SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
Filed by the Registrant /X/
Filed by a Party other than the Registrant: / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
WEBFINANCIAL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Persons(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)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
<PAGE>
(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:
<PAGE>
WEBFINANCIAL CORPORATION
--------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 29, 2000
--------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of WEBFINANCIAL CORPORATION, a Delaware corporation (the "Company"),
will be held at the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP,
located at 505 Park Avenue, New York, New York 10022, on August 29, 2000 at
11:00 A.M., local time, for the following purposes:
1. To elect two members of the board of directors of the
Company (the "Board of Directors" or the "Board") to serve until the
next annual meeting of stockholders and until their successors have
been duly elected and qualified;
2. To ratify the appointment of Grant Thornton LLP as the
Company's independent auditors for the year ending December 31, 2000;
and
3. To transact such other business as may properly be brought
before the Meeting or any adjournment thereof.
The Board has fixed the close of business on July 3, 2000 as the record
date for the Meeting. Only stockholders of record on the stock transfer books of
the Company at the close of business on that date are entitled to notice of, and
to vote at, the Meeting.
By Order of the Board of Directors
GLEN M. KASSAN
Secretary
Dated: July 12, 2000
New York, New York
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED
TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT IS
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
WEBFINANCIAL CORPORATION
150 EAST 52ND STREET, 21ST FLOOR
NEW YORK, NEW YORK 10022
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 29, 2000
----------------
INTRODUCTION
This Proxy Statement is being furnished to stockholders by the Board of
Directors of WEBFINANCIAL CORPORATION, a Delaware corporation (the "Company"),
in connection with the solicitation of the accompanying Proxy for use at the
2000 Annual Meeting of Stockholders of the Company (the "Meeting") to be held at
the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, located at 505
Park Avenue, New York, New York 10022, on August 29, 2000, at 11:00 A.M., local
time, or at any adjournment thereof.
The approximate date on which this Proxy Statement and the accompanying
Proxy will first be sent or given to stockholders is July 12, 2000.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on July 3, 2000,
the record date (the "Record Date") for the Meeting, will be entitled to notice
of, and to vote at, the Meeting and any adjournment thereof. As of the close of
business on the Record Date, there were 4,354,280 outstanding shares of the
Company's common stock, $.001 par value (the "Common Stock").
VOTING OF PROXIES
Shares of Common Stock represented by Proxies that are properly
executed, duly returned and not revoked will be voted in accordance with the
instructions contained therein. If no specification is indicated on the Proxy,
all such shares will be voted (i) for the election as directors of the persons
who have been nominated by the Board, (ii) for the ratification of the
appointment of Grant Thornton LLP as the Company's independent auditors for the
year ending December 31, 2000 and (iii) on any other matter that may properly be
brought before the Meeting in accordance with the judgment of the person or
persons voting the Proxies.
The execution of a Proxy will in no way affect a stockholder's right to
attend the Meeting and to vote in person. Any Proxy executed and returned by a
stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Meeting, or by execution of a subsequent proxy that is presented to
the Meeting or if the stockholder attends the Meeting and votes by ballot,
except as to any matter or matters upon which a vote shall have been cast
pursuant to the authority conferred by such Proxy prior to such revocation.
The cost of solicitation of the Proxies being solicited on behalf of
the Board will be borne by the Company. In addition to the use of the mails,
proxy solicitation may be made by telephone, telegraph and
<PAGE>
personal interview by officers, directors and employees of the Company. The
Company will, upon request, reimburse brokerage houses and persons holding
Common Stock in the names of their nominees for their reasonable expenses in
sending soliciting material to their principals.
The Company has retained Mackenzie Partners, Inc. ("Mackenzie") to
solicit proxies at a cost of approximately $5,000, plus certain out-of-pocket
expenses. If the Company requests Mackenzie to perform additional services,
Mackenzie will bill the Company at its usual rate.
VOTING RIGHTS
Holders of each share of Common Stock are entitled to one vote for each
share held on all matters. The holders of a majority of the outstanding shares
of Common Stock whether present in person or represented by proxy, will
constitute a quorum for the election of directors and the ratification of the
appointment of Grant Thornton LLP, and any other matters that may come before
the meeting.
Broker "non-votes" and the shares as to which a stockholder abstains
from voting are included for purposes of determining whether a quorum of shares
is present at a meeting. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner.
A plurality of the total votes cast by holders of Common Stock is
required for the election of directors. In tabulating the vote on the election
of directors, abstentions and broker "non-votes" will be disregarded and will
have no effect on the outcome of such vote.
The affirmative vote of a majority of the votes cast by holders of
Common Stock is required to ratify the appointment of Grant Thornton LLP. In
tabulating the votes on the proposal to ratify the appointment of Grant Thornton
LLP, shares as to which a stockholder abstains are considered shares entitled to
vote on the applicable proposal and therefore an abstention would have the
effect of a vote against such proposal. Broker non-votes, however, are not
considered shares entitled to vote on the applicable proposal and are not
included in determining whether the proposal to ratify the appointment of Grant
Thornton LLP is approved.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of the
Company's Common Stock, as of the Record Date, by each person known by the
Company to be the beneficial owner of more than five percent of the outstanding
Common Stock, each director, each executive officer, each nominee for election
as a director and by all directors and executive officers of the Company as a
group. Unless otherwise indicated, the address for each five percent stockholder
is in care of the Company, 150 East 52nd Street, 21st Floor, New York, New York
10022.
<TABLE>
<CAPTION>
Number of Shares
Directors, Nominees, Executive Officers and 5% of Common Stock Beneficially Percent
Stockholders Owned(1) -age
---------------------------------------------- -------- ----
<S> <C> <C>
Warren G. Lichtenstein 1,320,613(2) 28.7%
Steel Partners II, L.P. 1,090,655(3) 24.9%
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Directors, Nominees, Executive Officers and 5% of Common Stock Beneficially Percent
Stockholders Owned(1) -age
---------------------------------------------- -------- ----
<S> <C> <C>
Jack L. Howard 110,108(4) 2.5%
Glen M. Kassan 0 0
Earle C. May 410,777(5) 9.4%
4550 Kruse Way #345
Lake Oswego, Oregon 97035
May Management, Inc. 385,350 8.8%
4550 Kruse Way #345
Lake Oswego, Oregon 97035
James Benenson, Jr. 61,678(6) 1.4%
Joseph L. Mullen 20,361(7) *
All directors and executive 1,923,537 42.5%
officers as a group (six persons)
</TABLE>
---------------------
* Less than 1%
(1) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days after the Record Date
upon the exercise of options, warrants or convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
options, warrants or convertible securities that are held by such
person (but not those held by any other person) and that are currently
exercisable (i.e., that are exercisable within 60 days after the Record
Date) have been exercised. Unless otherwise noted, the Company believes
that all persons named in the table have sole voting and investment
power with respect to all shares beneficially owned by them.
(2) Includes: (a) 2,500 shares of Common Stock owned by Mr. Lichtenstein;
(b) 227,458 shares of Common Stock issuable upon the exercise of
options within sixty days of the Record Date granted to Mr.
Lichtenstein; (c) 1,068,970 shares of Common Stock owned by Steel
Partners II, L.P.; and (d) 21,685 shares of Common Stock issuable upon
the exercise of warrants within sixty days of the Record Date owned by
Steel Partners II, L.P. Mr. Lichtenstein is the Managing Member of the
general partner of Steel Partners II, L.P. Mr. Lichtenstein disclaims
beneficial ownership of the shares of Common Stock owned by Steel
Partners II, L.P. (except to the extent of his pecuniary interest in
such shares of Common Stock, which is less than the amount disclosed).
(3) Represents 1,068,970 shares of Common Stock and 21,685 shares of Common
Stock issuable upon exercise of warrants within sixty days of the
Record Date.
(4) Represents 34,400 shares of Common Stock and 75,708 shares of Common
Stock issuable upon exercise of options within sixty days of the Record
Date granted to Mr. Howard.
(5) Includes: (a) 5,066 shares of Common Stock owned by Mr. May; (b) 20,361
shares of Common Stock issuable upon the exercise of options within
sixty days of March 31, 2000 granted to Mr. May; (c) 35,000 shares of
Common Stock owned by May Management, Inc.; and (d) 350,350
-3-
<PAGE>
shares of Common Stock held in customer accounts as to which May
Management, Inc. has shared dispositive power. Mr. May is the Chief
Executive Officer and a principal stockholder of May Management, Inc.
and may be deemed to be the beneficial owner of shares owned by May
Management, Inc. or as to which May Management, Inc. has shared
dispositive power.
(6) The 61,678 shares of Common Stock are owned by Arrowhead Holdings
Corporation, of which Mr. Benenson is the controlling stockholder and
thus deemed the beneficial owner of all such shares of Common Stock.
(7) Represents 20,361 shares of Common Stock issuable upon exercise of
options within sixty days of the Record Date granted to Mr. Mullen.
----------------
Except as noted in the footnotes above, (i) none of such shares is
known by the Company to be shares with respect to which the beneficial owner has
the right to acquire beneficial ownership and (ii) the Company believes the
beneficial owner listed above has sole voting and investment power with respect
to the shares shown as being beneficially owned by it.
-4-
<PAGE>
PROPOSAL I--ELECTION OF DIRECTORS
At the annual meeting of stockholders held November 4, 1998 (the "1998
Meeting"), the stockholders of the Company voted to eliminate the Company's
staggered board system and provide for the annual election of directors, without
reducing the terms of any of the directors then in office (including those
elected at the 1998 Meeting). Although the Board is still divided into three
classes with the term of office of one class expiring each year and each
director holding office for a term expiring at the third annual meeting of
stockholders following his or her election (and until his successor has been
duly elected and qualified), commencing at last year's annual meeting of
stockholders held June 15, 1999 (the "1999 Meeting"), with respect to directors
whose terms expired at the 1999 Meeting, and continuing at this Meeting and the
annual meeting of stockholders to be held in 2001, each director whose term is
expiring (and any new nominees for director) shall be elected for one-year terms
only.
Two directors are to be elected at the Meeting. The Board has nominated
Jack L. Howard and James Benenson, Jr. to be re-elected for one-year terms,
expiring at the annual meeting in 2001 and until their successors shall be duly
elected and qualified. After the election of two directors at the Meeting, the
Company will have five directors, including the three continuing directors whose
present terms extend beyond the Meeting. Unless otherwise specified, all Proxies
received will be voted in favor of the election of the Board's nominees. Each of
the nominees currently serve as directors of the Company. The terms of office of
the current nominee directors expire at the Meeting and when their successors
are duly elected and qualified. Management has no reason to believe that any of
the nominees will be unable or unwilling to serve as a director, if elected.
Should any of the nominees not remain a candidate for election at the date of
the Meeting, the Proxies will be voted in favor of those nominees who remain
candidates and may be voted for substitute nominees selected by the Board. THE
BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE NOMINEES.
The name of, principal occupation of and certain additional information
about each nominee and each of the three current directors with unexpired terms
(as of the date of the Meeting) are set forth below.
NOMINEES FOR DIRECTOR
First Year
Name Age Became Director
--------------------------------------- --- ---------------
Jack L. Howard 38 1996
(term expires 2000)
James Benenson, Jr. 64 1999
(term expires 2000)
CONTINUING DIRECTORS
Warren G. Lichtenstein 34 1996
(term expires 2001)
Earle C. May 81 1997
(term expires 2001)
Joseph L. Mullen 52 1995
(term expires 2001)
-5-
<PAGE>
---------------
Jack L. Howard, a nominee for director, has served as a director of the
Company since 1996 and Vice President, Secretary, Treasurer and Chief Financial
Officer of the Company since December 1997. Mr. Howard has been a registered
principal of Mutual Securities, Inc., a stock brokerage firm, since prior to
1993. Mr. Howard has also been the Acting President and Chief Financial Officer
of Gateway Industries, Inc. since September 1994. Mr. Howard is a director of
the following publicly held companies: Gateway Industries, Inc. and Pubco
Corporation.
James Benenson, Jr., a nominee for director, has served as a director
of the Company since 1999, when he was appointed by the Board to fill the
vacancy created by the resignation of J. David Rosenberg. Mr. Benenson has been
Chairman of Vesper Company since 1979 and of Arrowhead Holdings Corporation
since 1983. Prior to such time, Mr. Benenson served in various capacities with
F. Eberstadt & Co., Walker, Hart & Co. and James Benenson & Co.
Warren G. Lichtenstein was appointed a director of the Company in 1996
and as President and Chief Executive Officer since 1997. Mr. Lichtenstein has
been the Chairman of the Board, Secretary and the Managing Member of Steel
Partners, L.L.C. ("Steel LLC"), the general partner of Steel Partners II, L.P.
since January 1, 1996. Prior to such time, Mr. Lichtenstein was the Chairman and
a director of Steel Partners, Ltd., the general partner of Steel Partners
Associates, L.P., which was the general partner of Steel Partners II, L.P. since
1993 and prior to January 1, 1996. Mr. Lichtenstein has also been President and
Chief Executive Officer of WebFinancial Corporation since December 1997. Mr.
Lichtenstein served as President and director of Marsel Mirror and Glass
Products, Inc. ("Marsel"), a subsidiary of the Company, from its inception in
July 1995 until shortly after the acquisition of its business by the Company in
November 1995, and continued as a director until its disposition in December
1996. Marsel filed for protection under Chapter 11 of the United States
Bankruptcy Code shortly following the Company's disposition of its interest in
Marsel. Mr. Lichtenstein is a director of the following publicly held companies:
Gateway Industries, Inc., PLM International, Inc., Tech-Sym Corporation, CPX
Corp., ECC International Corp. and Puroflow Incorporated.
Earle C. May has served as director of the Company since 1997. Mr. May
has been an executive officer of May Management, Inc., an investment management
firm, since prior to 1995.
Joseph L. Mullen has served as a director of the Company since 1995.
Since January 1994, Mr. Mullen has served as Managing Partner of Li Moran
International, a management consulting company, and has functioned as a senior
officer overseeing the merchandise and marketing departments for such companies
as Leewards Creative Crafts Inc., Office Depot of Warsaw, Poland and Rose's
Stores, Inc. From January 1994 to July 1994, Mr. Mullen served as senior Vice
President for Leewards Creative Crafts Inc., a national retail chain
specializing in crafts.
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES.
Meetings
The Board held five meetings during the year ended December 31, 1999.
The Board has a Stock Option and Compensation Committee, which administers the
Company's stock option plan, and makes recommendations concerning salaries and
incentive compensation for employees of and consultants to the Company, and an
Audit Committee, which reviews the Company's financial statements and accounting
policies, resolves potential conflicts of interest, receives and reviews the
recommendations of the Company's
-6-
<PAGE>
independent auditors and confers with the Company's independent auditors with
respect to the training and supervision of internal accounting personnel and the
adequacy of internal accounting controls. The Stock Option and Compensation
Committee is currently composed of Earle C. May (Chairman) and James Benenson.
In fiscal 1999, the members of the Audit Committee were Harold Smith (Chairman),
Earle C. May and Joseph L. Mullen. On June 15, 1999 Mr. Smith resigned from the
Audit Committee and Mr. May became Chairman. The Stock Option and Compensation
Committee held no meetings during the year ended December 31, 1999 and the Audit
Committee held one meeting during the year ended December 31, 1999. From time to
time, the members of the Board act by unanimous written consent pursuant to the
laws of the State of Delaware.
MANAGEMENT
Executive Officers of the Company
The following table contains the names, positions and ages of the
executive officers of the Company who are not directors.
Principal Occupation for the
Past Five Years and Current
Name Public Directorships Age
---- -------------------- ---
Glen M. Kassan Vice President, Chief Financial 56
Officer and Secretary of the
Company since June 2000. Vice-
President of Steel Partners
Services Ltd. since October 1999.
From 1997 to 1998, Chairman
and Chief Executive Officer of
Long Term Care Services, Inc., a
privately owned healthcare
services company which Mr.
Kassan co-founded in 1994 and
initially served as Vice Chairman
and Chief Financial Officer.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
paid by the Company during the fiscal years ended December 31, 1999, 1998 and
1997 to the Company's Chief Executive Officer. No executive officer of the
Company had a salary and bonus which exceeded $100,000 with respect to the
fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Securities
Name and Principal Position Year Salary(1)($) Bonus($) Options(#)
--------------------------- ---- ------------ -------- ----------
<S> <C> <C> <C> <C>
Warren G. Lichtenstein, President and 1999 - - 0
Chief Executive Officer 1998 - - 211,145
1997 - - 16,313
</TABLE>
-7-
<PAGE>
(1) For information relating to the management functions performed by
Steel Partners Services, Ltd. ("SPS"), an entity controlled by Warren G.
Lichtenstein, please see "Certain Relationships and Related Transactions."
The Chief Executive Officer did not receive any stock option grants
from the Company or exercise any Company stock options during the fiscal year
ended December 31, 1999. The following table sets forth certain information
regarding unexercised stock options held by the Chief Executive Officer as of
December 31, 1999.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options at Value of Unexercised In-the-Money
December 31, 1999 Options at December 31, 1999 (1)
Name Exercisable/Unexercisable Exercisable/Unexercisable($)
-------------------------- --------------------------------- ------------------------------------
<S> <C> <C>
Warren G. Lichtenstein 208,708/18,750 1,298,164/116,625
</TABLE>
(1) Based on the per-share closing price of the Common Stock of $6.22 on the
Nasdaq SmallCap Market on December 31, 1999.
Compensation of Directors and Executive Officers
The Company has no employees. Day-to-day management functions are
performed by SPS. Please see the section titled "Certain Relationships and
Related Transactions" for a description of the contractual arrangement between
the Company and SPS.
Compensation of directors consists of an annual retainer fee (the
"Retainer Fee") of $12,000 per year, plus a meeting fee (a "Meeting Fee") for
each meeting (i) of the Board (in the amount of $1,000 per meeting), (ii) of a
committee of the Board that does not meet on the same day as a meeting of the
Board (in the amount of $500 per meeting), and (iii) of a committee of the Board
that meets on the same day as the Board (in the amount of $375 per meeting).
Each director has the option to receive his Retainer Fee and Meeting Fee in cash
or in the form of Common Stock. For the year ending December 31, 1999, each
director has elected to receive his Retainer Fee and Meeting Fee in the form of
Common Stock.
-8-
<PAGE>
Board Compensation Committee Report on Executive Compensation
Securities and Exchange Commission regulations require the disclosure
of the compensation policies applicable to executive officers in the form of a
report by the compensation committee of the Board (or a report of the full Board
in the absence of a compensation committee). As noted above, the Company has no
employees and pays no compensation. As a result, the Board has not considered
compensation policy for employees and has not included a report with this proxy
statement.
Compensation Committee Interlocks and Insider Participation
None of the Directors serving on the Stock Option and Compensation
Committee were a party to any transaction which requires disclosure under Item
402(j) of Regulation S-K.
Transactions With Management and Others
See the section titled "Certain Relationships and Related
Transactions."
Stock Performance Graph
The following graph shows a comparison of the cumulative total returns
for the Company, the NASDAQ Composite Index, and the Media General Industry
Group (comprised of credit services). The graph assumes that the value of the
investment in the Company and each index was $100 on May 3, 1995 (the initial
listing date of the stock of the Company's predecessor after its reorganization
under Chapter 11 of the United States Bankruptcy Code), and that all dividends
were reinvested.
<TABLE>
<CAPTION>
Base
Period January January January December December
Company May 3, 31, 31, 29, 31, 31,
Name/Index 1995 1996 1997 1998 1998 1999
---------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
WebFinancial 100.00 50.89 58.28 58.28 177.51 184.02
Corporation
Credit 100.00 126.68 181.80 238.84 279.56 367.73
Services
NASDAQ 100.00 115.30 151.74 178.73 242.14 427.06
Market Index
</TABLE>
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership on Form 3 and changes in ownership on Form 4 or Form 5 with
the Securities and Exchange Commission ("SEC"). Such officers, directors and 10%
stockholders are also required by SEC rules to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons, the Company believes
that, during the fiscal year ended December 31, 1999, that there was compliance
with all Section 16(a) filing requirements applicable to its officers, directors
and 10% stockholders.
-9-
<PAGE>
Certain Relationships and Related Transactions
Pursuant to the Management Agreement approved by a majority of the
Company's disinterested directors, SPS provides the Company with certain
management, consulting, advisory services and office space. In 1999, SPS
received fees of $267,000. For 2000, the fee payable to SPS is expected to be
$310,000. The Management Agreement has a one year term and is renewable
automatically for successive one year periods, unless terminated by either party
upon 60 days' notice prior to the renewal date. The Company believes that the
cost of obtaining the type and quality of services rendered by SPS under the
Management Agreement is no less favorable than the cost at which the Company
could obtain from unaffiliated entities.
PROPOSAL II--RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
On May 1, 2000, the Company dismissed KPMG LLP ("KPMG"), as its
independent accountants. The audit reports of KPMG on the consolidated financial
statements of the Company as of December 31, 1999 and 1998, and for the year
ended December 31, 1999, the eleven-month period ended December 31, 1998 and the
year ended January 31, 1998 did not contain any adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles. The Board participated in and approved the decision to
change independent accountants.
In connection with the audits of the Company's consolidated financial
statements for each of the two fiscal years ended December 31, 1999 and 1998,
and in the subsequent interim period through May 1, 2000, there were no
"disagreements," as that term is defined in the instructions to Form 8-K and the
regulations applicable to Item 4 of Form 8-K, with KPMG on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which "disagreements," if not resolved to their
satisfaction would have caused them to make reference in connection with their
opinion on the subject matter of the "disagreement" in their report.
KPMG has furnished the Company with a letter addressed to the SEC
stating that it agrees with the above statements, except that KPMG did not agree
or disagree with the reference to the Board participating in and approving the
decision to change independent auditors.
The Company engaged Grant Thornton LLP as the Company's auditors on May
4, 2000. The Company has not consulted with Grant Thornton LLP during the past
two fiscal years concerning the application of accounting principles or any
issues relating to accounting, auditing or financial reporting.
Although the selection of auditors does not require ratification, the
Board has directed that the appointment of Grant Thornton LLP be submitted to
stockholders for ratification due to the significance of such appointment to the
Company. If stockholders do not ratify the appointment of Grant Thornton LLP,
the Board will consider the appointment of other certified public accountants.
The approval of the proposal to ratify the appointment of Grant Thornton LLP
requires the affirmative vote of a majority of the votes cast by holders of the
Common Stock.
The Company's auditors for the fiscal year ended December 31, 1999 were
KPMG. The Company does not expect a representative of either KPMG or Grant
Thornton LLP to be present at the Meeting.
-10-
<PAGE>
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
YEAR ENDING DECEMBER 31, 2000.
ANNUAL REPORT
All stockholders of record as of the Record Date, have been sent, or
are concurrently herewith being sent, a copy of the Company's 1999 Annual Report
for the year ended December 31, 1999, which contains certified financial
statements of the Company for the year ended December 31, 1999.
ANY STOCKHOLDER OF THE COMPANY MAY OBTAIN WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999
(WITHOUT EXHIBITS), AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY
WRITING TO GLEN M. KASSAN, VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY
AT WEBFINANCIAL CORPORATION, 150 EAST 52ND STREET, 21st FLOOR, NEW YORK, NEW
YORK 10022.
STOCKHOLDER PROPOSALS
Stockholder proposals made in accordance with Rule 14a-8 under the
Exchange Act and intended to be presented at the Company's 2001 Annual Meeting
of Stockholders must be received by the Company at its principal office in New
York, New York no later than February 5, 2001 for inclusion in the proxy
statement for that meeting.
On May 21, 1998 the Securities and Exchange adopted an amendment to
Rule 14a-4, as promulgated under the Securities and Exchange Act of 1934, as
amended. The amendment to Rule 14a-4(c)(1) governs the Company's use of its
discretionary proxy voting authority with respect to a stockholder proposal
which is not addressed in the Company's proxy statement. The new amendment
provides that if a proponent of a proposal fails to notify the Company at least
45 days prior to the month and day of mailing of the prior year's proxy
statement, then the Company will be allowed to use its discretionary voting
authority when the proposal is raised at the meeting, without any discussion of
the matter in the proxy statement.
With respect to the Company's 2001 Annual Meeting of Stockholders, if
the Company is not provided notice of a stockholder proposal, which the
stockholder has not previously sought to include in the Company's proxy
statement, by May 20 , 2001, the company will be allowed to use its voting
authority as outlined above.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no matters
other than those set forth herein which will be presented for consideration at
the Meeting. If any other matter or matters are properly brought before the
Meeting or any adjournment thereof, the persons named in the accompanying Proxy
will have discretionary authority to vote, or otherwise act, with respect to
such matters in accordance with their judgment.
Glen M. Kassan
Secretary
July 12, 2000
-11-
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
WEBFINANCIAL CORPORATION
Proxy -- Annual Meeting of Stockholders
August 29, 2000
The undersigned, a stockholder of WebFinancial Corporation, a Delaware
corporation (the "Company"), does hereby appoint Warren G. Lichtenstein and Jack
L. Howard, and each of them, the true and lawful attorneys and proxies with full
power of substitution, for and in the name, place and stead of the undersigned,
to vote all of the shares of Common Stock of the Company which the undersigned
would be entitled to vote if personally present at the 2000 Annual Meeting of
Stockholders of the Company to be held at the offices of Olshan Grundman Frome
Rosenzweig & Wolosky LLP, located at 505 Park Avenue, New York, New York 10022,
on August 29, 2000 at 11:00 A.M., local time, or at any adjournment or
adjournments thereof.
The undersigned hereby instructs said proxies or their
substitutes:
1. ELECTION OF DIRECTORS:
The election of Jack L. Howard and James Benenson, Jr. to the Board of
Directors, to service until the 2001 Annual Meeting of Stockholders and
until their respective successors are elected and shall qualify.
WITHHOLD AUTHORITY
FOR ALL TO VOTE FOR ALL ________________________
NOMINEES ___ NOMINEES ___ ________________________
To withhold authority to
vote for any individual
nominee(s), print name
above.
2. TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS:
______ FOR _____ AGAINST _____ ABSTAIN
3. DISCRETIONARY AUTHORITY:
In their discretion, the proxies are authorized to vote upon such other
and further business as may properly come before the Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS
HEREINBEFORE GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO
ELECT DIRECTORS, AND TO RATIFY THE APPOINTMENT OF GRANT THORNTON LLP AS THE
COMPANY'S INDEPENDENT AUDITORS.
<PAGE>
The undersigned hereby revokes any proxy or proxies heretofore given,
and ratifies and confirms that all the proxies appointed hereby, or any of them,
or their substitutes, may lawfully do or cause to be done by virtue hereof.
Dated _______________________, 2000
_____________________________ (L.S.)
_____________________________ (L.S.)
Signature(s)
NOTE: Please sign exactly as your name or names appear
hereon. When signing as attorney, executor, administrator,
trustee or guardian, please indicate the capacity in which
signing. When signing as joint tenants, all parties in the
joint tenancy must sign. When a proxy is given by a
corporation, it should be signed with full corporate name by
a duly authorized officer.
Please mark, date, sign and mail this proxy in the
envelope provided for this purpose. No postage is required
if mailed in the United States.
