<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 / /
Filed by a party other than the registrant /X/
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)
Bowne of New York City, Inc.
- --------------------------------------------------------------------------------
(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 registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1)Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
[HARSCO CORPORATION LOGO]
NOTICE OF
1996 MEETING
AND PROXY
STATEMENT
<PAGE> 3
[HARSCO CORPORATION LOGO]
HARSCO CORPORATION
P.O. Box 8888
Camp Hill, Pennsylvania 17001-8888
March 25, 1996
To Our Stockholders:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders of
your Company, which will be held on Tuesday, April 30, 1996, beginning at 10
a.m. at the Radisson Penn Harris Hotel 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/ D. C. HATHAWAY
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 30, 1996, at 10 a.m. at the Radisson Penn Harris Hotel and
Convention Center, Camp Hill, Pennsylvania to consider and act upon the
following matters:
1. Election of two Directors to serve until the 1999 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 L.L.P. as independent accountants to audit the accounts
of the Company for the fiscal year ending December 31, 1996; 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 6, 1996, 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, Chief Administrative Officer,
General Counsel and Secretary
March 25, 1996
<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 30, 1996, 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 6, 1996. On the
record date, there were issued and outstanding 25,158,105 shares of the
Company's common stock, $1.25 par value (the "common stock"). This figure does
not include 7,469,998 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 L.L.P. 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 L.L.P. 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, 1996.
1
<PAGE> 6
ELECTION OF DIRECTORS
The Company currently has ten Directors, of which three 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 eight commencing with the forthcoming Annual Meeting.
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 1996 Annual Meeting of
Stockholders consists of three Directors, one of whom, Mr. Wilburn, is a nominee
and two of whom, Messrs. Burdge and Smith, are retiring from the Board at the
end of their current term. In order to keep the three classes of Directors as
nearly equal in number as practicable, Mr. Sordoni, who presently has a term
expiring in 1997, has been nominated to have his current term extended for an
additional two years to expire in 1999. The stockholders are asked to vote FOR
Messrs. Wilburn and Sordoni, both of whom have been duly nominated by the Board
of Directors, to serve a term of office until the 1999 Annual Meeting of
Stockholders and their respective successors have been elected and qualified.
However, should either 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 seven times during the fiscal year ended
December 31, 1995.
2
<PAGE> 7
NOMINEES FOR TERMS EXPIRING IN 1999
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
- --------------------------------------------------------------------------
<C> <C> <S> <C>
52 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.
Member of the Audit Committee, the Manage-
ment Development and Compensation Commit-
tee and the Nominating Committee.
[PHOTO] 52 President and Chief Executive Officer of 1986
R. C. Wilburn the Colonial Williamsburg Foundation.
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.
Chairman of the Nominating Committee; mem-
ber of the Audit Committee and Executive
Committee.
</TABLE>
3
<PAGE> 8
DIRECTORS WHOSE TERMS EXPIRE IN 1998
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
- --------------------------------------------------------------------------
<C> <C> <S> <C>
[PHOTO] 67 Chairman of British Aerospace Holdings, 1990
R. L. Kirk Inc.; former Chairman and Chief Executive
Officer of CSX Transportation Inc. Mr.
Kirk served as Chairman and Chief
Executive Officer of Allied-Signal
Aerospace Company from 1986 to 1989. He
was President and Chief Executive Officer
of LTV Aerospace and Defense Company from
1977 until 1986. He is also a Director of
British Aerospace PLC of London, England.
Member of the Nominating Committee.
[PHOTO] 60 Chairman of AMP Incorporated. Mr. Marley 1993
J. E. Marley joined AMP Incorporated in 1963 and was
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.
Member of the Management Development and
Compensation Committee.
[PHOTO] 51 President and Chief Operating Officer of 1995
J. I. Scheiner Benatec Associates, Inc. He was President
of Stoner Associates, Inc. from 1988 to
1991 and Vice President of Huth Engineers
from 1987 to 1988. Served as Secretary of
Revenue for the Commonwealth of
Pennsylvania from 1983 to 1987, and from
1979 to 1983, served as Deputy Secretary
for Administration, Pennsylvania De-
partment of Transportation. Member of the
Pennsylvania Chamber of Business and
Industry Board and a Trustee of Harrisburg
Area Community College.
</TABLE>
4
<PAGE> 9
DIRECTORS WHOSE TERMS EXPIRE IN 1997(1)
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
- --------------------------------------------------------------------------
<C> <C> <S> <C>
[PHOTO] 51 Chairman since April 1, 1994. President 1991
D. C. Hathaway and Chief Executive Officer since January
1, 1994. Was President and Chief Operating
Officer of the Company from May 1, 1991 to
January 1, 1994. Served as Senior Vice
President-Operations from 1986 to May 1991
and as Group Vice President from 1984 to
1986. Prior to 1984, was Chairman and
Chief Executive Officer of Dartmouth
Investments Limited in the United Kingdom
which was acquired by the Company in 1979.
Mr. Hathaway is a Director of Dauphin
Deposit Corporation, PP&L Resources, Inc.
and Pennsylvania Power & Light Company.
Member of the Executive Committee.
[PHOTO] 70 President of Penn Harris Company (hotel) 1983
R. F. Nation since 1977. Mr. Nation is also a Director
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 and member of the
Executive Committee.
[PHOTO] 67 Retired President and Chief Executive 1990
N. H. Prater Officer of Mobay Corporation. Mr. 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.
Chairman of the Audit Committee; member of
the Management Development and Compensa-
tion Committee and the Executive
Committee.
</TABLE>
- ------------
(1) Mr. Sordoni is currently a member of this class of Directors but has been
nominated for election to have his current term extended for an additional
two years to 1999. Information concerning Mr. Sordoni appears on page 3.
5
<PAGE> 10
SHARE OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 6, 1996, 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......................................... 112,007(2) 5,000
L. A. Campanaro...................................... 12,062 31,366
P. C. Coppock........................................ 17,763(3) 33,986
W. D. Etzweiler...................................... 23,971 10,000
D. C. Hathaway....................................... 33,063 45,374
R. L. Kirk(4)........................................ 1,618 5,000
J. E. Marley(4)...................................... 250 3,000
R. F. Nation......................................... 12,000 5,000
N. H. Prater(4)...................................... 1,000 1,000
J. I. Scheiner....................................... 1,013 1,000
R. C. Smith(4)....................................... 2,000 4,000
A. J. Sordoni, III................................... 9,000 7,000
B. W. Taussig........................................ 1,047 -0-
R. C. Wilburn........................................ 400 6,000
All Directors and Executive Officers as a Group
(15 persons in total, including those listed
above)............................................. 231,070 170,799
</TABLE>
- ------------
(1) Includes in the case of Messrs. Campanaro, Coppock, Etzweiler, Hathaway,
Taussig and all Directors and executive officers as a group, 5,612 shares,
4,585 shares, 8,699 shares, 8,173 shares, -0- shares and 30,065 shares,
respectively, pursuant to the Company's Savings Plan in respect of which
such persons have shared voting power.
(2) Includes 23,850 shares owned by his wife as to which Mr. Burdge disclaims
beneficial ownership.
(3) Includes 5,812 shares owned by his wife as to which Mr. Coppock disclaims
beneficial ownership.
(4) In addition to the shares shown in the table above, certain Directors have
elected to receive compensation in the form of credits for non-voting
phantom shares under the terms of the Company's Deferred Compensation Plan
for Non-Employee Directors. These amounts will ultimately be paid out in
cash based upon the value of the shares at the time of payout. The
respective number of phantom shares held by the Directors as of March 6,
1996 are as follows: R. L. Kirk, 712.87 shares; J. E. Marley, 745.34 shares;
N. H Prater, 908.77 shares and R. C. Smith, 668.18 shares.
Except as otherwise stated, each individual has sole voting and investment
power over the shares set forth opposite his name. As of March 6, 1996, the
Directors and executive officers of the Company as a group beneficially owned
less than 1% of the Company's outstanding common stock. No Director or executive
officer beneficially owned as much as 1% of the outstanding common stock.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Based on information contained in Schedules 13G filed with the Securities
and Exchange Commission with respect to beneficial ownership at December 31,
1995, as of March 6, 1996,
6
<PAGE> 11
except as set forth below, 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.
<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............. The Capital Group Companies, 1,440,000 5.7
Inc. and Capital Research and Sole Dispositive Power
Management Company
333 South Hope Street
Los Angeles, CA 90071
Common............. FMR Corp. 1,392,700 5.5
82 Devonshire Street Sole Voting Power for
Boston, MA 02109 218,700 shares and
Sole Dispositive Power
for 1,392,700 shares
</TABLE>
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Management Development & 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 and 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 1995 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.
At the 1995 Annual Meeting of Stockholders, the Board of Directors
proposed, and the shareholders overwhelmingly approved the 1995 Executive
Incentive Compensation Plan which the Board believes has provided an improved
basis for achieving these goals. The current compensation program is applicable
to all corporate and divisional officers of the Company and 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;
7
<PAGE> 12
- Annual incentive compensation awarded under the 1995 Executive Incentive
Compensation Plan paid 60% in cash and 40% in the form of restricted
shares of Harsco Common Stock, based upon achievement of specific
financial objectives (return on capital, earnings per share, cash flow
provided by operations and sales growth) and strategic goals established
for the relevant business unit;
- Incentive stock option grants under the 1995 Executive Incentive
Compensation Plan made annually by the Compensation Committee on the
basis of the Committee's evaluation of each unit's strategic planning 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 53 division officers in addition to the five 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 current
1995 Executive 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 incentive compensation awards.
The Compensation Committee also believes that 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. This objective is met by paying a portion of the annual incentive
compensation in restricted shares of the Company's common stock, and granting
incentive stock options for the Company's common stock. Under the 1995 Harsco
Executive Incentive Plan and the related Authorization, Terms and Conditions of
the Annual Incentive Awards, 60% of a participant's annual incentive
compensation award is paid in cash with the remaining 40% paid in the form of a
grant of restricted shares of Harsco common stock. These shares are
nontransferable by the officer for a period of three years from date of grant
(but during the first two years of the new Plan, one-half of each award will be
restricted for only one year). Furthermore, the restricted stock is subject to
forfeiture by the officer during the applicable restricted period in the event
of the executive's termination for reasons other than:
- normal retirement
- death
- full and permanent disability; or
- involuntary termination other than termination for cause as defined in
the Plan.
The Committee has the authority to accelerate the expiration of the
restriction and forfeiture provisions in its discretion. With respect to
incentive stock options, the quantity granted to an individual in any year is
based upon the executive's grade level and the strategic planning performance of
the respective business unit. 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 $1 million 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
8
<PAGE> 13
effect and the exemption under Internal Revenue Service regulations applicable
to income derived from stock options granted under the Harsco 1986 Stock Option
Plan or the 1995 Executive Incentive Compensation Plan, and the exemption
applicable to the performance based incentive compensation bonuses under the
1995 Executive Incentive Compensation Plan, the Company should not be exposed to
any nondeductibility of executive compensation expense under Section 162(m) in
the 1996 tax year. Last year, we obtained shareholder approval of the 1995
Executive Incentive Compensation Plan, which was designed to preserve the
deductibility to the extent possible, of any such executive compensation subject
to Section 162(m) in the future.
RELATIONSHIP OF PERFORMANCE TO COMPENSATION
The Company currently ties executive pay to corporate performance primarily
through the 1995 Executive 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 Plan
The opportunity for compensation under the 1995 Executive Incentive
Compensation Plan in effect for 1995 was dependent upon meeting the four
financial objectives and the specific strategic objectives established by the
Compensation Committee prior to the beginning of the plan year, for the
appropriate business unit. Under the 1995 Executive Incentive Compensation Plan,
80% of the total possible award is based on achievement of financial objectives
established by the Compensation Committee each year, and 20% is based on
attainment of strategic goals. The financial goals for 1995 were based upon
performance improvement in return on capital, earnings per share, cash flow
provided by operations, and sales.
No award will be made for achievement of only the minimum target, but
awards will begin to be earned as performance in each of the designated
objective categories rises above the minimum. Achieving target levels of
performance in all objectives results in an award that is 67% of the award for
achieving the maximum level of performance against all objectives, and the award
will continue to rise correspondingly as the achieved results approach the
maximum financial and strategic objective performance levels set by the
Compensation Committee.
The Compensation Committee establishes minimum, target and maximum
financial objectives for the corporate office and each division for that year,
which will constitute 80% of the annual bonus criteria. The corporate officer
financial objectives for minimum, target and maximum achievement are established
based upon a consolidation of the goals for the nine operating divisions. Thus,
the incentive compensation awards of the corporate officers are closely related
to the overall performance of the divisions against their goals. The strategic
goals which constitute the other 20% of the evaluation criteria under the
current 1995 Executive Incentive Compensation Plan are established by the
Compensation Committee and are assigned various weights. The strategic goals set
for each business unit in 1995 involved achievement of various objectives
important to the profitable growth of the particular Harsco operating division
in such areas as safety, gross profit margin improvement, accounts receivable,
new product introduction and information technology system upgrades. The
corporate officer awards are then dependent on the degree of achievement based
upon the average attainment of strategic goals by the nine operating divisions.
As previously discussed, 60% of an executive participant's annual incentive
compensation award is paid in cash with the remaining 40% paid in the form of
restricted shares of Harsco common stock.
The executive officers attained 60.4% of maximum achievement with respect
to the combined strategic goals. The Company's record financial performance
yielded an achievement factor of 100% for 1995 for the financial goals. The
combined achievement on strategic and financial goals
9
<PAGE> 14
resulted in each of the executive officers earning 92.1% of the maximum annual
incentive compensation for 1995.
STOCK OPTIONS
As shown in the table that follows, the Compensation Committee granted
stock options to the executive officers on February 22, 1995 under the 1986
Stock Option Plan with an exercise price of $43.375 per share, which was the
market price on the date of grant. This Plan was approved by the stockholders
and was used to make grants to other corporate and division officers as well as
the executive officers. The number of options granted to each executive was
determined by grade level. Thus, the Chairman, President and Chief Executive
Officer, Mr. Hathaway, who has the highest grade level, received the largest
award. Following shareholder approval in April 1995 of the 1995 Executive
Incentive Compensation Plan, all subsequent stock options to officers are being
granted under that Plan. The number of options granted to each officer under the
1995 Plan is determined by grade level and the committee's evaluation of the
unit's strategic planning performance. The absolute maximum stock option award
as provided in the 1995 Plan is 25,000 shares for any single participant in a
calendar year.
The annual number of options granted for each grade level was established
in 1995 based upon a recommendation from Towers Perrin, a compensation
consulting firm, and that firm's survey of the long-term incentive compensation
practices of 130 major United States companies. In determining the February 22,
1995 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 1995 grants.
SALARIES
The Compensation Committee made its regular annual review of salaries of
all corporate and division officers, including the Named Executives, at its
November 14, 1994 Committee meeting, and recommended salary increases which the
Board then approved for implementation on January 1, 1995.
Each year, the Compensation Committee establishes executive salary budgets
for corporate and division officers based upon survey data provided by a number
of major consulting firms. For 1995, the Committee approved a budget for salary
increases which was slightly below the range of planned salary budgets indicated
by the various surveys. The Committee then adjusts the salary of each officer
based upon the available salary budget, the performance of each executive
officer, comparison to other internal salaries and the Company's salary range
structure for various grade levels. The salary range structure for various grade
levels 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 1994. 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 the Proxy Statement, though some of those companies may have been included in
the surveys.
In 1994, the Committee requested an analysis of competitive compensation
levels and total direct compensation (defined as base salary, annual incentives
and long-term incentives in the form of cash and stock option awards) to be
performed by an outside consultant. Towers Perrin was selected, and the results
of two detailed studies were provided to the Committee for its review and use in
adjusting the salary of each officer as one of the elements in a total
compensation package. The salary increases effective January 1, 1995 were based
upon those surveys. The salary for the Chief Executive Officer was substantially
below the survey median. The compensation for the executive officers was below
the survey median.
10
<PAGE> 15
In preparation for future compensation adjustments, the Committee intends
to periodically review similar detailed survey data. In general, the Committee
strives to maintain total compensation packages which range from moderately
below to moderately above the industry medians.
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 Retirement Benefit Plan ("Basic Supplemental
Plan") as described in the section "Retirement Plans".
THE CHIEF EXECUTIVE OFFICER'S 1995 COMPENSATION
The incentive plan cash and restricted stock compensation, stock options,
and salary awarded or paid to Mr. Hathaway with respect to 1995 are discussed
above in this Report with respect to amounts, and the factors considered by the
Compensation Committee. Of the total $1,151,140 in cash compensation paid to Mr.
Hathaway in 1995 as reflected in the Summary Compensation Table, 65.25% was
dependent upon achieving performance objectives under the 1995 Executive
Incentive Compensation Plan, and the predecessor Long-Term Incentive
Compensation Plan which made a one time shareholder approved payment of $154,980
for previously earned and accrued awards upon termination of that 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 composed of financial and
strategic objectives. The Compensation Committee believes that attainment of
specific, measurable financial and strategic goals is an important 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 and incentive compensation in the form of restricted shares of
Harsco Common Stock as important components of 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.
In summary, the Committee believes that the total compensation program
implemented in 1995 will achieve the objective of providing meaningful and
appropriate rewards, recognizing both current performance contributions and the
attainment of long-term strategic business goals of critical importance to the
future growth of Harsco Corporation.
SUBMITTED BY THE MANAGEMENT DEVELOPMENT AND COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS:
R. F. Nation, Chairman
J. E. Marley
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)
- ---------------------- ---- ------- ------- --------- ----------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
D.C. Hathaway......... 1995 400,000 357,696 -- 238,464(4) 15,000 154,980(6) 27,819
Chairman, 1994 350,000 159,705 -- -- 7,780 212,625 10,500
President & Chief 1993 270,834 148,282 -- -- 7,200 152,344 8,125
Executive Officer
L.A. Campanaro........ 1995 227,100 172,996 -- 115,330(4) 10,000 79,916(6) 14,970
Senior Vice 1994 211,867 82,352 -- -- 6,620 109,641 12,199
President & Chief 1993 190,734 96,073 -- -- 6,620 98,705 9,188
Financial Officer
P.C. Coppock.......... 1995 200,000 152,352 -- 101,568(4) 10,000 67,896(6) 12,930
Senior Vice 1994 180,000 69,966 -- -- 6,620 93,150 9,067
President, Chief 1993 144,900 60,293 -- -- 4,100 61,945 7,899
Administrative
Officer, General
Counsel & Secretary
W.D. Etzweiler........ 1995 227,100 172,996 -- 115,330(4) 10,000 79,916(6) 14,970
Senior Vice 1994 211,867 82,352 -- -- 6,620 109,641 12,352
President & Chief 1993 195,734 98,591 -- -- 6,620 101,292 11,772
Operating Officer
B.W. Taussig.......... 1995 168,225 213,578(5) -- -0- -0- 79,916(6) 182,819(7)
Senior Vice 1994 211,867 82,352 -- -- 6,620 109,641 12,352
President & Chief 1993 195,734 98,591 -- -- 6,620 101,292 11,772
Operating Officer
</TABLE>
- ---------------
(1) The aggregate holdings of restricted shares and market value as of December
31, 1995, for the Named Executives is as follows: Mr. Hathaway -- 3,509
shares with a value of $205,277; Mr. Campanaro -- -0- shares; Mr.
Coppock -- 3,049 shares with a value of $178,367; Mr. Etzweiler -- 2,906
shares with a value of $170,001, and Mr. Taussig -- 947 shares with a value
of $55,400. The market value at December 31, 1995, was $58.50 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.
(2) 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
12
<PAGE> 17
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.
(3) For the respective years, represents Company Savings Plan contributions and
certain Supplemental Retirement Benefit 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 1% 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 1% to 6% contribution.
The Company also maintains the Harsco Corporation Supplemental Retirement
Benefit Plan (described under "Retirement Plans"). If the IRS-imposed
limitations on 401(k) savings plan contributions are reached, participating
Named Executives, upon retirement or other termination of employment,
receive in cash under this Plan the amount of Company matching contributions
to the Savings Plan that were disallowed for the account of the Named
Executive by operation of the IRS-imposed limitations, including adjustments
for changes in the market value of Company common stock that would have been
purchased by the Company matching contributions and dividends that would
have been payable on such Company common stock.
(4) Represents 40% share of total annual incentive compensation award for 1995
under the terms of the new 1995 Executive Incentive Compensation Plan.
One-half of the stock granted will have a one year restriction from the date
of grant and the remaining one-half of the stock will have a three year
restriction from the date of the grant. During the period of restriction,
the restricted shares can be voted and dividends will be reinvested. The
dividend reinvestment shares will be restricted for the same period as the
underlying shares.
(5) Executive officer resigned effective September 30, 1995. Compensation and
bonus represents nine months of the year. Annual incentive compensation from
1995 Executive Incentive Compensation Plan was paid fully in cash by
agreement.
(6) Represents the payout of accrued long-term incentive compensation awards
earned in prior years under the 1986 Incentive Compensation Plan as a result
of termination of that Plan. Payments are for amounts accrued for the
incomplete three year Plan period ending in 1995 (relating to performance in
years 1993 and 1994) and the incomplete three year Plan period ending in
1996 (relating to performance in 1994). Payments were approved in April 1995
by the stockholders at the Annual Meeting of Stockholders in connection with
the adoption of the 1995 Executive Incentive Compensation Plan and were made
in May 1995.
(7) Represents payments of $55,800 for a consulting arrangement, $8,195 for
vacation payout, $105,374 for a lump sum distribution pension payout and
$13,450 for employer contributions to the Company Savings Plan.
13
<PAGE> 18
LONG-TERM INCENTIVE COMPENSATION PLAN
The stockholders approved the 1995 Executive Incentive Compensation Plan
and the existing Long-Term Incentive Compensation Plan was discontinued. Amounts
accrued for the incomplete three year Plan period ending in 1995 (relating to
performance in years 1993 and 1994) and the incomplete three year Plan period
ending in 1996 (relating to performance in 1994), were paid to participants in
May 1995 after stockholder approval.
STOCK OPTIONS
The following table contains information concerning the number of stock
options granted to each Named Executive under the Company's 1986 Stock Option
Plan during the last fiscal year.
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------
% OF POTENTIAL
TOTAL REALIZABLE VALUE AT
OPTIONS ASSUMED ANNUAL
SECURITIES GRANTED RATES OF STOCK
UNDERLYING TO EXERCISE PRICE APPRECIATION
OPTIONS EMPLOYEES OF BASE FOR OPTION TERM (1)
GRANTED IN FISCAL PRICE EXPIRATION -------------------
NAME (#)(2) YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------------------- ---------- --------- -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
D. C. Hathaway -- 15,000 8.7 43.375 2/21/05 409,175 1,036,929
Chairman, President & Chief
Executive Officer
L. A. Campanaro -- 10,000 5.8 43.375 2/21/05 272,783 691,286
Senior Vice President & Chief
Financial Officer
P. C. Coppock -- 10,000 5.8 43.375 2/21/05 272,783 691,286
Senior Vice President, Chief
Administrative Officer, General
Counsel & Secretary
W. D. Etzweiler -- 10,000 5.8 43.375 2/21/05 272,783 691,286
Senior Vice President & Chief
Operating Officer
B. W. Taussig -- 10,000(3) 5.8 43.375 2/21/05 -0- -0-
Senior Vice President & Chief
Operating Officer
</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 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,
14
<PAGE> 19
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 1995.
(3) Mr. Taussig resigned effective September 30, 1995 and the options granted
did not become exercisable. Had the options been exercisable, the potential
realizable value at a 5% annual rate of stock price appreciation would have
been $272,783 and at a 10% annual rate of stock price appreciation would
have been $691,286.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information, with respect to the Named
Executives, concerning the exercise of options during fiscal year 1995 and
unexercised options at December 31, 1995.
AGGREGATED OPTION EXERCISES IN 1995
AND OPTION VALUES AT 12/31/95
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT OPTIONS AT
ON VALUE 12/31/95 (#)(2) 12/31/95 ($)(3)
EXERCISE REALIZED -------------------------- --------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
D. C. Hathaway --
Chairman, President & Chief
Executive Officer.............. 8,354 124,641 18,510 15,000 334,582 226,875
L. A. Campanaro --
Senior Vice President & Chief
Financial Officer............. 3,800 69,655 15,251 10,000 266,588 151,250
Paul C. Coppock --
Senior Vice President, Chief
Administrative Officer,
General Counsel & Secretary... 6,812 195,104 17,238 10,000 348,429 151,250
W. D. Etzweiler --
Senior Vice President & Chief
Operating Officer............. 6,372 51,596 11,154 10,000 177,761 151,250
B. W. Taussig --
Senior Vice President & Chief
Operating Officer............. 19,800 275,114 -0- -0- -0- -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, 1995 was
$58.50 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 1995.
15
<PAGE> 20
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, 1990 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- INDUSTRIAL- S & P MIDCAP
(FISCAL YEAR COVERED) PORATION DIVERSIFIED 400 INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 119.7731 123.8202 150.10
1992 158.8962 144.0842 167.98
1993 176.4423 176.057 191.41
1994 183.5923 161.4771 184.55
1995 269.2308 211.46 241.66
</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., National Service Industries, Inc.,
Parker Hannifin Corp., PPG Industries Inc., Raychem Corp., Stanley Works,
Tenneco, Inc., Trinova Corporation and Tyco International Ltd.
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
16
<PAGE> 21
Plan (collectively the "Supplemental Plans"). All 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. Early retirement benefits commencing prior to
age 65 are reduced. The Supplemental 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, 1996. 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............................. 29,794 44,690 59,587 74,484 89,381 98,319
300,000............................. 45,793 68,690 91,586 114,483 137,380 151,118
400,000............................. 61,794 92,691 123,588 154,485 185,382 203,920
500,000............................. 77,794 116,690 155,587 194,484 233,381 256,719
600,000............................. 93,793 140,690 187,586 234,483 281,380 309,518
700,000............................. 109,794 164,691 219,588 274,485 329,382 362,320
800,000............................. 125,794 188,690 251,587 314,484 377,381 415,119
900,000............................. 141,793 212,690 283,586 354,483 425,380 467,918
1,000,000............................. 157,794 236,691 315,588 394,485 473,382 520,720
</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. Hathaway: $674,140; Mr. Campanaro: $351,055;
Mr. Coppock: $317,772; and Mr. Etzweiler: 391,440. The estimated years of
service for each Named Executive are as follows: Mr. Hathaway: 29.5 years;
Mr. Campanaro: 15.5 years; Mr. Coppock: 14.5 years; and Mr. Etzweiler:
29.5 years.
Mr. Taussig retired on September 30, 1995. He received a lump sum
distribution from the Harsco Employees Pension Plan of $105,373.61 on
October 1, 1995. After deducting the lump sum distribution from his
available pension benefits, Mr. Taussig is still entitled to receive
17
<PAGE> 22
$121.88 monthly for life from the Plan with 120 guaranteed payments
beginning November 1, 2004 when he reaches the age of 65.
In addition to the Harsco Employee Pension Plan, Mr. Taussig has benefits
under the Supplemental Pension Plan. These benefits entitle him to
$1,606.56 monthly for life with 120 guaranteed payments beginning November
1, 2004 when he reaches the age of 65.
The Company does not provide retiree medical benefits to its executive
officers.
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, 1996, the Company would have been required to pay
Messrs. Hathaway, Campanaro, Coppock and Etzweiler the following termination
payments based on compensation information available at December 31, 1995:
$1,865,233, $886,739, $894,401 and $1,131,830, respectively.
18
<PAGE> 23
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.
B. W. Taussig resigned from his position of Senior Vice
President -- Operations effective September 30, 1995. The Company entered into a
Consulting Agreement with Mr. Taussig dated August 22, 1995. This agreement
provides that the Company pay a monthly consulting fee of $18,333.33 to Mr.
Taussig for 36 months beginning October 1, 1995 and ending September 30, 1998.
In addition to this monthly fee for consulting services, the agreement provides
that the Company pay Mr. Taussig $800 per day of substantial service provided.
This Consulting Agreement superseded the Special Supplemental Retirement Benefit
Agreement and Severance Arrangement effective January 1, 1994, which would have
credited Mr. Taussig with service from October 27, 1979 for the purpose of
calculating retirement benefits and also provided for a cash severance payout in
the event his employment was terminated under certain circumstances.
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 $20,000 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, 1995, 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
$47.625 per share, exercisable in whole or in part commencing one year after the
date of grant and expiring on April 30, 2005.
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.
19
<PAGE> 24
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 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
1995.
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 division 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 eight times in 1995. 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 annual audit and any
accounting or disclosure questions, if any, encountered in the course of the
annual audit and reviews the adequacy of internal controls. The Audit Committee
met three times in 1995.
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors has designated Coopers & Lybrand L.L.P., as
independent accountants of the Company's accounts for the fiscal year ending
December 31, 1996, 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 L.L.P. 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 L.L.P. will attend the
Annual Meeting, with the opportunity to make a statement and answer questions of
stockholders.
20
<PAGE> 25
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, 1996, 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 1997.
The Audit Committee of the Company's Board of Directors, at its meeting
held on August 22, 1995, reviewed and approved the fee estimate for the annual
audit of the Company's fiscal 1995 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 unanimously recommends that the stockholders vote
FOR this proposal.
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 facsimile 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 $8,000 plus reasonable out-of-pocket
expenses.
STOCKHOLDER PROPOSALS FOR PRESENTATION AT
1997 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 26,
1996, 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,
Chief Administrative Officer,
General Counsel and Secretary
March 25, 1996
21
<PAGE> 26
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
HARSCO CORPORATION
The undersigned hereby appoints R.F. Nation, N.H. Prater and
A.J. Sordoni, III 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 discretion, all the shares
of stock of Harsco Corporation standing in the name of the undersigned with all
powers wich the undersigned would possess if present at the Annual Meeting of
Stockholders of the Company to be held April 30, 1996 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 30, 1996, 10:00 A.M.
The Radisson Penn Harris
Hotel and Convention Center
Routes 11 and 15 at Erford Road
Camp Hill, Pennsylvania
<PAGE> 27
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: A.J. Sordoni, III and R.C. Wilburn
(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 L.L.P. 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: , 1996
--------------------------------------------------------------------
- ------------------------------------------------------------------------------
(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 30, 1996
10:00 A.M.
THE RADISSON PENN HARRIS
HOTEL AND CONVENTION CENTER
ROUTES 11 AND 15 AT ERFORD ROAD
CAMP HILL, PENNSYLVANIA
