<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HARSCO CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
HARSCO CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1)Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
[LOGO]
NOTICE OF
1994 MEETING
AND PROXY
STATEMENT
<PAGE> 3
[ L O G O ]
HARSCO CORPORATION
P.O. Box 8888
Camp Hill, Pennsylvania 17001-8888
March 25, 1994
To Our Stockholders:
You are cordially invited to attend the 1994 Annual Meeting of Stockholders of
your Company, which will be held on Tuesday, April 26, 1994, beginning at 10
a.m. at the Radisson Penn Harris (formerly the Penn Harris Inn and Convention
Center), Camp Hill, Pennsylvania.
Information about the Annual Meeting, including a listing and discussion of the
various matters on which you, as our stockholders, will act, may be found in the
formal Notice of Annual Meeting of Stockholders and Proxy Statement which
follow. We look forward to greeting as many of our stockholders as possible.
Whether you plan to attend the Annual Meeting or not, we urge you to fill in,
sign, date and return the enclosed Proxy Card, in the postage-paid envelope
provided, in order that as many shares as possible may be represented at the
Annual Meeting. The vote of every stockholder is important and your cooperation
in returning your executed Proxy promptly will be appreciated.
Sincerely,
/s/ M. W. Gambill /s/ D. C. Hathaway
M. W. Gambill D. C. Hathaway
Chairman President and Chief
Executive Officer
<PAGE> 4
HARSCO CORPORATION
P.O. Box 8888
Camp Hill, Pennsylvania 17001-8888
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Harsco Corporation will be held on
Tuesday, April 26, 1994, at 10 a.m. at the Radisson Penn Harris (formerly the
Penn Harris Inn and Convention Center), Camp Hill, Pennsylvania to consider and
act upon the following matters:
1. Election of four Directors to serve until the 1997 Annual Meeting of
Stockholders, and until their successors are elected and qualified;
2. Considering the adoption of the appointment by the Board of Directors of
Coopers & Lybrand as independent accountants to audit the accounts of the
Company for the fiscal year ending December 31, 1994; and
3. Such other business as may properly come before the Annual Meeting.
The Board of Directors has fixed the close of business on March 4, 1994 as the
record date for the determination of stockholders who are entitled to notice of
and to vote at the Annual Meeting and at any adjournments thereof. The polls
will open at 9:30 a.m. on the date of the Annual Meeting and will close at
approximately 10:15 a.m. Proxies will be accepted continuously from the time of
mailing until the closing of the polls.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE
REQUESTED TO FILL IN, DATE, SIGN AND MAIL THE ENCLOSED FORM OF PROXY IN THE
ENVELOPE PROVIDED, TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors,
/s/ Paul C. Coppock
Paul C. Coppock
Senior Vice President, General Counsel and Secretary
March 25, 1994
<PAGE> 5
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement has been prepared in connection with the solicitation
by the Board of Directors of Harsco Corporation, a Delaware corporation (the
"Company"), of Proxies in the accompanying form to be used at the Annual Meeting
of Stockholders of the Company, to be held April 26, 1994, or at any adjournment
or adjournments of such Annual Meeting.
The record date for stockholders of the Company entitled to notice of, and
to vote at, the Annual Meeting is the close of business on March 4, 1994. On the
record date, there were issued and outstanding 25,032,945 shares of the
Company's common stock, $1.25 par value (the "common stock"). This figure does
not include 7,159,921 shares reacquired and held by the Company as treasury
stock which will not be voted. All such shares are one class, with equal voting
rights, and each holder thereof is entitled to one vote on all matters voted on
at the Annual Meeting for each share registered in such holder's name. The
presence, in person or by proxy, of a majority of the issued and outstanding
shares of common stock is necessary to constitute a quorum at the Annual
Meeting. Assuming that a quorum is present, the affirmative vote by the holders
of a plurality of the shares cast at the Annual Meeting will be required to act
on the election of directors, and the affirmative vote by the holders of a
majority of the shares entitled to vote present in person or by proxy will be
required to act on all other matters to come before the Annual Meeting,
including the adoption of the appointment of Coopers & Lybrand as independent
accountants for the current fiscal year.
In certain circumstances, a stockholder will be considered to be present at
the Annual Meeting for quorum purposes but will not be deemed to have cast a
vote on a matter. Such circumstances exist when a stockholder is present but
specifically abstains from voting on a matter or when shares are represented at
the Annual Meeting by a proxy conferring authority to vote only on certain
matters ("broker non-votes"). In conformity with Delaware law, abstentions and
broker non-votes will not be treated as votes cast with respect to election of
directors, and therefore will not affect the outcome of such matter. However,
with respect to each other matter presented at the Annual Meeting, abstentions
will be treated as negative votes on such matters, while broker non-votes will
not be counted in determining the outcome.
The shares of common stock represented by each properly executed proxy
received by the Board of Directors will be voted at the Annual Meeting in
accordance with the instructions specified therein. If no instructions are
specified, such shares of common stock will be voted FOR the election of
nominees for Directors and FOR the adoption of the appointment of Coopers &
Lybrand as independent accountants. The Board of Directors knows of no other
business to come before the Annual Meeting. However, if any other matters are
properly presented at the Annual Meeting, or any adjournment thereof, the
persons voting the proxies will vote them in accordance with their best
judgment. Any proxy may be revoked by notifying the Secretary of the Company in
writing at any time prior to the voting of the proxy.
The principal executive offices of the Company are located at 350 Poplar
Church Road, Wormleysburg, Pennsylvania (mailing address: P.O. Box 8888, Camp
Hill, Pennsylvania 17001-8888). This Proxy Statement and accompanying Notice of
Meeting and form of Proxy are first being mailed to stockholders on or about
March 25, 1994.
1
<PAGE> 6
ELECTION OF DIRECTORS
The Company currently has twelve Directors, of which four have a term of
office which will expire with the forthcoming Annual Meeting. The Company's
By-laws authorize the Board of Directors to fix the number of Directors from
time to time, provided that such number will not be less than five nor more than
twelve. In accordance with the By-laws, the Board of Directors has fixed the
number of Directors at eleven commencing with the forthcoming Annual Meeting.
M.W. Gambill informed the Board of Directors of his intention to retire as
non-executive Chairman and Director effective April 1, 1994. The Board of
Directors has elected D.C. Hathaway to succeed Mr. Gambill as Chairman effective
April 1, 1994.
At the 1986 Annual Meeting of Stockholders, a Classified Board was adopted
and elected by the Company's stockholders. Under this system, the Board of
Directors is divided into three classes. One class is elected each year for a
three-year term. The class whose term will expire at the 1994 Annual Meeting of
Stockholders consists of four Directors all of whom are nominees. The
stockholders are asked to vote FOR Messrs. Hathaway, Nation, Prater, and
Sordoni, each of whom has been duly nominated by the Board of Directors, to
serve a term of office until the 1997 Annual Meeting of Stockholders and their
respective successors have been elected and qualified. However, should any
nominee become unavailable or prove unable to serve for any reason, Proxies will
be voted for the election of such other person or persons as the Board of
Directors may select to replace such nominee. No circumstance is presently known
which would render any nominee named herein unavailable to serve.
Each person named as a nominee for Director has advised the Company of his
willingness to serve if elected. The information set forth below states the name
of each nominee for Director and of each Director continuing in office, his age,
a description of his present and previous positions, the year in which he first
became a Director of the Company, his business experience, other directorships
he holds and the Committees of the Board on which he serves.
The Board of Directors met eleven times during the fiscal year ended
December 31, 1993.
2
<PAGE> 7
NOMINEES FOR TERMS EXPIRING IN 1997
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
<S> <C> <C> <C>
49 President and Chief Executive Officer 1991
(PHOTO) since January 1, 1994. Will become
D. C. Hathaway Chairman April 1, 1994. President and
Chief Operating Officer of the Company
since May 1, 1991. Mr. Hathaway served as
Senior Vice President-Operations from 1986
to May, 1991. He assumed management
responsibilities at the Company's Corpo-
rate Headquarters in 1984 as Group Vice
President after serving as Chairman and
Chief Executive Officer of Dartmouth
Investments Limited in the United Kingdom
which was acquired by the Company in 1979.
Member of the Executive Committee and the
Special Project Review Committee.
68 President of Penn Harris Company (hotel) 1983
(PHOTO) since 1977. Mr. Nation is also a Director
R. F. Nation of Dauphin Deposit Corporation, and has
been involved in a variety of activities
in community, state and industrial areas.
Chairman of the Management Development and
Compensation Committee; member of the
Executive Committee, the Stock Repurchase
Committee, the Defense Strategic Plan
Committee and the Special Project Review
Committee.
66 Retired President and Chief Executive 1990
(PHOTO) Officer of Mobay Corporation. Mr. Prater
N. H. Prater is a Director of Koppers Industries, Inc.,
Calgon Carbon Corp. and Melamine Chemical
Corp. He serves as a trustee of the
University of Pittsburgh, Robert Morris
College and as a member of the Interna-
tional Advisory Board of Georgia Institute
of Technology.
Member of the Audit Committee, the Manage-
ment Development and Compensation Commit-
tee and the Special Project Review
Committee.
50 Mr. Sordoni is Chairman of Sordoni 1988
(PHOTO) Construction Services, Inc. (construction
A. J. Sordoni, III management) and has been employed by that
company since 1967. Mr. Sordoni is the
former Chairman and Director of C-TEC
Corporation (telecommunications) and
Mercom, Inc. (cable television) and a past
Director of Pennsylvania Gas and Water Co.
and United Penn Bank.
Chairman of the Stock Repurchase
Committee; member of the Audit Committee,
the Management Development and
Compensation Committee and the Nominating
Committee.
</TABLE>
3
<PAGE> 8
DIRECTORS WHOSE TERMS EXPIRE IN 1996
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
<S> <C> <C> <C>
71 Retired as Chairman of the Board of the 1972
(PHOTO) Company on April 30, 1991; served as
J. J. Burdge Chairman and Chief Executive Officer from
1983 through April, 1987. Mr. Burdge
served as President and Chief Executive
Officer from 1977 to 1983. Mr. Burdge is
also a Director of Dauphin Deposit
Corporation, Pennsylvania Power & Light
Company and AMP Incorporated.
Member of the Executive Committee, the
Nominating Committee and the Special
Project Review Committee.
55 Professor of Finance and International 1991
(PHOTO) Business at the Stern School of Business,
R. C. Smith New York University. Currently Limited
Partner, and until 1987 a General Partner,
of Goldman, Sachs & Co., an investment
banking firm. Mr. Smith is a specialist in
international investment banking and
corporate finance. He was President of
Goldman Sachs International Corporation
from 1980 to 1984. He became a General
Partner of Goldman, Sachs & Co. in 1977.
Member of the Stock Repurchase Committee,
Defense Strategic Plan Committee and the
Special Project Review Committee.
50 President and Chief Executive Officer of 1986
(PHOTO) the Colonial Williamsburg Foundation.
R. C. Wilburn Former President of Carnegie Institute and
Carnegie Library (educational and cultural
complex) located in Pittsburgh,
Pennsylvania. From 1983 to 1984, Mr.
Wilburn served as the Secretary of Educa-
tion for the Commonwealth of Pennsylvania.
From 1979 to 1983, Mr. Wilburn served as
the Secretary of Budget and Administration
for the Commonwealth of Pennsylvania. He
is also a Director of Dravo Corp.
Chairman of the Nominating Committee; mem-
ber of the Audit Committee, the Executive
Committee and the Stock Repurchase
Committee.
</TABLE>
4
<PAGE> 9
DIRECTORS WHOSE TERMS EXPIRE IN 1995
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
<S> <C> <C> <C>
65 Chairman of British Aerospace, Inc.; 1990
(PHOTO) former Chairman of CSX Transportation Inc.
R. L. Kirk Mr. Kirk served as Chairman and Chief
Executive Officer of Allied-Signal
Aerospace Company from 1986 to 1989. He
served for five months in 1986 as
President and Chief Operating Officer of
LTV Corporation and was President and
Chief Executive Officer of its Aerospace
and Defense subsidiary from 1977 until
1986. He is also a Director of British
Aerospace PLC and Reflectone, Inc. of
Tampa, Florida.
Member of the Nominating Committee and the
Defense Strategic Plan Committee.
72 Retired Chairman of the Board of C. H. 1975
(PHOTO) Masland and Sons (carpet manufacturers).
F. E. Masland III Mr. Masland is also a Director of Dauphin
Deposit Corporation.
Chairman of the Audit Committee; member of
the Executive Committee, the Management
Development and Compensation Committee and
the Stock Repurchase Committee.
73 Lt. General, U.S. Army Ret. Former Army 1980
(PHOTO) Deputy Chief of Staff-Personnel; twice
D. C. Smith, Jr. Commandant, Army War College. Chairman,
George Marshall Foundation (non-profit
organization), 1987-90. Senior Advisor,
American National Red Cross, 1983-87.
Director, Pennsylvania Emergency
Management Agency, 1980-83.
Vice Chairman of the Management Develop-
ment and Compensation Committee; member of
the Executive Committee and the Stock
Repurchase Committee.
58 Chairman of AMP Incorporated. Mr. Marley 1993
(PHOTO) joined AMP Incorporated in 1963 and was
J. E. Marley appointed Corporate Vice President,
Operations in 1983. He became the
company's President in 1986 and assumed
the position of President and Chief
Operating Officer in 1990. He is a
Director of AMP Incorporated, Armstrong
World Industries, Inc., and Dauphin
Deposit Corporation.
</TABLE>
5
<PAGE> 10
SHARE OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 4, 1994, information with
respect to the beneficial ownership of the Company's outstanding voting
securities by (a) each Director (b) the Company's chief executive officer and
the Company's four most highly compensated executive officers (the "Named
Executives") and (c) all Directors and executive officers as a group. All of the
Company's outstanding voting securities are common stock.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
NAME SHARES(1) STOCK OPTIONS
----------------------------------------------------- --------- -------------
<S> <C> <C>
J. J. Burdge......................................... 116,312(2) 3,000
L. A. Campanaro...................................... 4,794 19,051
W. D. Etzweiler...................................... 20,427 17,526
M. W. Gambill........................................ 67,723(3) 73,593
D. C. Hathaway....................................... 21,720 26,864
R. L. Kirk........................................... 1,611 3,000
J. E. Marley......................................... 250 1,000
F. E. Masland III.................................... 1,830(4) 4,000
R. F. Nation......................................... 10,000 5,000
N. H. Prater......................................... 1,000 3,000
D. C. Smith, Jr. .................................... 698 5,000
R. C. Smith.......................................... 2,000 2,000
A. J. Sordoni, III................................... 5,000 5,000
B. W. Taussig........................................ 13,242 19,800
R. C. Wilburn........................................ 400 5,000
All Directors and Executive Officers as a Group
(17 persons in total, including those listed
above)............................................. 276,953 224,954
</TABLE>
- ------------
(1) Includes in the case of Messrs. Campanaro, Etzweiler, Gambill, Hathaway,
Taussig and all Directors and executive officers as a group, 3,624 shares,
7,429 shares, 25,354 shares, 5,013 shares, 2,155 shares and 49,370 shares,
respectively, held as of December 31, 1993 pursuant to the Company's Savings
Plan in respect of which such persons have shared voting power, but no
investment power.
(2) Includes 23,850 shares owned by his wife as to which Mr. Burdge disclaims
beneficial ownership.
(3) Includes 6,342 shares owned by his wife as to which Mr. Gambill disclaims
beneficial ownership.
(4) Includes 500 shares owned by his wife as to which Mr. Masland disclaims
beneficial ownership.
Except as otherwise stated, each individual has sole voting and investment
power over the shares set forth opposite his name. As of March 4, 1994, the
Directors and executive officers of the Company as a group beneficially owned
less than 2% of the Company's outstanding common stock. No Director or executive
officer beneficially owned as much as 1% of the outstanding common stock.
6
<PAGE> 11
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNER
<TABLE>
<CAPTION>
NAME AMOUNT
AND ADDRESS AND NATURE OF
TITLE OF OF BENEFICIAL BENEFICIAL PERCENT
CLASS OWNER OWNERSHIP OF CLASS
- -------------------------- ----------------------- ---------------------- --------
<S> <C> <C> <C>
Common.................... Hotchkis and Wiley 1,606,375 6.52
800 West Sixth Street Sole Investment Power
Fifth floor
Los Angeles, CA 90017
</TABLE>
As of March 4, 1994, except as set forth above, no persons or group was
known by the Board of Directors to own beneficially more than 5% of the
outstanding voting securities of the Company.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Management Development and Compensation Committee ("Compensation Committee"), a
Committee of the Board of Directors composed of the non-employee Directors
listed below this report. The Company considers all of the members of the
Compensation Committee to be independent and none of these Directors have any
interlocking or other relationships with the Company that are subject to
disclosure under the Securities Exchange Commission rules relating to proxy
statements. All decisions of the Compensation Committee relating to the salaries
and grade levels of the Company's executive officers are approved by the full
Board.
Set forth below is a report prepared by the members of the Compensation
Committee whose names appear below this report, addressing the Company's
compensation policies for 1993 as they affected the Company's executive
officers, including the Named Executives.
Executive Officer Compensation Policies
The Compensation Committee's executive compensation policies are designed
to:
- Provide incentives for achievement of the Company's annual and long-term
performance goals;
- Reinforce the common interest of management and the shareholders in
enhancing shareholder value;
- Reward individual initiative and achievement;
- Provide levels of compensation that are fair, reasonable and competitive
with comparable industrial companies; and
- Attract and retain qualified executives who are critical to the Company's
long-term success.
The Compensation Committee seeks to achieve these goals through a
compensation program applicable to all corporate and divisional officers of the
Company. The compensation program is composed primarily of:
- Salary based upon grade levels that reflect the degree of responsibility
associated with the executive's position and the executive's past
achievement;
- Annual incentive compensation paid in cash based upon achievement of
annual return on asset ("ROA") objectives and strategic goals established
for the relevant business unit;
- Long-term incentive compensation paid in cash based upon achievement of
rate of return objectives by the appropriate business unit over a three
year cycle;
7
<PAGE> 12
- Incentive stock option grants under the 1986 Stock Option Plan made
annually by the Compensation Committee at its discretion with exercise
prices equal to the market price at the date of grant; and
- Various retirement and other benefits commonly found in similar
companies.
The Compensation Committee believes that the Company benefits from a broad
based executive compensation program that extends the program's incentives to
approximately 65 division officers in addition to the seven (six as of January
1, 1994) executive officers and five other corporate officers. However, as an
executive's level of responsibility increases, a greater portion of his or her
potential total compensation opportunity should be based on performance
incentives and a lesser portion on salary, causing greater variability in the
individual's total compensation from year to year. This is achieved under the
Company's Incentive Compensation Plan by using the executive's numeric grade
level and annual salary as multipliers along with the proportion of target
achievement when computing annual and long-term incentive compensation awards.
In addition, as executives rise to positions that can have a greater impact on
the Company's performance, the compensation program should place more emphasis
on the value of the common stock. Therefore, the quantity of stock options
granted to an individual in any year is based upon the executive's grade level.
The Company has not reset the exercise price on any existing stock options in
the past and, as a matter of sound compensation policy, does not foresee doing
so in the future.
On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993 was
signed into law, making significant revisions to the United States tax laws.
This Act added a new provision in Section 162(m) of the Internal Revenue Code
that beginning in 1994, limits the deductibility of executive compensation for
individuals in excess of one million dollars per year paid by publicly traded
corporations to the chief executive officer and the four other executives named
in the compensation table of the proxy statement. The Company has determined
that given the rates of compensation currently in effect and the interim
exemption under proposed Internal Revenue Service regulations applicable to
income derived from stock options granted under the Harsco 1986 Stock Option
Plan, the Company should not be exposed to any nondeductibility of executive
compensation expense under Section 162(m) in the 1994 tax year. In connection
with a more general review of the Company's executive compensation structure to
be conducted during this year, the Compensation Committee will consider what
changes should be made, if any, to preserve the deductibility of any such
executive compensation subject to Section 162(m) in the future.
Relationship of Performance to Compensation
The Company ties executive pay to corporate performance primarily through
the Annual and Long-Term Incentive Compensation Plan awards that are based upon
achievement of objectives adopted by the Compensation Committee, and stock
option grants which only provide realizable compensation through increases in
the stock price.
Incentive Compensation Plans
The opportunity for compensation under the Annual and Long-Term Incentive
Compensation Plans is heavily dependent upon meeting ROA objectives established
by the Compensation Committee for the appropriate business unit. The entire
long-term incentive compensation award is based upon the degree of achievement
of ROA objectives over a three year cycle. The Annual Incentive Compensation
Plan in each year provides an opportunity for compensation equal to the
opportunity under the long-term Plan. Under the Annual Incentive Compensation
Plan, 60% of the total possible award is based on achievement of various
strategic objectives established by the Compensation Committee each year and 40%
is based on reaching annual ROA objectives. Thus, taken together, the total
potential award under the annual and long-term Plans is based 70% on ROA and 30%
on strategic goals.
8
<PAGE> 13
Under the Long-Term Incentive Compensation Plan, the Compensation Committee
each year establishes minimum, target and maximum ROA objectives for the
corporate office and each division for the three year plan cycle that is
commencing. No award will be made for achievement of only the minimum target,
but awards will begin to be earned as ROA rises above the minimum. Achieving
target ROA results in an award that is two thirds of the award for achieving the
maximum ROA objective and the award will continue to rise correspondingly as the
achieved ROA approaches the maximum ROA objective set by the Compensation
Committee. The ROA achieved by the Company during the last three year plan cycle
that resulted from three consecutive record years of earnings by the Company
exceeded the maximum return objective under the Plan, and the executive officers
all received 100% of the maximum award under the Long-Term Incentive
Compensation Plan for the three year cycle completed in 1993.
The strategic goals which constitute 60% of the evaluation criteria under
the Annual Incentive Compensation Plan are established by the Compensation
Committee early in each year and are assigned various weights. The Compensation
Committee also establishes minimum, target and maximum ROA objectives for the
corporate office and each division for that year, which will constitute the
other 40% of the annual bonus criteria. These ROA objectives operate in the same
manner as under the Long-Term Incentive Compensation Plan discussed above. The
strategic goals for 1993 involved achievement of consolidated sales, cash flow
and operating profit objectives; aggressive pursuit of acquisitions as part of
the corporate growth plan; expansion of employee training and education;
expansion of product development and offerings to the Company's markets; and
achievement of a fourth consecutive record year of income after inflation.
The executive officers attained 95.6% of maximum achievement with respect
to the strategic goals. The record income performance yielded an ROA under the
Plan for 1993 which was in excess of the maximum return. The combined
achievement on strategic and ROA goals resulted in each of the executive
officers earning 97.3% of the maximum annual incentive compensation for 1993.
Stock Options
As shown in the table that follows, the Compensation Committee granted
stock options to the executive officers in January 1993 under the 1986 Stock
Option Plan with an exercise price of $41.56 per share, which was the market
price on the date of grant. This Plan was approved by the stockholders and is
used to make grants to other corporate and division officers as well as the
executive officers. The number of options granted to each executive is
determined by grade level. Thus, the Chairman and Chief Executive Officer, Mr.
Gambill, who had the highest grade level, received the largest award.
The annual number of options granted for each grade level was originally
established in 1987 based upon a recommendation from a compensation consulting
firm and that firm's survey of the long-term incentive compensation practices of
130 major United States companies. Subsequently, the number of options granted
for each grade level was increased 20% in 1988 and 20% in 1989 to enhance the
competitiveness of the Company's program and to reinforce the alignment of the
officers' financial interests with those of the stockholders. In determining the
appropriateness of maintaining this grade level structure for the January 1993
grants, the Committee considered the number of options previously granted to
participants under the 1986 Stock Option Plan and the aggregate number that
would be outstanding upon approval of the 1993 grants.
In addition to the January 1993 grant of options to Mr. Gambill, in April
1993, the Compensation Committee granted him non-qualified stock options
covering 5,000 shares in lieu of any increase in cash salary compensation. The
Compensation Committee determined that based on his past performance, including
the achievement of record earnings in three consecutive years and data
concerning compensation paid to other chief executive officers, Mr. Gambill
should receive a salary
9
<PAGE> 14
increase effective May 1, 1993, but further determined that granting stock
options in lieu of the cash salary increase would provide added incentive for
Mr. Gambill to achieve increased shareholder value. Therefore, based upon the
cash salary compensation that Mr. Gambill will forgo, the Compensation Committee
granted the options for 5,000 shares to vest in equal increments over two years
subject to Mr. Gambill's continued employment with the Company on each
respective vesting date. Subsequently, in connection with Mr. Gambill's
retirement on January 1, 1994, the Compensation Committee made these options
immediately exercisable.
Salaries
The Compensation Committee made its annual review of the salaries of all
corporate and division officers including the named executive officers at its
April 1993 Committee meeting, and recommended salary increases which the Board
then approved. Early in each year, the Compensation Committee establishes
executive salary budgets for the corporate and division officers, based upon
industry survey data provided by a number of major compensation consulting
firms. The Committee then adjusts the salary of each officer based upon the
available salary budget, the performance of each executive officer in the
previous year, overall Company performance, comparisons to other internal
salaries and the Company's salary range structure for the various grade levels.
The salary range structure is also revised from time to time based upon industry
survey data provided by a number of major consulting firms. The last adjustment
to the salary range structure was made in 1991. The various industry
compensation surveys considered by the committee are generally broad based
surveys of companies selected by the consulting firms which are not limited to
the companies within the Dow Jones Industrial-Diversified Index referenced
elsewhere in this Proxy Statement, though some of those companies may have been
included in the surveys. For 1993, the Committee approved a budget for salary
increases which was at the lower end of the range of planned salary budgets
indicated by the various surveys. In general, the Committee strives to maintain
compensation packages which are equal to or moderately above the industry
medians.
As discussed above under "Stock Options," Mr. Gambill was granted options
in lieu of an increase in salary in 1993. Mr. Gambill had also received stock
options in 1991 in lieu of a cash salary increase upon his promotion to the
position of Chairman and Chief Executive Officer and also in 1992, leaving his
annual salary unchanged at $370,000 since May 1, 1990.
Other Compensation Plans
The Company has certain other broad based employee benefit plans in which
the executive officers participate on the same terms as non-executive employees,
including health insurance, the Savings Plan and the term life insurance benefit
equal to two times the individual's salary. In addition, the executive officers
participate in the Supplemental Executive Retirement Plan ("Secular Plan") or
the Supplemental Retirement Benefit Plan ("Basic Supplemental Plan") as
described in the section "Retirement Plans".
The Chief Executive Officer's 1993 Compensation
The incentive plan compensation, stock options and salary awarded or paid
to Mr. Gambill with respect to 1993 are discussed above in this Report with
respect to amounts, and the factors considered by the Compensation Committee. Of
the total $1,153,684 in cash compensation paid to Mr. Gambill in 1993 (including
amounts representing the payout of open plan periods under the Long-Term
Incentive Plan) as reflected in the Summary Compensation Table, 68% was
dependent upon achieving performance objectives under the Incentive Compensation
Plan. This is consistent with the Compensation Committee's view that those
executives most able to affect the performance of the Company should have a
significant portion of their potential total compensation opportunity at risk
based upon Company performance. Those Company performance objectives were
heavily weighted toward ROA objectives. The Compensation Committee believes that
ROA is a primary
10
<PAGE> 15
determinant of total return to stockholders over the long-term and has the
advantage of not being subject to the period to period vagaries of the common
stock price. However, the Compensation Committee also believes that the Chief
Executive Officer and other officers should share in the gains or losses of
common stock value experienced by the stockholders in order to reinforce the
alignment of their respective interests. Therefore, the Compensation Committee
utilizes stock option grants as an important component of compensation. In
addition to the regular stock option grants made to Mr. Gambill in January of
1991, 1992 and 1993, as discussed above, the Compensation Committee and the
Board shifted planned salary increases for Mr. Gambill in 1991, 1992 and 1993 to
stock options to increase the impact of Company stock values on his total
compensation. The Compensation Committee believes that the combined effect of
these compensation elements is to establish strong incentives to achieve results
which will provide stockholders with the investment returns that they seek.
SUBMITTED BY THE MANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
R. F. Nation, Chairman
D. C. Smith, Jr., Vice Chairman
F. E. Masland III
N. H. Prater
A. J. Sordoni, III
11
<PAGE> 16
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information concerning the compensation
awarded to, earned by or paid to the Named Executives for services rendered to
the Company in all capacities during each of the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS
----------------------------- ----------------------- PAYOUTS
OTHER RESTRICTED SECURITIES -------- ALL OTHER
NAME AND ANNUAL STOCK UNDERLYING LTIP COMPEN-
PRINCIPAL SALARY COMPENSA- AWARD(S) OPTIONS PAYOUTS SATION
POSITION YEAR ($) BONUS($) TION($)(1) ($)(2) (#)(3) ($)(4) ($)(5)
- ------------------ ---- -------- -------- --------- ----------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
M. W. Gambill..... 1993 370,000 259,778 -- -- 12,780(6) 523,906 10,000
Chairman & 1992 370,000 254,745 -- -- 16,780(6) 254,745 10,000
Chief 1991 370,000 239,356 114,987 239,356 31,780(6) -- 10,000
Executive
Officer
D. C. Hathaway.... 1993 270,834 148,282 -- -- 7,200 152,344 8,125
President & 1992 258,334 145,313 -- -- 7,200 145,313 9,306
Chief 1991 233,502 131,345 31,549 65,673 6,620 65,673 6,039
Operating
Officer
B. W. Taussig..... 1993(7) 195,734 98,591 -- -- 6,620 101,292 10,000
Senior Vice 1992 190,000 98,325 -- -- 6,620 98,325 10,000
President- 1991 82,567 32,333 8,093 16,847 -- 16,846 5,838
Operations
W. D. Etzweiler... 1993(8) 195,734 98,591 -- -- 6,620 101,292 6,850
Senior Vice 1992 190,000 98,325 -- -- 6,620 98,325 7,749
President- 1991 N/A N/A N/A N/A N/A N/A N/A
Operations
L. A. Campanaro... 1993(9) 190,734 96,073 -- -- 6,620 98,705 9,188
Senior Vice 1992 114,498 56,291 -- -- -- 59,253 2,876
President- 1991 N/A N/A N/A N/A N/A N/A N/A
Finance
</TABLE>
- ---------------
(1) Consists of any cash supplement received in 1991 by those officers electing
to receive Company restricted common stock in payment of Long-Term Incentive
Compensation. Any stock received is restricted as to transfer or
hypothecation for any purposes whatsoever until the earlier of (a)
termination of employment, (b) five (5) years after the date the long-term
incentive compensation payment was approved by the Company, or (c) a "change
in control" of the Company as defined in the 1986 Stock Option Plan. The
Long-Term Incentive Compensation Plan was amended in March 1992 to require
that starting with amounts earned in 1992, all Long-Term Incentive
Compensation will be paid in cash only. The provision allowing a cash
supplement to be paid to the officers electing to receive their Long-Term
Incentive in Company restricted common stock was also eliminated.
(2) The aggregate holdings of restricted shares and market value as of December
31, 1993 for each of the Named Executives is as follows: Mr.
Gambill -- 13,920 shares with a value of $568,110; Mr. Hathaway -- 3,509
shares with a value of $143,211; Mr. Taussig -- 947 shares with a value of
$38,649; and Mr. Etzweiler -- 2,906 shares with a value of $118,601. The
market value at December 31, 1993 was $40.81 per share which represents the
average of the high and low price on that date. Dividends on restricted
holdings are paid at the normal common stock rate.
12
<PAGE> 17
(3) Represents stock options granted in the respective years. The Company
granted these options, relating to shares of its common stock, to employees,
including executive officers of the Company under its 1986 Stock Option
Plan. The Company's 1986 Stock Option Plan authorizes the Compensation
Committee to grant stock options as well as stock appreciation rights to
certain officers and employees who in the discretion of the Compensation
Committee significantly impact upon the profitability of the Company.
Options granted during a particular year are not exercisable for twelve
months following the date of grant, unless a change in control of the
Company occurs, nor are they exercisable ten years after the grant. The
exercise price per share of options granted under the Plan was one hundred
percent (100%) of the fair market value of common stock at the date of
grant.
(4) Represents the earned Long-Term Incentive Compensation elected by each Named
Executive to be paid in the form of cash. As previously noted, the Long-Term
Incentive earned in 1993 was paid entirely in cash. In the case of Mr.
Gambill, the Long-Term Incentive Compensation for uncompleted periods ending
in 1994 and 1995 were paid in accordance with provisions of the Long-Term
Incentive Compensation Plan applicable to retirement.
(5) For the respective years, represents Company Savings Plan contributions made
on behalf of the Named Executives. The Company maintains the Harsco
Corporation Savings Plan which includes the "Salary Reduction" feature
afforded by Section 401(k) of the Internal Revenue Code. Eligible employees
may authorize the Company to contribute from 2% to 16% of their pre-tax
compensation to the Savings Plan. The Company makes monthly contributions
for the purchase of common stock of the Company for the account of each
participating employee equal to 50% of such employee's first 2% to 6%
contribution.
(6) Includes 24,000, 9,000 and 5,000 stock options granted to Mr. Gambill in
1991, 1992 and 1993 respectively, in lieu of an increase in cash salary. On
April 22, 1991, in lieu of any increase in cash salary compensation upon his
promotion to Chairman and for the twelve months commencing May 1, 1991, the
Board granted Mr. Gambill pursuant to its 1986 Stock Option Plan, stock
options having an exercise price of $26.25 covering 24,000 shares of common
stock, becoming exercisable in whole or in part in four equal increments of
6,000 shares on each anniversary of the date of grant commencing April 22,
1992 and ending not more than ten years from the date of grant. On April 27,
1992, in lieu of any increase in cash salary compensation for the twelve
months commencing May 1, 1992, the Board granted Mr. Gambill pursuant to its
1986 Stock Option Plan, stock options having an exercise price of $35.44
covering 9,000 shares of common stock, becoming exercisable in whole or in
part in three equal increments of 3,000 shares on each anniversary of the
date of grant commencing April 27, 1993 and ending not more than ten years
from the date of grant. On April 26, 1993, in lieu of any increase in cash
salary compensation for the twelve months commencing May 1, 1993, the Board
granted Mr. Gambill pursuant to its 1986 Stock Option Plan, stock options
having an exercise price of $40.94 covering 5,000 shares of common stock,
becoming exercisable in whole or in part in two equal increments of 2,500
shares on each anniversary of the date of grant commencing April 26, 1994
and ending not more than ten years from the date of the grant. The exercise
price per share of options granted under the Plan was one hundred percent
(100%) of the fair market value of common stock at the date of grant. The
vesting schedule for Mr. Gambill has been accelerated pursuant to the
Retirement and Consulting Agreement between Mr. Gambill and the Company
dated January 1, 1994.
(7) Executive officer effective July 1, 1991.
(8) Executive officer effective January 1, 1992.
(9) Executive officer effective April 1, 1992.
13
<PAGE> 18
LONG-TERM INCENTIVE COMPENSATION PLAN
The following table provides information concerning contingent awards made
during the last fiscal year under the Company's Long-Term Incentive Compensation
Plan to the Named Executives. Awards received under this Plan will consist of
cash awards which are based on minimum, target and maximum return on assets
objectives over a three-year cycle as described in the Compensation Committee
Report above. Until the end of the three-year cycle, the amount of long-term
incentive compensation to which a participant is entitled could at any point be
reduced, increased or eliminated by the Management Development and Compensation
Committee.
POTENTIAL FUTURE LONG-TERM INCENTIVE PLAN AWARDS PAYABLE IN 1996
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE BASED
PERFORMANCE OR PLANS
OTHER PERIOD UNTIL -------------------------------
MATURATION OR MINIMUM TARGET MAXIMUM
NAME PAYOUT ($) ($)(1) ($)(1)
- ------------------------------------ ------------------- ------- ------- -------
<S> <C> <C> <C> <C>
M. W. Gambill --.................... 1/1/93 to 12/31/95 N/A(2) N/A(2) N/A(2)
Chairman & Chief Executive Officer
D. C. Hathaway --................... 1/1/93 to 12/31/95 0 101,563 152,344
President & Chief Operating
Officer
B. W. Taussig --.................... 1/1/93 to 12/31/95 0 67,528 101,292
Senior Vice President - Operations
W. D. Etzweiler --.................. 1/1/93 to 12/31/95 0 67,528 101,292
Senior Vice President - Operations
L. A. Campanaro --.................. 1/1/93 to 12/31/95 0 65,803 98,705
Senior Vice President - Finance
</TABLE>
- ---------------
(1) Estimated using current salary levels.
(2) In the case of Mr. Gambill, a payout of the uncompleted periods ending in
1994 and 1995 were paid in accordance with the Long-Term Incentive
Compensation Plan provisions applicable to retirement.
14
<PAGE> 19
STOCK OPTIONS
The following table contains information concerning the number of stock
options granted to each Named Executive under the Company's 1986 Stock Option
Plan during the last fiscal year.
OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------- POTENTIAL
% OF REALIZABLE VALUE
TOTAL AT ASSUMED ANNUAL
OPTIONS RATES OF STOCK
GRANTED PRICE
SECURITIES TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM (1)
OPTIONS IN FISCAL PRICE EXPIRATION -----------------
NAME GRANTED(#) YEAR ($/SH) DATE 5% ($) 10% ($)
- ----------------------- ---------- --------- -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
M. W. Gambill -- 7,780(2) 3.7 41.56 1/24/03 203,345 515,316
Chairman & 5,000(3) 2.4 40.94 4/25/03 128,735 326,239
Chief Executive
Officer
D. C. Hathaway -- 7,200(2) 3.4 41.56 1/24/03 188,185 476,899
President & Chief
Operating Officer
B. W. Taussig -- 6,620(2) 3.1 41.56 1/24/03 173,026 438,482
Senior Vice President
- Operations
W. D. Etzweiler -- 6,620(2) 3.1 41.56 1/24/03 173,026 438,482
Senior Vice President
- Operations
L. A. Campanaro -- 6,620(2) 3.1 41.56 1/24/03 173,026 438,482
Senior Vice President
-
Finance
</TABLE>
- ---------------
(1) Dollar amounts under these columns are the result of calculations of stock
price appreciation over 10 years 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.
The Company did not use an alternative formula for a grant date valuation,
as the Company is not aware of any formula which will determine with
reasonable accuracy a present value based on future unknown or volatile
factors.
(2) The Company granted these options, relating to shares of its common stock,
to employees, including executive officers of the Company under its 1986
Stock Option Plan. The Company's 1986 Stock Option Plan authorizes the
Compensation Committee to grant stock options to purchase common stock, as
well as stock appreciation rights to certain officers and employees who in
the discretion of the Compensation Committee significantly impact upon the
profitability of the Company. Options granted during a particular year are
not exercisable for twelve months following the date of grant, unless a
change in control of the Company occurs, nor are they exercisable ten years
after the grant. The exercise price per share of options granted under the
1986 Stock Option Plan was one hundred percent (100%) of the fair market
value of common stock at the date of grant. There were no stock appreciation
rights granted in 1993.
(3) On April 26, 1993, in lieu of any increase in cash salary compensation for
the twelve months commencing May 1, 1993, the Board granted Mr. Gambill
pursuant to its 1986 Stock Option
15
<PAGE> 20
Plan, stock options having an exercise price of $40.94 covering 5,000 shares
of common stock, exercisable in whole or in part in two equal increments of
2,500 shares on each anniversary of the date of grant commencing April 26,
1994 and ending not more than ten years from the date of grant. The exercise
price per share of options granted under the 1986 Stock Option Plan was one
hundred percent (100%) of the fair market value of common stock at the date
of grant.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executives, concerning the exercise of options during fiscal year 1993 and
unexercised options at December 31, 1993.
AGGREGATED OPTION EXERCISES IN 1993
AND OPTION VALUES AT 12/31/93
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT OPTIONS AT
ON VALUE 12/31/93 (#)(2) 12/31/93 ($)(3)
EXERCISE REALIZED -------------------------- --------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
M. W. Gambill --
Chairman & Chief Executive
Officer........................ 7,780 149,726 42,813 30,780 512,511 206,985
D. C. Hathaway --
President & Chief Operating
Officer....................... 11,220 136,038 13,820 7,200 169,787 -0-
B. W. Taussig --
Senior Vice President -
Operations.................... 10,140 207,052 6,560 6,620 58,597 -0-
W. D. Etzweiler --
Senior Vice President -
Operations.................... 6,469 93,215 14,081 6,620 147,083 -0-
L. A. Campanaro --
Senior Vice President -
Finance....................... 2,684 37,180 6,981 6,620 69,265 -0-
</TABLE>
- ---------------
(1) Represents the difference between the exercise (strike) and market price of
each stock option on the date of exercise.
(2) Options granted during a particular year are not exercisable for twelve
months following the date of grant unless a change in control of the Company
occurs or the Compensation Committee expressly authorizes earlier
exercisability.
(3) Represents the difference between the exercise (strike) and market price
multiplied by the number of in-the-money unexercised options contained in
the respective category. Average market price at December 31, 1993 was
$40.81 per share. Options are in-the-money when the market price of the
underlying securities exceeds the exercise price. No Named Executive
exercised any stock appreciation right during 1993.
16
<PAGE> 21
STOCK PERFORMANCE GRAPH
The following performance graph compares the yearly percentage change in
the cumulative total stockholder return (assuming the reinvestment of dividends)
on the Company's common stock against the cumulative total return of the
Standard & Poor's MidCap 400 Index and the Dow Jones Industrial-Diversified
Index for the past five years. The graph assumes an initial investment of $100
on December 31, 1988 in the Company's common stock or in the underlying
securities which comprise each of those market indices. The information
contained in the graph is not necessarily indicative of future Company
performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG HARSCO CORPORATION, S&P MIDCAP 400 INDEX AND DOW JONES
INDUSTRIAL-DIVERSIFIED INDEX(1)
FISCAL YEAR ENDING DECEMBER 31
<TABLE>
<CAPTION>
DOW JONES
MEASUREMENT PERIOD HARSCO COR- S & P MIDCAP INDUSTRIAL-
(FISCAL YEAR COVERED) PORATION 400 INDEX DIVERSIFIED
<S> <C> <C> <C>
1988 100 100 100
1989 96 135 126
1990 103 128 117
1991 123 193 145
1992 163 216 168
1993 181 244 206
</TABLE>
- ---------------
(1) Peer companies included in the Dow Jones Industrial-Diversified Index are:
Allied-Signal Inc., CBI Industries Inc., Cooper Industries Inc., Crane
Company, Dexter Corporation, Dover Corporation, FMC Corporation, Illinois
Tool Works, Inc., Ingersoll-Rand Co., Parker Hannifin Corp., Penn Central,
PPG Industries Inc., Raychem Corp., Stanley Works, Tenneco, Inc., Trinova
Corporation and Tyco Laboratories, Inc.
RETIREMENT PLANS
The Company provides retirement benefits for each officer under one of two
supplemental plans. They are the Supplemental Retirement Benefit Plan ("Basic
Supplemental Plan") and the Supplemental Executive Retirement Plan ("Secular
Plan") which covers certain executive officers and division presidents who have
attained age 58, in lieu of participation in the Basic Supplemental
17
<PAGE> 22
Plan (collectively the "Supplemental Plans"). All other executive officers are
covered by the Basic Supplemental Plan. All executive officers are also covered
by the qualified pension plan. Each plan is a defined benefit plan providing for
normal retirement at age 65. Early retirement may be taken commencing with the
first day of any month following the attainment of age 55, provided at least 15
years of service have been completed (10 years in the case of the Supplemental
Plans). Early retirement benefits commencing prior to age 65 are reduced. The
plans also provide for unreduced pension benefits if retirement occurs after age
62, provided at least 30 years of service have been completed. The Supplemental
Plans contain provisions providing for a preretirement death benefit payable in
a lump sum to a beneficiary designated by the participant for participants who
die after qualifying for benefits. The Supplemental Plans also include
provisions which fully vest participants upon termination of employment
following a "change in control" of the Company as defined in the Supplemental
Plans.
Total pension benefits are based on final average compensation and years of
service. The normal retirement benefit under the Supplemental Plans is equal to
a total of .8% of final average compensation up to the "Social Security Covered
Compensation" as defined in the Supplemental Plans plus 1.6% of the final
average compensation in excess of the "Social Security Covered Compensation"
multiplied by up to 33 years of service, reduced by the benefits under the
qualified plan. Final average compensation is defined as the aggregate
compensation (base salary plus nondiscretionary incentive compensation) for the
60 highest consecutive out of the last 120 months prior to date of retirement or
termination of employment for any reason prior to normal retirement date.
The following table shows estimated total annual pension benefits payable
to the executive officers of the Company under the qualified Basic Supplemental
Plan, including the Named Executives upon retirement at age 65, in various
remuneration and year-of-service classifications, assuming the total pension
benefit was payable as a straight life annuity guaranteed for ten years and
retirement took place on January 1, 1994. The annual pension benefit payable to
executive officers participating in the Secular Plan would be reduced from the
amounts shown below to account for previous distributions under that Plan.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------------------
REMUNERATION(1) 10 15 20 25 30 35*
- --------------------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
200,000............................. 30,055 45,083 60,110 75,138 90,165 99,182
300,000............................. 46,055 69,083 92,110 115,138 138,165 151,982
400,000............................. 62,055 93,083 124,110 155,138 186,165 204,782
500,000............................. 78,055 117,083 156,110 195,138 234,165 257,582
600,000............................. 94,055 141,083 188,110 235,138 282,165 310,382
700,000............................. 110,055 165,083 220,110 275,138 330,165 363,182
800,000............................. 126,055 189,083 252,110 315,138 378,165 415,982
900,000............................. 142,055 213,083 284,110 355,138 426,165 468,782
1,000,000............................. 158,055 237,083 316,110 395,138 474,165 521,582
</TABLE>
- ---------------
* Supplemental Plans have a 33 year service maximum.
(1) Final average compensation for the Named Executives as of the end of the
last calendar year is: Mr. Gambill: $872,637; Mr. Hathaway: $481,362; Mr.
Taussig: $329,060; Mr. Etzweiler: $317,655; and Mr. Campanaro: $211,267. The
estimated years of service for each Named Executive are as follows: Mr.
Gambill: 33 years (maximum); Mr. Hathaway: 27.5 years; Mr. Taussig: 14
years; Mr. Etzweiler: 27.5 years; and Mr. Campanaro: 13.5 years.
The Company does not provide retiree medical benefits to its executive
officers.
18
<PAGE> 23
EMPLOYMENT AGREEMENTS WITH OFFICERS OF THE COMPANY
On September 25, 1989, the Board of Directors authorized the Company to
enter into employment agreements with certain officers including the Named
Executives (the "Agreements"), pursuant to which authorization, the Company
entered into individual Agreements with certain officers.
The Agreements are designed as an inducement to retain the services of the
officers and provide for continuity of management during the course of any
threatened or attempted change in control of the Company. The Agreements are
also intended to ensure that if a possible change in control should arise and
the officer should be involved in deliberations or negotiations in connection
with the possible change in control, the officer would be in a position to
consider as objectively as possible whether the possible change in control
transaction is in the best interest of the Company and its stockholders without
concern for his position or financial well-being. Should a change in control
occur, the Agreements provide for continuity of management following the change
by imposing certain obligations of continued employment on the officers.
Under the Agreements, the Company and the officers agree that in the event
of a change in control, such officer will remain in the Company's employ for a
period of three years from the date of the change in control (or to such
officer's normal retirement date, if earlier), subject to such officer's right
to resign during a thirty-day period commencing one year from the date of the
change in control or for good reason, as defined in the Agreements. If such
officer's employment terminates within three years after a change in control for
any reason other than cause as defined in the Agreements, resignation without
good reason as defined in the Agreements, or disability or death, such officer
will be paid a lump sum amount equal to such officer's average annual gross
income reported on Form W-2 for the most recent five taxable years prior to the
change in control, multiplied by the lesser of 2.99 or the number of whole and
fractional years left to such executive officer's normal retirement date, plus
interest. The payment may be subject to reduction to avoid adverse tax
consequences.
For purposes of the Agreements, a "change in control" would be deemed to
have occurred if (i) any person or group acquires 20% or more of the Company's
issued and outstanding shares of common stock; (ii) the members of the Board as
of the date of the Agreements (the "Incumbent Board") including any person
subsequently becoming a Director whose election, or nomination for election by
the Company's shareholders, was approved by a majority of the Directors then
comprising the Incumbent Board, cease to constitute a majority of the Board of
the Company as a result of the election of Board members pursuant to a contested
election; (iii) the stockholders approve of a reorganization, merger or
consolidation that results in the stockholders of the Company immediately prior
to such reorganization, merger or consolidation owning less than 50% of the
combined voting power of the Company or (iv) the stockholders approve the
liquidation or dissolution of the Company or the sale of all or substantially
all of the Company's assets.
If such provisions under the applicable Agreements were to have become
operative on January 1, 1994, the Company would have been required to pay
Messrs. Gambill, Hathaway, Taussig, Etzweiler and Campanaro the following
termination payments based on compensation information available at December 31,
1993: $-0-, $1,276,568, $797,086, $834,902, $468,685, respectively.
On September 26, 1988, the Company entered into an agreement with Mr.
Hathaway which provides that for purposes of calculating his retirement
benefits, his years of service will be deemed to have commenced June 20, 1966.
On January 1, 1994, the Company entered into a Retirement and Consulting
Agreement with Mr. Gambill. Pursuant to the Agreement, Mr. Gambill will receive
monthly compensation at the rate of $370,000 per annum ending June 9, 1995.
19
<PAGE> 24
The Company entered into a Special Supplemental Retirement Benefit
Agreement and Severance Arrangement with Mr. Taussig effective January 1, 1994.
The Benefit Agreement provides that for purposes of calculating his retirement
benefits, his years of service will be deemed to have commenced October 27,
1979. The Arrangement provides for a capped cash severance payout in the event
that his employment with the Company terminates within three years under certain
circumstances. The combined value of the lump sum dollar amount attributable to
the extra years of service and the severance would not exceed a cash amount of
$600,000.
Except as set forth in "Directors' Compensation" herein, to the knowledge
of the Company, the only other transactions or proposed transactions since the
beginning of the last fiscal year to which the Company has been a party and in
which any Director, Named Executive or person nominated as a Director has had
any interest, direct or indirect, have been transactions in the ordinary course
of business consisting principally of the use of certain banks, as depositories
and trustees under several of the pension plans of the Company, and use of an
investment bank, in which certain Directors were interested as Directors,
stockholders or limited partners but did not receive any material benefit as a
result of the transactions. The terms and conditions of such transactions were
on a basis no less favorable than obtainable from other sources for the same
services rendered.
DIRECTORS' COMPENSATION
Directors of the Company currently receive compensation of $17,000 per year
plus $1,000 for participation at each meeting of the Board and $800 for each
committee meeting. Directors who are chairmen of Board committees receive
additional compensation of $2,000 per year. Certain Directors also received
compensation for special services at the rate of $800 per day.
Members of the Board who are not officers or employees of the Company or
its divisions or subsidiary companies ("Outside Directors") are eligible to
receive grants of nonqualified stock options. Individuals who are Outside
Directors on the first business day of May of each year will automatically be
granted on that date a nonqualified stock option to purchase 1,000 shares of the
Company's common stock at a price equal to the market value on the date of
grant. The Compensation Committee has no discretion as to the eligibility,
exercise price or size of awards to Outside Directors. On May 1, 1993, the
Company granted stock options in the amount of 1,000 each to the Outside
Directors. The options permit the holders to purchase shares at the price of
$41.38 per share, exercisable in whole or in part commencing one year after the
date of grant and expiring on April 30, 2003.
The Company also maintains a non-qualified pension plan for Directors
("Directors Retirement Plan"). Pursuant to the terms of the Directors Retirement
Plan, members of the Board who are not eligible for pension benefits resulting
from employment with the Company are eligible after completion of five (5) years
of service as a Director to receive pension benefits upon retirement from the
Board. A monthly pension benefit equal to 60% of the monthly director's retainer
in effect at the time of retirement will be paid to the Director for a period of
months equal to the number of whole months of his service as a Director of the
Company up to a maximum of one hundred twenty (120) months. The monthly retainer
does not include meeting fees, chairmanship increments and consulting fees.
Directors who are actively employed by the Company receive no additional
compensation for serving as Directors.
NOMINATING COMMITTEE
The Nominating Committee recommends periodically to the Board prospective
Director candidates in light of resignations, retirements, or other changes in
the composition of the Board; proposes to the Board by January of each year a
slate of Directors for submission to the stockholders at the Annual Meeting; and
represents the Board in discussions with prospective
20
<PAGE> 25
Director candidates. At the present time, the Nominating Committee will accept
nominations only from Directors and Officers of the Company. The Nominating
Committee met one time in 1993.
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
The Management Development and Compensation Committee administers the
Company's executive compensation policies and programs. The Committee also
advises the Board concerning election of officers and executive salaries, and
reviews and consults with appropriate members of management with respect to
organizational matters. Areas of responsibility include, but are not necessarily
limited to, planning for management succession at the corporate and divisional
level, particularly in senior executive ranks, recommending to the Board the
annual base salary of corporate officers and divisional presidents, authorizing
awards under the Incentive Compensation Plans and advising the Board regarding
the institution or amendment of any incentive or contingent compensation plan
applicable to officers of the Company. The Management Development and
Compensation Committee met ten times in 1993. For additional information
regarding the policies and mission of the Compensation Committee see the "Board
Compensation Committee Report on Executive Compensation" which appears on page 7
of this Proxy Statement.
AUDIT COMMITTEE
The Audit Committee meets with members of management, the independent
accountants and internal auditors and reviews and approves the scope of audit
and non-audit services, reviews the results of the audit and any accounting or
disclosure questions, if any, encountered in the course of the audit and reviews
the adequacy of internal controls. The Audit Committee met two times in 1993.
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors has designated Coopers & Lybrand, Certified Public
Accountants, as independent accountants of the Company's accounts for the fiscal
year ending December 31, 1994, subject to stockholder approval. This firm has
audited the accounts of the Company and its predecessors since 1929. Although
neither the Certificate and By-laws nor the General Corporation Law of the State
of Delaware, the State of incorporation, requires the election or approval of
the selection of independent accountants, the Board of Directors desires that
the selection of independent accountants be approved by the stockholders. Such
designation of Coopers & Lybrand will be submitted to the Annual Meeting for
confirmation or rejection and, in the absence of contrary direction, it is
intended that Proxies in the accompanying form will be voted in favor of
confirmation. A representative of Coopers & Lybrand will attend the Annual
Meeting, with the opportunity to make a statement and answer questions of
stockholders.
If this proposal is not approved by a majority of the shares entitled to
vote at the Annual Meeting present in person or by proxy, the appointment of the
independent accountants will be reevaluated by the Board of Directors. However,
because of the difficulty and expense of making any substitution of accountants
so long after the beginning of the current year, it is contemplated that the
appointment for the fiscal year ending December 31, 1994, will be permitted to
stand unless the Board finds other good reasons for making a change. The Board
will then make an independent business judgment as to whether to seek new
independent accountants for the fiscal year ending 1995.
The Audit Committee of the Company's Board of Directors, at its meeting
held on August 24, 1993, reviewed and approved the fee estimate for the annual
examination of the Company's fiscal 1993 financial statements and, taking into
consideration the possible effect of non-audit services on the accountants'
independence, also approved the type of non-audit services to be rendered in
such year.
The Board of Directors recommends that the stockholders vote FOR this
proposal.
21
<PAGE> 26
OTHER MATTERS
The cost of this solicitation of Proxies will be borne by the Company. In
addition to solicitation by use of mail, employees of the Company may solicit
Proxies personally or by telephone or telegraph but will not receive additional
compensation for these services. Arrangements may be made with brokerage houses,
custodians, nominees and fiduciaries to send Proxies and Proxy materials to
their principals and the Company may reimburse them for their expense in so
doing. The Company has retained Morrow & Co. to assist in the solicitation at a
cost that is not expected to exceed $7,000 plus reasonable out-of-pocket
expenses.
STOCKHOLDER PROPOSALS FOR PRESENTATION AT
1995 ANNUAL MEETING
If a stockholder of the Company wishes to present a proposal for
consideration at the next Annual Meeting of Stockholders, such proposal must be
received at the executive offices of the Company no later than November 25,
1994, to be considered for inclusion in the Company's Proxy Statement and form
of Proxy relating to that Annual Meeting.
HARSCO CORPORATION
/s/ Paul C. Coppock
Paul C. Coppock
Senior Vice President, General Counsel and Secretary
March 25, 1994
22
<PAGE> 27
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
HARSCO CORPORATION
The undersigned hereby appoints F. E. Masland III, R. C. Smith
and R. C. Wilburn proxies, each with power to act without the other and with
power of substitution, and hereby authorizes them to represent and vote, as
designated on the other side and otherwise in their direction, all the shares
of stock of Harsco Corporation standing in the name of the undersigned with all
powers with the undersigned would possess if present at the Annual Meeting of
Stockholders of the Company to be held April 26, 1994 or any adjournment
thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE
[HARSCO CORPORATION LOGO]
ANNUAL
MEETING OF
STOCKHOLDERS
APRIL 26, 1994, 10:00 A.M.
The Radisson Penn Harris
(formerly the Penn Harris Inn
and Convention Center)
Routes 11 and 15 at Erford Road
Camp Hill, Pennsylvania
<PAGE> 28
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1 AND 2.
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS NOMINEES: D.C. Hathaway, R.F. Nation, N. H. Prater and A.J. Sordoni, III
(S> <C> <C>
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote for any individual nominee, write the
listed to the right AUTHORITY nominee's name in the space provided below.)
(except as marked to vote for all
to the contrary) nominees listed ------------------------------------------------------------------------------------
to the right
/ / / /
</TABLE>
2. Appointment of Coopers & Lybrand as
the independent accountants of the
corporation.
FOR AGAINST ABSTAIN
/ / / / / /
Please sign exactly as name appears to the left. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: , 1994
--------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Signature)
- ------------------------------------------------------------------------------
(Signature if held jointly)
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
FOLD AND DETACH HERE
ANNUAL MEETING
OF
HARSCO CORPORATION STOCKHOLDERS
TUESDAY, APRIL 26, 1994
10:00 A.M.
THE RADISSON PENN HARRIS
(FORMERLY THE PENN HARRIS INN AND CONVENTION CENTER)
ROUTES 11 AND 15 AT ERFORD ROAD
CAMP HILL, PENNSYLVANIA
<PAGE> 29
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
HARSCO CORPORATION
The undersigned hereby appoints F. E. Masland III, R. C. Smith
and R. C. Wilburn proxies, each with power to act without the other and with
power of substitution, and hereby authorizes them to represent and vote, as
designated on the other side and otherwise in their direction, all the shares
of stock of Harsco Corporation standing in the name of the undersigned with all
powers with the undersigned would possess if present at the Annual Meeting of
Stockholders of the Company to be held April 26, 1994 or any adjournment
thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE
[HARSCO CORPORATION LOGO]
ANNUAL
MEETING OF
STOCKHOLDERS
APRIL 26, 1994, 10:00 A.M.
The Radisson Penn Harris
(formerly the Penn Harris Inn
and Convention Center)
Routes 11 and 15 at Erford Road
Camp Hill, Pennsylvania
<PAGE> 30
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1 AND 2.
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS NOMINEES; D.C. Hathaway, R.F. Nation, N. H. Prater and A.J. Sordoni, III
(S> <C> <C>
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote for any individual nominee, write the
listed to the right AUTHORITY nominee's name in the space provided below.)
(except as marked to vote for all
to the contrary) nominees listed ------------------------------------------------------------------------------------
to the right
/ / / /
</TABLE>
2. Appointment of Coopers & Lybrand as
the independent accountants of the
corporation.
FOR AGAINST ABSTAIN
/ / / / / /
Please sign exactly as name appears to the left. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: , 1994
--------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Signature)
- ------------------------------------------------------------------------------
(Signature if held jointly)
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
HARSCO CORPORATION
Camp Hill, PA 17011
IF YOU HAVE ALREADY
SENT IN YOUR PROXY PLEASE
DISREGARD THIS LETTER
April 11, 1994
To the Stockholders of
HARSCO CORPORATION
A REMINDER
We have previously sent to you proxy soliciting material relative to
the Annual Meeting of Stockholders to be held on April 26, 1994.
According to our latest records, we have not as yet received your
Proxy. The time before the meeting is short and many of our shares are held in
small amounts. Your signed Proxy will be helpful, whether your holding is
large or small, and we encourage you return it without delay.
A Proxy and return envelope are enclosed for your use.
Thank you for your cooperation.
Very truly yours,
PAUL C. COPPOCK
Senior Vice President, General
Counsel & Secretary
