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
Filed by the Registrant [X] Filed by a party other than the
Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WEIRTON STEEL CORPORATION
- ----------------------------------------------
(Name of Registrant as Specified in its Charter)
- ----------------------------------------------
(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(i)(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 transactions 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:
(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:
WEIRTON STEEL CORPORATION
400 THREE SPRINGS DRIVE
WEIRTON, WV 26062
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 25, 1995
Dear Stockholder:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of
Stockholders of Weirton Steel Corporation, a Delaware corporation
(the "Company"), will be held at the Jefferson County Civic Arena,
3151 Johnson Road, Steubenville, Ohio, on Thursday, May 25, 1995,
at 7:00 P.M., Eastern Daylight Time, for the following purposes:
1. To elect three directors for a two-year term and five
directors for a three-year term, in each case until their
successors have been elected and qualified, and to approve the
election of a director by the Board of Directors for a term ending
at the 1997 Annual Meeting;
2. To approve the 1994 Employee Stock Purchase Plan;
3. To ratify the appointment of Arthur Andersen LLP as the
Company's independent accountants for the fiscal year ending
December 31, 1995; and
4. To consider and act upon any other matters which properly
may come before the meeting or any adjournment thereof.
In accordance with the provisions of the By-Laws, the Board of
Directors has fixed the close of business on April 5, 1995, as the
date for the determination of the holders of record of stock
entitled to notice of, and to vote at, the Annual Meeting.
Your attention is directed to the accompanying Proxy
Statement.
Stockholders who do not expect to attend the meeting in person
are requested to sign, date and mail the enclosed Proxy as promptly
as possible in the enclosed stamped envelope.
By Order of the Board of Directors,
WILLIAM R. KIEFER,
Secretary
Weirton, West Virginia
April 25, 1995
WEIRTON STEEL CORPORATION
400 THREE SPRINGS DRIVE
WEIRTON, WV 26062
______________
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Weirton Steel
Corporation, a Delaware corporation (the "Company"), of proxies for
use at the 1995 Annual Meeting of Stockholders (the "Annual
Meeting") to be held on May 25, 1995, and any adjournments thereof.
This Proxy Statement and the accompanying proxy are being mailed on
or after April 25, 1995 to stockholders of record as of April 5,
1995.
If the enclosed proxy is executed, dated and returned, it
nevertheless may be revoked at any time before it has been voted by
(i) a later dated, properly executed proxy, or (ii) a vote in
person at the Annual Meeting. If not revoked and no contrary
instructions are specified, or no specific instructions are
otherwise given, all shares covered by a properly signed, dated and
returned proxy will be voted by the persons appointed therein:
FOR the election of directors and approval for the Board of
Directors to elect a director for a term commencing April 1, 1996;
FOR the approval of the 1994 Employee Stock Purchase Plan; and
FOR the ratification of independent accountants,
all as specified in this Proxy Statement. In addition, the proxy
will be voted in the discretion of the proxy holders with respect
to such other business as may properly come before the meeting.
A copy of the Company's Annual Report to Stockholders for the
preceding fiscal year has been mailed to stockholders prior to the
mailing of this Proxy Statement.
All expenses of the solicitation of proxies for the Annual
Meeting, including the cost of mailing, will be borne by the
Company.
Directors, officers and regular employees of the Company may
solicit proxies from stockholders. The Company reimburses
brokerage firms, fiduciaries, custodians and other nominees holding
stock in their name or custody, for their expenses in forwarding
proxy materials to beneficial owners and seeking instructions
regarding proxies. The Company has engaged Georgeson & Co. to
solicit proxies on behalf of the Board of Directors from
individuals, brokers, nominees and institutional holders.
Georgeson & Co. will be paid a fee of $15,000 for its services and
will be reimbursed for its reasonable expenses.
OUTSTANDING VOTING STOCK
Only holders of record of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), and Convertible Voting
Preferred Stock, Series A, par value $.10 per share (the
"Convertible Preferred Stock"), at the close of business on April
5, 1995 (the "Record Date") are entitled to vote on matters to be
presented at the Annual Meeting. On the Record Date, 42,008,075
shares of Common Stock and 1,756,718 shares of Convertible
Preferred Stock were outstanding and entitled to vote. The holders
of the Convertible Preferred Stock and the holders of the Common
Stock will vote as a single class at the Annual Meeting. Each
share of Convertible Preferred Stock is entitled to ten votes and
each share of Common Stock is entitled to one vote.
Common Stock allocated to the accounts of participants in the
Company's 1984 Employee Stock Ownership Plan (the "1984 ESOP") and
Convertible Preferred Stock allocated to the accounts of
participants in the Company's 1989 Employee Stock Ownership Plan
(the "1989 ESOP") will be voted by the holder of record, United
National Bank, as trustee, as directed by participants and in
accordance with the terms of the applicable ESOP.
QUORUM REQUIREMENTS
In order to transact business at the Annual Meeting, there
must be present, in person or by proxy, at least a majority of the
total votes of the outstanding shares of Common Stock and
Convertible Preferred Stock, without regard to any shares of stock
whose voting power is restricted under Article Eleventh of the
Company's Restated Certificate of Incorporation (the "Charter"),
which deals with certain significant holders. At this time, the
Board of Directors is not aware of any holder who would be
considered restricted under the Charter. If a quorum is not
present, the Annual Meeting may be adjourned from time to time
until a quorum is obtained.
THE ELECTION OF DIRECTORS
The Charter provides that one director ("ESOP Director"), who
must have the qualifications of an Independent Director, is to be
nominated by the ESOP Nominating Committee, which Committee is
elected by the 1984 and 1989 ESOP participants. The Charter
provides that seven directors ("Independent Directors") cannot be,
nor ever have been, employees of the Company, nor can they have
served as an advisor or consultant to the Company or to the
Independent Steelworkers Union (the "ISU"), nor have been
affiliated with such an advisor or consultant, for a period of two
years prior to election as an Independent Director. The Charter
provides that three directors ("Management Directors") must consist
of the Chief Executive Officer and two Company employees designated
by the Chief Executive Officer. The Charter provides that three
directors ("Union Directors") must consist of the President of the
primary collective bargaining agent for the represented employees
of the Company and two persons designated by the collective
bargaining agent.
The Charter also provides for a Board of Directors of 14
members divided into three classes, designated as Class I, Class II
and Class III. Each class serves a three-year term, and the term
of one class expires at each year's annual meeting of stockholders.
The terms of the Class I, Class II and Class III Directors expire
at the annual meetings of stockholders in 1997, 1998, and 1996,
respectively. Since the Company did not hold an annual meeting to
elect directors in 1994, both the four Class I directors, whose
terms would have expired in 1994 and who will serve for a term of
two years, and the five Class II directors, who will serve for a
term of three years, will be elected at this Annual Meeting.
The Board of Directors intends to present for action at the
Annual Meeting the election (and approval for election) of the
following: Class I directors, to serve for a term of two years,
and until their successors are elected and qualified: Richard K.
Riederer, Management Director and Michael Bozic, Richard R. Burt
(to be approved for election by the Board of Directors) and Thomas
R. Sturges, Independent Directors; and as Class II directors to
serve for a term of three years, and until their successors are
elected and qualified: Robert S. Reitman, Richard F. Schubert,
David I.J. Wang, and Ronald C. Whitaker, Independent Directors, and
Joseph J. Nowak, ESOP Director.
Under the Charter, Mr. Burt is not qualified at this time to
be an Independent Director because, until March 31, 1994, he was a
partner of McKinsey & Company, which performed consulting services
for the Company in 1994. Because Mr. Burt becomes qualifed to be
an Independent Director on April 1, 1996 and because the Board of
Directors believes that Mr. Burt is otherwise eminently qualifed to
be an Independent Director, the Board of Directors is requesting
the stockholders at this Annual Meeting to approve the election by
the Board of Directors, on April 1, 1996, of Mr. Burt as an
Independent Director for a term ending at the 1997 annual meeting.
If a majority of the Voting Stock voting at this Annual Meeting
gives such approval, the Board of Directors intends to so elect Mr.
Burt. The Board of Directors has requested, and Mr. Burt has
agreed, to attend meetings of the Board of Directors occurring
prior to his election as an Independent Director.
Unless authority to vote for any one or more of the Class I
(including Mr. Burt) or Class II director nominees is withheld as
indicated on the enclosed proxy, the shares represented by the
enclosed proxy will be voted FOR such persons.
The nominees receiving a plurality vote among the total votes
properly cast at the Annual Meeting, in person or by proxy, and who
are qualified under the Charter will be elected as directors.
The following table sets forth the name, age (as of April 1,
1995) and principal occupation for at least the last five years of
each nominee for director of the Company and of the remaining
directors who are not standing for election at the Annual Meeting.
Name Principal Occupation Director Since
Class I Directors: Nominees to Serve in Office Until 1997
Richard K. Riederer 1993
Age 51 (1) President, Chief Operating Officer and Chief
Financial Officer of the Company; Director
of Portico Funds; employee of the Company
since January 1989; Executive Vice
President-Finance and Chief Financial
Officer of the Company from September 1994
to January 1995; Vice President and Chief
Financial Officer of the Company from
January 1989 to September 1994.
Michael Bozic 1994
Age 54 (3) President, Chief Executive Officer and
Director of Hills Stores Company; Director
of Domain, Inc., Eagle Mark Credit, Inc.,
Dean Witter InterCapital, Inc. and United
Negro College Fund. Employee of Sears,
Roebuck and Company from 1963 to 1991;
President of Sears Canada, Inc. from
December 1983 to April 1986; President and
Chief Operating Officer of Sears
Merchandise Group from January 1987 to
February 1991.
Richard R. Burt *
Age 48 (3) Chairman of International Equity Partners, LLP;
Director of the Lauder Institute of the
Wharton School of Business, American
Publishing Company and several mutual
funds managed by PaineWebber, Inc.; Member
of the International Advisory Council of
the Bank of Montreal; Partner, McKinsey
and Company from 1991 to 1994; Chief
Negotiator for the United States in the
Strategic Arms Reduction Talks (START) from
1989 to 1991 and the United States
Ambassador to the Federal Republic of
Germany from 1985 to 1989.
Thomas R. Sturges 1986
Age 50 (3) Executive Vice President of the Harding
Group, Inc., since February 1990; Special
Associate Director of Bear, Stearns and Company,
Inc. from May 1986 to February 1990.
Class II Directors: Nominees to Serve in Office Until 1998
Joseph J. Nowak *
Age 63 (4) Director of Penn Power Company. Vice-Chairman
of Armco, Inc. from 1992 to 1993; Executive
Vice President of Cyclops Corporation from
1988 to 1992.
Robert S. Reitman *
Age 61 (3) Chairman, President, Chief Executive Officer and
Director of The Tranzonic Companies;
Director of Society National Bank.
Richard F. Schubert 1983
Age 58 (3) President and Chief Executive Officer of The
Points of Light Foundation; Chairman of
BioRelease, Inc.; Director of National
Alliance of Business and Management
Training Corporation; President of
American Red Cross from 1983 to 1989.
David I.J. Wang 1992
Age 62 (3) Director of U.G.I. Corporation, Petrolane, Inc.
and several privately held companies; Member of
Advisory Boards of Georgia Institute of
Technology and Hampton University; Chairman
of Science and Technology Council of the
Naples Institute; Executive Vice President
and Director of International Paper Co.
from 1987 to 1991.
Ronald C. Whitaker 1995
Age 47 (3) President, Chief Executive Officer and Director
of Colt's Manufacturing Company; President of
Wheelabrator Corporation from 1988 to
1992.
Class III Directors: To Continue in Office Until 1996
James B. Bruhn 1990
Age 54 (1) Executive Vice President -Commercial of the
Company; employee of the Company since
1987; Vice President-Tin Mill Products Sales
from 1987 to 1992; Vice President-Tin Mill
Products Business from 1992 to 1994.
Robert J. D'Anniballe, Jr. 1990
Age 38 (2) Partner of Alpert, D'Anniballe & Visnic,
attorneys; General Counsel to the ISU.
Herbert Elish 1983
Age 61 (1) Chairman of the Board and Chief Executive Officer
of the Company; employee of the Company since
1987; Chairman of the Board,
President and Chief Executive Officer of
the Company from July 1987 to January
1995.
Mark G. Glyptis 1991
Age 43 (2) President of the ISU since August 1991; employee
of the Company since 1973.
Phillip A. Karber 1992
Age 48 (2) Corporate Vice President for International
Development of BDM International, Inc.;
employee of BDM since 1971.
_________________________
* Has not previously served as a director of the Company.
(1) Management Director
(2) Union Director
(3) Independent Director
(4) ESOP Director
APPROVAL OF 1994 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors adopted the 1994 Employee Stock Purchase
Plan (the "1994 Stock Purchase Plan") to provide substantially all
employees of the Company and its subsidiaries with the opportunity
to purchase Common Stock through accumulated payroll deductions.
The 1994 Stock Purchase Plan is a successor to the Company's 1989
Employee Stock Purchase Plan, which expired at the end of 1994 and
pursuant to which Company employees purchased a total of 1,439,723
shares of Common Stock. As provided in a 1994 amendment to the
Charter, to the extent that the total number of shares of Common
Stock reserved under the 1994 Stock Purchase Plan is not purchased
by employees, the remaining shares will be available for bona fide
public offerings by the Company.
Description of the 1994 Employee Stock Purchase Plan
Shares Subject to Plan
A total of 5,000,000 shares of Common Stock has been made
available for sale to employees under the 1994 Stock Purchase Plan.
Shares to be sold under the 1994 Stock Purchase Plan may be either
authorized but unissued shares or previously issued shares
reacquired by the Company.
Eligibility
Each person employed by the Company (except probationary,
summer or co-op employees) is eligible to participate in the 1994
Stock Purchase Plan (an "Eligible Employee"), provided he or she
(i) has completed as of the first day of a Purchase Period (as
defined below), at least six months of service (as defined in the
Company's retirement plan applicable to such person) and (ii) is
not, as of the day preceding the first day of the Purchase Period,
deemed, for purposes of Section 423(b)(3) of the Internal Revenue
Code of 1986, as amended (the "Code"), to own stock possessing 5%
or more of the total combined voting power or value of all classes
of stock of the Company.
Purchase Price
The purchase price per share of Common Stock sold under the
1994 Stock Purchase Plan for any Purchase Period will be equal to
the lesser of (a) 85% of the "fair market value" of a share of
Common Stock on the first day of such Purchase Period, or (b) 85%
of the "fair market value" of a share of Common Stock on the last
day of such Purchase Period (the "Exercise Date"). The fair market
value as of any date is the last reported sale price reported on
the principal national securities exchange on which the Common
Stock is traded on such date.
Grant of Right to Purchase
Under the 1994 Stock Purchase Plan, a separate right to
purchase shares of Common Stock will be granted to each Eligible
Employee as of the first day of each "Purchase Period". The
purchase right applies automatically to all Eligible Employees, but
to participate in the 1994 Stock Purchase Plan, further action is
required as explained below. A Purchase Period is a period of
twelve months, during which time payroll deductions will be made to
fund the purchase of shares. The maximum number of shares an
Eligible Employee is eligible to purchase for any Purchase Period
is $25,000 divided by the fair market value of a share of Common
Stock on the first day of such Purchase Period. If, as of the
first day of the Purchase Period, an Eligible Employee would be
deemed for purposes of Section 423(b)(3) of the Code to own stock
of the Company (including any number of shares which such person is
entitled to purchase under the 1994 Stock Purchase Plan) possessing
5% or more of the total combined voting power or value of all
classes of stock of the Company, the maximum number of shares such
person will be entitled to purchase pursuant to the 1994 Stock
Purchase Plan will be reduced. Rights to purchase shares granted
to Eligible Employees who fail to authorize payroll deductions will
lapse automatically.
Election to Participate, Payroll Deductions
In order to purchase shares, an Eligible Employee must sign a
Stock Purchase Agreement in advance of the first day of each
Purchase Period. By doing so, the employee becomes a Participant
in the 1994 Stock Purchase Plan. Under the Stock Purchase
Agreement, each Eligible Employee who elects to participate in the
1994 Stock Purchase Plan must authorize contributions to the 1994
Stock Purchase Plan through regular payroll deductions from his or
her total cash W-2 compensation, as defined in the 1994 Stock
Purchase Plan ("Compensation"), for each payroll period, of a
specified percentage of such compensation not less than 1% and not
more than 15% in multiples of 1/2%. The amount of payroll
deduction must be established at the beginning of a Purchase Period
and may not be altered, except for complete discontinuance. The
payroll deduction authorized by a Participant will be credited to
an individual account maintained for the Participant under the 1994
Stock Purchase Plan (an "Account"). No interest or other earnings
will be paid on any amount in a Participant's Account.
Purchase of Stock
If there is credited to the Account of a Participant as of any
Exercise Date an amount at least equal to the purchase price
determined under the 1994 Stock Purchase Plan of one share of
Common Stock for the current Purchase Period, the Participant will
purchase, and the Company will sell, at such price the largest
number of whole shares of Common Stock which can be purchased with
the amount credited to his or her Account. Fractional shares will
not be issued. Any balance remaining in a Participant's Account at
the end of a Purchase Period (not in excess of the purchase price
of one share of Common Stock) generally will be carried forward
into a Participant's Account for the following Purchase Period.
No Participant may, in any calendar year, purchase that number
of shares under the 1994 Stock Purchase Plan which, when aggregated
with all other shares of stock of the Company which he or she may
be entitled to purchase under any other employee stock purchase
plan of the Company, meeting the requirements of Section 423(b) of
the Code, will exceed $25,000 in fair market value. Since the
exclusive method for purchasing shares under the 1994 Stock
Purchase Plan is through payroll deductions whose maximum limit
under the 1994 Stock Purchase Plan is 15% of Compensation, the 15%
limitation will be the effective limit on purchases of stock under
the 1994 Stock Purchase Plan for substantially all employees.
The maximum number of shares of Common Stock which may be
purchased by all Participants for any Purchase Period may not
exceed 1,000,000. In the event Participants purchase less than the
maximum number of shares during any Purchase Period, the balance of
such maximum number of shares for such Purchase Period will be
available for purchase in succeeding Purchase Periods until
purchased, or until December 31, 1999, whichever occurs first.
If, as of the Exercise Date in any Purchase Period, the
aggregate funds available for the purchase of shares of Common
Stock would result in a purchase of shares in excess of the maximum
number of shares then available for purchase under the 1994 Stock
Purchase Plan, the number of shares which would otherwise be
purchased by each Participant on the Exercise Date will be reduced
by a factor relative to the payroll deduction accumulation for each
Participant.
Other Plan Features
Participants may withdraw from the 1994 Stock Purchase Plan
prior to any Exercise Date and have their Account balances
refunded. Participants who have withdrawn may again participate
for the next Purchase Period. Each Stock Purchase Agreement under
the 1994 Stock Purchase Plan requires a Participant to hold
purchased shares until the second anniversary of the Exercise Date,
unless the Company consents to a prior transfer by a Participant.
The numbers of shares of Common Stock which can be purchased
pursuant to the 1994 Stock Purchase Plan are subject to adjustment
in the event of any substantial recapitalization of the Company.
Participants' rights to purchase stock under the 1994 Stock
Purchase Plan are not transferable. The 1994 Stock Purchase Plan
is administered by a committee appointed by the Company's Board of
Directors. The Board of Directors may amend the 1994 Stock
Purchase Plan without the consent of Participants, except that no
action can affect rights to purchase previously granted and no
amendment can, without approval of the Company's stockholders: (i)
increase the total number of shares; (ii) change the class of
Eligible Employees; (iii) decrease the minimum purchase price; (iv)
extend Purchase Periods; or (v) extend the term of the 1994 Stock
Purchase Plan. Unless terminated sooner as provided in the 1994
Stock Purchase Plan, the term of the 1994 Stock Purchase Plan
expires after December 31, 1999.
Income Tax Consequences
Rights to purchase shares issued under the 1994 Stock Purchase
Plan are intended to be options issued pursuant to an "Employee
Stock Purchase Plan" within the meaning of Section 423 of the Code.
Accordingly, if a Participant exercises a right to purchase and
holds the shares for the applicable holding period, and remains an
employee at all times during the period beginning with the date the
right to purchase is granted and ending three months before the
date it is exercised, he or she will be entitled for Federal income
tax purposes to special tax treatment. Under such circumstances,
any gain realized upon disposition of the shares will be treated as
ordinary income to the extent of the lesser of (i) 15% of the fair
market value of the shares on the date the right to purchase was
granted, or (ii) the amount by which the fair market value of the
shares on the date of disposition exceeded the purchase price. Any
further gain will be treated as long-term capital gain. The
applicable holding period is the longer of (i) two years after the
date the right to purchase is granted or (ii) one year after the
shares are issued. The Company will not be entitled to any tax
deduction for Federal income tax purposes with respect to shares so
acquired and disposed of by a Participant.
If a Participant does not hold the Common Stock for more than
two years after the right to purchase is granted and one year after
the stock is issued, he or she will not be entitled to long-term
capital gain treatment for Federal income tax purposes on any
increase in fair market value of the stock between the date the
right to purchase was granted and the date the purchase occurred.
If the Participant disposes of the Common Stock within such one-
year period or such two-year period, any excess of the fair market
value on the date of exercise over the purchase price is taxable as
ordinary income to him or her and is deductible by the Company for
Federal income tax purposes.
Securities and Exchange Act Consequences
The 1994 Stock Purchase Plan is also designed to meet the
requirements of Rule 16b-3 promulgated by the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934 (the "Exchange Act"). As a result of this feature,
acquisitions of Common Stock pursuant to the 1994 Stock Purchase
Plan will not be subject to the matching of purchases and sales
which otherwise could result in the repayment to the Company by
officers and other statutory insiders of so-called "short swing"
profits under Section 16(b) of the Exchange Act. Shares of Common
Stock offered to employees of the Company under the 1994 Stock
Purchase Plan are offered and sold only pursuant to a prospectus
contained in a registration statement filed with the SEC under the
Securities Act of 1933.
An affirmative majority of the total votes cast at the Annual
Meeting will be sufficient to approve the adoption of the 1994
Stock Purchase Plan.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon recommendation of its Audit
Committee, has appointed the firm of Arthur Andersen LLP,
independent accountants, as auditors of the Company for the fiscal
year ending December 31, 1995, subject to ratification by the
stockholders. Such firm has audited the Company's accounts since
1984. The Company is informed that no member of Arthur Andersen
LLP has any direct or any material indirect financial interest in
the Company. It is expected that representatives of Arthur
Andersen LLP will be present at the Annual Meeting where they will
have an opportunity to address the meeting, if they so desire, and
to respond to appropriate questions.
The affirmative majority of the total votes cast at the
Annual Meeting will be sufficient to ratify the appointment of the
independent accountants.
If the appointment of Arthur Andersen LLP is not ratified
by the stockholders, the Audit Committee will reconsider its
recommendation.
OTHER BUSINESS
The Board of Directors is not aware of any matters to come
before the Annual Meeting other than those stated in this Proxy
Statement.
THE BOARD OF DIRECTORS: COMMITTEES, MEETINGS AND COMPENSATION
Audit Committee
The Board's Audit Committee is currently composed of Messrs.
Karber (Chairman), Wang, Sturges, Glyptis, D'Anniballe and Elish
(ex officio). The Audit Committee reviews, at least annually, the
services performed and to be performed by the Company's independent
accountants and the fees charged for their services, and, in
connection therewith, considers the effect of those services on the
independence of such accountants. The Audit Committee also
discusses with the Company's independent accountants and management
the Company's accounting policies and reporting practices,
including the impact of alternative accounting policies. The Audit
Committee also reviews with the Company's internal audit department
the scope and results of internal auditing procedures and the
adequacy of accounting and financial systems and internal controls.
The Audit Committee may authorize the Company's independent
accountants to perform special investigations or supplemental
reviews as deemed desirable. The Audit Committee held three
meetings during 1994.
Compensation Committee
The Board's Compensation Committee is currently composed of
Messrs. Gordon C. Hurlbert (Chairman) (a Class II director who is
not standing for re-election), Bozic, Karber, Schubert, Harvey L.
Sperry (a Class I director who is not standing for re-election),
Sturges, Wang and Elish (ex officio). A report of the
Compensation Committee concerning its policies and their
applications is set forth in this Proxy Statement under "Report of
the Compensation Committee on Executive Compensation". The
Compensation Committee held four meetings in 1994.
Nominating Committee
The Nominating Committee is currently composed of Messrs.
Hurlbert (Chairman), Elish, Glyptis and Wang. The Company's By-
Laws provide for a Nominating Committee of the Board of Directors
which identifies and recommends to the Board of Directors
candidates to be nominated as Independent Directors. The
Nominating Committee held three meetings in 1994.
Meetings and Attendance
The Board of Directors held ten meetings in 1994. All
directors who served during 1994 attended at least 75% of the
aggregate of the meetings of the Board of Directors and Board
committees occurring while they served in 1994.
Directors' Compensation
Directors who are not officers or employees of the Company
receive an annual retainer of $15,000, payable monthly, and a
meeting fee of $800 for each meeting of the Board of Directors
attended, together with a meeting fee of $700 for each meeting of
a committee of the Board of Directors attended. All directors who
are not officers or other employees of the Company are eligible to
participate in the Deferred Compensation Plan for Directors. The
Plan permits participants to defer part or all of their directors'
fees for a specified year. Amounts representing deferred fees are
used to purchase shares of the Company's Common Stock at an amount
equal to 90% of the market price of the Common Stock on the first
or last trading day of the year, whichever is lower. The shares
are held in trust until distributed to the respective participants
in accordance with their election.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the
"Committee") is responsible for determining the compensation of the
executives. Set forth below are the factors and criteria used by
the Committee in establishing that compensation.
Compensation of All Executives. In order to achieve the best
corporate performance, the Company must be able to attract,
motivate and retain persons of outstanding talent and ability who
will make a substantial contribution to the growth and success of
the Company. The Committee endeavors to reach this goal by
providing executives with competitive compensation programs of
salary and incentive compensation, and by linking long-term
incentive compensation to the growth of the market price of the
Company's Common Stock, thereby aligning the interests of
executives and all shareholders. The Committee also endeavors to
provide an executive compensation package that recognizes
individual contributions as well as corporate results.
In the Committee's establishment of the Company's compensation
structure, it reviews in detail the compensation of the individuals
whose compensation is detailed in this Proxy Statement, and sets
policies for and reviews in general the compensation of
approximately 16 other members of senior management. These reviews
are designed to ensure consistency for all executives throughout
the compensation program.
The Committee reviews the total compensation package for the
Company's executives, such total compensation package consists of
two basic elements -- annual compensation and long-term incentive
compensation. In setting the executive total compensation
package, the Committee does not use a precise formula to establish
executive compensation at an exact level of comparability with
executives at other companies. However, in establishing the
executive compensation package the Committee looks to the
competitive marketplace for executive talent, with specific
comparative reference to executives in similar positions in the
steel industry, specifically considering the 9 member peer group
utilized in the discussion of Common Stock Performance herein, and
manufacturing companies generally. Information regarding such
compensation levels is provided to the Committee by a consultant
engaged in management compensation. The Committee places the
executive base salaries in the lower quartile of the comparative
scale of base salaries of executives in similar positions, and the
Company's annual performance awards at the higher end of the
comparative scale. For each executive's total compensation
package, the Committee intends to provide a level of compensation
that, in a comparison with other companies, is in the middle range
or higher depending upon performance.
Annual Compensation. Base salary of an executive is
determined subjectively but in comparison with executive salaries
as set forth in the preceding paragraph.
In 1994, the Company adopted a Performance Incentive Plan (the
"Incentive Plan") applicable to senior managers (including the
named executive officers) who are judged to have a substantial
impact on financial results. The purpose of the Incentive Plan is
to measure and reward, on an annual basis, financial and individual
performance of Incentive Plan participants and provide them with
opportunities to obtain additional compensation. Under the
Incentive Plan, participants are assigned, for each year, a target
bonus percentage of base salary to be awarded if the Company meets
its financial goals for the year and if there is a sufficient
incentive fund available to pay awards at that level.
Beginning with 1995, for each year under the Incentive Plan,
the Board of Directors will adopt financial goals for that year.
Performance is to be measured against a combination of Company-wide
financial performance standards. The amount of each participant's
incentive payment under the Incentive Plan will depend on the
achievement of financial objectives, and a remaining portion will
be dependent on achievement of personal, non-financial goals.
The maximum amount of incentive payments that may accrue for any
year is four percent of the Company's net income, and no incentive
payment will be paid for any year in which profit sharing under the
Company's Profit Sharing Plan is not also accrued. Participants in
the Incentive Plan do not participate in the Profit Sharing Plan.
Earned incentive payments may be paid in cash or other form as
determined by the Committee. Payment is expected to be made in the
year following accrual, with the payment of 1995 incentive payments
to be made on October 1, 1996. Generally, to be entitled to
payment, a participant must be employed at the end of each plan
year.
Long-term Incentive Compensation. Long-term incentive
compensation consists of awards of stock options. These awards are
designed to provide a greater community of interest between the
Company's shareholders and key employees through gains in the price
of the Common Stock over an extended period, and to encourage such
employees to remain in the employ of the Company. Long-term
incentive compensation awards are dependent upon the Committee's
general assessment of the responsibilities of the position held,
individual and Company performance, and for an executive with
responsibilities in a particular operating unit of the Company, the
performance of that operating unit.
In 1994, the Committee granted to 43 employees options to
purchase an aggregate of 504,000 shares of Common Stock at an
exercise price of $8.69 per share, which was the market price on
the date of the grant.
The Committee believes that long-term incentive compensation
is competitive with long-term compensation plans of the peer group
of the Company.
Compensation of Chief Executive Officer and Chief Operating
Officer. On January 26, 1995, Mr. Elish announced that it was his
intention to resign his position as Chairman, President and Chief
Executive Officer of the Company during 1995. He stated that the
Company had, in large measure, accomplished the objectives which he
had established when he became Chief Executive Officer in July,
1987 and that the Company needed to develop new long-term plans
which should be implemented by the executives developing the plans.
As part of a transition in management succession, Mr. Elish
resigned as President and Mr. Riederer, who had been Executive Vice
President and Chief Financial Officer, was elected President and
Chief Operating Officer. As a further inducement to Mr. Elish to
remain as Chief Executive Officer during such transition, the
employment agreement of Mr. Elish was amended to provide that if he
terminated his services not earlier than October 1, 1995 and not
later than March 31, 1996, (i) he would receive a payment of
$350,000, (ii) after termination he would receive the health
benefits provided to retirees of the Company, (iii) if such
termination occurred before January 1, 1996, he would be
compensated at the annual rate of $350,000 (his present salary
rate) for the balance of 1995 and (iv) in lieu of receiving 2/10 of
1% of the net income of the Company as a bonus for 1995, he would
participate in the Incentive Plan for 1995. In recognition of the
additional duties and responsibilities assumed by Mr. Riederer, his
employment agreement was amended to increase his annual base
compensation from $205,000 to $250,000 and to provide that, if he
is not elected as Chief Executive Officer on or before December 31,
1995, he will receive $375,000 as a termination payment provided he
agrees, if requested by the Board of Directors, to remain as
President and Chief Operating Officer for a period ending not later
than June 30, 1996.
Limitation Affecting Tax Deduction of Certain Executive
Compensation
Section 162(m) of the Code affects publicly held corporations,
such as the Company, by limiting the amount of certain compensation
in excess of $1 million per year paid to each of its chief
executive officer and four other most highly compensated executive
officers that can be deducted during the corresponding taxable
year. Certain "performance based" compensation, such as stock
options awarded under the Company's 1987 Stock Option Plan are not
subject to the limitation.
The Company was not subject to any such limitations for its
1994 taxable year and based on the anticipated levels of
compensation for the Company's executive officers in the near term,
the Company believes that the limitations under Code Section
162(m), if applicable, will not be material.
Compensation Committee
Gordon C. Hurlbert, Chairman
Michael Bozic
Phillip A. Karber
Richard F. Schubert
Harvey L. Sperry
Thomas R. Sturges
David I. J. Wang
Herbert Elish, ex officio
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1994, Mr. Elish served as Chairman of the Board of
Directors, President and Chief Executive Officer of the Company,
and is required by the Company's By-Laws to be an ex officio member
of the Compensation Committee. The Company retained Willkie Farr
& Gallagher, of which Mr. Sperry is a member, to perform legal
services for the Company during 1994.
COMMON STOCK PERFORMANCE
The following graph compares the cumulative return of an
assumed investment of $100 in the Company's Common Stock over the
periods presented with the cumulative return on an equal investment
over the same periods in a market capitalization weighted index
comprising the Company's peer group. This group of companies is
comprised of the other nine companies that, when combined with the
Company, represent in terms of net tonnage shipped the ten largest,
publicly traded domestic integrated steelmakers, namely: the U.S.
Steel Group of USX Corporation, Bethlehem Steel Corporation, LTV
Corporation, National Steel Corporation, Inland Steel Industries,
Inc., AK Steel Holding Corporation, Rouge Steel Company, WHX
Corporation and Geneva Steel Company (the "New Peer Group"). The
calculated return assumes the reinvestment of all dividends. The
data used to construct the New Peer Group includes the performance
of the U.S. Steel Group of USX Corporation since 1991, National
Steel Corporation and LTV Corporation since 1993 and AK Steel
Holding Corporation and Rouge Steel Company since 1994, as public
trading did not commence in the common stocks of these companies
until such respective dates. In past years, the Company compared
its Common Stock performance to a peer group consisting of five
companies, namely: Armco Inc., Bethlehem Steel Corporation, Inland
Steel Industries, Inc., LTV Corporation and WHX Corporation (the
"Old Peer Group"), all members of which except Armco Inc. are
included in the New Peer Group. Armco, Inc. has redirected its
business efforts to align itself as a specialty steel producer and
its performance is no longer comparable to the Company. The graph
also compares an equal investment over the same periods in the S&P
500 and, as in prior years, the New York Stock Exchange Index,
which is based upon a broad equity market.
<TABLE>
<CAPTION>
Year Company Old Peer Group New Peer Group S&P 500 NYSE
- ---- ------- -------------- -------------- ------- -----
<S> <C> <C> <C> <C> <C>
1989 100.00 100.00 100.00 100.00 100.00
1990 65.66 71.32 81.65 96.89 95.76
1991 34.05 68.41 85.02 126.42 123.96
1992 36.48 77.14 96.55 136.05 130.18
1993 62.01 97.99 127.24 149.76 148.27
1994 87.55 95.78 123.21 151.74 145.94
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 5, 1995, the only
persons (including any group of persons) who, to the knowledge of
the Company, may be deemed to be the beneficial owners of more than
5% of the Company's Common or Convertible Preferred Stock as of
that date. A beneficial owner of a security includes any person
who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has the power to vote or
direct the voting or who has investment power over the security,
which includes the power to dispose of or direct the disposition of
the security.
<TABLE>
<CAPTION>
Common Stock
Share
Name and address of beneficial owner Amount Percent of class
<S> <C> <C>
United National Bank, 11,892,234(1) 28.3%
as Trustee under the 1984
ESOP
1501 Market Street
Wheeling, WV 26003
Mark Dickstein
Dickstein Partners, Inc. 2,488,300(2) 5.9%
(collectively,
the "Reporting Persons")
9 West 57th Street
New York, NY 10019
Wellington Management Co. 2,092,200(2) 5.0%
75 State Street
Boston, MA 02109
<CAPTION>
Convertible Preferred Stock
Share
Name and address of beneficial owner Amount Percent of class
<S> <C> <C>
United National Bank, 1,748,504(3) 99%
as Trustee under the 1989 ESOP
1501 Market Street
Wheeling, WV 26003
<FN>
(1) All shares have been allocated to the accounts of participants
in the 1984 ESOP consisting of approximately 7,524 employees and
former employees of the Company. Participants generally have full
voting but limited dispositive power over securities allocated to
their accounts.
(2) The Company has received a copy of a Schedule 13-D filed with
the SEC by the Reporting Persons indicating that, at March 28,
1995, they had investment discretion and dispositive power over
2,488,300 shares of Common Stock. The Company has received a copy
of a Schedule 13-G filed with the SEC by Wellington Management Co.
("Wellington") indicating that, at December 31, 1994, Wellington
had shared investment discretion over 2,092,200 shares of Common
Stock.
(3) Includes 956,639 shares allocated to the accounts of
participants in the 1989 ESOP consisting of approximately 7,740
employees and former employees of the Company. Participants
generally have full voting but limited dispositive power over
securities allocated to their accounts.
</TABLE>
The following table sets forth, as of April 5, 1995, the total
number of shares of Company Common Stock owned beneficially by each
nominee for director, each director, the Chief Executive Officer
and the five other most highly compensated executive officers and
all of such persons and other executive officers of the Company as
a group. Included are those shares of Common Stock, if any,
allocated under the 1984 ESOP, and the percentage of outstanding
Common Stock represented thereby. The table also sets forth the
number of shares of Convertible Preferred Stock, if any, allocated
under the 1989 ESOP through the latest allocation date (December
31, 1994), and the percentage of outstanding Convertible Preferred
Stock represented thereby. Unless otherwise indicated, and except
for shares allocated to the accounts of employees under the terms
of the 1984 ESOP and 1989 ESOP, each beneficial owner has full
voting and investment power over the shares shown in the table.
<TABLE>
<CAPTION>
Convertible
Common Stock Preferred Stock
Share Share
Amount % of Class Amount % of Class
(1) (1)
<S> <C> <C> <C> <C>
Michael Bozic - - - -
William C. Brenneisen 4,008 * 468 *
James B. Bruhn 3,852 * 582 *
Richard R. Burt - - - -
Craig T. Costello 3,505 * 395 *
Robert J.D'Anniballe, - - - -
Jr.
Herbert Elish 252,113(2) * 745 *
Mark G. Glyptis 2,265 * 205 *
Gordon C. Hurlbert 27,579(3) * - -
Phillip A. Karber - - - -
Dennis R. Mangino 1,000 - 426 -
Joseph J. Nowak 1,000 - - -
Robert S. Reitman - - - -
Richard K. Riederer 34,775(4) * 606 *
Richard F. Schubert 300 * - -
Harvey L. Sperry 28,391(3) * - -
Thomas R. Sturges 19,827(3) * - -
David I.J. Wang 30,847(3) * - -
Ronald C. Whitaker 1,231 * - -
All directors and 426,542(5) 1.0% 5,576 *
executives as
a group (25 persons)
<FN>
(1) An asterisk in this column indicates ownership of less than
1%.
(2) Includes 240,000 shares subject to options currently
exercisable; and 100 shares held for Mr. Elish's daughter.
(3) Includes 27,579, 28,091, 19,827, and 20,847 shares credited
to the accounts of Messrs. Hurlbert, Sperry, Sturges, and
Wang, respectively, under the Deferred Compensation Plan for
Directors, over which shares the named individuals do not
exercise voting and/or investment power until distribution.
(4) Includes 30,000 shares subject to options currently
exercisable.
(5) Includes 270,000 shares subject to options currently
exercisable; 100 shares held by immediate family members of
directors.
</TABLE>
Additional Information-Director and Officer Securities Reports
The Company is required to identify any director or officer
who failed to file on a timely basis with the SEC a required report
relating to ownership and changes in ownership of the Company's
equity securities. Ten officers, Herbert Elish, Richard K.
Riederer, James B. Bruhn, Craig T. Costello, William C. Brenneisen,
Thomas W. Evans, Mac S. White, William R. Kiefer, Earl E. Davis,
and Narendra M. Pathipati were,as a result of administrative delays
within the Company, each late in filing one report relating to
stock options granted to each of them in November 1994. Each of
the option grants were reported on a Form 5, timely filed with the
SEC on or before February 14, 1995.
EXECUTIVE COMPENSATION
The following table sets forth information for each of the
Company's last three fiscal years, summarizing the compensation
paid to the Company's Chief Executive Officer and each of the
Company's next five most highly compensated executive officers
(collectively, the "Named Executive Officers") who were serving as
such at the end of the Company's last completed fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compens-
Annual Compensation ation
Awards
Name & Principal Position Year Salary Bonus (1) Other Annual Options
($) ($) Compensation($) (SARS)
(2)(3)
<S> <C> <C> <C> <C> <C>
Herbert Elish 1994 $350,000 $77,944 $172,974 90,000
Chairman of the Board 1993 350,000 - 205,236 -
& Chief Executive Officer 1992 350,000 - 146,923 -
Richard K. Riederer 1994 $205,000 $ 4,688 $ 21,464 35,000
President, Chief Operating 1993 191,256 - - -
Officer & Chief Finan- 1992 150,000 25,000 - -
cial Officer
James B. Bruhn 1994 $190,000 $ 4,519 $ 23,114 35,000
Executive Vice 1993 178,338 - - -
President-Commercial 1992 162,000 - - -
Craig T. Costello 1994 $150,838 $ 4,907 $ 26,418 35,000
Executive Vice President 1993 107,508 - - -
Operations 1992 100,008 - - -
William C. Brenneisen 1994 $150,000 $ 3,947 $ 19,863 30,000
Senior Vice President- 1993 143,001 - - -
Human Resources 1992 122,004 - - -
Dennis R. Mangino 1994 $150,000 $ 3,755 $ 5,789 -
Former Vice President 1993 140,010 - - -
Product Quality and 1992 130,020 - - -
Weirtec
<CAPTION>
- -------------------------------All other compensation (4)(5)(6)($)
<S> <C> <C>
Herbert Elish 1994 $235,062
1993 214,794
1992 198,500
Richard K. Riederer 1994 $ 31,487
1993 829
1992 510
James B. Bruhn 1994 $ 33,208
1993 773
1992 412
Craig T. Costello 1994 $ 34,609
1993 462
1992 251
William C. Brenneisen 1994 $ 29,207
1993 620
1992 311
Dennis R. Mangino 1994 $ 84,162
1993 607
1992 330
<FN>
(1) In 1995, Mr. Elish received a bonus in respect of 1994
of $77,944 pursuant to his employment agreement.
Messrs. Riederer, Bruhn, Costello, and Brenneisen
received the sums reported in 1995, in respect of
1994 according to the Company's Profit Sharing
Plan; Mr. Riederer received a bonus of $25,000 in
1992 for services pursuant to his employment
agreement.
(2) Aggregate amounts of perquisites and other
personal benefits that are the lesser of $50,000 or
10% of each of the respective Named Executive
Officers combined salary and bonuses, have been
omitted. Under the terms of the Company's
Supplemental Executive Retirement Plan (the
"SERP"), the Company paid income taxes associated
with contributions made to trusts established
under the SERP on behalf of Messrs. Riederer,
Bruhn, Costello, Brenneisen and Mangino in the
amounts of $21,464, $23,114, $26,418, $19,863 and
$5,789, respectively.
(3) The terms of Mr. Elish's current and prior employment
agreements provide for the purchase of annuity
contracts. The Company has purchased annuity
contracts, which vest over time, in Mr. Elish. As
these contracts vest, Mr. Elish incurs reportable
taxable income, without a corresponding cash
payment, equal to the replacement value of the
vested contract. Mr. Elish is also entitled to
receive payments equal to his incremental income
tax liability as a result of the vesting of the
annuities. In 1994, 1993, and 1992, Mr. Elish
received $172,974, $168,926, and $110,823,
respectively, related to such tax liabilities.
Other amounts reported represent perquisites and
other personal benefits paid by the Company
including life insurance premiums in the
amount of $26,143 and $26,693 for 1993 and 1992,
respectively.
(4) Includes the replacement value of annuity contracts
which vested pursuant to the terms of Mr. Elish's
employment agreement in the amounts of $234,144,
$213,772, and $197,919 for the years 1994, 1993,
and 1992, respectively. Other amounts reported
represent contributions made by the Company on
behalf of Mr. Elish pursuant to the terms of the
1989 ESOP.
(5) Amounts shown for 1994 include contributions made by
the Company of $30,569, $32,290, $33,691, $28,289
and $8,244 to a non-qualified SERP trust for the
benefit of Messrs. Riederer, Bruhn, Costello,
Brenneisen and Mangino, respectively. Other
amounts reported represent contributions made by
the Company on behalf of Messrs. Riederer, Bruhn,
Costello, Brenneisen and Mangino pursuant to the
terms of the 1989 ESOP.
(6) Mr. Mangino's employment with the Company was
terminated effective December 31, 1994. Of the
amount shown for 1994, $75,000 related to severance
payments.
</TABLE>
1994 STOCK OPTION GRANTS
The following table sets forth all stock options granted
during 1994 to named executive officers, including certain
additional information such as the potential gain that could be
realized if Company Common Stock were to appreciate in value at
specified annual rates over the related option terms:
<TABLE>
<CAPTION>
Options/SAR Grants in last fiscal year
Individual Grants
- -------------------------------------------------------------------------------
Name Number of % of Exercise Expira- Grant Date Present
Options Total Price tion Value
Granted in Options per Date
1994 Granted share
(1) to employees (2) (3)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
H. Elish 90,000 18.0% $8.69 3/31/1999 $406,800
R.K. Riederer 35,000 7.0% $8.69 11/15/2004 $226,100
J.B. Bruhn 35,000 7.0% $8.69 11/15/2004 $226,100
C.T. Costello 35,000 7.0% $8.69 11/15/2004 $226,100
W.C. Brenneisen 30,000 6.0% $8.69 11/15/2004 $193,800
D.R. Mangino - - - - -
- -------------------------------------------------------------------------------
<FN>
(1) Options granted in 1994 to the Named Executive Officers, other
than Mr. Elish, become exercisable in three equal annual
installments commencing with October 1996. In the case of Mr.
Elish, such options were immediately exercisable and expire on
March 31, 1999.
(2) The exercise price was determined using the average of the
high and low selling price of the Company's Common Stock on the
date of the grant, in accordance with the terms of the Company's
1987 Stock Option Plan.
(3) The Company used the Black-Scholes Option Valuation Model to
determine grant date present value of the options. The Company
does not advocate or necessarily agree that the Black-Scholes Model
properly reflects the value of an option. The assumptions used in
calculating the option value were as follows: A risk-free interest
rate of 8%, the rate applicable to a ten-year treasury security at
the time of the award; A dividend yield of 0%, the yield at the
conclusion of the most recently completed fiscal year; Volatility
of 0.527, calculated using daily stock returns for the twelve-month
period preceding the option award; a stock price at date of grant
of $8.69; the price at which the option can be exercised is fair
market value ($8.69); and a ten-year term (except for Mr. Elish's
option term, which is 4.4 years-extending through March 31, 1999).
No adjustments were made for forfeitures or vesting restrictions on
exercise. The value of an option on the Company's Common Stock
under the Black-Scholes model of option valuation applying the
preceding assumptions was $4.52 per optioned share for Mr. Elish
and $6.46 per optioned share for the other named executives.
</TABLE>
Option Exercises/Outstanding Options and Year End Values
The following table sets forth information regarding the
exercise of stock options during 1994 and the unexercised options
held as of the end of the 1994 fiscal year by the named executive
officers in the Summary Compensation Table. No stock appreciation
rights ("SARs") were granted to any of the Named Executive
Officers.
<TABLE>
<CAPTION>
Aggregated Options/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
Total
Number of Value of Shares
Unexercised Unexercised
Options/SARS In-the-money
at Fiscal Options/SARS
Year end at Fiscal Year-
(#) End ($)
- --------------------------------------------------------------------------
Name No. of Shares Total Value Exercisable/ Exercisable/
Underlying Realized Unexercisable Unexercisable
Options/SARS ($) (1) (2)
Exercised
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H. Elish - - 240,000/ -0- 128,400/-0-
R.K. Riederer - - 30,000/35,000 20,100/10,850
C.T. Costello - - -0- /35,000 -0-/10,850
J.B. Bruhn - - -0- /35,000 -0-/10,850
W.C. Brenneisen - - -0- /30,000 -0-/ 9,300
D.R. Mangino - - - / - -
- ----------------------------------------------------------------------
<FN>
(1) Options were granted to Messrs. Elish and Riederer on the
commencement of their employment with the Company in 1987 and 1989,
respectively; the options are currently exercisable at a price of
$8.33 per share.
(2) The "Value of Unexercised In-the-Money Options at Fiscal Year-
End" is equal to the difference between the closing price ($9 per
share) of the Company's Common Stock on the New York Stock Exchange
on its last trading day in 1994 (December 30, 1994) and the
exercise price ($8.69 for the shares granted in 1994 and $8.33 for
previously granted shares), times the number of shares underlying
the options.
</TABLE>
EMPLOYMENT AGREEMENTS WITH CERTAIN EXECUTIVES
Mr. Elish entered into an employment agreement with the
Company on July 1, 1990, which was amended August 5, 1993 and
January 26, 1995, (the "Employment Agreement"). The Employment
Agreement is for an indefinite term and can be terminated by either
party. The Employment Agreement provides for termination by the
Company for disability, for "just cause" (as defined) and without
cause. Mr. Elish may terminate employment within 180 days after
the election to the Board of Directors of a person not nominated by
the Board (except for Union Directors). For a further description
of the Employment Agreement, see "Report of Compensation Committee
on Executive Compensation", herein.
The Employment Agreement provides for a base salary of
$350,000 per year. The Employment Agreement also provides for
supplemental life insurance benefits, supplemental retirement
benefits in the form of annuities (as hereinafter described), and
for the immediate vesting of annuities with respect to supplemental
retirement benefits. The Employment Agreement provides, for cash
payments to Mr. Elish for certain income tax liabilities incurred
upon the vesting of the annuities.
Pursuant to provisions which provide for supplemental
retirement benefits under the Employment Agreement, the Company has
purchased five annuity contracts, which provide for certain cash
annuity payments, payable to Mr. Elish commencing at age 62, for
life, or if Mr. Elish does not survive for 20 years, payable to his
designated beneficiary for the remainder of such 20 year period,
and thereafter to his surviving spouse, if any, for her life. The
Employment Agreement provides that the annuities vest at the rate
of one annuity contract on each of July 1, beginning 1991 through
1995. All of the annuity contracts vest in the event that Mr.
Elish's employment is terminated, except for a termination by the
Company for just cause, in which case those annuity contracts which
have not vested are forfeited.
Mr. Riederer, President, Chief Operating Officer and Chief
Financial Officer and a director, has an employment agreement with
the Company, which was amended on January 26, 1995, providing a
base salary of $250,000. The agreement also provides for
supplemental disability income and supplemental life insurance.
The agreement may be terminated by the Company or by Mr. Riederer.
For a further description of the employment agreement of Mr.
Riederer, see "Report of the Compensation Committee on Executive
Compensation", herein.
Mr. Bruhn, Executive Vice President - Commercial and a
director, has an employment agreement with the Company which
requires the Company to pay 18 months compensation if such
agreement is terminated by the Company without cause as follows:
12 months in one lump sum payable within 10 days following
termination and six months in six monthly installments beginning in
the 13th month following termination. Mr. Bruhn's employment
agreement also provides supplemental retirement benefits whereby he
is to be credited for two years of service for pension purposes for
each actual year of service up to a maximum of 20 years of credit
for 10 years of service.
Messrs. Brenneisen and Costello have employment agreements
with the Company which require the Company to pay 18 months
compensation if such agreements are terminated by the Company
without cause as follows: 12 months in one lump sum payable within
10 days following termination and six months in six monthly
installments beginning in the 13th month following termination.
PENSION PLAN
The following table shows the estimated annual retirement
benefit payable, beginning at normal retirement age, under the
Company's Retirement Plan (the "Retirement Plan") as in effect on
January 1, 1995, on a straight life annuity basis to salaried
employees in the earnings and years of service classifications
indicated.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Years of Service
Renumeration(1) 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$125,000 23,462 33,692 43,922 54,151 64,381
150,000 29,369 41,567 53,766 65,964 78,162
175,000 35,275 49,442 63,609 77,776 91,943
200,000 41,181 57,317 73,453 89,589 105,725
225,000 47,088 65,192 83,297 101,401 119,506
250,000 52,994 73,067 93,141 113,214 120,000
300,000 64,806 88,817 112,828 120,000 120,000
400,000 88,431 120,000 120,000 120,000 120,000
450,000 100,244 120,000 120,000 120,000 120,000
500,000 112,056 120,000 120,000 120,000 120,000
<FN>
(1) The highest benefit level is based on the maximum
pensionable earnings (as described below) allowable under the
Code ($150,000 effective January 1, 1994, as indexed for cost-of-
living in future years) and the maximum annual benefit amount
allowable under the Code. Benefits accrued prior to January 1,
1994 are preserved (based on a $200,000 annual maximum); however,
none of the named executive officers had accrued a benefit amount
as of such date exceeding the maximum amount set forth in the above
table. Section 415 of the Code limits the maximum annual benefit
which may be paid from a qualified defined benefit plan (such as
the Retirement Plan) at age 65 with an actuarial reduction for
earlier commencement. This limitation is indexed for future cost-
of-living increases. In 1995, the maximum annual benefit amount is
$120,000.
</TABLE>
The Company maintains the Retirement Plan, a noncontributory
pension plan, which covers all employees who have completed one
year of service and attained age 21. The Retirement Plan meets the
funding requirements of the Employee Retirement Income Security Act
of 1974. Full vesting is obtained after five years of pension
service. The calculation of retirement benefits for salaried
employees is generally based upon length of service and average
annual pension compensation (as defined in the Retirement Plan) for
the highest five years of the fifteen years preceding retirement.
Effective January 1, 1995, average annual pension compensation
generally consists of W-2 earnings plus pre-tax 401(k) plan
contributions. Prior to January 1, 1995, pension earnings
consisted of earnings (base salary or hourly wages and bonuses or
profit sharing payments), reduced by cost-of-living increases
granted after 1974, and increased by the greater of (i) 50% of such
cost-of-living increases or (ii) amounts payable under the
Company's Profit Sharing Plan formula. Annual pension compensation
for the purposes of the Retirement Plan benefit amount calculations
for 1994 for the named executive officers was $150,000 for Mr.
Elish, $150,000 for Mr. Riederer, $150,000 for Mr. Bruhn, $145,939
for Mr. Costello, $145,101 for Mr. Mangino and $145,101 for Mr.
Brenneisen. As of December 31, 1994, Messrs. Elish, Riederer,
Bruhn, Costello, Mangino and Brenneisen had credited service under
the Retirement Plan of 7.5, 5.11, 7.6, 28.11, 4.4 and 9.3 years,
respectively. In certain circumstances, pension benefits are
subject to integration with social security benefits.
In 1994, the Company established a non-qualified, supplemental
executive retirement plan (the "SERP") which covers management
employees in Company job class 56 and above. The SERP is a defined
contribution target-benefit plan under which a projected retirement
benefit at age 62 is calculated for each participant based on W-2
earnings and projected service to age 62, reduced by the
participant's projected benefit under the Retirement Plan and a
predecessor plan, if applicable. A payment is made to each
participant for the first year of participation equal to the after-
tax present value of the portion of the target benefit accrued to
that date. This payment is then contributed to a trust established
by the participant. The trust assets are payable to the
participant at age 62 or at an earlier unreduced retirement. For
subsequent years of participation, additional payments are made to
the participant for contribution to the trust in amounts which are
determined so as to provide sufficient assets in the trust at age
62 equal to the then present value of the target benefit. Annual
payments to participants under the SERP constitute taxable income
and have been reflected in the Summary Compensation Table under
"Executive Compensation". The named executive officers, except for
Mr. Elish, were covered by the SERP in 1994. Mr. Elish became a
participant in 1995.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders' proposals to be included in the Company's Proxy
Statement for the 1996 Annual Meeting of Stockholders must be
received by the Company at its executive offices located at 400
Three Springs Drive, Weirton, West Virginia 26062 no later than
December 31, 1995.
Suggestions for nominees for Independent Directors may be
made, not less than sixty (60) days prior to the Annual or Special
Meeting at which an election for directors is to occur, by any
stockholder in writing addressed to the Nominating Committee, in
care of the Secretary of the Company.
By Order of the Board of
Directors,
Herbert Elish,
Chairman and
Chief Executive Officer
Weirton, West Virginia
April 25, 1995
CONFORMED COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1994 MAY BE OBTAINED WITHOUT CHARGE BY
ANY STOCKHOLDER TO WHOM THIS PROXY STATEMENT IS SENT, UPON WRITTEN
REQUEST TO THE DIRECTOR OF INVESTOR RELATIONS, WEIRTON STEEL
CORPORATION, 400 THREE SPRINGS DRIVE, WEIRTON, WEST VIRGINIA 26062.
