&H shall pay you a severance payment (the "Severance Payment")
equal to one years' full base salary at your highest rate in effect
during the twelve (12) months preceding the date on which the Notice of
Termination is given;
(b) For a twelve (12) month period after termination of your
employment, H&H shall arrange to provide you with life, medical and
dental insurance benefits substantially similar to those which you are
receiving or entitled to receive immediately prior to the Notice of
Termination, unless you are eligible to receive such benefits from as a
subsequent employer or as a spouse's employer;
(c) H&H shall pay you the Severance Payment no later than the fifth
(5th) day following the Date of Termination;
5. Successors; Binding Agreement. H&H will require any successor to all or
substantially all of the business and/or assets of H&H to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
H&H is required to perform it. Failure of H&H to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle you to compensation from H&H in the same amount
and on the same terms as you would be entitled to if you had terminated your
employment for Good Reason following a Change of Control of H&H, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. All references to H&H
shall be deemed to include its successors.
(a) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you die
while any amount is payable to you hereunder, all such amounts shall be
paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there is no such designee, to your
estate.
6. Section 280G - Excise Tax Limitation. Notwithstanding other provisions of
this Agreement, in the event of a change of control, as defined in paragraph 2
(a) (b) (c) and (d) herein, payments would only be made to you to the extent
that they are deductible by H&H and not subject to the excise tax provisions of
Section 280G of the Internal Revenue Code.
7. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
<PAGE>
provided that all notices to H&H shall be directed to the attention of the
Office of the Vice President and General Counsel of H&H, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
8. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by both parties. No waiver by either party at any time of any breach
by the other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or any prior or subsequent time. No agreements or
representations, oral or written, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York. All references to sections of the Code shall be deemed also to refer to
any successor provisions to such sections. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state or
local law.
9. Validity. This invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first written above.
Handy & Harman
- ---------------------------- -----------------------------
by: by:
Dated as of this 14th day of May, 1997
