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SCHEDULE 14A
(RULE 14a)
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
THE LTV CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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NOTICE AND PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
LTV LOGO THE LTV CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, APRIL 23, 1999
The LTV Corporation
200 Public Square
Cleveland, Ohio 44114-2308
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The Annual Meeting of Stockholders of The LTV Corporation will be held on
Friday, April 23, 1999 at nine o'clock a.m., Delaware Time, in the Gold Ballroom
of the Hotel DuPont at Eleventh and Market Streets, Wilmington, Delaware 19801
for the following purposes:
1. To elect three directors;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for 1999; and
3. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Enclosed herewith is a Proxy Statement setting forth certain additional
information.
Only stockholders of record at the close of business on February 25, 1999
will be entitled to notice of and to vote at the meeting. The meeting is
scheduled to adjourn at ten o'clock a.m.
Stockholders who do not expect to be present at the meeting are requested
to sign and date the enclosed proxy and return it promptly in the self-addressed
envelope enclosed for that purpose. No postage is required if mailed in the
United States. Any person giving a proxy has the power to revoke it at any time
before it is exercised, and stockholders who are present at the meeting may
withdraw their proxies and vote in person. Revocation may be effected in the
manner provided on page 1 of the Proxy Statement. Stockholders are also
requested to indicate by checking the appropriate box on the proxy if they
intend to attend the meeting in person.
By Order of the Board of
Directors
Glenn J. Moran
Senior Vice President,
General Counsel and Secretary
March 5, 1999
<PAGE> 3
LTV LOGO
THE LTV CORPORATION
March 5, 1999
PROXY STATEMENT
The LTV Corporation
200 Public Square
Cleveland, Ohio 44114-2308
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This Proxy Statement is furnished to stockholders of The LTV Corporation
(the "Company") in connection with the solicitation, by order of the Board of
Directors, of proxies for use at the Annual Meeting of Stockholders of the
Company to be held on Friday, April 23, 1999 (the "1999 Annual Meeting") at the
time and place and for the purposes set forth in the accompanying notice of the
meeting.
The accompanying proxy is solicited on behalf of the Board of Directors of
the Company and is revocable at any time before it is exercised. A proxy may be
revoked by written notice of revocation or by a later proxy, in either case
delivered to ChaseMellon Shareholder Services. Attendance at the 1999 Annual
Meeting will not automatically revoke a proxy, but a stockholder in attendance
may request a ballot and vote in person, thereby revoking a prior granted proxy.
The Company has adopted a confidential voting policy which provides that
votes of all stockholders of the Company shall be held in confidence from the
Company and its officers, directors and employees except (i) as may be required
by law or to assert or defend claims for or against the Company, (ii) in the
case of a contested proxy solicitation, or (iii) in the case of stockholder
communications written on the returned proxy material. As part of the policy,
the Company employs the transfer agent for the Company's Common Stock (or
another third party) as an independent tabulator to receive and tabulate the
proxies and as independent inspectors of election.
All outstanding shares of the Company's common stock, par value $0.50
("Common Stock") and Series B Convertible Preferred Stock ("Series B Preferred
Stock"), represented by properly executed and unrevoked proxies received in the
accompanying form in time for the 1999 Annual Meeting will be voted. A
stockholder may, with respect to the election of directors, (i) vote for the
election of all nominees named herein as directors, (ii) withhold authority to
vote for all such director nominees or (iii) vote for the election of all such
director nominees other than any nominee with respect to whom the stockholder
withholds authority to vote by so indicating in the appropriate space on the
proxy. Withholding authority to vote for a director nominee will not prevent
such director nominee from being elected. A stockholder may, with respect to the
ratification of auditors, (i) vote "FOR" ratification, (ii) vote "AGAINST"
ratification or (iii) "ABSTAIN" from voting on ratification. A vote to abstain
from voting on ratification has the legal effect of a vote against ratification.
Shares will be voted as instructed in the accompanying proxy on each matter
submitted to stockholders. If no instructions are given, the shares will be
voted for the election of all nominees named herein as directors and for
ratification of the selection of independent auditors.
A proxy submitted by a stockholder may indicate that all or a portion of
the shares represented by such proxy are not being voted by such stockholder
with respect to a particular matter. This may occur, for example, when a broker
is not permitted to vote stock held in street name on certain matters in the
absence of instructions from the beneficial owner of the stock. The shares
subject to any such proxy which are not being voted with respect to a particular
matter (the "non-voted shares") will be treated as shares not present and
entitled to vote on such matter, although such shares may be considered present
and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum. Shares voted to abstain as to a particular
matter will not be considered non-voted shares. Ratification of the Company's
auditors requires the
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affirmative vote of a majority and the election of directors requires a
plurality of the votes attributable to all shares present in person or by proxy
at the meeting and entitled to vote on such matter. Accordingly, non-voted
shares with respect to such matters will not affect the ratification of the
Company's auditors or the outcome of the election of directors.
The Company will bear the cost of the solicitation. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodian nominees and fiduciaries to supply proxy material to the beneficial
owners of Common Stock of whom they have knowledge, and will reimburse them for
their expenses in so doing; and certain directors, officers and other employees
of the Company, not specially employed for the purpose, may solicit proxies,
without additional remuneration therefor, by personal interview, mail, telephone
or telegraph. The Company has retained Morrow & Co. to aid in the solicitation
of proxies for a fee of $8,000, plus out-of-pocket expenses.
Only holders of the Company's Common Stock and Series B Preferred Stock of
record at the close of business on February 25, 1999 will be entitled to vote at
the meeting. Each issued and outstanding share of Common Stock is entitled to
one vote upon each matter to be voted on at the 1999 Annual Meeting. Each issued
and outstanding share of Series B Preferred Stock will be entitled to 5.85138
votes upon each matter to be voted upon at such meeting. All such stock will
vote as a single class upon each matter proposed by the Company for
consideration. As of February 25, 1999, there were issued and outstanding
99,794,426 shares of Common Stock and 500,000 shares of Series B Preferred
Stock.
BUSINESS AGENDA
Information relating to the election of directors is set forth immediately
below. The proposal to ratify the selection of the Company's independent
auditors is set forth beginning at page 25.
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ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation as amended provides for
three classes of directors of as nearly equal size as possible and further
provides that the total number of directors shall be determined by resolution
adopted by the affirmative vote of a majority of the entire Board of Directors,
except that the total number of directors shall be not less than three nor more
than fifteen. The Restated Certificate further provides that the term of each
class of directors is three years. The term of each class expires in rotation.
In the case of any director who is an officer or employee of the Company, such
director's term will expire at the end of the second month following such
director's retirement or resignation from his position as an officer or
employee. No person is eligible to be elected a director if such person is 70
years old or older at the time of election.
Mr. Hoag, who had been the Chairman of the Board of Directors and Chief
Executive Officer of the Company prior to the election of Mr. Peter Kelly to
such positions, and whose term would have expired at the 2000 Annual Meeting,
has elected to retire as an officer and a director of the Company effective
January 31, 1999. Mr. Ball, age 72, whose term as a director expires at the 1999
Annual Meeting, has reached retirement age and is not standing for re-election,
and Mr. Stern, whose term as a director would have expired at the 2000 Annual
Meeting, resigned as a director because of conflicting work commitments in
October 1998.
The departures of Mr. Hoag and Dr. Stern created an imbalance in the Third
Class of the Board. To address such imbalance, Mr. Kelly, who had been a
Director of the Second Class, was appointed a Director of the Third Class to
fill the vacancy created by the departure of Dr. Stern. In connection with the
departures of Messrs. Hoag and Ball, the Board of Directors determined not to
fill such vacancies and has reduced the size of the Board to ten, effective as
of the date of the 1999 Annual Meeting.
Pursuant to the terms of the Company's current collective bargaining
agreements which expire in August 1999, the United Steelworkers of America
("USWA") has the right to select a nominee for one seat on the Board of
Directors, and the Company is obligated, if the nominee is reasonably
satisfactory to the Company, to use its best efforts to secure the election of
such nominee. In the event such right is exercised in the future, the total
number of directors will be increased by one.
Further, pursuant to an agreement with Sumitomo Metal Industries, Ltd.
("Sumitomo"), Sumitomo has the right to designate or approve the nomination of
one person (who, if such person is not a current or former employee of Sumitomo
or any of its subsidiaries, must be reasonably acceptable to the Company) for
election as a director of the Company so long as Sumitomo holds 5 percent or
more of the then outstanding shares of Common Stock (assuming conversion of its
convertible securities) and at least one share of Series B Preferred Stock. See
"Security Ownership of Directors, Management and Principal Stockholders."
Sumitomo's director selection right has not been exercised. In the event such
right is exercised in the future, the total number of directors will be
increased by one. In the event that the Company's Board of Directors is expanded
to exceed fifteen directors, Sumitomo will have the right to designate or
approve the nomination of two persons for election as directors to the Board of
Directors.
In addition, under the Certificate of Designations of the Series B
Preferred Stock, if the Company does not pay dividends for six or more
consecutive quarters on its Series B Preferred Stock, the Company's Board of
Directors will be increased by two members and holders of the Series B Preferred
Stock will be entitled, voting separately as a single class, to elect two
directors of the Company.
At the present time it is intended that shares represented by the enclosed
proxy will be voted for the re-election of Mr. John E. Jacob, Mr. Edward C.
Joullian III and Mr. Samuel K. Skinner as Directors of the Second Class for a
three-year term expiring at the 2002 annual election, unless contrary
instructions are received.
All of the nominees named are currently members of the Board of Directors.
All incumbent directors attended during the last fiscal year more than 75
percent of the total number of meetings of
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the Board and committees on which they served (held during the periods that they
served) except Mr. Jacob who attended 74% of such meetings. In the event that
any nominee should become unavailable for reasons not now known, it is intended
that such shares will be voted for such substitute nominee as may be selected by
the Board of Directors. Alternatively, the Board may elect not to fill the
vacancy and to reduce the number of directors.
The affirmative vote of a plurality of the votes attributable to all shares
entitled to vote, voting together as a single class, is required to elect the
nominees as Directors.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR DIRECTORS.
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INFORMATION ABOUT DIRECTORS AND NOMINEES FOR DIRECTORS
The names of the directors whose terms of office will continue after the 1999
Annual Meeting and the nominees, their principal occupations during at least the
past five years, other directorships held, and certain other information are set
forth below. Edgar Ball whose term expires at the 1999 Annual Meeting has, as
indicated above, reached retirement age and is not standing for re-election.
Ages shown are as of March 1, 1999.
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Directors of the Second Class Nominated for Election at the 1999 Meeting for
Terms Expiring in 2002
<TABLE>
<S> <C>
[John E. Jacob photo] John E. Jacob, age 64, became a director of the Company in
June 1993. Mr. Jacob has been Executive Vice President and
Chief Communications Officer for Anheuser-Busch Companies,
Inc. since June 1994. Prior thereto, he had been President
and Chief Executive Officer of the National Urban League
Inc. since January 1982. He also is a director of Coca-Cola
Enterprises, Inc. and Anheuser-Busch Companies, Inc. Member
of the Company's Board Affairs and Compensation and
Organization Committees.
[Edward C. Joullian Edward C. Joullian III, age 69, became a director of the
III photo] Company in October 1976. For more than the past five years,
he has been Chairman of the Board and, until August 1998,
Chief Executive Officer of Mustang Fuel Corporation (energy
development and services). He also is a director of American
Fidelity Companies (insurance) and its subsidiaries and
Fleming Companies, Inc. (food distribution). He also is a
trustee of The Colonial Williamsburg Foundation,
Williamsburg, Virginia. Member of the Company's Capital and
Technology and Compensation and Organization Committees.
[Samuel K. Skinner Samuel K. Skinner, age 60, became a director of the Company
photo] in June 1993. Since September 1998, Mr. Skinner has been a
partner and Co-Chairman of the law firm of Hopkins & Sutter.
Until his retirement, he was President and a director of
Commonwealth Edison Company from February 1993 to March
1998. Prior thereto, he served as Chief of Staff to the
President of the United States. Prior to his White House
service, Mr. Skinner served as U.S. Secretary of
Transportation for nearly three years. Prior to February
1989, he practiced law as a Senior Partner in the Chicago
law firm of Sidley & Austin, where he served on the firm's
executive committee. He is also a director of ANTEC
Corporation (supplier to communications industry), Union
Pacific Resources Group Inc. (oil and gas exploration and
production), Stimsonsite Corporation (manufacturing), EVEREN
Capital Corporation (investment banking) and Midwest Express
Holdings, Inc. (airline). Member of the Company's Board
Affairs and Pension and Investment Committees.
</TABLE>
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Directors of the Third Class -- Terms Expire in 2000
<TABLE>
<S> <C>
[J. Peter Kelly photo] Peter Kelly, age 57, became Chairman of the Board on
February 1, 1999 and Chief Executive Officer of the Company
in September 1998. Additionally, since July 1997 he has been
a director and the President and Chief Operating Officer of
the Company. Prior thereto, he was a Group Vice President of
the Company from February 1991 to July 1997. He also has
been the President, Chief Operating Officer and a director
of LTV Steel Company, Inc. since January 1993. Mr. Kelly
also serves as a director of National City Bank.
[Stephen B. Timbers Stephen B. Timbers, age 54, became a director of the Company
photo] in June 1993. In February 1998, he became the President of
Northern Trust Global Investments. From 1995 through 1997,
he was President, Chief Executive Officer and Chief
Investment Officer of Zurich Kemper Investments, Inc. From
1992 to 1996 he was President, Chief Operating Officer, and
a director of Kemper Corporation. Chairman of the Company's
Compensation and Organization Committee and member of the
Company's Executive and Audit Committees.
[Farah M. Walters Farah M. Walters, age 54, became a director of the Company
photo] in June 1993. She is President and Chief Executive Officer
of University Hospitals Health System Inc. and University
Hospitals of Cleveland. Prior thereto, beginning in March
1991 until January 1992, she served as Senior Executive Vice
President of University Hospitals Health System and
Executive Director of University Hospitals of Cleveland. She
also is a director of Kerr-McGee Corporation (oil and gas)
and The Geon Company (polyvinyl chloride compounds and
resins). Chairwoman of the Company's Audit Committee and
member of the Executive and Pension and Investment
Committees.
</TABLE>
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Directors of the First Class -- Terms Expire in 2001
<TABLE>
<S> <C>
[Dr. Colin C. Blaydon Dr. Colin C. Blaydon, age 58, became a director of the
photo] Company in September 1988. Dr. Blaydon is Dean Emeritus and
Buchanan Professor of Management of the Amos Tuck School of
Business Administration and a director of the John H. Foster
Center for Private Equity at Dartmouth College. Dr. Blaydon
is also a Senior Advisor of Putnam, Hayes & Bartlett, Inc.,
a professional consulting firm, and Chairman of the Board of
ITP Systems (systems integration). He is also a director of
Mercantile Trust Company NA, a Trustee of The Center for
Excellence in Government and a Trustee of the Lowell
Whiteman School. Chairman of the Company's Pension and
Investment Committee and Member of the Company's Executive,
Audit and Board Affairs Committees.
</TABLE>
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<TABLE>
<S> <C>
[William C. Bricker William H. Bricker, age 67, became a director of the Company
photo] in March 1982. He was from July 1976 to May 1987 the Chief
Executive Officer and from November 1979 to May 1987 the
Chairman of the Board of Diamond Shamrock Corporation, now
known as Maxus Energy Corporation (coal, chemicals and oil
and gas). He is Chairman of the Board and Chief Executive
Officer of BTC Partners, Inc. and D.S. Energy Services, Inc.
(business consultants and international oil and gas), Trust
Manager of American Industrial Properties REIT and President
of Bear Creek Angus Ranch, Inc. Member of the Company's
Capital and Technology and Compensation and Organization
Committees.
[M. Thomas Moore M. Thomas Moore, age 64, became a director of the Company in
photo] June 1993. Mr. Moore was Chairman of the Board of
Cleveland-Cliffs Inc (iron ore) from May 1988 to November
1997 and its Chief Executive Officer from January 1987 to
November 1997. He also is a director of KeyCorp (banking)
and The Lubrizol Corporation (chemical manufacturing).
Chairman of the Company's Board Affairs Committee and member
of the Company's Executive and Capital and Technology
Committees.
[Vincent A. Sarni Vincent A. Sarni, age 70, became a director of the Company
photo] in June 1993. Mr. Sarni was Chairman of the Board and Chief
Executive Officer of PPG Industries, Inc. from November 1984
until September 1993. He is also a director of PPG
Industries, Inc. and Hershey Foods Corporation. Chairman of
the Company's Capital and Technology Committee and member of
the Company's Executive and Compensation and Organization
Committees.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has standing Audit, Board Affairs, Capital and Technology,
Compensation and Organization, Pension and Investment and Executive Committees
of the Board of Directors. The members of these Committees have been identified
above. The Board of Directors routinely meets in the evening and again the
following morning. In 1998, the Board of Directors had eight evening meetings
and eight morning meetings.
The Audit Committee recommends the selection of independent auditors to the
Board of Directors; reviews the plan of the audits to be performed by the
independent auditors and internal audit department, together with their audit
reports and any recommendations made by them; reviews the results of the audit
for the prior fiscal year with the independent auditors; reviews annual
financial statements before they are published; reviews the independence of the
independent auditors and the internal audit function; and reviews the Company's
significant accounting policies, internal controls and financial reporting
practices. The Committee also reviews the Company's policies in respect to
business conduct, environmental operations, safety and health. The Audit
Committee met three times in 1998.
The Board Affairs Committee reviews and recommends to the Board of
Directors nominees for election to the Board. The Committee also reviews and
recommends to the Board all matters relating to its composition, terms, ethics,
procedures, compensation and benefits, committee structures and assignments, and
corporate governance and committee guidelines. The Committee also monitors the
effectiveness of the Board and reviews the annual proxy statement before
publication. The Board Affairs Committee met four times in 1998.
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The Capital and Technology Committee reviews and recommends to the Board of
Directors the annual capital expenditure budget, designated capital
expenditures, and reviews and recommends to the Board new business ventures. The
Committee also reviews new and emerging technologies relating to the steel
industry. The Capital and Technology Committee met four times in 1998.
The Compensation and Organization Committee determines the annual salary,
bonus and other benefits of the officers of the Company and certain subsidiary
officers, and establishes and reviews, as appropriate, executive compensation
policies and performance standards under compensation programs for such
officers. The Committee also reviews and recommends new or revised employee
benefit plans to the Board of Directors, grants stock related incentives and
administers the Company's employee benefit plans. The Committee also reviews and
recommends to the Board candidates for election as corporate officers, reviews
and monitors management development and succession including the evaluation of
the Chief Executive Officer, reviews and approves the service of certain
officers with respect to other entities, and reviews the annual proxy statement
before publication. The Compensation and Organization Committee met seven times
in 1998.
The Pension and Investment Committee sets funding and investment policies
for the pension plans and employee welfare benefit plans of the Company and its
subsidiaries, monitors compliance by the Company with the terms of the Company's
settlement agreement with the Pension Benefit Guaranty Corporation, and
appoints, monitors and terminates investment managers. The Pension and
Investment Committee met two times in 1998.
The Executive Committee is empowered to exercise all of the authority of
the Board of Directors, except that it does not have the power to rescind any
action previously taken by the Board or to take certain actions enumerated in
the Company's By-Laws (such as amend the Certificate of Incorporation or adopt
an agreement of merger or consolidation). The Executive Committee meets as
necessary and did not meet in 1998.
DIRECTOR COMPENSATION
Mr. Kelly receives no compensation for his service as a director. Directors
who are not employees of the Company receive fees in accordance with the
following schedule.
<TABLE>
<S> <C> <C>
Annual retainer For Board service.......................... $40,000 (half in Common Stock)
For service as chairman of a committee................ $ 2,500
Attendance fees
Board meetings (per meeting).......................... $ 1,000
Committee meetings (per meeting)...................... $ 1,000
</TABLE>
The Company believes that the overall level of its compensation for
non-employee directors is competitive with the average level of director
compensation at other integrated flat rolled steel companies and selected
industrial companies similar in size to the Company which were reviewed by the
Board Affairs Committee.
The primary objective of the Company in paying 50% of the annual retainer
for Board service in the form of Common Stock is to further align the financial
interests of its directors with those of the Company's stockholders. The Company
also has a non-employee directors' stock option plan whereunder non-employee
directors who own at least 1,000 shares of the Company's Common Stock receive an
annual grant of options to purchase 1,000 shares of Common Stock.
Further, the Company has a non-employee directors' equity compensation plan
whereunder non-employee directors may elect to take the remainder of their
annual retainer and other fees in the form of Common Stock of the Company. The
Company also has a non-employee directors' deferred compensation plan which
permits non-employee directors to defer receipt of their fees and provides eight
notional investment options for such fees, including a notional investment in
the Company's Common Stock payable in cash.
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SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the ownership
as of December 31, 1998 of each class of the Company's equity securities by (i)
each of the directors, (ii) the executives named in the summary compensation
table below and (iii) all current directors and officers of the Company as a
group. The table also sets forth separately such individual's interest in
notional Common Stock derivative securities whose unit value is derived from the
market value of a share of the Company's Common Stock. The value of such
securities is paid out in cash. All securities shown have been acquired since
June 1, 1993. No persons are known by management to be beneficial owners of more
than 5% of any class of the Company's equity securities, except as noted below.
All such holders have sole voting and investment powers unless otherwise
indicated.
<TABLE>
<CAPTION>
INTEREST IN
NUMBER BENEFICIALLY OWNED % OF CLASS NOTIONAL
------------------------- ------------ COMMON STOCK
SHARES OF SHARES OF DERIVATIVE
NAME COMMON STOCK COMMON STOCK SECURITIES (E)
---- ------------------------- ------------ --------------
<S> <C> <C> <C>
DIRECTORS
David H. Hoag....................... 646,573(c)(d)(f) (a) 1,596
Peter Kelly......................... 203,626(c)(d)(f) (a) 1,562
Edgar L. Ball....................... 5,651(c)(d) (a) 0
Dr. Colin C. Blaydon................ 9,651(c)(d) (a) 0
William H. Bricker.................. 6,114(d) (a) 0
John E. Jacob....................... 9,679(c)(d) (a) 1,208
Edward C. Joullian III.............. 17,878(b)(d) (a) 0
M. Thomas Moore..................... 12,898(c)(d) (a) 0
Vincent A. Sarni.................... 9,651(c)(d) (a) 0
Samuel K. Skinner................... 9,788(c)(d) (a) 0
Stephen B. Timbers.................. 17,514(d) (a) 0
Farah M. Walters.................... 9,651(c)(d) (a) 0
FOUR OTHER OFFICERS NAMED IN
SUMMARY COMPENSATION TABLE
James F. Haeck...................... 63,027(c)(d)(f) (a) 1,519
Richard J. Hipple................... 42,445(c)(d)(f) (a) 1,002
Arthur W. Huge...................... 91,395(c)(d) (a) 1,150
Glenn J. Moran...................... 58,529(c)(d) (a) 1,285
All current directors and executive
officers (19 including above)..... 1,318,500(c)(d) 1.3 11,540
</TABLE>
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(a) Less than 1% of class.
(b) Mr. Joullian has a beneficial interest in 3,000 shares of Common Stock owned
by Joullian & Co., a limited partnership.
(c) Includes restricted shares of Company Common Stock in the following amounts
which are subject to conditions of forfeiture and restrictions on sale,
transfer or other disposition: Mr. Hoag -- 1,500 shares; Mr. Kelly -- 38,391
shares; Mr. Hipple -- 1,205 shares; Mr. Huge -- 900 shares; Mr. Moran -- 326
shares and All Current Directors and Executive Officers as a Group -- 49,248
shares. Additionally, the amounts shown for Messrs. Ball, Blaydon, Jacob,
Moore, Sarni, and Mrs. Walters include 3,651 notional shares payable in
Common Stock. Additional amounts of such notional stock included for other
individuals named in the table are as follows: Mr. Hoag -- 80,670 shares;
Mr. Kelly -- 23,482 shares; Mr. Skinner -- 2,230 shares; Mr. Haeck -- 10,873
shares; Mr. Hipple -- 2,231 shares, Mr. Huge -- 8,049 shares and Mr. Moran
-- 8,479 shares. Such notional shares have no voting rights.
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(d) Includes shares of Common Stock in the following amounts which are not now
owned but which could be acquired by exercise of stock options: Each
non-employee Director (except Messrs. Ball and Bricker) -- 5,000 shares;
Messrs. Ball and Bricker -- 2,000 shares; Mr. Hoag -- 538,800 shares; Mr.
Kelly -- 133,000 shares; Mr. Haeck -- 49,652 shares; Mr. Hipple -- 32,456
shares; Mr. Huge -- 73,584 shares and Mr. Moran -- 45,998 shares and All
Current Directors and Executive Officers as a Group -- 978,693 shares.
(e) These derivative securities are notional (or phantom) investments in Common
Stock that are denominated and payable in cash. Accordingly, these
derivative securities have no voting rights.
(f) In addition to the shares shown above, certain named executive officers have
purchased shares of Common Stock during 1999 in the following amounts using
a portion of their payments made in February 1999 under the Company's Annual
Incentive Program and/or amounts held in their accounts in the LTV
retirement plans: Mr. Kelly -- 73,565 shares; Mr. Haeck -- 7,273 shares and
Mr. Hipple -- 8,753 shares. All shares using funds from the Annual Incentive
Program were matched on a one-for-four share basis pursuant to the terms of
the Company's Management Stock Acquisition Program; shares acquired using
funds in the retirement plans were not matched.
Sumitomo and its affiliates own 100% of the Company's Series B Preferred
Stock (500,000 shares) and 3,328,220 shares of the Company's Common Stock.
Sumitomo and its affiliates, through conversion of its Series B Preferred Stock,
together with its existing shares of the Company's Common Stock, could acquire
up to 6,253,908 shares or more than 6% of the Company's Common Stock. The
address of Sumitomo's U.S. affiliate is c/o Sumitomo Metal USA Corporation, 8750
West Bryn Mawr Avenue, Suite 1000, Chicago, Illinois 60631.
In January 1999, the Company was notified that affiliates of Oaktree
Capital Management owned beneficially 5,943,700 shares of Common Stock of the
Company. As to such shares, the OCM Principal Opportunities Fund, L.P., the OCM
Opportunities Fund II, L.P. and other separate accounts had the sole power to
vote or direct the vote and the power to dispose or direct the deposition of
4,849,600 shares, 1,072,220 shares and 21,880 shares, respectively. The address
of Oaktree Capital Management is 550 South Hope Street, 22nd Floor, Los Angeles,
California 90071.
10
<PAGE> 13
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table sets forth the cash compensation
and other components of the compensation for 1998 of David H. Hoag, the Chief
Executive Officer of the Company until September 1, 1998, Peter Kelly, the Chief
Executive Officer for the period thereafter and the other four most highly
compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION LONG-TERM COMPENSATION
------------------ -----------------------------------
AWARDS PAYOUTS
------------------------ -------
NUMBER OF
RESTRICTED SECURITIES ALL OTHER
STOCK UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL SALARY BONUS AWARD(S) OPTIONS PAYOUTS SATION(2)
POSITION IN 1998 YEAR ($) ($) ($)(1) GRANTED ($) $
------------------ ---- ------- ------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
David H. Hoag 1998 690,000 164,000 50,470 107,400 0 255,247
Chairman and Chief 1997 645,000 280,000 21,984 107,400 0 243,724
Executive Officer 1996 600,000 316,000 0 61,000 0 224,461
(until 9/1/98)
Peter Kelly 1998 503,333 140,000 221,299 196,500 0 203,114
President and Chief 1997 430,000 212,000 14,541 46,500 0 181,075
Operating Officer 1996 390,417 216,000 0 19,500 0 151,293
(Chief Executive Officer
beginning 9/1/98)
James F. Haeck 1998 275,963 95,000 9,245 22,200 0 94,355
Executive Vice President 1997 234,850 129,000 3,324 15,500 0 83,343
1996 227,333 121,000 0 7,750 0 71,304
Richard J. Hipple 1998 247,112 82,000 11,824 22,200 0 52,259
Executive Vice President 1997 200,533 105,000 3,563 15,500 0 37,646
1996 174,200 101,000 0 7,750 0 33,851
Arthur W. Huge 1998 367,283 134,000 11,946 28,700 0 117,917
Executive Vice President 1997 316,700 162,000 5,050 28,700 0 110,402
& Chief Financial Officer 1996 296,000 184,000 0 9,170 0 99,434
Glenn J. Moran 1998 247,650 94,000 10,178 15,500 0 77,991
Senior Vice President, 1997 234,333 115,000 4,780 15,500 0 64,668
General Counsel 1996 225,333 113,000 0 7,750 0 65,657
and Secretary
</TABLE>
- ---------------
(1) The number of shares and year-end value of restricted Common Stock awards
held as of December 31, 1998 were as follows: Mr. Hoag -- 74,228 shares and
$426,811; Mr. Kelly -- 46,725 shares and $268,669; Mr. Haeck -- 6,810 shares
and $39,158; Mr. Hipple -- 3,670 shares and $21,103; Mr. Huge -- 7,082
shares and $40,722; and Mr. Moran -- 5,925 shares and $34,069. Included in
these amounts are deferred restricted stock awards accrued in the form of
notional stock and payable in shares of Common Stock which are subject to a
10% forfeiture provision for early withdrawal. Dividends are payable on
restricted stock awards to the same extent as all other shares of Common
Stock. All restricted stock awards granted under the Company's Amended and
Restated Management Incentive Program, except for awards of matching
restricted shares under the Company's Management Stock Acquisition Program,
vest on the fifth anniversary of the date of grant. Restricted stock awards
granted under the Company's Management Stock Acquisition Program vest on the
third anniversary of the date of grant. Of the 30,000 shares of restricted
stock granted to Mr. Kelly, 10,000 shares vest on the third anniversary of
the date of grant. The remaining shares of restricted stock vest on or after
the first anniversary of the date of grant only if the price of the
Company's Common Stock reaches $10 a share as to 10,000 shares of restricted
stock and $15 a share as to the remaining 10,000 shares of restricted stock.
(2) Consists of supplemental salary under the Design Your Benefits Program,
accruals under defined contribution pension plans, matching employer
contributions of cash to the Capital Accumulation Plan and service
recognition payments in the following respective amounts for 1998: Mr.
Hoag -- $40,140, $196,282, $5,625 and $13,200; Mr. Kelly -- $28,145,
$160,344, $5,625 and $9,000; Mr. Haeck -- $13,636, $70,243, $5,625 and
$4,851; Mr. Hipple -- $9,960, $36,739, $5,560 and $0; Mr. Huge -- $17,084,
$95,208, $5,625 and $0; Mr. Moran -- $13,203, $59,216, $5,572 and $0.
11
<PAGE> 14
The following table sets forth certain information concerning options to
purchase Company Common Stock granted in 1998 to the individuals named in the
Summary Compensation Table.
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED
ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM(3)
--------------------------------------------------- -----------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OR
OPTIONS IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED YEAR(1) ($/SHARE)(2) DATE 0%($) 5%($) 10%($)
---- ---------- ---------- ------------ ---------- ----- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
David H. Hoag 107,400 10% 11.9375 02/26/08 0 806,306 2,043,339
Peter Kelly 46,500 4% 11.9375 02/26/08 0 349,099 884,686
150,000 14% 6.0625 09/24/08 0 571,875 1,449,375
James F. Haeck 22,200 2% 11.9375 02/26/08 0 166,667 422,366
Richard J. Hipple 22,200 2% 11.9375 02/26/08 0 166,667 422,366
Arthur W. Huge 28,700 3% 11.9375 02/26/08 0 215,465 546,032
Glenn J. Moran 15,500 1% 11.9375 02/26/08 0 116,366 294,895
All Common Stock
Holders(4) 99,785,382 -- 11.9375 -- 0 749,138,755 1,898,466,785
99,785,382 -- 6.0625 -- 0 380,431,769 914,176,254
</TABLE>
- ---------------
(1) A total of 1,060,800 options were granted to employees in 1998. With respect
to those options (except for the 150,000 option share grant to Mr. Kelly),
one-third of the options becomes exercisable on February 26, 1999, one-third
on February 26, 2000 and one-third on February 26, 2001. With regard to Mr.
Kelly's 150,000 option share grant, 50,000 options become exercisable on
September 24, 1999. The remaining 100,000 options become exercisable on or
after September 24, 1999 only if the price for a share of Common Stock has
reached $10 as to 50,000 options and $15 as to the remaining 50,000 options.
Each optionee must demonstrate the ownership of a specified number of
"qualifying shares" of Company Common Stock in order to participate in
future option awards. Each option is exercisable with a payment of cash,
stock or both for a period of 10 years and vests immediately in the event of
death, disability or retirement or in the event certain change of control
events occur. If shares are used to exercise an option, the Compensation and
Organization Committee of the Board of Directors may grant a replacement
option on the shares so used.
(2) The exercise prices of all options were based on the closing prices of a
share of Common Stock as reported on the New York Stock Exchange on the date
of grant ($11.9375 and $6.0625).
(3) The dollar amounts under these columns are the result of theoretical
calculations at 5% and 10% rates set by the Securities and Exchange
Commission, and therefore are not intended to forecast possible future
appreciation, if any, in the Company's stock price.
(4) The potential realizable value for all stockholders is based on 99,785,382
shares of Common Stock outstanding at December 31, 1998.
12
<PAGE> 15
The following table sets forth certain information concerning the exercise
in 1998 of options to purchase Company Common Stock by the individuals named in
the Summary Compensation Table and the unexercised options to purchase Company
Common Stock held by such individuals at December 31, 1998.
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS GRANTED AT YEAR END AT YEAR END($)(1)
EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David H. Hoag 0 0 339,466 199,334 0 0
Peter Kelly 0 0 117,500 234,000 0 0
James F. Haeck 0 0 42,252 35,118 0 0
Richard J. Hipple 0 0 25,056 35,118 0 0
Arthur W. Huge 0 0 64,018 50,892 0 0
Glenn J. Moran 0 0 40,832 28,418 0 0
</TABLE>
- ---------------
(1) The value is calculated based on the aggregate amount of the excess of $5.75
(the closing price of a share of the Company's Common Stock as reported on
the New York Stock Exchange Composite Transactions report for December 31,
1998) over the relevant exercise price.
LONG-TERM INCENTIVE PLAN -- AWARDS MADE IN 1998
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS OF PERFORMANCE SHARES
NUMBER OF PERIOD ----------------------------------------------
PERFORMANCE UNTIL MATURATION NO AWARD THRESHOLD TARGET MAXIMUM
NAME SHARES OR PAYOUT (#) (#) (#) (#)
---- ----------- ------------------- --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
David H. Hoag 28,000 1998-2002 0 9,333 28,000 84,000
Peter Kelly 12,100 1998-2002 0 4,033 12,100 36,300
James F. Haeck 5,800 1998-2002 0 1,933 5,800 17,400
Richard J. Hipple 5,800 1998-2002 0 1,933 5,800 17,400
Arthur W. Huge 7,500 1998-2002 0 2,500 7,500 22,500
Glenn J. Moran 4,000 1998-2002 0 1,333 4,000 12,000
</TABLE>
The number of performance shares earned will be determined on the basis of
the Company's total stockholder return (share price appreciation plus reinvested
dividends) over a four-year performance period as compared to the companies
composing the peer group as set forth in the Performance Graph (Armco/AK Steel,
Bethlehem Steel, National Steel, Weirton, Wheeling-Pittsburgh and USX-Steel
Group) plus Inland, Nucor and the Company. The Compensation and Organization
Committee (the "Committee") has established an award achievement schedule for
determining the actual shares earned, which will vary between threshold and
maximum levels based on performance. Payment of shares generally will be made in
shares of Common Stock as soon as practicable after the end of the performance
period.
During the performance period, participants will be credited with dividend
equivalents which will be used to grant additional performance shares that will
be subject to the same performance requirements and the same terms and
conditions.
No Award: If the Company's total stockholder return ranks sixth or worse
among the nine steel companies listed above, no performance shares will be
earned.
Threshold Award: The amounts shown in the table represent the number of
shares paid if the Company's total stockholder return ranks fifth among the nine
steel companies listed above and
13
<PAGE> 16
total stockholder return for the period is negative. (If the Company's total
stockholder return is negative for the period, any performance share award
otherwise earned is reduced by two-thirds in amount.)
Target Award: The target award will be earned if the Company's total
stockholder return ranks fifth among the nine steel companies listed above, and
total stockholder return for the period is positive.
Maximum Award: The maximum award will be earned if the Company finishes
with the highest total stockholder return among the steel companies listed
above, and total stockholder return for the period is positive.
The performance share award achievement schedule for 1998 awards requires
that companies which cease to exist as independent entities be ranked last among
the companies used in the comparison. Inland, which ceased to exist as an
independent entity in 1998, will therefore be ranked last among the nine
companies used in the comparison.
The Committee retains the authority to adjust the performance share awards
in appropriate circumstances.
RETIREMENT BENEFIT PLANS
Restated Executive Benefit Plan
In January 1996, the Company replaced the Executive Benefit Plan (the
"Benefit Plan"), a defined benefit plan, with the Restated Executive Benefit
Plan (the "Restated Plan"), a defined contribution plan. The Restated Plan is
designed to provide a fixed annual contribution (expressed as a percentage of
covered compensation) to a participant which, together with projected investment
returns, will be sufficient to provide an annual retirement benefit at age 65
equal to the difference between (i) 55% of projected final average three year
compensation (salary plus annual incentive award, if any) and (ii) the aggregate
benefit provided under all other retirement plans maintained by the Company.
Such benefit is prorated to the extent that years of service total less than 30.
Participants will invest such contributions in notional investment options.
Nineteen executives of the Company and its subsidiaries (including Messrs.
Kelly, Haeck, Hipple, Huge, and Moran) currently are included in the Restated
Plan. Mr. Hoag, who retired effective January 31, 1999, was not a participant in
the Restated Plan.
With regard to participants who were also in the predecessor Benefit Plan
(which includes Messrs. Kelly, Huge and Moran), annual contributions will be
increased, if necessary, at retirement to provide a retirement benefit
equivalent to the defined benefit to which these participants would have been
entitled had the provisions of the predecessor Benefit Plan remained in effect.
These participants (along with Mr. Hoag) would also be provided the survivor and
disability benefits included in the predecessor Benefit Plan.
Predecessor Plan
Under the predecessor Benefit Plan, the maximum retirement benefit was 50%
of final average compensation (as defined below) after 15 years of participation
or upon attaining normal retirement age, whichever should first occur, after
offsetting for amounts payable under all other existing retirement benefits. For
participants whose employment terminated prior to normal retirement age and
prior to 15 years of participation, benefits accrued at the rate of 3 1/3% of
final average compensation per year of participation (prorated for each calendar
month during which the participant participated for at least one day). Final
average compensation was a participant's average annual compensation (base
salary plus awards under the Annual Incentive Program) for the 36 consecutive
months which yielded the highest average compensation while a participant.
Retirement benefits were payable at the later of a participant's termination of
employment or normal retirement age or before normal retirement age with
approval of the Board of Directors of the
14
<PAGE> 17
Company. Normal retirement age under the Benefit Plan was age 62 for individuals
becoming participants as of or after January 1, 1985 and age 60 for those who
became participants prior to January 1, 1985.
The disability benefit provided in the predecessor Benefit Plan was equal
to 100% of final average compensation for one year and 50% thereafter and a
survivor benefit payable to a participant's spouse (until death) and,
subsequently, to the participant's children collectively (until the last child
reached age 21). The survivor's benefit for active and disabled participants was
25% of final average compensation. Similar survivors of retired participants
would have received in the aggregate a benefit of 50% of the relevant
participant's pension. Furthermore, survivors of former participants who died
while still employed by the Company would have received a benefit of 50% of the
pension accrued while an active participant.
Five executive officers of the Company and its subsidiaries (including
Messrs. Kelly, Huge and Moran) are participants in the predecessor Benefit Plan.
Mr. Hoag, who retired effective January 31, 1999, is also a participant of the
predecessor plan. The Company closed the Benefit Plan to new participants at
year end 1993. As of December 31, 1998, the annualized compensation of Messrs.
Hoag, Kelly, Huge and Moran covered by the Benefit Plan was approximately
$1,155,000, $990,000, $640,000 and $409,440, respectively. As of December 31,
1998, Messrs. Hoag, Kelly, Huge and Moran were credited with 15, 9, 6 and 6
years of participation, respectively. The following table shows the estimated
annual benefits payable upon retirement under the Benefit Plan for employees in
the classifications specified.
<TABLE>
<CAPTION>
AGE/YEARS ANNUAL COVERED COMPENSATION--THREE-YEAR AVERAGE
OF ------------------------------------------------------------------------
PARTICIPATION $300,000 $450,000 $600,000 $750,000 $1,000,000 $1,120,000
------------- -------- -------- -------- -------- ---------- ----------
ESTIMATED ANNUAL BENEFIT
<S> <C> <C> <C> <C> <C> <C>
Before Normal Retirement
Age
5 years $ 50,000 $ 75,000 $100,000 $125,000 $166,667 $186,667
10 years $100,000 $150,000 $200,000 $250,000 $333,333 $373,333
15 years $150,000 $225,000 $300,000 $375,000 $500,000 $560,000
At Normal Retirement Age
(60/62) $150,000 $225,000 $300,000 $375,000 $500,000 $560,000
</TABLE>
- ------------
Note: Benefits will be reduced by Social Security benefits and retirement and
disability benefits payable under other Company plans. For those
individuals who became participants after December 31, 1984, benefits are
also reduced to the extent benefits are payable by retirement plans of
former employers.
Other Prior Retirement Plans
Officers included in the Summary Compensation Table, except for Mr. Huge,
were also covered by defined benefit plans at the Company and its steel
subsidiary, which have been frozen. Assuming retirement at age 65, the aggregate
annual benefit payable to Messrs. Kelly, Haeck, Hipple, Huge and Moran under
these frozen defined benefit retirement plans will be approximately $75,450,
$14,520, $6,230, $0 and $35,975, respectively. The annual benefit payable to Mr.
Hoag, who retired effective January 31, 1999, is $109,384, which will be reduced
to $98,151 due to his election of an optional form of benefit.
With respect to Messrs. Kelly, Haeck, Hipple and Moran, their annual
retirement benefits under the frozen defined benefit plans described in the
immediately preceding paragraph are taken into account in calculating the annual
contribution under the Restated Plan and are taken into account as offsets to
any additional amount otherwise payable to them under the predecessor Benefit
Plan. In
15
<PAGE> 18
Mr. Huge's case, his annual retirement benefit at his prior employer is offset
against any additional amount payable under the predecessor Benefit Plan.
Mr. Hoag's aggregate annual retirement benefit consists of (1) $500,000
payable annually from annuities purchased by the Company pursuant to the terms
of Mr. Hoag's employment agreement with the Company which was approved by the
bankruptcy court while the Company was in reorganization proceedings; (2)
$98,151 payable annually from the Company's retirement plans described above;
and (3) $54,000 payable annually from annuities purchased by the Company
pursuant to the terms of the Company's predecessor Benefit Plan. In addition,
Mr. Hoag was a participant in the Company's broad-based defined contribution
plan; the contributions to Mr. Hoag under such plan for 1998 are included in the
amounts shown in the Summary Compensation Table.
EXECUTIVE SEVERANCE AND CHANGE IN CONTROL PLANS
Executive Severance Pay Plan
The Company has an Executive Severance Plan (the "Severance Plan") which
provides severance benefits for certain key executives (including Messrs. Kelly,
Haeck, Hipple, Huge, and Moran) if the executive's employment is involuntarily
terminated for reasons other than cause. Until his retirement, Mr. Hoag was also
a participant in such plan. The Severance Plan provides for the following to be
included in calculating the severance benefit: (i) base salary and (ii) bonus
award, if any, payable under the Company's Annual Incentive Plan using a
combination of actual corporate and target individual performance criteria for
that year. During the period for which severance benefits are paid, the
executive will continue to participate in the Company's life and health
insurance and retirement plans.
The maximum period during which plan benefits will be paid ranges from 6 to
24 months depending upon the participant's position level. The benefit (as
defined above) payable under the Severance Plan to the executives named in the
Summary Compensation Table is as follows: Mr. Kelly-24 months; Mr. Haeck-12
months; Mr. Hipple-12 months; Mr. Huge-12 months; and Mr. Moran-12 months. The
severance payments would be offset by compensation earned by such executives
from other employers and/or payments made under the Change in Control Severance
Pay Plan described below. Members of senior management, including the six
officers named in the Summary Compensation Table, will be required to enter into
a non-compete agreement with the Company and release the Company from all
employment-related liabilities as a condition to receiving payments under the
Severance Plan.
Executive Change in Control Severance Pay Plan
The Company also has an Executive Change in Control Severance Pay Plan (the
"CIC Plan") which covers the senior executives of the Company and certain senior
executives of its subsidiaries, including Messrs. Kelly, Haeck, Hipple, Huge,
and Moran. Until his retirement, Mr. Hoag was also a participant in such plan.
The purposes of the CIC Plan are to assure continuity of management by
establishing certain minimum severance benefits for such executives in the event
of a "change in control" (as defined below), and to insure that such executives
discharge their duties in respect of any proposed or actual change in control
without concern for their personal employment security. Benefits are payable
under the CIC Plan only if a change in control has occurred and within 24 months
thereafter a covered executive's employment is terminated by the Company other
than for cause (as defined) or, in the case of Messrs. Kelly, Huge and Moran, if
the executive terminates his employment for good reason. Good reason is defined
in the CIC Plan as an adverse change in the executive's position, authority,
responsibilities, salary or incentive targets, benefits, location of employment
or travel schedule.
Benefits payable under the CIC Plan include the following: a lump sum
payment equal to two times the named executive's current base salary and annual
incentive target award (three times in the case of Mr. Kelly), the continuation
of certain welfare plans, and the provision of financial
16
<PAGE> 19
counseling and outplacement services. Further, the Company will make an
additional payment in an amount such that, after the payment of all income and
excise taxes, the executive will be in the same after-tax position as if no
excise tax under the Internal Revenue Code had been imposed.
In addition, upon an executive's termination under the terms of the CIC
Plan, awards under the Company's Amended and Restated Management Incentive
Program, and any successor or similar plan, will accelerate, including the
vesting of stock options, the release of restrictions on restricted stock, and
the receipt of performance share awards for the measurement period not yet
expired or otherwise not vested, earned as if management objectives have been
met at the target level. The terminated executive would also receive a
retirement contribution based on the amount of the lump sum payment and a lump
sum payment equal to the executive's balance under the LTV Executive Deferred
Compensation Plan. As a condition to receiving such benefits, the executive must
enter into certain confidentiality, non-solicitation and non-competition
agreements. Payments under the CIC Plan are in lieu of payments under the
Severance Plan described above.
For purposes of the CIC Plan, any of the following events will be deemed to
be a change in control of the Company: (a) acquisition by a person or entity
(excluding certain qualified owners such as a Company employee benefit plan or
an owner whose acquisition was approved by the then incumbent Board) of 15% or
more of the Company's voting securities (as defined); (b) change in more than
one-half of the incumbent Board of Directors or their approved successors; (c)
consummation of a reorganization, merger or consolidation of, or sale of
substantially all of the assets of, the Company or its principal steelmaking
subsidiary, LTV Steel Company, Inc., unless substantially all stockholders
receive two-thirds or more of the stock of the resulting entity, a majority of
the Board of Directors of the resulting entity were members of the incumbent
Board, and no person or entity owns more than 20% of the stock of the resulting
company; or (d) liquidation or dissolution of the Company.
The CIC Plan provides for a rolling three-year term, which is automatically
extended on each anniversary of the CIC Plan unless the Company gives notice
that it does not intend to extend the term of the CIC Plan.
EMPLOYMENT, RETIREMENT AND NON-COMPETITION AGREEMENT
On December 28, 1998, the Company and Mr. Hoag entered into an Employment,
Retirement and Non-Competition Agreement (the "Agreement"). The Agreement
provides for Mr. Hoag's continued employment as Chairman until his retirement on
January 31, 1999. During the employment period, Mr. Hoag will receive his base
salary and annual incentive opportunity, and continue to participate in welfare
and pension benefit plans, programs and perquisites on the same basis as when he
was the Chief Executive Officer of the Company. The Agreement provides for the
vesting of and lapse of restrictions on his retirement date of all unvested
equity awards granted or awarded to Mr. Hoag under the Management Incentive
Program ("MIP") including (i) the 8,600 restricted shares awarded on October 27,
1994, (ii) all options to acquire Common Stock of the Company granted on or
before January 31, 1999, (iii) the 28,000 performance shares awarded on April
27, 1997, and the 28,000 performance shares awarded on February 26, 1998
(provided that payment with respect to such performance shares will be made
following the end of the respective performance periods specified in such
awards, and will reflect the actual performance of the Company during the
respective performance periods set forth in such awards), (iv) the 1,500
restricted shares awarded under the Management Stock Acquisition Program
("MSAP") portion of the MIP plus any reinvested dividends, (v) the 4,128
matching restricted shares awarded under the MSAP plus any reinvested dividends,
and (vi) any matching restricted shares resulting from Mr. Hoag's deferral of a
portion of his bonus for 1998 under the Annual Incentive Program portion of the
MIP.
Under the Agreement, Mr. Hoag will receive a non-compete fee of $25,000 per
month for the period commencing February 1, 1999, and ending on the earlier of
January 31, 2002 or his death, in
17
<PAGE> 20
exchange for Mr. Hoag's agreement not to engage in activities competitive with
the Company in North America. The Agreement also includes confidentiality and
non-solicitation commitments by Mr. Hoag, and he has agreed to make himself
available for consultation with and advice to the Board of Directors at mutually
agreeable times and periods.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Contracts and Certain Commercial Relationships
In the ordinary course of business, the Company and its subsidiaries have
engaged in transactions with other corporations whose directors or officers are
members of the Board of Directors of the Company. All such transactions,
including those described in the next paragraph, were conducted on an arm's
length basis and on terms competitive with those generally available in the
marketplace at the time.
In 1998, the Company paid $12.8 million for technical assistance and other
fees, steel mill product and dividends on preferred stock and sold $14.7 million
of steel product to Sumitomo and its affiliates. Subsidiaries of the Company and
of Sumitomo also are partners in two electro-galvanizing line joint ventures and
a steel mini-mill joint venture. The Company paid an aggregate of $97.1 million
in processing fees to the electro-galvanizing partnerships in 1998, and such
partnerships paid an aggregate of $5.2 million in rent and related fees to the
Company in 1998. Sumitomo and its affiliates are a significant stockholder of
the Company. See "Security Ownership of Directors, Management and Principal
Stockholders."
18
<PAGE> 21
COMPENSATION AND ORGANIZATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Introduction
The Compensation and Organization Committee of the Board of Directors,
composed exclusively of independent, non-management directors, has the
responsibility to review and approve compensation and benefit programs for all
officers of the Company. In addition, the Committee reviews compensation and
benefit programs applying to all non-union represented salaried employees. The
Committee meets with Towers Perrin, an internationally recognized independent
executive compensation consultant, and obtains survey data on competitive pay
and benefit practices.
Steel producers operate in a highly competitive and cyclical market
environment. Business cycles can have wide variations in intensity and duration.
The investments needed to maintain a leadership position are significant and
require an extended period of time to see a satisfactory profit return. The
Committee considers these conditions in administering the senior management
compensation program.
The Committee has set forth the following principles that underlie
compensation awards:
- In order to align the interests of its executives with those of the
Company and its stockholders, a substantial portion of executive
compensation should be "at risk" and based upon stock price and the
attainment of pre-set performance goals established by the Committee.
- The Company's compensation program should strongly encourage
significant management ownership of the Company's Common Stock.
- The senior management compensation program should be competitive.
In implementing these principles, the Committee compares performance,
compensation levels and compensation programs of the Company with other
integrated carbon flat roll steel companies (a peer group consisting of Armco/AK
Steel, Bethlehem Steel, Inland, National Steel and USX-Steel Group -- the
"Compensation Comparison Group"). The companies in the Compensation Comparison
Group (excluding Inland) plus Wheeling-Pittsburgh and Weirton are the companies
in the Performance Graph (the "Performance Graph Companies"). The Committee also
reviews compensation practices of both a broader group of steel companies, which
consists of the Performance Graph Companies plus Nucor, and comparably sized
companies in general industry.
During 1998, Inland Steel was purchased by Ispat International N.V. In
addition, Wheeling-Pittsburgh purchased Handy & Harman, altering
Wheeling-Pittsburgh's mix of business significantly. As a result,
Wheeling-Pittsburgh was dropped from the Comparison group for Annual Incentive
Program (AIP) purposes beginning in 1998 and Inland was dropped from the
Performance Graph group in 1998.
Overview of LTV Senior Management Compensation Program
The mix of salary, annual incentive and long-term incentive varies based on
management level and on competitive market practices. For positions with major
corporate responsibility, including those executive officers named in the
Company's Summary Compensation Table ("Named Executives"), between 55% and 70%
of the value of target total direct compensation (salary, annual incentive and
long-term incentives) is represented by at-risk annual and long-term incentives
(with the balance in salary). For positions with lesser impact, salary
represents a higher proportion of total direct compensation. The Committee has
broad discretion within the limitations of the Amended and Restated Management
Incentive Program ("AMIP") to administer the program's provisions.
In its entirety, the senior management compensation program is expected to
focus executives on creating stockholder value and to attract and retain
outstanding individuals. The Committee
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<PAGE> 22
emphasizes total direct compensation consisting of salary, annual incentive and
long-term incentive, rather than a single element. The Committee has also
established stock ownership guidelines for senior management.
Additionally, all salaried employees, including each Named Executive, are
eligible to participate in the LTV Capital Accumulation Plan and Supplemental
Management Retirement Plan which includes a provision to match a specified
portion of the employee's contributions. Matching contributions made to the
accounts of Named Executives in 1998, which are invested in shares of the
Company's Common Stock or invested notionally in Common Stock, are included in
the accompanying Stock Ownership Table.
Salary
Salaries are targeted in the middle range of the Compensation Comparison
Group. Salary adjustments are determined by evaluating the responsibilities of
the position, the competitive salary for the position (using as a target the
middle range of salaries of comparable positions in the Compensation Comparison
Group and similarly sized general industry companies), the experience of the
incumbent, the performance of the incumbent and the performance of the Company.
Annual Incentive Opportunity
The Annual Incentive Program rewards individuals for meeting annual
corporate and individual objectives. Under the AIP, weighted objectives (using
performance measurements and goals) are established in advance each year by the
Committee. The Committee has currently set annual incentive "targets" which it
believes are 5 to 10 percentage points above the middle range of annual
incentive targets for the Compensation Comparison Group, reflecting the risk
that payments under the AIP may be less than target levels because the Committee
has established aggressive performance targets. Annual incentive awards are
determined by measuring actual performance against these objectives. Objectives
are based on a combination of corporate and individual performance criteria for
most plan participants.
The Committee, working with senior management, is responsible for measuring
the attainment of all corporate and individual objectives and goals for
corporate officers. Members of senior management are responsible for measuring
the attainment of individual goals for all other participants. The Committee has
the responsibility to review and approve all awards prior to payment. Based on
position impact and competitive pay opportunities, target annual incentive
opportunities range from 40% to 65% of salary. Actual individual awards often
vary above and below target levels. The Committee has the discretion to make
these awards in either cash or Common Stock.
For 1998, the Committee established the following financial objectives and
other focus objectives (which will change from year to year). The Committee
placed its primary emphasis on return on net assets ("RONA") relative to an
internal standard, and adjusted earnings per ton relative to the Performance
Graph Companies (less Wheeling-Pittsburgh as previously noted) plus Inland. The
weight of these two measures comprises 60% of the total, each providing 30%.
Achieving the Company's growth initiatives for the year was allocated 10% of the
award. The remaining 30% weight was allocated equally to various internal
objectives including safety, quality/customer satisfaction, cost reduction,
information technology, environmental, and equipment performance. The Committee
reviewed senior management's performance against these objectives, considered
the market environment in which the Company operated for the year, and used its
judgment and discretion in determining the awards.
Long-Term Incentive Opportunity
The Company's Long-Term Incentive Program ("LTIP") provides compensation
tied to stock performance and encourages executives to increase their holdings
of Common Stock. The Company has used fixed LTIP target opportunity levels since
it emerged from bankruptcy in 1993. The
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<PAGE> 23
current targets were originally set in 1994 and updated in 1997. The target LTIP
opportunity levels are intended to position the Company within the range of
competitive practice for the Compensation Comparison Group and comparably sized
companies in general industry at the time the targets are established. The
inclusion of general industry data reflects the growing influence of broader
industry practice on the Company's ability to attract and retain senior
executives.
The Company's primary long-term incentive vehicles are stock options and
performance shares. For the majority of LTIP participants, stock options
comprise 100% of the individual's LTIP opportunity. Performance shares are
provided to approximately 25 senior managers (including the Named Executives).
For those executives who receive performance shares, stock options represent
approximately 70% of the target value, and performance shares make up the
remaining 30%.
In addition to stock options and performance shares, the Company also
selectively uses time-lapse and performance vesting restricted stock. Such
restricted stock is generally used in new hire, retention, and promotion
situations, as well as in the Management Stock Acquisition Program (described
below), which was designed to encourage greater stock ownership among
executives. The Company currently does not make broad-based time-lapse vesting
restricted stock grants.
Both the stock option and performance share plans are intended to focus and
reward executives on creating stockholder value. Stock options emphasize the
Company's absolute share price appreciation, while performance shares emphasize
the Company's relative stockholder value creation as compared to the Performance
Graph Companies (Armco/AK Steel, Bethlehem Steel, National Steel, Weirton,
Wheeling-Pittsburgh and USX-Steel Group) plus Nucor. In total, the expected
value at grant of stock options and performance shares is intended to result in
target long-term incentive awards within the range of competitive practice for
the Compensation Comparison Group and comparably sized companies in general
industry.
The Company encourages stock ownership among all employees in order to
emphasize the importance of stockholder value creation. The Committee has
established formal stock ownership guidelines for each participant in the LTIP.
Executives are required to maintain specific stock ownership levels, based on a
multiple of salary at the time the levels were established, in order to continue
participation in the LTIP.
To facilitate executives meeting these guidelines, the Company introduced a
Management Stock Acquisition Program for 1997 and 1998. Prior to the
introduction of this program, the ability of executives to purchase the
Company's Common Stock had been limited because the Company's current stock was
not issued until 1993. This program was intended to encourage executives to
increase their holdings of the Company's Common Stock through direct purchases
or exchanges of current cash compensation on a deferred basis for the Company's
Common Stock. For every four shares of Common Stock acquired under this program,
the Company granted the executive one restricted share. If the acquired shares
are held for a minimum of three years, the restrictions are lifted on the
restricted shares. All of the Named Executives participated in this program
during 1998. This program expired in 1998.
The Committee believes that the executive compensation program is highly
performance-oriented and provides a strong alignment of management's interests
with those of the stockholders.
1998 Corporate Performance and CEO Compensation
Effective September 1, 1998, Mr. Hoag resigned as Chief Executive Officer
of the Company and Peter Kelly was named the CEO. Mr. Hoag remained with the
Company as Chairman through January 31, 1999, at which time he retired from all
positions with the Company.
Prior to announcing his retirement, Mr. Hoag's salary was increased in 1998
from $660,000 to $700,000. The increase was made to maintain Mr. Hoag's salary
within the middle range of salaries of comparable positions in the Compensation
Comparison Group.
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<PAGE> 24
Under the Annual Incentive Program, Mr. Hoag's target award was 65% of base
salary. Mr. Hoag's Annual Incentive Program award of $164,000 is based upon 1998
performance against the goals discussed earlier under the section titled "Annual
Incentive Opportunity".
In 1998, a stock option for 107,400 shares was granted to Mr. Hoag under
the LTIP. In addition, Mr. Hoag was granted 28,000 performance shares for the
1998-2001 cycle of the LTIP. These grant levels are consistent with 1997 grant
levels.
In connection with Mr. Hoag's retirement, the Committee approved the
Employment, Retirement and Non-Competition Agreement described herein, which
provides for the vesting of all equity awards granted under the MIP to Mr. Hoag,
certain employee benefits and for the payment of a non-compete fee to him of
$25,000 per month for the period commencing February 1, 1999, and ending on the
earlier of January 31, 2002 or his death. See the description of such agreement
under "Employment, Retirement and Non-Competition Agreement."
In his previous position as Chief Operating Officer and President, Mr.
Kelly's salary was increased in 1998 from $450,000 to $470,000. This increase
was intended to maintain Mr. Kelly's salary within the middle range of salaries
of comparable positions in the Compensation Comparison Group. Effective with Mr.
Kelly's assumption of CEO responsibilities as of September 1, 1998, his salary
was increased to $600,000. This increase was intended to bring Mr. Kelly's
salary closer to but slightly below the middle range of salaries for comparable
positions in the Compensation Comparison Group, recognizing his brief tenure in
the new position.
Under the Annual Incentive Program, Mr. Kelly's target award for 1998 was
65% of base salary of $600,000, consistent with the target percentage before his
promotion. Mr. Kelly's Annual Incentive Program award of $140,000 is based upon
1998 performance against the goals discussed earlier under the section titled
"Annual Incentive Opportunity".
In 1998, Mr. Kelly received a grant of 46,500 stock options and 12,100
performance shares in accordance with the Company's regular long-term incentive
program. These grant levels are consistent with 1997 grant levels. Mr. Kelly
also deferred $127,600 of cash compensation with respect to 1998 compensation
into Company Common Stock and received 5,059 shares of restricted stock under
the Management Stock Acquisition Program. Upon his promotion to CEO, Mr. Kelly
received an additional 150,000 stock options and 30,000 shares of restricted
stock. One-third of the stock options granted upon his promotion become
exercisable one year from grant, an additional one-third become exercisable
after LTV's stock price reaches $10.00 but not sooner than one year after the
grant, and the final one-third become exercisable after LTV's stock price
reaches $15.00 but not sooner than one year after the grant. One-third of the
restricted shares vest three years after grant, one-third vest after LTV's stock
price reaches $10.00 but not sooner than one year after the grant, and the final
one-third become exercisable after LTV's stock price reaches $15.00 but not
sooner than one year after the grant. This special grant is designed to reward
and recognize Mr. Kelly's assumption of CEO responsibilities and provide extra
incentive to increase stockholder value. The Committee believes the above
actions further align Mr. Kelly's interests with those of the Company's
stockholders.
Policy Regarding Section 162(m)
The Committee's policy is that, effective for awards made after 1995,
executive compensation should be provided in such a manner as to comply with the
rules governing the deductibility of executive compensation under Section 162(m)
of the Internal Revenue Code.
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<PAGE> 25
Conclusion
The Committee believes the compensation program was prudently administered
during 1998 and that the overall design, and objectives of the program are
consistent with the long-term interests of the Company and its stockholders.
THE COMPENSATION AND ORGANIZATION COMMITTEE
STEPHEN B. TIMBERS--CHAIRMAN
WILLIAM H. BRICKER
JOHN E. JACOB
EDWARD C. JOULLIAN III
VINCENT A. SARNI
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<PAGE> 26
PERFORMANCE GRAPH
The following graph compares the total stockholder return on the Company's
Common Stock with the cumulative total return on the Standard & Poor's 500 Stock
Index ("S&P Index") and a Company-constructed peer group of publicly traded
domestic integrated steelmakers consisting of Bethlehem Steel Corporation,
National Steel Corporation, Weirton Steel Corporation, Wheeling-Pittsburgh, USX
Corporation-Steel Group and Armco Inc./AK Steel Holding Corporation (the "Peer
Group"). Armco Inc., in a recapitalization, transferred its carbon steel
business to a wholly-owned subsidiary of AK Steel Holding Corporation at the end
of March 1994. Accordingly, the index includes Armco Inc. for that period in the
performance graph prior to the divestiture and AK Steel Holding Corporation for
the period thereafter. Additionally, the domestic steel producing assets of
Inland Steel Corporation were purchased by Ispat International N.V. in 1998, and
the financial results of these domestic operations are no longer reported
publicly on a stand alone basis. Accordingly, Inland Steel Corporation was
removed from the Peer Group this year for all periods shown in the graph.
The graph assumes the investment of $100 in the Company's Common Stock, the
S&P Index and the Peer Group on December 31, 1993 with immediate reinvestment of
all dividends. The Peer Group total return has been weighted for market
capitalization based on information contained in the public filings of members
of the Peer Group.
LTV COMMON STOCK PERFORMANCE
LTV VS. TOTAL RETURNS OF S&P 500 AND PEER GROUP
<TABLE>
<CAPTION>
S&P 500 LTV PEER GROUP
------- --- ----------
<S> <C> <C> <C>
DEC-93 100.00 100.00 100.00
DEC-94 101.00 102.00 90.83
DEC-95 139.00 85.00 77.56
DEC-96 171.00 74.00 71.42
DEC-97 228.00 62.00 73.35
DEC-98 293.00 37.00 64.83
</TABLE>
PEER GROUP: MARKET WEIGHTED INDEX COMPRISED OF ARMCO/AK STEEL, BETHLEHEM STEEL,
NATIONAL STEEL, WEIRTON, WHEELING-PITTSBURGH AND USX-STEEL GROUP.
CLOSING PRICE INDEXED ON DECEMBER 31, 1993=100
24
<PAGE> 27
- --------------------------------------------------------------------------------
PROPOSAL TO RATIFY SELECTION OF INDEPENDENT AUDITORS
Ernst & Young LLP and their predecessors have been the auditors for the
Company since 1957. Upon the recommendation of the Audit Committee, the Board of
Directors has selected Ernst & Young LLP to be the independent auditors of the
Company for the year ending December 31, 1999. The Board of Directors will offer
a resolution at the 1999 Annual Meeting to ratify this selection. It is
anticipated that representatives of Ernst & Young LLP will be present at the
1999 Annual Meeting to respond to appropriate questions, and they will have an
opportunity, if they desire, to make a statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF INDEPENDENT AUDITORS.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders must be received by the Company by November 8, 1999 to
be considered for inclusion in the Company's Proxy Statement and Form of Proxy
relating to that meeting.
The Company has provisions in its By-Laws intended to promote the efficient
functioning of its annual meetings. The provisions describe the Company's right
to determine the time, place and conduct of stockholder meetings, require
advance notice by mail or delivery to the Company of stockholder proposals or
director nominations for annual meetings and require persons wishing to conduct
a solicitation of written consents of stockholders or to call a special meeting
of stockholders to apply to the Board of Directors to set a record date for the
consent solicitation or to determine whether the requisite number of
stockholders desire to call a special meeting.
Under the By-Laws, stockholders must provide the Company with at least 60
days, but no more than 90 days, notice prior to the announced Tentative Meeting
Date of (i) business the stockholder is proposing for consideration at that
meeting and (ii) persons the stockholder intends to nominate for election as
directors at that meeting. The Tentative Meeting Date for the 2000 Annual
Meeting is April 28, 2000.
The Board Affairs Committee will consider nominees recommended by
stockholders as candidates for election to the Board of Directors at the 2000
Annual Meeting. A stockholder wishing to nominate a candidate for election to
the Board should give written notice to the Secretary of the Company of his or
her intention to make such a nomination in accordance with the procedure
described above and furnish a written consent by such nominee that he or she
agrees to the nomination and will serve if elected. The notice of nomination
should contain background information about both the nominee and the stockholder
making the nomination. The Company may also require that the proposed nominee
furnish additional information to determine that person's eligibility to serve
as a director.
Notices and proposals or nominations should be addressed to Glenn J. Moran,
Senior Vice President, General Counsel and Secretary, The LTV Corporation, 200
Public Square, Cleveland, Ohio 44114-2308.
DISCRETIONARY VOTING OF PROXIES ON OTHER MATTERS
Management does not now intend to bring before the 1999 Annual Meeting any
matters other than those specified in the notice of the meeting, and, except for
one stockholder proposal omitted in accordance with the rules and regulations of
the Securities and Exchange Commission, it does not know of any business which
persons other than the management intend to present at the
25
<PAGE> 28
meeting. Should any business requiring a vote of the stockholders, which is not
specified in the notice, properly come before the meeting, the persons named in
the accompanying proxy intend to vote the shares represented by them in
accordance with their best judgment.
By Order of the Board of Directors
Glenn J. Moran
Senior Vice President,
General Counsel and Secretary
Cleveland, Ohio
March 5, 1999
26
<PAGE> 29
LTV LOGO
The LTV Corporation
200 Public Square - Cleveland, Ohio 44114-2308
<PAGE> 30
THE LTV CORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 23, 1999
This Proxy is solicited by the Board of Directors
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE LTV
CORPORATION ("LTV") FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS ON APRIL 23,
1999. The undersigned hereby appoints Peter Kelly and Glenn J. Moran, and each
of them, as Proxy holders and attorneys, with full power of substitution, to
appear and vote all shares of LTV Common Stock which the undersigned shall be
entitled to vote at the Annual Meeting of Stockholders of LTV to be held on
April 23, 1999, and at any adjournment or postponement thereof, hereby revoking
any and all proxies heretofore given, on all matters as may properly come before
said meeting. WITH RESPECT TO SHARES REGISTERED IN YOUR NAME, THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
This card also provides voting instructions for shares held in The LTV Steel
Group Employee Stock Ownership Plan ("ESOP"), The LTV Steel Stock Bonus Plan
("Bonus Plan"), The LTV Steel Retirement Plan ("Retirement Plan") and the LTV
Capital Accumulation Plan ("CAP"). If you are a participant in any of these
plans and have shares of Common Stock of LTV allocated to your plan account,
please read the following authorization to the Trustee of these plans as to the
voting of such shares.
Trustee's Authorization. The undersigned authorizes Mellon Bank, N.A. as Trustee
under the ESOP, Bonus Plan, Retirement Plan or CAP, as the case may be, to vote
all shares of common Stock of LTV allocated to the undersigned's account under
such plan(s) (as shown on the reverse side) at the Annual Meeting in accordance
with the Instructions on the reverse side.
If you do not return your signed proxy card, the Trustee will vote any shares
held in the three plans in the same proportion as it votes those plan shares
with respect to which it does receive voting instructions on each matter to be
voted upon at the meeting.
Individual voting instructions will be held in confidence by the Tabulating
Agent and Trustee and will not be divulged to LTV, its employees or other third
parties.
You are encouraged to specify your choice by marking the appropriate boxes. SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR PROPOSALS NOS. 1 AND 2.
FOLD AND DETACH HERE
THE LTV CORPORATION
ANNUAL
MEETING OF
STOCKHOLDERS
April 23, 1999, 9:00 a.m.
In an effort to minimize the expenses associated with the
solicitation of proxies, participants in the LTV employee
plans referenced on the reverse side who are also registered
owners of LTV Common Stock will receive only one proxy card.
IF YOU ARE A PLAN PARTICIPANT, PLEASE RETURN THIS
PROXY CARD ON OR BEFORE APRIL 19, 1999 TO ENSURE
THAT YOUR VOTES WILL BE COUNTED.
<PAGE> 31
----
Please mark | X |
your votes as ----
indicated in
this example
----------------------------------------------------------------
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2 |
----------------------------------------------------------------
1. Election of Directors
NOMINEES: SECOND CLASS: JOHN E. JACOB, EDWARD C. JOULLIAN, III, SAMUEL K.
SKINNER
FOR WITHHELD For, except vote withheld from the following
---- ---- nominee(s):
| | | |
---- ---- --------------------------------------------------
2. To vote to ratify the selection of auditors
FOR AGAINST ABSTAIN
---- ---- ---- Plan to ----
| | | | | | Attend Meeting | |
---- ---- ---- ----
SIGNATURE(S) SIGNATURE(S)
--------------------------- ---------------------------
DATE ,1999
----------------------
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON: JOINT OWNERS SHOULD EACH SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OF GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH.
FOLD AND DETACH HERE
THE LTV CORPORATION
ANNUAL
MEETING OF
STOCKHOLDERS
April 23, 1999, 9:00 a.m.
In an effort to minimize the expenses associated with the
solicitation of proxies, participants in the LTV employee
plans referenced on the reverse side who are also registered
owners of LTV Common Stock will receive only one proxy card.
IF YOU ARE A PLAN PARTICIPANT, PLEASE RETURN THIS
PROXY CARD ON OR BEFORE APRIL 19, 1999 TO ENSURE
THAT YOUR VOTES WILL BE COUNTED.
