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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
(Amendment No. 8)
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
(Name of Subject Company)
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
(Name of Person(s) Filing Statement)
Common Stock, Par Value $0.25
(including the associated preferred stock purchase rights)
(Title of Class of Securities)
379335 10 2
(CUSIP Number of Class of Securities)
Jeanette H. Quay, Esq.
Vice President,
General Counsel and Secretary
Global Industrial Technologies, Inc.
2121 San Jacinto Street, Suite 2500
Dallas, Texas 75201
(214) 953-4500
(Name, address and telephone number of person authorized to receive notice
and communications on behalf of the person(s) filing statement)
Copy to:
James C. Morphy, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
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This Amendment No. 8 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 filed with the Securities and Exchange Commission on
December 23, 1998, and as subsequently amended (as so amended, the "Schedule
14D-9"), by Global Industrial Technologies, Inc., a Delaware corporation,
relating to the offer by WHX Corporation, a Delaware corporation, to purchase
for cash through its wholly-owned subsidiary, GT Acquisition Corp., a Delaware
corporation, all of the outstanding common shares, par value $0.25 per share, of
the Company, together with the Rights. Capitalized terms used but not defined
herein have the meaning ascribed to them in the Schedule 14D-9.
Item 3. Identity and Background
Item 3, paragraph (b)(1) is hereby amended and supplemented by
deleting the last two sentences of the fifth paragraph and adding in its place
the following sentence:
Each of these severance agreements provides for a Period equal to 30 months, a
Multiplier equal to two and one-half (2.5), and an excise tax gross-up payment
as described above.
Item 7. Certain Negotiations and Transactions by the Subject Company.
Item 7, paragraph (a-b) is hereby supplemented and amended by the
addition of the following sentence following the second complete sentence in
the paragraph:
At its March 29, 1999 Board meeting, the Board instructed management, with the
assistance of the Company's financial and legal advisors, to explore and
evaluate a number of alternatives to generate stockholder value that may be
greater than that which the Company's business plan can create. Such
alternatives could include a possible merger or strategic combination.
Accordingly, representatives of the Company may enter into confidentiality
agreements and discussions and negotiations with third parties relating to such
transactions. The Board has determined that disclosure with respect to the
parties to, and the possible terms of, any transactions or proposals of the type
referred to above might jeopardize any discussions or negotiations that the
Company may conduct. Accordingly, the Board has adopted a resolution
instructing management not to disclose the possible terms of any such
transactions or proposals, or the parties thereto, unless and until a definitive
agreement or any agreement in principle relating thereto has been reached or,
upon the advice of counsel, as may otherwise be required by law.
Item 9. Material to be Filed as Exhibits
Item 9 is hereby amended and supplemented by the addition of the following
exhibits:
Exhibit 18 Form of Amendment No. 3 dated March 8, 1999 to the Severance
Agreement dated February 23, 1998 by and between the company and Mr. James B.
Alleman (Amendment to Severance Agreements with Mr. George W. Pasley, Mr.
Maurice W. Barrett, Ms. Jeanette H. Quay and Ms. Donna A. Reeves respectively,
are identical to the Amendment to Severance Agreement filed as this Exhibit
except as to the name of the party and as to the original date of the Agreement
which is December 18, 1998 for Ms. Quay and Ms. Reeves).
Exhibit 19 Text of Press Release, dated March 29, 1999
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
/s/ Jeanette H. Quay
By:
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Name: Jeanette H. Quay
Title: Vice President, General Counsel
and Secretary
Dated: March 29, 1999
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Exhibit List
Exhibit 18 Amendment No. 3 to Severance Agreement.
Exhibit 19 Text of Press Release, dated March 29, 1999.
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Exhibit 18
AMENDMENT NO. 3 TO SEVERANCE AGREEMENT
AMENDMENT NO. 3, entered into as of March 8, 1999 ("Amendment"), to
Severance Agreement, dated as of February 23, 1998 (the "Agreement"), as amended
on September 18, 1998, and October 27, 1998, by and between Global Industrial
Technologies, Inc., a Delaware corporation (the "Company"), and James B. Alleman
("Executive").
Company and Executive hereby agree, pursuant to Section 17 of the Agreement
and for and in consideration of the premises and the mutual covenants and
agreements contained herein, to amend the Agreement in the following respects:
1. Paragraph 5 of the Agreement is hereby amended to read in its entirety as
follows:
"5. Certain Additional Payments by the Company.
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(a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment, award, benefit or
distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or
for the benefit of Executive (whether pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5) (the "Payments") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then the Company
shall pay to Executive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by Executive of all taxes (including any Excise Tax)
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y)
the product of any deductions disallowed because of the inclusion of the Gross-
up Payment in Executive's adjusted gross income and the highest applicable
marginal rate of federal income taxation for the calendar year in which the
Gross-up Payment is to be made. For purposes of determining the amount of the
Gross-up Payment, the Executive shall be deemed to (i) pay federal income taxes
at the highest marginal rates of federal income taxation for the calendar year
in which the Gross-up Payment is to be made, (ii) pay applicable state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes and (iii) have otherwise allowable deductions for federal income tax
purposes at least equal to those which could be disallowed because of the
inclusion of the Gross-up Payment in the Executive's adjusted gross income.
Notwithstanding the foregoing provisions of this Section 5(a), if it
shall be determined that Executive is entitled to a Gross-Up Payment, but that
the Payments would not be subject to the Excise Tax if the Payments were reduced
by an amount that is less than 10% of the portion of the Payments that would be
treated as "parachute payments" under Section 280G of the Code, then the amounts
payable to Executive under this Agreement shall be reduced (but not below zero)
to the maximum amount that could be paid to Executive without giving rise to the
Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to
Executive. The reduction of the amounts payable hereunder, if applicable, shall
be made by reducing first the payments under Section 4(a)(ii), unless an
alternative method of reduction is elected by Executive. For purposes of
reducing the Payments to the Safe Harbor Cap, only amounts payable under this
Agreement (and no other Payments) shall be reduced. If the reduction of the
amounts payable hereunder would not result in a reduction of the Payments to the
Safe Harbor Cap, no amounts
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payable under this Agreement shall be reduced pursuant to this provision.
(b) Subject to the provisions of Section 5(a), all determinations
required to be made under Sections 4 and 5, including whether and when a Gross-
Up Payment is required, the amount of such Gross-Up Payment, the reduction of
the Payments to the Safe Harbor Cap and the assumptions to be utilized in
arriving at such determinations, shall be made by a nationally recognized public
accounting firm that is retained by the Company (the "Accounting Firm"). In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, Executive may
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). The Accounting Firm shall provide detailed
supporting calculations both to the Company and Executive within fifteen (15)
business days of the receipt of notice from the Company or the Executive that
there has been a Payment, or such earlier time as is requested by the Company
(collectively, the "Determination"). All fees and expenses of the Accounting
Firm shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the performance of
the services hereunder. The Gross-up Payment under this Section 5 with respect
to any Payments shall be made no later than thirty (30) days following such
Payment. If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion to such effect, and
to the effect that failure to report the Excise Tax, if any, on Executive's
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty. In the event the Accounting Firm determines that
the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Executive
with a written opinion to such effect. The Determination by the Accounting Firm
shall be binding upon the Company and Executive. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of the Determination,
it is possible that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment") or Gross-up Payments are made by
the Company which should not have been made ("Overpayment"), consistent with the
calculations required to be made hereunder. In the event that the Executive
thereafter is required to make payment of any Excise Tax or additional Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to
or for the benefit of Executive. In the event the amount of the Gross-up Payment
exceeds the amount necessary to reimburse the Executive for his Excise Tax, the
Accounting Firm shall determine the amount of the Overpayment that has been made
and any such Overpayment (together with interest at the rate provided in Section
1274(b)(2) of the Code) shall be promptly paid by Executive (to the extent he
has received a refund if the applicable Excise Tax has been paid to the Internal
Revenue Service) to or for the benefit of the Company. Executive shall
cooperate, to the extent his expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contests or disputes
with the Internal Revenue Service in connection with the Excise Tax."
2. Defined terms used in this Amendment shall have the meanings assigned to
them in the Agreement.
3. The Agreement is only amended as expressly set forth herein.
EXECUTED as of the day and year first above written by the undersigned duly
authorized officer of the Company and the Executive.
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Global Industrial Technologies, Inc.
By: By:
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Rawles Fulgham James B. Alleman
Chairman Vice President, Human Resources
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EXHIBIT 19
FOR IMMEDIATE RELEASE
Contact: George Pasley
V. P. Communications
214-953-4510
Website: prnewswire.com/gix
GLOBAL INDUSTRIAL TECHNOLOGIES REPORTS RESULTS FOR 1998
- --Global Expects To Report Profit In First Quarter 1999--
- --Company To Explore Strategic Alternatives For
Further Enhancing Stockholder Value--
DALLAS, TX (March 29, 1999) -- Global Industrial Technologies (NYSE: GIX)
today reported its results for 1998, commented on its expected first
quarter 1999 performance, and announced that its Board of Directors has
authorized a review of all strategic alternatives for further enhancing
stockholder value.
Revenues for 1998 from continuing operations were $496.0 million. Loss
from continuing operations, before charges, was ($6.5) million or ($.30)
per fully diluted share. Including $15.0 million income from
discontinued operations, and restructuring charges and write downs from
continuing operations of $44.5 million (net of tax), Global reported a
net loss of ($36.0) million or ($1.64) per fully diluted share for 1998.
For the fiscal period ending October 31, 1997, Global's revenues from
continuing operations were $435.1 million and its income from continuing
operations, before charges, was $11.4 million. Including $20.2 million
income from discontinued operations and special charges and writedowns
of $36.0 million (net of tax), Global's net loss for 1997 was ($4.4)
million or ($.20) per fully diluted share.
Rawles Fulgham, Global Chairman and Chief Executive Officer, said,
"Strategically, 1998 and the early part of this year have been very
important for Global's future growth. We have taken a number of
aggressive steps to improve our business going forward in accordance
with our strategic plan of building a focused and world-class
refractories business. For example, the recently announced agreement
for the sale of our lime business and the decision to sell our
Ameri-Forge operation are integral parts of our program for enhancing
stockholder value.
"However, 1998 was a complex year for Global. Poor world-wide market
conditions, the process of integrating A. P. Green into our
Harbison-Walker operations, and charges relating to restructuring and
discontinued operations combined to make 1998 a very difficult year for
Global financially.
"The proceeds from these sales, and the cost savings and synergies we
have gained from the restructuring and integration of our refractories
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operations, are expected to produce improved operating margins and
reduced interest expenses. For stockholders, this is expected to yield
improved financial results in 1999. Moreover, I am convinced that we
will beat the goal we stated in December of becoming profitable by the
first half of 1999. In fact, the improvement will become visible in the
first quarter of this year, which is now expected to be profitable.
"Our overriding commitment is to enhancing stockholder value. While we
believe that we will be able to fulfill that commitment by achieving
stronger results this year, we are not content to stop there. That is
why we are asking our financial advisors to help us explore and evaluate
a number of alternatives to generate stockholder value that may be
greater than that which our business plan can create. Such alternatives
could include a possible merger or strategic combination," Mr. Fulgham
concluded. There can be no assurance that any such transaction will be
proposed, authorized by the Board or consummated.
Statements the Company may publish, including those in this
announcement, that are not strictly historical are "forward-looking"
statements under the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Although the Company believes the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations
will be realized. Forward-looking statements involve known and unknown
risks which may cause the Company's actual results and corporate
developments to differ materially from those expected. Factors that
could cause results and developments to differ materially from the
Company's expectations include, without limitation, changes in
manufacturing and shipment schedules, delays in completing plant
construction and acquisitions, currency exchange rates, new product and
technology developments, competition within each business segment,
cyclicity of the markets for the products of a major segment,
litigation, significant cost variances, the effects of acquisitions,
divestitures, merger, strategic combination, and other risks described
from time to time in the Company's SEC reports including quarterly
reports on Form 10-Q, annual reports on Form 10-K and reports on Form
8-K.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Global Industrial Technologies, Inc. (the "Company") and certain other
persons named below may be deemed to be participants in the
solicitations of proxies against the proposals of WHX Corporation. The
participants in this solicitation may include (i) the directors of the
Company: David H. Blake, Richard W. Vieser, Samuel B. Casey, Jr., Rawles
Fulgham and Graham L. Adelman and (ii) the following executive officers
and employees of the Company: Rawles Fulgham (Chairman and Chief
Executive Officer), Graham L. Adelman (President and Chief Operating
Officer), Alfred L. Williams (Senior Vice President and Chief Financial
Officer), Donna Reeves (Vice President and Controller), Jeanette H. Quay
(Vice President, General Counsel and Secretary), James Alleman (Vice
President-Human Resources), and George Pasley (Vice
President-Communications). As of the date of this communication, none
of the foregoing participants individually beneficially own in excess of
.1% of the Company's common stock or in the aggregate in excess of 2% of
the Company's common stock.
