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:
[x] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11. (1) Title of each class of securities to which
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 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or
schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement No.:
(3) Filing party:
(4) Date filed:
PRELIMINARY
WEIRTON STEEL CORPORATION
400 THREE SPRINGS DRIVE
WEIRTON, WV 26062
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 21, 1997
Dear Stockholder:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of
Stockholders of Weirton Steel Corporation, a Delaware corporation
(the "Company"), will be held at St. John Arena, 3151 Johnson Road,
Steubenville, Ohio, on Wednesday, May 21, 1997, at 7:00 P.M.,
Eastern Daylight Time, for the following purposes:
1. To elect four 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, 1997;
3. To approve a proposal amending Article FIFTH of the
Company's Restated Certificate of Incorporation to
change the qualification requirements for service as
a director; 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 March 24, 1997, 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 __, 1997
PRELIMINARY
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 1997 Annual Meeting of Stockholders (the "Annual
Meeting") to be held on May 21, 1997, and any adjournments thereof.
This Proxy Statement and the accompanying form of proxy are being
mailed on or after April __, 1997 to stockholders of record as of
March 24, 1997.
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 four directors;
FOR the ratification of independent accountants; and
FOR a proposal seeking to amend Article FIFTH of the Company's
Restated Certificate of Incorporation to change the
qualification requirements for service as a director,
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, 1996 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
24, 1997 (the "Record Date") are entitled to vote on matters to be
presented at the Annual Meeting. On the Record Date, 42,760,202
shares of Common Stock and 1,742,784 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 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") 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 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 1999,
respectively. The four Class I 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 I directors, to
serve for a term of three years, and until their successors are
elected and qualified: Richard K. Riederer, Management Director;
and Michael Bozic, Richard R. Burt, and Thomas R. Sturges,
Independent Directors.
Unless authority to vote for any one or more of the Class I
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,
1997) 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>
<S> <C> <C>
Name Principal Occupation Director Since
Class I Directors: Nominees to Serve in Office until 2000
Richard K. Riederer 1993
Age 53 (1) President and Chief Executive Officer of the
Company 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.
Name Principal Occupation Director Since
Michael Bozic 1994
Age 56 (3) Chairman, Chief Executive Officer and Director
of 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 1996
Age 50 (3) Chairman of the Board of the Company since
April 1, 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 1986
Age 52 (3) Executive Vice President of The Harding
Group Inc., an investment firm, since February
1990.
Class II Directors: To Continue in Office Until 1998
Joseph J. Nowak 1995
Age 65 (4) Director of Penn Power Company. Vice-President
of 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 1995
Age 63 (3) Chairman, President, Chief Executive Officer
and Director of The Tranzonic Companies, a
manufacturer of paper and plastic products
principally for industrial/institutional use;
Director of Key Bank, N.A.
Name Principal Occupation Director Since
Richard F. Schubert 1983
Age 60 (3) Former President, Bethlehem Steel Corporation,
American Red Cross, and The Points of Light
Foundation; Former Deputy Secretary of Labor;
Chairman of BioRelease, Inc., a biotechnology
firm; Director of National Alliance of Business
and Management Training Corporation.
David I.J. Wang 1992
Age 64 (3) Director of U.G.I. Corporation, Amerigas, Inc.
and several privately held companies; Chairman
of Advisory Board of George Washington
University; Trustee, Eisenhower Exchange
Fellowship; Executive Vice President and
Director of International Paper Co. from 1987 to
1991.
Ronald C. Whitaker 1995
Age 49 (3) President and Chief Executive Officer of
Johnson Worldwide Associates, a sporting goods
manufacturer since October 1996; former
President and Chief Executive Officer of EWI,
Inc. from 1995 to October 1996; former Chairman,
President and Chief Executive Officer of Colt's
Manufacturing Company from 1992 to 1995;
President of Wheelabrator Corporation from 1988
to 1992.
Class III Directors: To Continue in Office until 1999
James B. Bruhn 1990
Age 56 (1) Executive Vice President-Commercial of the
Company 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 1996
Age 49 (1) Executive Vice President-Manufacturing of the
Company 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. 1990
Age 40 (2) Partner in Alpert, D'Anniballe & Visnic,
attorneys; General Counsel to the ISU.
Name Principal Occupation Director Since
Mark G. Glyptis 1991
Age 45 (2) President of the ISU since August 1991; employee
of the Company since 1973.
Phillip A. Karber 1992
Age 50 (2) Chairman of the Board of Directors of JFK
International Air Terminal, New York, New York
commencing January 1997; Corporate Vice President
of BDM International, Inc., 1989 to 1996;
previously served as the Strategic Advisor to the
Secretary of Defense, Casper Weinberger; Director
of Embryon Capital, a privately held venture
capital investment firm specializing in Internet
communications located in Bethesda, Maryland;
Director, German American Business Association;
Washington, D.C. Metropolitan Area Y.M.C.A.;
Advisory Board, Mosher Institute, Texas A&M
University.
_________________________
<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, 1997, 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.
PROPOSAL TO AMEND ARTICLE FIFTH OF
THE CHARTER TO CHANGE THE AGE
QUALIFICATIONS LIMITATION FOR DIRECTORS
The Board of Directors has adopted and is recommending to
stockholders for their approval an amendment to Article FIFTH of
the Charter increasing the age limitation to 68 for qualification
to serve as a director. The current limitation, adopted in 1994
and contained in Article FIFTH, provides that no director will be
eligible to serve for any term which commences after his or her
65th birthday. Because the Company's Board is divided into three
classes with directors serving three year terms, the current
limitation, depending upon a particular director's age, effectively
functions to allow directors to serve as long as until
approximately age 68.
The proposed change results from the submission of a
stockholder proposal to the Company and subsequent discussions
between the proponents of such proposal and Company
representatives. The proponents, from their involvement with the
ESOP Nominating Committee charged with selecting candidates to
serve as ESOP Directors, indicated, particularly in the case of the
ESOP Director where there was a need to obtain experienced
candidates with availability of time to devote to the position,
that the age 65 limitation was operating to exclude from
consideration retired or semi-retired individuals who otherwise
would have been qualified for service.
The Board of Directors recognizes that it is important to
provide for a sufficient pool of director talent. However, the
Board is also mindful of the fact that, in recent years, the trend
of most large enterprises has been to establish written policies of
retirement ages for directors. Thus, in the 1994 survey of the
Fortune 1000 companies conducted by Korn Ferry international, 80%
of the respondents reported that they had a mandatory retirement
age for directors, up from 76% in the prior year. In the European
community, director retirement ages are usually mandated by law.
The Board further believes that the appropriateness of any
specific retirement age depends on the circumstances of the
enterprise involved and may be the fair subject of debate. In the
case of the Company, the age chosen in 1994 was intended to allow
for long-term service continuity, but also to provide for planned,
orderly succession on the Board. Based on additional review since
that time of retirement ages in effect at other businesses, it
appears that a somewhat later age than that adopted by the Company
remains common. As a result, while the Board continues to believe
it is important to maintain an effective age for retirement from
service for directors, the Board has determined it is in the best
interests of the Company and its stockholders to enlarge the
potential pool of candidates by making a small increase in the age
from 65 to 68. Accordingly, in the manner in which the
qualification requirement works, no director will be eligible to
serve as a director for a term of office which commences after the
director's 68th birthday. Therefore, under the proposed amendment
to the Charter, depending on a particular director's age at the
conclusion of an expiring term, directors effectively may remain in
office up to approximately age 71.
The proposed Charter amendment has been approved by the Board
of Directors and is being submitted to stockholders with the
recommendation of the Board for its approval at the Annual Meeting.
In order for the proposed amendment to be adopted, it will require
for passage the affirmative vote of not less than 80% of the
Company's voting power entitled to vote thereon.
The Board recommends a vote FOR this proposal.
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), Burt, 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 three meetings during 1996.
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 four meetings in 1996.
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 one meeting in 1996.
Corporate Responsibility Committee
- ----------------------------------
The Corporate Responsibility Committee is currently composed
of Messrs. Schubert (Chairman), Bruhn, Burt, D'Anniballe, Glyptis,
Karber, 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, policies concerning such matters where appropriate. The
Corporate Responsibility Committee held three meetings in 1996.
Finance and Strategic Planning Committee
- ----------------------------------------
The Finance and Strategic Planning Committee is currently
composed of Messrs. Wang (Chairman), Bozic, Bruhn, Burt, Costello,
Glyptis, Karber, Nowak and Reitman. The Committee reviews and
confers with management on the following subject matters 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
two meetings in 1996.
Meetings and Attendance
- -----------------------
The Board of Directors held six regular meetings in 1996. All
directors who served during 1996 attended at least 75% of the
aggregate of the meetings of the Board of Directors and Board
committees occurring while they served in 1996.
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, devoting
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.
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 performance incentive plans. These
reviews are designed to ensure a consistent application of the
compensation programs for all executives.
The Compensation Committee reviews the total compensation
package for the Company's executives. The 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
domestic steel industry, specifically considering the nine member
peer group utilized in the discussion of "Common Stock Performance"
herein, and manufacturing companies generally. Information
regarding corporate compensation levels is provided to the
Compensation Committee by consultants engaged in management
compensation and the Compensation Committee considers
recommendations of consultants in establishing compensation
policies. The Compensation Committee seeks to place executive base
salaries initially in the lower to middle range on the comparative
scale of base salaries of executives in comparable positions, with
the Company's performance awards similarly placed. 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.
For 1995, the Company utilized a Performance Incentive Plan
("PIP") including the Named Executive Officers to measure and
reward the financial and individual performance of participants,
measured against preestablished goals, on an annual basis.
Incentive payments were paid in cash in the second quarter of 1996
for 1995 performances and are reflected in the Summary Compensation
Table set forth under "Executive Compensation." Participants in
the PIP did not participate in the Company-wide Profit Sharing Plan
("Profit Sharing Plan") for 1995. Due mainly to the focus of the
PIP on short-term financial goals and the judgment of the
Compensation Committee that a long-term incentive plan was needed
instead, the PIP was not continued for 1996. As a result, if a
replacement plan for the PIP is not adopted and implemented, annual
compensation for executives will depend primarily on salary and
bonus, either pursuant to individual awards or contracts or from
the Profit Sharing Plan. For senior managers who participate in
the Company's non-qualified Supplemental Executive Retirement Plans
(the "SERPs"), annual value is received by participants through
payments made to fund retirement benefits and to provide for the
payment of applicable income taxes.
Long-term Incentive Compensation.
- --------------------------------
In order to change the short-term focus of the PIP, the
Compensation Committee has been considering and is in the process
of further developing a three year long-term incentive plan ("LTI
Plan"). The LTI Plan would be expected to include the Chief
Executive Officer, the other Named Executive Officers and a number
of other management personnel. The LTI Plan would provide primarily
cash-based remuneration based on achieving a combination of
individual and Company-wide goals over a multi-year period. Annual
accruals of benefits would be made from year to year depending on
comparisons with a base period, but, in general, the vesting and
entitlement to benefits would not become due until after a final
measurement period. In order to align the interests of managers
participating in an LTI Plan with other employees in the Profit
Sharing Plan, the Committee anticipates that payments of LTI Plan
benefits would be timed in coordination with payments under the
Profit Sharing Plan, such that LTI Plan benefits would not be paid
if Profit Sharing Plan payments were not being paid.
Long-term incentive compensation for Company executives has
also consisted of awards of stock options under the Company's 1987
Stock Option Plan (the "1987 Option Plan"). In 1996, the
Compensation Committee granted two officers options to purchase an
aggregate of 47,000 shares of Common Stock at an exercise price of
$2.50 per share, the market price on the date of a grant. Stock
option awards are designed to promote stock ownership by
executives, encourage them to remain in the employ of the Company
and provide a greater community of interest between key employees
as stockholders and stockholders in general through gains in stock
price over an extended period of time. Shares available for option
grants under the 1987 Option Plan have been substantially
exhausted, and the plan is due to expire in June, 1997. As a
result, unless current options lapse without exercise prior to the
expiration of the 1987 Option Plan, or the Company adopts another
option-based plan, the Company will not be able to make option
grants in the near future. Options granted under the 1987 Option
Plan will remain outstanding according to their respective option
agreements. Furthermore, the Charter, in limiting the Company's
number of authorized shares of Common Stock, may make it
impractical to adopt a new option-based plan without further action
by the stockholders. The Committee intends to continue to review
these and a number of other option-related issues as part of the
long-term compensation element for remunerating executives.
Compensation of Chief Executive Officer.
- ---------------------------------------
In November 1995, the Board of Directors elected Mr. Riederer
President and Chief Executive Officer of the Company. Mr. Riederer
entered into an 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 any incentive plan; (iv) his receipt of
life insurance benefits in excess of those provided pursuant to the
Company's basic program of insurance for its employees; and (v)
receipt of contributions to the SERPs in excess of those provided
to other participants in those Plans.
Limitation on Deductibility of Executive Compensation.
- -----------------------------------------------------
[TO BE UPDATED IN DEFINITIVE PROXY MATERIALS]
Management Development and Compensation Committee
Michael Bozic, Chairman
Joseph J. Nowak
Robert S. Reitman
Richard F. Schubert
Ronald C. Whitaker
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 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.
Year Company Peer Group S&P 500
- ---- ------- -------------- -------
1991 100.00 100.00 100.00
1992 107.14 113.55 107.62
1993 182.14 149.66 118.46
1994 257.14 144.92 120.03
1995 117.86 121.23 165.13
1996 100.00 107.81 203.05
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 15, 1997, 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>
<S> <C> <C>
<CAPTION>
Common Stock
Share
Name and address of beneficial owner Amount Percent of class
- ------------------------------------ ------ ----------------
United National Bank, 10,930,906(1) 25.8%
as Trustee under the 1984 ESOP
1501 Market Street
Wheeling, WV 26003
Wellington Management Company 3,719,500(2) 8.8%
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, 1,742,784(3) 96.8%
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 6,781 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 January 24, 1997, Wellington had investment discretion
over 3,719,500 shares of Common Stock.
(3) Includes 1,706,363 shares allocated to the accounts of
participants in the 1989 ESOP consisting of approximately 7,502
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 March 15, 1997, 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, 1996), 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
Common Stock Preferred Stock
Share Share
Amount % of Class Amount % of Class
------ (1) ------ (1)
<S> <C> <C> <C> <C>
Michael Bozic 12,357 - - -
James B. Bruhn 25,518(3) * 784 *
Richard R. Burt 1,234(2) - - -
Craig T. Costello 30,171(3) * 597 *
Robert J.D'Anniballe, - - - -
Jr.
Earl E. Davis 26,678(3) * 434 *
Mark G. Glyptis 2,265 * 305 *
Phillip A. Karber - - - -
Joseph J. Nowak 1,000 - - -
Robert S. Reitman 14,266(2) - - -
Richard K. Riederer 94,774(3) * 808 *
David L. Robertson 21,300(3) * - -
Richard F. Schubert 1,300 * - -
Thomas R. Sturges 27,211(2) * - -
David I.J. Wang 48,275(2) * - -
Ronald C. Whitaker 14,154(2) * - -
All directors and 419,974(4) * 5,344 *
executives as
a group (22 persons)
<FN>
(1) An asterisk in this column indicates ownership of less than
1%.
(2) Includes 1,234, 14,266, 19,827, 38,275 and 12,154 shares
credited to the accounts of Messrs. Burt, 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.
(3) Includes shares subject to options currently exercisable:
Messrs. Bruhn 11,666, Costello 11,666, Davis 4,666, Riederer
59,999, and Robertson 11,000.
(4) Includes 122,661 shares subject to options currently
exercisable.
</TABLE>
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 during 1996 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.
[TO BE UPDATED IN DEFINITIVE PROXY MATERIALS]
1996 STOCK OPTION GRANTS
The following table sets forth information about options
granted during 1996 to the Named Executive Officers. No stock
appreciation rights ("SARs") were granted to any of the Named
Executive Officers.
<TABLE>
<CAPTION>
Options/SAR Grants in last fiscal year
Individual Grants
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Name Number of % of Exercise Expira- Grant Date Present
Options Total Price tion value
Granted in Options per Date
1996 Granted share
(1) to employees (2) (3)
- ---------------------------------------------------------------------------
R.K. Riederer - - - - -
J.B. Bruhn - - - -
C.T. Costello - - - - -
D.L. Robertson 33,000 50.8% $2.50 10/31/2006 $58,410
E.E. Davis - - - - -
- ---------------------------------------------------------------------------
<FN>
(1) Options for 33,000 shares granted to Mr. Robertson on October
1, 1996 became exercisable in three equal annual installments
commencing with October 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 6.6% for those options granted on October 1, 1996, 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 0.509,
calculated using daily stock returns for the twelve-month period
preceding the option award; a stock price at date of grant of
$2.50; 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
valuation applying the preceding assumptions was $1.77.
</TABLE>
Option Exercises/Outstanding Options and Year-End Values
The following table sets forth information regarding the
exercise of stock options during 1996 and the unexercised options
held as of the end of the 1996 fiscal year by the Named Executive
Officers. No options/SARs were exercised by any of the Named
Executive Officers.
<TABLE>
<CAPTION>
Aggregated Options/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
Total
Number of Value of Shares
Unexercised Unexercised
Options/SARS In-the-Money
at Fiscal Options/SARS
Year end at Fiscal Year-
(#) End ($)
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Name No. of Shares Total Value Exercisable/ Exercisable/
Underlying Realized Unexercisable Unexercisable
Options/SARS ($) (1) (2)
Exercised
- -------------------------------------------------------------------------
R.K.Riederer - - 30,000/90,000 -0-/-0-
J.B. Bruhn - - 11,666/23,334 -0-/-0-
C.T.Costello - - 11,666/23,334 -0-/-0-
D.L.Robertson - - 11,000/22,000 $11,000/22,000
E.E. Davis - - 4,666/ 9,334 -0-/-0-
- ----------------------------------------------------------------------
<FN>
(1) Options were granted to Mr. Riederer on the commencement of
his employment with the Company in 1989; 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 ($3.50
per share) of the Company's Common Stock on the New York Stock
Exchange on its last closing day in 1996 (December 31, 1996) and
the exercise price ($2.50 for the shares granted in 1996, $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.
</TABLE>
EMPLOYMENT AGREEMENTS WITH CERTAIN EXECUTIVES
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. Bruhn, Costello, Davis and Robertson 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
[TO BE UPDATED IN DEFINITIVE PROXY MATERIALS]
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders' proposals to be included in the Company's proxy
statement for the 1998 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, 1997.
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 __, 1997
CONFORMED COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1996 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, WV 26062.
PRELIMINARY
(front)
PROXY WEIRTON STEEL CORPORATION COMMON STOCK
Annual Meeting of Stockholders, May 21, 1997
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 one 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 21, 1997 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.
(back)
I. DIRECTORS: Class I: Michael Bozic, Richard R. Burt, Richard K.
Riederer and Thomas R. Sturges.
[ ] FOR all persons listed above [ ] WITHHOLD AUTHORITY
(except as specified) to vote for all persons
Instruction: To withhold authority to vote for any person, write
the name of such person on the line above.
II. AUDITORS
Ratification of the appointment of Arthur Andersen LLP as the
Company's independent accountants for the fiscal year ending
December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. PROPOSAL
To amend Article FIFTH of the Company's Restated Certificate
of Incorporation to change the qualification requirements for
service as a director.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. OTHER MATTERS
Considering and acting upon any other matters which may
properly come before the meeting or any adjournment thereof.
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.
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.
Signature: X
X
Date
Please mark, sign, date and mail this proxy in the provided.
PRELIMINARY
(front)
PROXY WEIRTON STEEL CORPORATION PREFERRED STOCK
Annual Meeting of Stockholders, May 21, 1997
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 one 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 Convertible
Voting Preferred Stock, Series A, 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 21,
1997 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.
(back)
I. DIRECTORS: Class I: Michael Bozic, Richard R. Burt, Richard K.
Riederer and Thomas R. Sturges.
[ ] FOR all persons listed above [ ] WITHHOLD AUTHORITY
(except as specified) to vote for all persons
Instruction: To withhold authority to vote for any person, write
the name of such person on the line above.
II. AUDITORS
Ratification of the appointment of Arthur Andersen LLP as the
Company's independent accountants for the fiscal year ending
December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. PROPOSAL
To amend Article FIFTH of the Company's Restated Certificate
of Incorporation to change the qualification requirements for
service as a director.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. OTHER MATTERS
Considering and acting upon any other matters which may
properly come before the meeting or any adjournment thereof.
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.
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.
Signature: X
X
Date
Please mark, sign, date and mail this proxy in the envelope provided.
