<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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:
- --------------------------------------------------------------------------------
<PAGE> 2
WEIRTON STEEL CORPORATION
400 THREE SPRINGS DRIVE
WEIRTON, WV 26062
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1996
Dear Stockholder:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of
Weirton Steel Corporation, a Delaware corporation (the "Company"), will be held
at the St. John Arena, 3151 Johnson Road, Steubenville, Ohio, on Wednesday, May
22, 1996, at 7:00 P.M., Eastern Daylight Time, for the following purposes:
1. To elect five directors for a three-year term and until their successors
have been elected and qualified;
2. To ratify the appointment of Arthur Andersen LLP as the Company's
independent accountants for the fiscal year ending December 31, 1996;
and
3. 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 March 25, 1996, as the date for the
determination of the holders of record of stock entitled to notice of, and to
vote at, the Annual Meeting. A complete list of such stockholders will be open
for examination by any stockholder for any purpose germane to the meeting for a
period of at least 10 days prior to the meeting. The list will be available at
the Company's office, 400 Three Springs Drive, Weirton, West Virginia, during
ordinary business hours.
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 17, 1996
<PAGE> 3
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 1996 Annual Meeting of Stockholders (the
"Annual Meeting") to be held on May 22, 1996, and any adjournments thereof. This
Proxy Statement and the accompanying form of proxy are being mailed on or after
April 17, 1996 to stockholders of record as of March 25, 1996.
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 five directors; 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 year ended
December 31, 1995 has been mailed to stockholders prior to or with 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.
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 March 25, 1996 (the "Record Date") are entitled to vote on matters
to be presented at the Annual Meeting. On the Record Date, 42,346,794 shares of
Common Stock and 1,786,091 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
<PAGE> 4
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 aware
of one 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.
ELECTION OF DIRECTORS
The Charter provides for a Board of Directors consisting of 14 persons. It
requires that seven directors ("Independent Directors") can not 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
one director ("ESOP Director"), who must have the qualifications of an
Independent Director, is to be nominated by an ESOP Nominating Committee, which
Committee is elected by the 1984 ESOP and 1989 ESOP participants. 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 (currently the ISU) and two persons
designated by the primary collective bargaining agent.
The Charter also provides for the Board of Directors to be 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. The five Class III 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 of the following Class III directors, to serve for a term of three
years, and until their successors are
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<PAGE> 5
elected and qualified: Craig T. Costello and James B. Bruhn, Management
Directors; and Robert J. D'Anniballe, Jr., Mark G. Glyptis and Phillip A.
Karber, Union Directors.
Unless authority to vote for any one or more of the Class III 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 March 15, 1996) 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.
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
- --------------------------- ------------------------------------------------------- --------
<S> <C> <C>
CLASS III DIRECTORS: NOMINEES TO SERVE IN OFFICE UNTIL 1999
James B. Bruhn Executive Vice President-Commercial of the Company 1990
Age 55 (1) since 1994; Vice President-Tin Mill Products Business
from 1992 to 1994; Vice President-Tin Mill Products
Sales from 1987 to 1992. Employee of the Company since
1987.
Craig T. Costello Executive Vice President-Manufacturing of the Company 1996
Age 48 (1) since 1995; Vice President-Operations October 1993 to
1995; General Manager-Operations 1989 to 1993; employee
of the Company since 1966.
Robert J. D'Anniballe, Jr. Partner in Alpert, D'Anniballe & Visnic, attorneys; 1990
Age 39 (2) General Counsel to the ISU.
Mark G. Glyptis President of the ISU since August 1991; employee of the 1991
Age 44 (2) Company since 1973.
Phillip A. Karber Corporate Vice President of BDM International, Inc., a 1992
Age 49 (2) firm that provides information technology services to
both the public and private sector in the United States
and abroad since 1989; joined BDM in 1971; during a
leave of absence from BDM, served as an advisor on
strategy development to the Secretary of Defense from
1981 to 1983; Director, German American Business
Association; Washington, D.C. Metropolitan Area
Y.M.C.A; Advisory Board, Mosher Institute, Texas A&M
University.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
- --------------------------- ------------------------------------------------------- --------
<S> <C> <C>
CLASS I DIRECTORS: TO CONTINUE IN OFFICE UNTIL 1997
Richard K. Riederer President and Chief Executive Officer of the Company 1993
Age 52 (1) since November 1995; President and Chief Operating
Officer since January 1995; 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; employee of the Company since
1989; Director of Portico Funds.
Michael Bozic Chairman, Chief Executive Officer and Director of 1994
Age 55 (3) Levitz Furniture Corporation since 1995; former
President and Chief Executive Officer and Director of
Hills Stores Company 1991 through 1995; Director of
EagleMark Financial Services, Inc., Dean Witter
InterCapital, Inc. and United Negro College Fund.
Richard R. Burt Chairman of the Board of the Company since April 1, 1996
Age 49 (3) 1996; Chairman of International Equity Partners, LLP,
an international financial services firm since 1994;
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; Director of
the Lauder Institute of the Wharton School of Business,
Hollinger International Inc. and The Mitchell Hutchin
Funds managed by PaineWebber, Inc.; Chairman of the
Board of Video Lottery Technologies, Inc.; Member of
the International Advisory Council of the Bank of
Montreal.
Thomas R. Sturges Executive Vice President of The Harding Group Inc., an 1986
Age 51 (3) investment firm, since February 1990.
CLASS II DIRECTORS: TO CONTINUE IN OFFICE UNTIL 1998
Joseph J. Nowak Director of Penn Power Company. Vice-President of 1995
Age 64 (4) Armco, Inc., a specialty steel producer, from 1992 to
1993; Executive Vice President of Cyclops Corporation,
a specialty steel producer, from 1988 to 1992.
Robert S. Reitman Chairman, President, Chief Executive Officer and 1995
Age 62 (3) Director of The Tranzonic Companies, a manufacturer of
paper and plastic products principally for industrial
use; Director of Society National Bank.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
- --------------------------- ------------------------------------------------------- --------
<S> <C> <C>
Richard F. Schubert Former President and Chief Executive Officer of The 1983
Age 59 (3) Points of Light Foundation from 1990 to 1995; Chairman
of the Peter F. Drucker Foundation since 1995; Chairman
of BioRelease, Inc., a biotechnology firm; Director of
National Alliance of Business and Management Training
Corporation.
David I.J. Wang Director of U.G.I. Corporation, Americas, Inc. and 1992
Age 63 (3) several privately held companies; Member of Advisory
Boards of Georgia Institute of Technology and Hampton
University; Executive Vice President and Director of
International Paper Co. from 1987 to 1991.
Ronald C. Whitaker President and Chief Executive Officer of EWI, Inc., a 1995
Age 48 (3) supplier of metal fabrications and prototype products
for automotive/truck/bus industries since 1995; former
Chairman, President and Chief Executive Officer of
Colt's Manufacturing Company from 1992 to 1995;
President of Wheelabrator Corporation from 1988 to
1992.
<FN>
- ---------
(1) Management Director
(2) Union Director
(3) Independent Director
(4) ESOP Director
</TABLE>
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, 1996, 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.
5
<PAGE> 8
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. Sturges
(Chairman), D'Anniballe, Wang and Whitaker. 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 fees 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 four meetings during 1995.
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
The Board's Management Development and Compensation Committee is currently
composed of Messrs. Bozic (Chairman), Nowak, Reitman, Schubert, and Whitaker. A
report of the Management Development and Compensation Committee concerning its
policies and their applications is set forth in this Proxy Statement under
"Report of the Management Development and Compensation Committee on Executive
Compensation". The Management Development and Compensation Committee held six
meetings in 1995.
NOMINATING COMMITTEE
The Nominating Committee is currently composed of Messrs. Reitman
(Chairman), Glyptis, Nowak, Riederer and Whitaker. 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 1995.
CORPORATE RESPONSIBILITY COMMITTEE
The Corporate Responsibility Committee is currently composed of Messrs.
Schubert (Chairman), Bruhn, Burt, D'Anniballe, Glyptis, Nowak and Sturges. The
Corporate Responsibility Committee advises management of the Company concerning
matters of public and internal policy with regard to such matters as
governmental and regulatory affairs, safety and health of employees, charitable
contributions and ethics, and recommends, for action by the full Board,
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<PAGE> 9
policies concerning such matters where appropriate. The Corporate Responsibility
Committee held two meetings in 1995.
FINANCE AND STRATEGIC PLANNING COMMITTEE
The Finance and Strategic Planning Committee is currently composed of
Messrs. Wang (Chairman), Bozic, Bruhn, Burt, Glyptis, Karber, Nowak and Reitman.
The Committee reviews and confers with management on the following subject
matter in the finance function: (i) the Company's projected financial condition
and financial plans; (ii) the Company's financial policies, including dividend
recommendations; (iii) the management and performance of the Company's employee
benefit funds; and (iv) the Company's policies and practices on financial risk
management.
In the strategic planning area, the Committee assists management in the
development of a viable strategic plan including the following: (i) projections
of the market and competitive environment; (ii) assessment of the Company's core
strengths and weaknesses; (iii) identification of key opportunities and threats;
and (iv) articulation of the Company's long-range direction, including action
plans addressing both the core business and growth opportunities. The Finance
and Strategic Planning Committee held one meeting in 1995.
MEETINGS AND ATTENDANCE
The Board of Directors held six regular meetings in 1995. All directors who
served during 1995 attended at least 75% of the aggregate of the meetings of the
Board of Directors and Board committees occurring while they served in 1995.
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. The Chairman
of the Board of Directors serves as a non-executive Chairman and devotes
substantial time to this position and receives an annual retainer of $120,000,
payable quarterly, but does not receive additional fees for attendance at
meetings of the Board or its Committees. Directors who are officers or other
employees of the Company do not receive a retainer or meeting fees. 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 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.
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<PAGE> 10
REPORT OF THE MANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Management Development and Compensation Committee of the Board of
Directors (the "Compensation Committee") is responsible for determining the
compensation of the executives. Set forth below are the factors and criteria
used by the Compensation Committee in establishing that compensation.
Compensation of All Executives. In order to maximize 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 Compensation Committee endeavors to reach
this goal by providing executives with competitive programs of salary and
incentive compensation. The Compensation Committee also endeavors to provide an
executive compensation package that recognizes individual contributions as well
as corporate results.
In the Compensation 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 the officers of the corporation and other
members of senior management covered by a Performance Incentive Plan. These
reviews are designed to ensure consistency for all executives throughout the
compensation program.
The Compensation 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
establishing the executive compensation package the Compensation 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 nine 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 Compensation Committee by
a consultant engaged in management compensation. The Compensation Committee
places the executive base salaries in the lower to middle range of the
comparative scale of base salaries of executives in similar positions, and the
Company's annual performance awards at the middle range of the comparative
scale. For each executive's total compensation package, the Compensation
Committee intends to provide a level of compensation that, in a comparison with
other companies, is in the middle range 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 1995, the Company adopted a Performance Incentive Plan (the "Incentive
Plan") applicable to senior managers (including the Named Executive Officers, as
defined in this Proxy Statement) who are judged to have a substantial impact on
financial results. The purpose of the plan is to measure and reward, on an
annual basis, financial and individual performance of 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
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<PAGE> 11
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, the Board of Directors adopted and for future years
will adopt financial goals under the Incentive Plan. Performance is to be
measured against a combination of Company-wide financial performance standards.
A portion 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 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 Company's Profit
Sharing Plan.
Earned incentive payments may be paid in cash or such other form as may be
determined by the Compensation Committee, in the year following the year of
measurement. Initial payments under the Incentive Plan are being finalized, and
are expected to be paid in the second quarter of 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, under the Company's 1987 Stock Option Plan.
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 Compensation 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. Shares available for options
have been substantially exhausted under the existing plan. As a result, options
will not be able to be granted, unless current options lapse without exercise or
the Company adopts another option-based plan. As a result, the Compensation
Committee is exploring other methods of long-term incentive compensation
calculated to more closely align the interests of stockholders and key
employees.
In 1995, the Compensation Committee granted to one employee options to
purchase an aggregate of 15,000 shares of Common Stock at an exercise price of
$8.88 per share and 40,000 shares of Common Stock at an exercise price of $4.375
per share, each of which was the market price on the date of the grant.
COMPENSATION OF CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING OFFICER
On January 26, 1995, Herbert Elish, who had served as President and Chief
Executive Officer since 1987, announced that it was his intention to retire. As
part of a transition in management succession, Mr. Elish resigned his position
as President in January 1995 and Richard K. Riederer, who had been Executive
Vice President-Finance 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, his employment agreement was
9
<PAGE> 12
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 (paid in January 1996); (ii) after termination he would receive the
health benefits provided to retirees of the Company; and (iii) 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. Mr. Elish terminated
employment on December 31, 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.
In November 1995, Mr. Elish resigned as Chief Executive Officer and the
Board of Directors elected Mr. Riederer to replace him. Mr. Riederer has entered
into a new employment agreement with the Company providing for the following
significant items: (i) an annual base compensation of $375,000; (ii) a severance
payment of two times the base compensation in the event that his employment
agreement is terminated by the Company without cause or in the event of a change
in control in the Board of Directors of the Company; (iii) his continued
participation in the Incentive Plan; and (iv) his receipt of life insurance
benefits in excess of those provided pursuant to the Company's basic program of
insurance for its employees.
LIMITATION ON DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986 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.
Although the Company was subject to a limitation for its 1995 taxable year
for one of the Named Executive Officers, the Company believes that the
limitations under Code Section 162(m) are not material to its financial
condition or results of operations.
MANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE
Michael Bozic, Chairman
Joseph J. Nowak
Robert S. Reitman
Richard F. Schubert
Ronald C. Whitaker
10
<PAGE> 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, Mr. Elish served as Chairman of the Board of Directors, and
Messrs. Elish and Riederer both served as President and Chief Executive Officer
of the Company, and in such capacity served as an ex officio member of the
Compensation Committee, while serving. Until May 1995, Harvey L. Sperry served
as a 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 1995.
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 composed 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: 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 calculated return
assumes the reinvestment of all dividends. The data used to construct the 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. The graph also compares an equal investment over the same periods in the
S&P 500.
11
<PAGE> 14
<TABLE>
<CAPTION>
Measurement Period Weirton Steel
(Fiscal Year Covered) Corporation S&P 500 Peer Group
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 51.85 130.47 104.13
1992 55.56 140.41 118.25
1993 94.44 154.56 155.85
1994 133.33 156.60 150.91
1995 61.11 215.45 126.24
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 15, 1996, 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
12
<PAGE> 15
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
--------------------------
PERCENT
SHARE OF
NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT CLASS
- -------------------------------------------------------------- ---------- -------
<S> <C> <C>
United National Bank, as Trustee under the 1984 ESOP 11,269,993(1) 26.6%
1501 Market Street, Wheeling, WV 26003
Wellington Management Company 3,963,600(2) 9.4%
75 State Street, Boston, MA 02109
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED
STOCK
--------------------------
PERCENT
SHARE OF
NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT CLASS
- -------------------------------------------------------------- ---------- -------
<S> <C> <C>
United National Bank, as Trustee under the 1989 ESOP 1,717,288(3) 95.4%
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 7,372 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-G filed with the SEC by
Wellington Management Company ("Wellington") indicating that, at February 2,
1996, Wellington had investment discretion over 3,963,600 shares of Common
Stock.
(3) Includes 1,087,288 shares allocated to the accounts of participants in the
1989 ESOP consisting of approximately 7,561 employees and former employees
of the Company. Participants generally have full voting but limited
dispositive power over securities allocated to their accounts.
</TABLE>
13
<PAGE> 16
The following table sets forth, as of March 15, 1996, the total number of
shares of Company Common Stock owned beneficially by each nominee for director,
director, the Named Executive Officers (as hereinafter defined) and all
directors and officers of the Company as a group. Included are those shares of
Common Stock, if any, allocated under the 1984 ESOP. 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, 1995), and the
percentage of outstanding Common and 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 PREFERRED
COMMON STOCK STOCK
------------------------- ------------------------
SHARE % OF SHARE % OF
AMOUNT CLASS(1) AMOUNT CLASS(1)
------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Michael Bozic......................... 12,357 -- -- --
William C. Brenneisen................. 4,008 * 573 *
James B. Bruhn........................ 3,852 * 687 *
Richard R. Burt....................... -- -- -- --
Craig T. Costello..................... 3,505 * 500 *
Robert J. D'Anniballe, Jr............. -- -- -- --
Herbert Elish......................... 252,113(2) * 851 *
Thomas W. Evans....................... 3,775 * 542 *
Mark G. Glyptis....................... 2,265 * 256 *
Phillip A. Karber..................... -- -- -- --
Joseph J. Nowak....................... 1,000 -- -- --
Robert S. Reitman..................... 4,225(3) -- -- --
Richard K. Riederer................... 34,775(4) * 711 *
Richard F. Schubert................... 300 * -- --
Thomas R. Sturges..................... 27,211(3) * -- --
David I.J. Wang....................... 39,189(3) * -- --
Ronald C. Whitaker.................... 4,112(3) * -- --
All directors and executives as a
group (24 persons).................. 398,837(5) * 6,099 *
<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 4,225, 19,827, 29,189 and 2,112 shares credited to the accounts of
Messrs. Reitman, Sturges, Wang and Whitaker, 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>
14
<PAGE> 17
EXECUTIVE COMPENSATION
The following table sets forth information for each of the Company's last
three fiscal years, summarizing the compensation paid to each person serving as
the Company's Chief Executive Officer during 1995 and each of the Company's next
four 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.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------
ANNUAL COMPENSATION AWARDS
---------------------------------------------------------
OTHER ANNUAL ALL OTHER
SALARY BONUS COMPENSATION COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2)(3) OPTION/SARS (#) ($)(4)
- ---------------------------- ---- -------- ------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Herbert Elish* 1995 $350,000 $ ** $412,376 -- $256,898
former Chairman of the 1994 350,000 77,944 198,605 90,000 235,062
Board and CEO 1993 350,000 -- 205,236 -- 214,794
Richard K. Riederer 1995 $261,882 $ ** $ 88,311 55,000 $ 433
President, Chief Executive 1994 205,000 4,688 21,464 35,000 918
Officer & Chief Operating 1993 191,256 -- -- -- 829
Officer
James B. Bruhn 1995 $198,453 $ ** $ 91,716 -- $ 433
Executive Vice 1994 190,000 4,519 23,114 35,000 918
President-Commercial 1993 178,338 -- -- -- 773
Craig T. Costello 1995 $189,000 $ ** $ 21,133 -- $ 433
Executive Vice President 1994 150,838 4,907 26,418 35,000 918
Manufacturing 1993 107,508 -- -- -- 462
William C. Brenneisen* 1995 $157,000 $ ** $ 69,845 -- $ 433
Senior Vice President- 1994 150,000 3,947 19,863 30,000 918
Human Resources 1993 143,001 -- -- -- 620
Thomas W. Evans 1995 $141,015 $ ** $123,347 -- $ 408
Vice President- 1994 134,004 3,661 16,242 14,000 819
Materials Management 1993 124,004 -- -- -- 537
<FN>
- ---------
* Mr. Elish and Mr. Brenneisen ceased employment with the Company December 31,
1995 and March 7, 1996, respectively.
** Bonuses to be paid later in 1996 pursuant to the Performance Incentive Plan
for the year 1995 have not yet been calculated, audited or finalized.
</TABLE>
15
<PAGE> 18
- ---------
(1) In 1995, Mr. Elish received a bonus in respect of 1994 of $77,944 pursuant
to his employment agreement. Messrs. Riederer, Bruhn, Costello, Brenneisen
and Evans received the 1994 sums reported in 1995, according to the
Company's Profit Sharing Plan.
(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 Officer's
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 Evans in the amounts of $21,464, $23,114, $26,418, $19,863 and $16,242,
respectively for 1994 and on behalf of Messrs. Elish, Riederer, Bruhn,
Costello, Brenneisen and Evans in the amounts of $196,365, $88,311, $91,716,
$21,133, $69,845 and $123,347, respectively for 1995.
(3) The terms of Mr. Elish's prior employment agreements provided for the
purchase of annuity contracts. The Company purchased annuity contracts,
which vested over time, in Mr. Elish. As these contracts vested, Mr. Elish
incurred reportable taxable income, without a corresponding cash payment,
equal to the replacement value of the vested contract. Mr. Elish was also
entitled to receive payments equal to his incremental income tax liability
as a result of the vesting of the annuities. In 1995, 1994, and 1993, Mr.
Elish received $189,464, $172,974, and $168,926, 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 $26,547, $25,631 and $26,143 for 1995, 1994 and 1993,
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 $256,465,
$234,144, and $213,772 for the years 1995, 1994, and 1993, respectively.
Other amounts reported represent contributions made by the Company on behalf
of the Named Executive Officers pursuant to the terms of the 1989 ESOP.
1995 STOCK OPTION GRANTS
The following table sets forth information about options granted during
1995 to the Named Executive Officers. No stock appreciation rights ("SARs") were
granted to any of the Named Executive Officers.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------------
NUMBER OF
OPTIONS % OF TOTAL EXERCISE GRANT DATE
GRANTED IN OPTIONS GRANTED PRICE PER EXPIRATION PRESENT
NAME 1995 (1) TO EMPLOYEES SHARE(2) DATE VALUE(3)
- ------------------- --------------------- -------------------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
H. Elish -- -- -- -- --
R.K. Riederer 15,000 27.3% $ 8.88 1/24/2005 $ 93,150
40,000 72.7% $ 4.375 10/31/2005 $121,600
J.B. Bruhn -- -- -- --
C.T. Costello -- -- -- -- --
W.C. Brenneisen -- -- -- -- --
T.W. Evans -- -- -- -- --
</TABLE>
16
<PAGE> 19
- ---------
(1) Options for 15,000 shares granted to Mr. Riederer on January 25, 1995 become
exercisable in three equal annual installments commencing with October 1,
1996. Options for 40,000 shares granted to Mr. Riederer on November 16, 1995
become exercisable in three equal annual installments commencing with
November 1, 1996.
(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 the
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 are as
follows: A risk-free interest rate of 7.7% for those options granted on
January 25, 1995 and 5.9% for those options granted on November 16, 1995,
the rate applicable to a ten-year treasury security at the time of each
award; a dividend yield of 0%, the yield at the conclusion of the most
recently completed fiscal year; volatility of 0.458 for the options granted
on January 25, 1995 and 0.506 for the options granted on November 16, 1995,
calculated using daily stock returns for the twelve-month period preceding
each option award; a stock price at dates of grant of $8.88 for the options
granted on January 25, 1995 and $4.375 for the options granted on November
16, 1995; the price at which the option can be exercised is fair market
value ($8.88 and $4.375, respectively); and a ten-year term. 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 $6.21 for the
options granted January 25, 1995 and $3.04 for the options granted November
16, 1995 per optioned share.
OPTION EXERCISES/OUTSTANDING OPTIONS AND YEAR END VALUES
The following table sets forth information regarding the exercise of stock
options during 1995 and the unexercised options held as of the end of the 1995
fiscal year by the Named Executive Officers. No options/SARs were exercised by
any of the Named Executive Officers.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
TOTAL VALUE OF
SHARES
NUMBER OF UNEXERCISED IN-
NUMBER OF UNEXERCISED THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS/SARS AT
UNDERLYING FISCAL YEAR END FISCAL YEAR-END
OPTIONS/SARS TOTAL VALUE (#) EXERCISABLE/ ($) EXERCISABLE/
NAME EXERCISED REALIZED($) UNEXERCISABLE(1) UNEXERCISABLE(2)
- ------------------- ------------ ----------- ---------------- ----------------
<S> <C> <C> <C> <C>
H. Elish -- -- 240,000/ -0- -0-/-
R.K. Riederer -- -- 30,000/90,000 -0-/-0-
J.B. Bruhn -- -- -0- /35,000 -/-0-
C.T. Costello -- -- -0- /35,000 -/-0-
W.C. Brenneisen -- -- -0- /30,000 -/-0-
T.W. Evans -- -- -0- /14,000 -/-0-
</TABLE>
17
<PAGE> 20
- ---------
(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 ($4.125 per share) of the
Company's Common Stock on the New York Stock Exchange on its last closing
day in 1995 (December 29, 1995) and the exercise price ($8.88 and $4.375 for
the shares granted in 1995, $8.69 for the shares granted in 1994 and $8.33
for previously granted shares), times the number of shares underlying the
options.
EMPLOYMENT AGREEMENTS WITH CERTAIN EXECUTIVES
Mr. Elish and the Company were parties to an employment agreement pursuant
to which Mr. Elish received the payments described under Executive Compensation.
Mr. Elish terminated his employment with the Company on December 31, 1995. For a
further description of Mr. Elish's employment agreement, see "Management
Development and Compensation Committee Report on Executive Compensation",
herein.
Mr. Riederer, President, Chief Executive Officer and Chief Operating
Officer and a director, has an employment agreement with the Company providing a
base salary of $375,000. The agreement also provides for supplemental disability
income and supplemental life insurance. The agreement may be terminated by the
Company or by the employee. For a further description of the employment
agreement of Mr. Riederer, see "Management Development and Compensation
Committee Report on Executive Compensation", herein.
Messrs. Brenneisen, Bruhn, Costello and Evans 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. Mr.
Brenneisen's employment with the Company terminated March 7, 1996.
18
<PAGE> 21
PENSION PLAN
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
FINAL AVERAGE EARNINGS 15 20 25 30 35
- ------------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000...................... $ 61,875 $ 68,750 $ 68,750 $ 68,750 $ 74,375
150,000...................... 74,250 82,500 82,500 82,500 89,250
175,000...................... 86,625 96,250 96,250 96,250 104,125
200,000...................... 99,000 110,000 110,000 110,000 119,000
225,000...................... 111,375 123,750 123,750 123,750 133,875
250,000...................... 123,750 137,500 137,500 137,500 148,750
300,000...................... 148,500 165,000 165,000 165,000 178,500
400,000...................... 198,000 220,000 220,000 220,000 238,000
450,000...................... 222,750 247,500 247,500 247,500 267,750
500,000...................... 247,500 275,000 275,000 275,000 297,500
</TABLE>
The figures in the Pension Table reflect total benefits from the qualified
pension plan as well as non-qualified SERPs administered by the Company. The
amount of pension is based upon the employee's average earnings (average of the
highest five years of the last fifteen years). For those participating in a
SERP, benefits are based on earnings defined as annual cash compensation (as
reported in the Salary and Bonus columns of the Summary Compensation Table). For
the Named Executive Officers, pension service as of December 31, 1995 for the
purpose of calculating retirement benefits is as follows: Mr. Elish: 8.42 years;
Mr. Riederer: 6.92 years; Mr. Bruhn: 8.50 years; Mr. Costello: 29.92 years; Mr.
Brenneisen: 10.25 years; and Mr. Evans: 9.75 years.
The SERPs are "target benefit" plans which have characteristics of both a
defined benefit plan and a defined contribution plan. In the Company's 1995
Proxy Statement, the SERPs were disclosed as defined contribution plans, with
amounts contributed thereunder reflected in the "All Other Compensation" column
of the Summary Compensation Table. The Company has determined that the SERPs are
more properly disclosed as defined benefit plans, and therefore benefits payable
thereunder are now reflected in the table above.
19
<PAGE> 22
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders' proposals to be included in the Company's proxy statement for
the 1997 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, 1996.
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,
Richard K. Riederer,
President and Chief
Executive Officer
Weirton, West Virginia
April 17, 1996
CONFORMED COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1995 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.
20
<PAGE> 23
PROXY WEIRTON STEEL CORPORATION PREFERRED STOCK
ANNUAL MEETING OF STOCKHOLDERS, MAY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of WEIRTON STEEL CORPORATION hereby appoints Richard
R. Burt, Richard K. Riederer and William R. Kiefer, and each or any of them, as
the true and lawful attorneys, agents and proxies of the undersigned with full
power of substitution and resubstitution for and in the name of the undersigned,
to vote as set forth below all shares of Preferred Stock, par value, $.10 per
share, of WEIRTON STEEL CORPORATION which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders to be held on May 22, 1996 at the St.
John Arena, 3151 Johnson Road, Steubenville, Ohio, and at any and all
adjournments or postponements thereof, with all powers which the undersigned
would possess if personally present.
I. DIRECTORS: (change of address/comments)
Class III: James B. Bruhn, Craig T. Costello,
Robert J. D' Anniballe, Jr., Mark G. Glyptis -----------------------------
and Phillip A. Karber.
-----------------------------
-----------------------------
-----------------------------
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY IN THE ENVELOPE PROVIDED.
IF THIS CARD IS PROPERLY EXECUTED AND DATED, SHARES WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS SPECIFIED, ALL SHARES
COVERED BY THIS PROXY WILL BE VOTED FOR PROPOSAL I, PROPOSAL II, AND
PROPOSAL III.
SEE REVERSE
SIDE
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOR
all persons WITHHOLD II. AUDITORS: Ratification of the appointment
listed above AUTHORITY of Arthur Andersen LLP as the Company's
(except as to vote for all independent accountants for the fiscal
specified) persons year ending December 31, 1996. FOR AGAINST ABSTAIN
I. ELECTION OF DIRECTORS / / / / / / / / / /
III. OTHER MATTERS: Considering and acting upon any other matters which
may properly come before the meeting or any adjournment thereof.
</TABLE>
_________________________________________________________
Instruction: To withhold authority to vote for any person,
write the name of such person on the line above.
CHANGE OF ADDRESS / /
SIGNATURE(S)________________________________________ DATE ____________
SIGNATURE(S)________________________________________ DATE ____________
NOTE: Sign exactly as name(s) appear hereon. Important: When signing
as attorney, executor, administrator, trustee, guardian, or
corporate officer, please give your full title as such. For joint
accounts, all co-owners must sign.
<PAGE> 24
PROXY WEIRTON STEEL CORPORATION COMMON STOCK
ANNUAL MEETING OF STOCKHOLDERS, MAY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of WEIRTON STEEL CORPORATION hereby appoints Richard
R. Burt, Richard K. Riederer and William R. Kiefer, and each or any of them, as
the true and lawful attorneys, agents and proxies of the undersigned with full
power of substitution and resubstitution for and in the name of the undersigned,
to vote as set forth below all shares of Common Stock, par value, $.01 per
share, of WEIRTON STEEL CORPORATION which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders to be held on May 22, 1996 at the
St. John Arena, 3151 Johnson Road, Steubenville, Ohio, and at any and all
adjournments or postponements thereof, with all powers which the undersigned
would possess if personally present.
I. DIRECTORS: (change of address/comments)
Class III: James B. Bruhn, Craig T. Costello,
Robert J. D' Anniballe, Jr., Mark G. Glyptis -----------------------------
and Phillip A. Karber.
-----------------------------
-----------------------------
-----------------------------
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY IN THE ENVELOPE PROVIDED.
IF THIS CARD IS PROPERLY EXECUTED AND DATED, SHARES WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS SPECIFIED, ALL SHARES
COVERED BY THIS PROXY WILL BE VOTED FOR PROPOSAL I, PROPOSAL II, AND
PROPOSAL III.
SEE REVERSE
SIDE
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOR
all persons WITHHOLD II. AUDITORS: Ratification of the appointment
listed above AUTHORITY of Arthur Andersen LLP as the Company's
(except as to vote for all independent accountants for the fiscal
specified) persons year ending December 31, 1996. FOR AGAINST ABSTAIN
I. ELECTION OF DIRECTORS / / / / / / / / / /
III. OTHER MATTERS: Considering and acting upon any other matters which
may properly come before the meeting or any adjournment thereof.
</TABLE>
_________________________________________________________
Instruction: To withhold authority to vote for any person,
write the name of such person on the line above.
CHANGE OF ADDRESS / /
SIGNATURE(S)________________________________________ DATE ____________
SIGNATURE(S)________________________________________ DATE ____________
NOTE: Sign exactly as name(s) appear hereon. Important: When signing
as attorney, executor, administrator, trustee, guardian, or
corporate officer, please give your full title as such. For joint
accounts, all co-owners must sign.
<PAGE> 25
WEIRTON STEEL CORPORATION
1984 AND 1989 EMPLOYEE STOCK OWNERSHIP PLANS
DISCLOSURE SUPPLEMENT
This Disclosure Supplement (the "Supplement") is being furnished to
participants in the 1984 Employee Stock Ownership Plan (the "1984 ESOP") and
1989 Employee Stock Ownership Plan (the "1989 ESOP", collectively the "ESOPs")
sponsored by Weirton Steel Corporation (the "Company"). This Supplement
accompanies the Company's Notice of Annual Meeting of Stockholders and Proxy
Statement dated April 17, 1996 (the "Company Proxy Materials") for an Annual
Meeting of Stockholders scheduled to be held on May 22, 1996 (the "Annual
Meeting"). Participants in the ESOPs are urged to read this Supplement together
with the Company Proxy Materials prior to completing and returning the
Confidential Participant Instruction Form ("Instruction Form") which is
enclosed.
PURPOSE OF SUPPLEMENT
This Supplement describes the method to be used by participants in the
ESOPs in completing their Instruction Forms, and the tabulation of the
Instruction Forms submitted by ESOP participants. As disclosed in the Company
Proxy Materials, the stockholders of the Company are voting on the election of
five Directors to be elected to the Board of Directors and the ratification of
the appointment of the Company's independent accountants. ESOP participants may
vote on these issues, but may only do so by completing the Instruction Form. In
past years, questions have been asked by participants in the ESOPs concerning
the completion of the Instruction form, and the tabulation of votes. This
Supplement is intended to address the most frequently asked questions.
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 March 25, 1996 are entitled to vote on matters to be presented at
the Annual Meeting. On March 25, 1996, 42,346,794 shares of Common Stock and
1,786,091 shares of Convertible Preferred Stock were outstanding and entitled to
vote. Each share of Convertible Preferred Stock is entitled to ten votes and
each share of Common Stock is entitled to one vote.
All Common Stock and all Convertible Preferred Stock held in the ESOPs will
be voted by the holder of record, United National Bank--North (the "ESOP
Trustee"), as directed by participants and in accordance with the terms of the
applicable ESOP. As of March 25, 1996 there were 11,269,996 shares of Common
Stock and 1,717,288 shares of Convertible Preferred Stock entitled to be voted
by the ESOP Trustee. The ESOP Trustee will vote all of these shares representing
28,442,873 votes at the Annual Meeting.
ESOP VOTING PROCEDURES
Participants in the ESOPs are also receiving Company Proxy Materials
distributed to public stockholders and will find enclosed an Instruction Form
for use in instructing the ESOP Trustee how to vote their shares.
The enclosed Instruction Form provides the means for participants in the
ESOPs to vote on the same issues to be presented to stockholders of record at
the Annual Meeting. The shares represented by the Instruction Forms will be
voted by the ESOP Trustee in the manner specifically indicated by ESOP
participants. Instruction Forms returned with no specific voting instructions,
without signature or undated, will result in the related shares being voted by
the ESOP Trustee as uninstructed shares. The Instruction Form may be changed or
revoked only by a later dated and properly signed Instruction Form received by
the ESOP Trustee prior to completion of the ESOP Trustee's tabulation of votes
to be cast at the Annual Meeting. Since the ESOP Trustee is the only holder of
record of voting stock owned by the ESOPs, only it can cast a ballot at the
Annual Meeting on behalf of ESOP participants. A participant may vote in person
only to the extent the
<PAGE> 26
participant has withdrawn shares from the ESOPs and become a public stockholder
of record or beneficial owner (such as through a brokerage account) as of March
25, 1996.
All Common Stock held in the 1984 ESOP has been allocated. Common Stock in
the 1984 ESOP for which no voting instructions are received and Convertible
Preferred Stock in the 1989 ESOP which has not yet been allocated to the
accounts of participants or for which no voting instructions are received also
will be voted by the ESOP Trustee, all in accordance with the terms of the
applicable ESOP.
ESOP VOTE TABULATION
The ESOP Trustee has retained the firm of Ellen Philip and Associates to
tabulate the Instruction Forms. The Instruction Forms are confidential and no
person not associated with Ellen Philip and Associates, or the ESOP Trustee, has
access to any participant's Instruction Form or information as to how a
participant instructed the ESOP Trustee to vote.
METHOD OF CALCULATING ESOP VOTES
The matters to be voted on at the Annual Meeting will be voted by the ESOP
Trustee on the "account balance" method. This gives specific effect to the
shares owned and voted by each participant who properly returns an Instruction
Form. On each issue, involving voting by the account balance method, the
Instruction Forms voting "FOR" and "AGAINST" are tabulated and the votes
resulting therefrom are cast. Once this is accomplished, percentages of shares
instructed "FOR" and AGAINST" are determined, and this percentage is applied to
all unallocated or uninstructed shares voted by the ESOP Trustee. Instruction
Forms which are not returned, or which are returned without an indication as to
"FOR" or "AGAINST" are treated as "uninstructed" shares.
For example, a participant who has 1,000 shares of Common Stock (one vote
per share) and 100 shares of Convertible Preferred Stock (ten votes per share)
can instruct the ESOP Trustee as to voting shares with a total of 2,000 votes.
If the participant does not return the Instruction Form, or returns it signed
and dated but without instructions, the ESOP Trustee will vote that
participant's shares on the basis of instructions received from all other
participants. For example, if all other participants (tabulated separately in
each ESOP), who voted on an issue voted 60% FOR and 40% AGAINST, the ESOP
Trustee would vote 1,200 votes FOR and 800 votes AGAINST the issue, in the case
of the hypothetical participant.
This Supplement has been prepared jointly by the Company and the ESOP
Administrative Committee under the ESOPs.
WEIRTON STEEL CORPORATION
AND
ESOP ADMINISTRATIVE COMMITTEE
Weirton, West Virginia
April 17, 1996
