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 (AMENDMENT NO. )
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 Rule 14a-11(c) or Rule 14(a)-12
WHX CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
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 transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 9, 2001
---------------------------
To Our Stockholders:
We invite you to attend our annual stockholders' meeting on Monday,
July 9, 2001 at the Dupont Hotel, 11th & Market Streets, Wilmington, Delaware
19801 at 11:00 a.m. At the meeting, you will hear an update on our operations,
have a chance to meet some of our directors and executives, and will act on the
following matters:
1) To elect three (3) class II directors to a three-year
term;
2) To adopt our 2001 Stock Option Plan;
3) To approve an amendment to our 1991 Incentive and
Nonqualified Stock Option Plan whereby the term of the
1991 Option Plan is extended until September 23, 2006,
the definition of persons eligible to receive grants of
options under the 1991 Option Plan is expanded and
certain other administrative matters are amended;
4) To ratify the appointment of PricewaterhouseCoopers LLP
as our independent accountants for fiscal 2001; and
5) Any other matters that properly come before the meeting.
This booklet includes a formal notice of the meeting and the proxy
statement. The proxy statement tells you more about the agenda and procedures
for the meeting. It also describes how our Board of Directors operates and gives
personal information about our director nominees.
Only stockholders of record at the close of business on May 14, 2001
will be entitled to vote at the annual meeting. Even if you only own a few
shares, we want your shares to be represented at the annual meeting. I urge you
to complete, sign, date, and return your proxy card promptly in the enclosed
envelope.
We have also provided you with the exact place and time of the meeting
if you wish to attend in person.
Sincerely yours,
MARVIN L. OLSHAN
Secretary
Dated: New York, New York
May 21, 2001
WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
---------------------------
2001 PROXY STATEMENT
GENERAL INFORMATION
This proxy statement contains information related to the annual meeting
of stockholders of WHX Corporation to be held on Monday, July 9, 2001, beginning
at 11:00 a.m., at the Dupont Hotel, 11th & Market Streets, Wilmington, Delaware
19801, and at any postponements or adjournments thereof.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Company's annual meeting, stockholders will hear an update on
the Company's operations, have a chance to meet some of its directors and
executives and will act on the following matters:
1) To elect three (3) class II directors to a three-year
term;
2) To adopt our 2001 Stock Option Plan (the "2001 Option
Plan");
3) To approve an amendment to our 1991 Incentive and
Nonqualified Stock Option Plan (the "1991 Option Plan")
whereby the term of the 1991 Option Plan is extended
until September 23, 2006, the definition of persons
eligible to receive grants of options under the 1991
Option Plan is expanded and certain other administrative
matters are amended (the "1991 Option Plan Amendment");
4) To ratify the appointment of PricewaterhouseCoopers LLP
as our independent accountants for fiscal 2001; and
5) Any other matters that properly come before the meeting.
WHO MAY VOTE
Stockholders of WHX Corporation, as recorded in our stock register on
May 14, 2001 (the "Record Date"), may vote at the meeting. As of this date, we
had 15,312,272 shares of common stock eligible to vote. We have only one class
of voting shares. All shares in this class have equal voting rights of one vote
per share.
HOW TO VOTE
You may vote in person at the meeting or by proxy. We recommend that
you vote by proxy even if you plan to attend the meeting. You can always change
your vote at the meeting.
VOTING ELECTRONICALLY VIA THE INTERNET OR BY TELEPHONE
Stockholders whose shares are registered directly on the books of the
Company may vote either by telephone or via the Internet. Your telephone or
Internet vote authorizes the named proxies in the same
manner as if you had executed a proxy card and returned it by mail. Instructions
for registered stockholders interested in voting by telephone or via the
Internet are set forth on the enclosed proxy card. The telephone and Internet
voting procedures are designed to authenticate the shareholder's identity and to
allow shareholders to vote their shares and confirm that their instructions have
been properly recorded.
If your shares are registered in the name of a bank or brokerage firm,
you may be eligible to vote your shares electronically over the Internet or by
telephone. If your voting form does not reference Internet or telephone
information, please complete and return the paper form in the self-addressed,
postage paid envelope provided.
HOW PROXIES WORK
Our Board of Directors is asking for your proxy. Giving us your proxy
means you authorize us to vote your shares at the meeting in the manner you
direct. You may vote for all, some, or none of our director nominees. You may
also vote for or against the other proposal or abstain from voting.
Proxies submitted by mail, telephone or Internet will be voted by the
individuals named on the proxy card in the manner you indicate. If you give us
your proxy but do not specify how you want your shares voted, they will be voted
in accordance with the Board of Directors recommendations, i.e. in favor of all
our director nominees, in favor of the approval of the 2001 Stock Option Plan,
in favor of the approval of the 1991 Option Plan Amendment and in favor of the
ratification of the appointment of PricewaterhouseCoopers LLP as our independent
accountants.
You may receive more than one proxy or voting card depending on how you
hold your shares. If you hold shares through someone else, such as a
stockbroker, you may get materials from them asking how you want to vote. The
latest proxy card we receive from you will determine how we will vote your
shares.
REVOKING A PROXY
There are three ways to revoke your proxy. First, you may submit a new
proxy with a later date up until the existing proxy is voted. Secondly, you may
vote in person at the meeting. Lastly, you may notify our corporate secretary in
writing at 110 East 59th Street, New York, New York 10022.
QUORUM
In order to carry on the business of the meeting, we must have a
quorum. This means at least a majority of the outstanding shares eligible to
vote must be represented at the meeting, either by proxy or in person. Shares
that we own are not voted and do not count for this purpose.
VOTES NEEDED
The director nominees receiving a majority of the votes cast during the
meeting will be elected to fill the seats of our Class II Directors. For the
other proposals to be approved, we require the favorable vote of a majority of
the votes cast. Only votes for or against a proposal count. Votes which are
withheld from voting on a proposal will be excluded entirely and will have no
effect in determining the quorum or the majority of votes cast. Abstentions and
broker non-votes count for quorum purposes only and not for voting purposes.
Broker non-votes occur when a broker returns a proxy but does not have the
authority
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to vote on a particular proposal. Brokers that do not receive instructions are
entitled to vote on the election of directors and the ratification of the
auditors.
ATTENDING IN PERSON
Only stockholders, their proxy holders, and our invited guests may
attend the meeting. If you wish to attend the meeting in person but you hold
your shares through someone else, such as a stockbroker, you must bring proof of
your ownership and an identification with a photo at the meeting. For example,
you could bring an account statement showing that you owned WHX Corporation
shares as of May 14, 2001 as acceptable proof of ownership.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of the
Common Stock of WHX Corporation outstanding at May 14, 2001, by (i) each person
known by the Company to be the beneficial owner of more than five percent of its
Common Stock, (ii) each director, (iii) each of the executive officers named in
the summary compensation table and (iv) by all directors and executive officers
of the Company as a group.
SHARES BENEFICIALLY PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED OF CLASS(2)
- --------------------------------------- ------------------- -----------
Deutsche Bank A.G. (3)
Taunusanlage 12, D-60325
Frankfurt am Main, Federal Republic of Germany............... 3,936,018 20.6%
Founders Financial Group, L.P. (4)
53 Forest Avenue
Old Greenwich, Connecticut 06870............................ 1,034,706 6.8%
WPN Corp. (5)
110 E. 59th Street
New York, New York 10022.................................... 1,694,150 10.0%
Donald Smith & Co., Inc. (6)
East 80, Route 4, Suite 360
Paramus, New Jersey 07652.................................... 830,000 5.4%
Dimensional Fund Advisors Inc. (7)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401............................... 1,317,625 8.6%
Gabelli Funds, LLC (8)
One Corporate Center,
Rye, New York 10580.......................................... 1,827,881 11.5%
Alliance Capital Management L.P. (9)
1290 Avenue of the Americas
New York, New York 10104..................................... 1,162,100 7.6%
Dewey Square Investors Corporation (10)
One Financial Center
Boston, Massachusetts 02111.................................. 866,419 5.7%
Ronald LaBow ................................................ 1,694,150(5) 10.0%
Neil D. Arnold............................................... 70,000(11) *
Paul W. Bucha................................................ 115,000(11) *
Robert A. Davidow............................................ 112,035(12) *
William Goldsmith............................................ 70,000(11) *
Robert D. LeBlanc............................................ 290,090(13) 1.9%
Marvin L. Olshan............................................. 71,000(12) *
Raymond S. Troubh............................................ 72,000(12) *
James G. Bradley............................................. 261,654(14) 1.7%
Howard A. Mileaf............................................. 27,000(15) *
Arnold G. Nance.............................................. 109,158(16) *
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SHARES BENEFICIALLY PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED OF CLASS(2)
- --------------------------------------- ------------------- -----------
All Directors and Executive Officers as a Group 2,982,087(17) 16.6%
(12 persons)
- -------------------
* less than one percent.
(1) Each stockholder, director and executive officer has sole voting power
and sole dispositive power with respect to all shares beneficially
owned by him, unless otherwise indicated.
(2) Based upon shares of Common Stock outstanding at May 14, 2001 of
15,312,272 shares.
(3) Based on a Schedule 13G filed in February 2001, Deutsche Bank A.G.
beneficially owns 687,220 shares of Series A Convertible Preferred
Stock and 666,460 shares of Series B Convertible Preferred Stock
convertible into 2,177,525 and 1,633,493 shares of Common Stock,
respectively, and 125,000 shares of Common Stock.
(4) Based on a Schedule 13G/A filed in February 2000, Founders Financial
Group, L.P, Forest Investment Management LLC/ADV, Michael A. Boyd, Inc.
and Michael A. Boyd collectively beneficially hold 1,034,706 shares of
Common Stock.
(5) Based on a Schedule 13D filed jointly in December 1997 by WPN Corp.,
Ronald LaBow, Stewart E. Tabin and Neale X. Trangucci. Includes
1,582,500 shares of Common Stock issuable upon exercise of options
within 60 days hereof. Ronald LaBow, the Company's Chairman, is the
sole stockholder of WPN Corp. Consequently, Mr. LaBow may be deemed to
be the beneficial owner of all shares of Common Stock owned by WPN
Corp. Mr. LaBow disclaims beneficial ownership of the options to
purchase 400,000 shares of Common Stock held by WPN Corp. as nominee
for Messrs. Tabin and Trangucci, all of which are exercisable within 60
days hereof. Messrs. Tabin and Trangucci are officers and directors of
WPN Corp. and disclaim beneficial ownership of all shares of Common
Stock owned by WPN Corp., except for options to purchase such 400,000
shares of Common Stock held by WPN Corp. as nominee for Messrs. Tabin
and Trangucci. Each of Messrs. Tabin and Trangucci holds options,
exercisable within 60 days hereof, to purchase 435,000 shares of Common
Stock.
(6) Based on Schedule 13G filed in February 2001, Donald Smith & Co., Inc.
beneficially holds 830,000 shares of Common Stock.
(7) Dimensional Fund Advisors, Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered
under the Investment Company Act of 1940, and serves as investment
manager to certain other investment vehicles, including commingled
group trusts. (These investment companies and investment vehicles are
the "Portfolios"). In its role as investment advisor and investment
manager, Dimensional possessed both investment and voting power over
1,317,625 shares of WHX Corporation stock as of December 31, 2000. The
Portfolios own all securities reported in this statement, and
Dimensional disclaims beneficial ownership of such securities.
(8) Based on a Schedule 13D/A filed in January 2001, Gabelli Funds, LLC,
GAMCO Investors, Inc., Gabelli International Limited, Gabelli Advisers,
Inc. and Gabelli Performance Partnership L.P. collectively beneficially
hold 1,827,881 shares of Common Stock. This amount includes Common
Stock issuable upon their conversion of 340,876 shares of Series A
Convertible Preferred Stock and 254,658 shares of Series B Convertible
Preferred Stock.
(9) Based on a Schedule 13G filed jointly in February 1999, Alliance
Capital Management, L.P., AXA, AXA Assurances I.A.R.D. Mutuelle
("AXAAIM"), AXA Assurances Vie
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Mutuelle ("AXAAVM"), AXA Conseil Vie Assurance Mutuelle ("AXACVAM"),
AXA Courtage Assurance Mutuelle ("AXACAM") and The Equitable Companies,
Inc. collectively beneficially hold 1,162,100 shares of Common Stock.
The address of AXA is 9 Place Vendome 75001 Paris, France. The address
of AXAAIM and AXAAVM is 21, rue de Chateaudun 75009 Paris, France. The
address of AXACVAM is 100-101 Terrasse Boieldieu 92042 Paris La
Defense, France. The address of AXACAM is 26, rue Louis le Grand 75002
Paris, France.
(10) Based on a Schedule 13G/A filed in January 1999, Dewey Square Investors
Corp. beneficially holds 866,419 shares of Common Stock. This amount
includes Common Stock issuable upon their conversion of Preferred
Stock.
(11) Consists of shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(12) Includes 70,000 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(13) Includes 260,000 shares of Common Stock issuable upon their exercise of
options within 60 days hereof, 21,639 shares of Common Stock, and
approximately 2,451 shares of Common Stock issuable upon conversion of
1,000 shares of Series B Preferred Stock owned directly by Mr. LeBlanc,
1,000 shares of Common Stock held by Mr. LeBlanc's wife and 4,000
shares of Common Stock held by Mr. LeBlanc's children.
(14) Includes 260,000 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(15) Includes 25,000 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(16) Includes 103,333 shares of Common Stock issuable upon their exercise of
options within 60 days hereof, approximately 3,105 shares of Common
Stock issuable upon conversion of 980 shares of Series A Preferred
Stock, approximately 980 shares of Common Stock issuable upon
conversion of 400 shares of Series B Preferred Stock held by Mr.
Nance's children, and 1,740 shares of Common Stock.
(17) Includes 2,695,833 shares of Common Stock issuable upon their exercise
of options within 60 days hereof.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation and Bylaws provide for the
classification of the Board of Directors into three classes. The term of the
current Class II Directors expires at the 2001 Annual Meeting of Stockholders
(the "Meeting") and when their successors are duly elected and shall have
qualified. All nominees are currently Class II Directors of the Company.
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 nominee not be a
candidate at the time of the Meeting (a situation which is not now anticipated),
proxies may be voted in favor of the remaining nominees and may be also voted
for a substitute nominee selected by the Board of Directors.
Unless authority is specifically withheld, proxies will be voted for
the election of the nominees named below, to serve as Class II Directors of the
Company for a term of office to expire at the third succeeding Annual Meeting of
Stockholders and until their successors have been duly elected and qualified.
Class II Directors shall be elected by a plurality of the votes cast, in person
or by proxy, at the Meeting. The Class I and Class III Directors will continue
to serve their respective terms, with the three Class III Directors having a
term that will expire at the 2002 Annual Meeting of Stockholders of the Company
and the two Class I Directors having a term that will expire at the 2003 Annual
Meeting of Stockholders of the Company.
The names of the nominees and certain information concerning them are
set forth:
PRINCIPAL OCCUPATION FIRST YEAR
CLASS OF FOR THE PAST FIVE YEARS BECAME
NAME DIRECTOR AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR(1)
- ---- -------- -------------------------------- --- -------------
Paul W. Bucha II DIRECTOR. Consultant to the Company 57 1993
since December 2000. President,
B,L,H&J, Inc. an international consulting
firm since November 2000 and from July
1991 to April 1998; Chairman of the
Board of Wheeling-Pittsburgh Steel
Corporation from April 1998 to November
2000; President, Paul W. Bucha &
Company, Inc., an international marketing
consulting firm from 1979 to April 1999
and since November 2000; Chairman and
Chief Executive Officer of Delta Defense
from October 1997 to April 1998.
President, Congressional Medal of Honor
Society of U.S. from September 1995 to
November 1999.
Marvin L. Olshan II DIRECTOR. Secretary of the Company since 72 1991
1991. Partner, Olshan Grundman Frome
Rosenzweig & Wolosky LLP, since 1956.
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Raymond S. II DIRECTOR. Financial Consultant for in 74 1992
Troubh excess of past five years. Mr. Troubh is
also a director of ARIAD Pharmaceuticals,
Inc., Diamond Offshore Drilling, Inc.,
General American Investors Company,
Gentiva Health Services, Inc., a health
services business, Health Net, Inc., a
managed health care company, Starwood
Hotels & Resorts, and Triarc Companies,
Inc., restaurants and soft drinks. Trustee
of Corporate Renaissance Group
Liquidating Trust, Microcap Liquidating
Trust and Petrie Stores Liquidating Trust.
The names of the Class III and Class I Directors, whose terms expire at
the 2002 and 2003 Annual Meeting of Stockholders of the Company, respectively,
who are currently serving their terms are set forth below:
PRINCIPAL OCCUPATION FIRST YEAR
CLASS OF FOR THE PAST FIVE YEARS BECAME
NAME DIRECTOR AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR(1)
- ---- -------- -------------------------------- --- -------------
William Goldsmith I DIRECTOR. Management and Marketing 82 1987
Consultant since 1984. Chairman of
Nucon Energy Corp. since 1997 and
TMP, Inc. from January 1991 to 1993.
Chairman and Chief Executive Officer of
Overspin Golf Corp. since 1993.
Chairman and Chief Executive Officer of
Fiber Fuel International, Inc., from 1994
to 1997. Life Trustee to Carnegie Mellon
University since 1980.
Robert D. LeBlanc I DIRECTOR. Executive Vice President of 51 1999
the Company since April 1998. President
and Chief Executive Officer of Handy &
Harman ("H&H") since April 1998.
(H&H was acquired by the Company in
April 1998). President, Chief Operating
Officer and Director of H&H from July
1997 to April 1998. Executive Vice
President of H&H from November 1996
to July 1997. Executive Vice President
of Elf Atochem North America, Inc.
from January 1994 to November 1996.
Director of Church & Dwight Co., Inc.,
a consumer products and specialty
chemical company, since July 1998.
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PRINCIPAL OCCUPATION FIRST YEAR
CLASS OF FOR THE PAST FIVE YEARS BECAME
NAME DIRECTOR AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR(1)
- ---- -------- -------------------------------- --- -------------
Neil D. Arnold III DIRECTOR. Private Investor since May 52 1992
1999. Group Finance Director of Lucas
Varity plc from December 1996 to May
1999, and Executive Vice President -
Corporate Development from September
1996 to December 1996; Senior Vice
President and Chief Financial Officer
of Varity Corporation from July 1990 to
September 1996. Lucas Varity plc
designs, manufactures and supplies
advanced technology systems, products
and services in the world's automotive
and aerospace industries.
Robert A. III DIRECTOR AND VICE CHAIRMAN OF THE 58 1992
Davidow BOARD. Private investor since January
1990. Director of Arden Group, Inc., a
supermarket holding company.
Ronald LaBow III CHAIRMAN OF THE BOARD. President of 65 1991
Stonehill Investment Corp. since
February 1990. Director of Regency
Equities Corp., a real estate company,
and an officer and director of WPN
Corp., a financial consulting company.
- --------------------
(1) The Company and its subsidiaries were reorganized into a new holding
company structure ("Corporate Reorganization") on July 26, 1994. Prior
to the Corporate Reorganization, all directors of the Company who were
directors at the time of the Corporate Reorganization were directors of
Wheeling-Pittsburgh Corporation.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES.
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MEETINGS AND COMMITTEES
The Board of Directors met on 9 occasions and took action by unanimous
written consent on 1 occasion during the fiscal year ended December 31, 2000.
There are five Committees of the Board of Directors: the Executive Committee,
the Audit Committee, the Compensation Committee, the Nominating Committee and
the Stock Option Committee (for the 1991 Option Plan). The members of the
Executive Committee are Ronald LaBow, Robert A. Davidow, Marvin L. Olshan,
Raymond S. Troubh and Neil D. Arnold. The Executive Committee took action by
unanimous written consent on 3 occasions during the fiscal year ended December
31, 2000. The Executive Committee possesses and exercises all the power and
authority of the Board of Directors in the management and direction of the
business and affairs of the Company except as limited by law and except for the
power to change the membership or to fill vacancies on the Board of Directors or
the Executive Committee. The members of the Audit Committee are Neil D. Arnold,
Robert A. Davidow and Raymond S. Troubh. The Audit Committee met on 4 occasions
during the fiscal year ended December 31, 2000. The primary purpose of the Audit
Committee is to assist the Board of Directors in fulfilling its responsibility
to oversee the Company's financial reporting activities. The Audit Committee
annually recommends to the Board of Directors independent public accountants to
serve as auditors of the Company's books, records and accounts, reviews the
scope of the audits performed by such auditors and the audit reports prepared by
them, reviews and monitors the Company's internal accounting procedures and
monitors compliance with the Company's Code of Ethics Policy and Conflict of
Interest Policy. A report from the Audit Committee is also included in this
Proxy Statement, see Audit Committee Report. The members of the Compensation
Committee are Robert A. Davidow, William Goldsmith and Marvin L. Olshan. The
Compensation Committee met on 4 occasions and took action by unanimous written
consent on 1 occasion during the fiscal year ended December 31, 2000. The
Compensation Committee reviews compensation arrangements and personnel matters.
The members of the Nominating Committee are Ronald LaBow, Marvin L. Olshan, Paul
W. Bucha and Robert A. Davidow. The Nominating Committee recommends nominees to
the Board of Directors of the Company. The members of the Stock Option Committee
are Raymond S. Troubh and Robert A. Davidow. The Stock Option Committee
administers the granting of stock options under the 1991 Option Plan. The Stock
Option Committee took action by unanimous written consent on 2 occasions during
the fiscal year ended December 31, 2000.
Directors of the Company who are not employees of the Company or its
subsidiaries are entitled to receive compensation for serving as directors in
the amount of $40,000 per annum and $1,000 per Board Meeting, $800 per Committee
Meeting attended in person and $500 per telephonic meeting other than the Stock
Option Committee, and $1,000 per day of consultation and other services provided
other than at meetings of the Board or Committees thereof, at the request of the
Chairman of the Board. Committee Chairmen also receive an additional annual fee
of $1,800. Directors of the Company (other than the Chairman of the Board or
directors who are employees of the Company or its subsidiaries) also receive
options to purchase 8,000 shares of Common Stock per annum on the date of each
annual meeting of Stockholders up to a maximum of 40,000 shares of Common Stock
pursuant to the Company's 1993 Directors and Non-Employee Officers Stock Option
Plan (the "1993 Plan"). All directors of the Company permitted to participate in
the 1993 Plan have received the maximum number of shares permitted to be issued
thereunder. In addition, directors of the Company (other than the Chairman of
the Board or directors who are employees of the Company or its subsidiaries)
also received options to purchase 25,000 shares of Common Stock on December 1,
1997 and receive options to purchase 5,000 shares of Common Stock per annum on
the date of each annual meeting of Stockholders (commencing with the 1998 Annual
Meeting of Stockholders) up to a maximum of 40,000 shares of Common Stock
pursuant to the Company's 1997 Directors Stock Option Plan (the "1997 Plan").
All directors of the Company permitted to participate in the 1997 Plan have
received the maximum number of shares permitted to be issued thereunder.
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Pursuant to a management agreement effective as of January 3, 1991, as
amended (the "Management Agreement"), approved by a majority of the Company's
disinterested directors, WPN Corp. ("WPN"), of which Ronald LaBow, the Chairman
of the Board of the Company, is the sole stockholder and an officer and
director, provides financial, management, advisory and consulting services to
the Company, subject to the supervision and control of the Company's
disinterested directors. The Management Agreement has a two year term and is
renewable automatically for successive two year periods, unless terminated by
either party upon 60 days' notice prior to the renewal date. In 2000, WPN
received a monthly fee of $520,833.33. WPN Corp. also receives certain benefits
from financial intermediaries which it transacts business with on behalf of the
Company in the form of research materials and services, which are used by WPN
Corp. on behalf of the Company and in connection with its other activities. For
the fiscal year 2000, the amount of such reimbursement was approximately
$75,000. The Company believes that the cost of obtaining the type and quality of
services rendered by WPN under the Management Agreement is no less favorable
than that at which the Company could obtain such services from unaffiliated
entities. See "Executive Compensation -- Management Agreement with WPN."
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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
NAME FIVE YEARS AND CURRENT PUBLIC DIRECTORSHIPS AGE
- ---- ------------------------------------------- ---
James G. Bradley EXECUTIVE VICE PRESIDENT. President and Chief Executive 55
Officer of WPSC since April 1998. President
and Chief Operating Officer of Koppel Steel
Company from October 1997 to April 1998. Vice
President of WHX from October 1995 to October
1997. Executive Vice President-Operations of
WPSC from October 1995 to October 1997. Vice
President- Operations of International Mill
Service from May 1992 to October 1995.
Director of WesBanco, Inc. since August 1998.
Paul J. Mooney VICE PRESIDENT. Vice President of the Company and 49
Executive Vice President and Chief Financial Officer of WPC
and WPSC since October 1997. National Director of Cross
Border Filing Services with the Accounting, Auditing and SEC
Services department of PricewaterhouseCoopers LLP from
July 1996 to November 1997. Accounting and Business
Advisory Services Department--Pittsburgh Site Leader of
PricewaterhouseCoopers LLP from 1988 until June 1996.
Client Service and Engagement Partner of
PricewaterhouseCoopers LLP from 1985 until November
1997.
Howard A. Mileaf VICE PRESIDENT -- GENERAL COUNSEL. Vice President -- 64
General Counsel of the Company since May
1998; Vice President -- Special Counsel of
the Company from April 1993 to April 1998.
Trustee/Director of Neuberger Berman Equity
Mutual Funds, since 1984.
Arnold G. Nance VICE PRESIDENT -- FINANCE. Vice President -- Finance since 44
April 1998. Vice President of Development and Planning of
Handy & Harman since May 1998. Special Assistant to the
Chairman of the Board of Directors from November 1995 to
April 1998. Vice President of Wheeling-Pittsburgh Radio
Corporation from July 1993 to November 1995.
-12-
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth, for the
fiscal years indicated, all compensation awarded to, paid to or earned by the
following type of executive officers for the fiscal years ended 1998, 1999 and
2000: (i) individuals who served as, or acted in the capacity of, the Company's
chief executive officer for the fiscal year ended December 31, 2000 (Messrs.
Bradley and LeBlanc currently serve as Co-Principal Executive Officers, with Mr.
Bradley having primary responsibility for the operations of WPSC and Mr. LeBlanc
having primary responsibility for the operations of H&H); and (ii) the
Company's other most highly compensated executive officers, which together with
the Co-Principal Executive Officers are the five most highly compensated
officers of the Company whose salary and bonus exceeded $100,000 with respect to
the fiscal year ended December 31, 2000 and who were employed at the end of
fiscal year 2000. Please note that Messrs. LeBlanc and Bradley and the executive
officers identified in (ii) above are collectively referred to as the "Named
Executive Officers."
SUMMARY COMPENSATION TABLE
Long Term
Name and Principal Position Annual Compensation Compensation
- --------------------------- --------------------------------------- ------------
Other Annual Securities All Other
Salary Bonus Compensation Underlying Compensation
Year ($) ($)(1) ($)(2) Options (#) ($)(3)
---- ----- ------- ------------- ----------- ------------
James G. Bradley.............. 2000 400,000 -- -- -- 12,350
Executive Vice President(4) 1999 400,000 125,000 -- -- 10,767
1998 277,436 150,000 46,445(5) 260,000 10,767
Robert D. LeBlanc............. 2000 433,500 175,000 -- -- 2,496(7)
Executive Vice President (6) 1999 410,774 300,000 -- -- 1,640(7)
1998 298,469 150,000 -- 260,000 121,043(8)
Arnold G. Nance............... 2000 364,525 75,000 -- 10,000 8,628(9)
Vice President-Finance 1999 355,654 150,000 -- -- 8,718(10)
1998 282,154 105,000 42,172(11) 100,000 7,308
Howard A. Mileaf.............. 2000 120,000 480,000 -- -- 15,300
Vice President-General Counsel 1999 120,000 500,000 -- -- 15,300
1998 120,000 1,080,000 -- -- 14,623
Paul J. Mooney................ 2000 275,000 35,000 -- -- 35,996(12)
Vice President 1999 275,000 30,000(13) -- -- 35,033(12)
1998 256,250 90,000(13) 44,282(14) -- 36,992(15)
- ---------------------------
(1) Mr. Mileaf was granted a bonus during 2000, 1999 and 1998 for his
performance relative to insurance company settlements, as a result of
which the Company received gross proceeds of in excess of an aggregate
of approximately $38 million. Messrs. LeBlanc and Nance were granted
bonuses pursuant to the H&H Management Incentive Plan. Messrs. LeBlanc,
Nance and Mooney were granted bonuses in 2000 and 1999 for services
performed in the prior year. Mr. Bradley was granted a bonus in 2000
for services performed in the prior year. All bonus amounts have been
attributed to the year in which the services were performed.
(2) Excludes perquisites and other personal benefits unless the aggregate
amount of such compensation exceeds the lesser of either $50,000 or 10%
of the total of annual salary and bonus reported for such Named
Executive Officer.
-13-
(3) Amounts shown, unless otherwise noted, reflect employer contributions
to pension plans.
(4) Effective April 23, 1998, Mr. Bradley returned as President and Chief
Executive Officer.
(5) Includes membership dues of $31,355.
(6) Mr. LeBlanc's employment with the Company commenced April 1998 as a
result of the Handy & Harman acquisition.
(7) Represents insurance premiums paid by the Company.
(8) Includes the value of awards under the H&H Long-Term Incentive Plan
aggregating $120,097, half of which vested in February 1999 and half of
which vested in January 2000, and insurance premiums of $946 the
Company paid in 1998.
(9) Includes insurance premiums paid by the Company in 2000 of $928.
(10) Includes insurance premiums paid by the Company in 1999 of $1,018.
(11) Includes relocation allowance of $40,411.
(12) Includes insurance premiums paid by the Company in 2000 and 1999 of
$25,000.
(13) Represents payments made pursuant to Mr. Mooney's employment agreement.
(14) Includes membership dues of $36,233.
(15) Includes insurance premiums paid by the Company in 1998 of $28,125.
OPTION GRANTS TABLE. The following table sets forth certain information
regarding stock option grants made to each of the Named Executive Officers
during the fiscal year ended December 31, 2000.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term
----------------- -----------------------
% of Total
Options
Number of Securities Granted to Exercise
Underlying Options Employees in Price Expiration
Name Granted (#) (1) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- --------------- ------------- ------- ------ ----- ------
Arnold G. Nance.......... 10,000 3.7% $6.875 2/9/10 43,236 109,570
- -------------------
(1) All options were granted under the Company's 1991 Incentive and
Nonqualified Stock Option Plan and vest ratably over a three-year
period. This period commenced February 9, 2000.
-14-
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as of December
31, 2000.
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at 2000 Fiscal Money Options at 2000
Year-End(#) Fiscal Year-End($)(1)
Name Exercisable/Unexerrcisable Exercisable/Unexercisable
- ---- --------------------------------- ----------------------------
James G. Bradley..................... 260,000/0 0/0
Robert D. LeBlanc.................... 260,000/0 0/0
Arnold G. Nance...................... 103,333/6,667 0/0
Howard A. Mileaf..................... 25,000/0 0/0
Paul J. Mooney ...................... 40,000/0 0/0
- -------------------
(1) On December 29, 2000, the last reported sales price of the Common Stock
as reported on the New York Stock Exchange Composite Tape was $0.75.
LONG-TERM INCENTIVE AND PENSION PLANS. Other than as described below,
the Company does not have any long-term incentive or defined benefit pension
plans.
In January 1999, H&H amended and restated its Long Term Incentive Plan
("LTIP"), in which the final cycle had been terminated on December 31, 1998. The
current LTIP is a performance-based plan pursuant to which executives of H&H
earn the right to receive awards based on the achievement of pre- established
financial performance and other goals. The amended LTIP established overlapping
cycles with each cycle encompassing five fiscal years, commencing on January 1,
1999. LTIP participants are selected by H&H's Chief Executive Officer and the
Compensation Committee of the Board of Directors of the Company. Messrs. LeBlanc
and Nance are the only Named Executive Officers who are participants in the
Amended and Restated LTIP.
H&H maintains the Supplemental Executive Retirement Plan ("SERP") to
provide executive officers the amount of reduction in their formula pension
benefits under the Handy & Harman Pension Plan on account of the limitation on
pay under Section 401(a)(17) of the Internal Revenue Code ("IRC") and the
limitation on benefits under Section 415 of the IRC. The SERP also applies the
Handy & Harman Pension Plan formula to the Career Average Pay after including
100 percent of the amounts received under the Handy & Harman Management
Incentive Plan. Amounts received under the SERP are not subject to Cost of
Living increases.
The following Table shows the projected Annual Retirement Benefits,
payable on the basis of ten years of certain payments and thereafter for life,
to each of the individuals listed in the Summary Compensation Table at age 65
assuming continuation of employment until age 65. The amounts shown under Salary
reflect the December 31, 2000 rate of salary paid by H&H as plan compensation of
Messrs. LeBlanc and Nance of $433,500 and $227,500, respectively, and include
the benefits payable under both the Handy & Harman Pension Plan and the SERP.
The amount of benefits shown under Bonus would be payable under the SERP and
assumes continuation of the amount of Bonus received for 2000.
-15-
EXECUTIVE PENSION BENEFITS
NORMAL RETIREMENT ANNUAL RETIREMENT BENEFITS FROM:
Name Date (NRD) Service at Salary Bonus Total
- ---- ---------- ---------- ------ ----- -----
NRD
R.D. LeBlanc July 1, 2014 17 yrs. 8 mos. $148,547 $65,442 $213,989
A.G. Nance January 1, 2022 28 yrs. 6 mos. 111,706 38,125 149,831
In 1998 WPC established a supplemental defined benefit plan covering
WPC salaried employees employed as of January 31, 1998 which provides a
guaranteed minimum benefit based on years of service and compensation. The gross
benefit from this plan is offset by the annuitized value of the defined
contribution plan account balance and any benefits payable from the Pension
Benefit Guaranty Corporation from the previously terminated defined benefit
pension plan. None of the Named Executive Officers are entitled to any benefits
under such plan.
DEFERRED COMPENSATION AGREEMENTS. Except as described in the next
paragraph with respect to the employment agreements of Messrs. Bradley, LeBlanc
and Nance, no plan or arrangement exists which results in compensation to a
Named Executive Officer in excess of $100,000 upon such officer's future
termination of employment or upon a change-of-control.
EMPLOYMENT AGREEMENTS. Mr. Robert D. LeBlanc became Executive Vice
President of the Company pursuant to a three-year employment agreement dated as
of April 7, 1998, which will be automatically extended for successive two-year
periods unless earlier terminated pursuant to the provisions of such agreement.
The agreement provides for an annual salary to Mr. LeBlanc of no less than
$400,000 and an annual bonus to be awarded at the Company's sole discretion. Mr.
LeBlanc was granted bonuses of $175,000 and $300,000 in 2001 and 2000,
respectively, for services performed in 2000 and 1999. In the event that Mr.
LeBlanc's employment is terminated by the Company other than with cause, he will
receive a payment of two year's salary at the highest rate in effect for the
twelve preceding months plus two times his average bonus during the last three
preceding years.
Mr. James G. Bradley became President and Chief Executive Officer of
WPSC and Executive Vice President of the Company pursuant to a three-year
employment agreement dated as of April 23, 1998, which will be automatically
extended for successive three-year periods unless earlier terminated pursuant to
the provisions of such agreement. The agreement provides for an annual salary to
Mr. Bradley of $400,000 and an annual bonus to be awarded at the Company's sole
discretion. Mr. Bradley was granted a bonus of $125,000 in 2000 for services
performed in 1999. In the event that Mr. Bradley's employment is terminated by
the Company other than with cause, he will receive a payment of $1,200,000.
Mr. Arnold G. Nance became Vice President, Planning and Development of
H&H pursuant to a one- year employment agreement with H&H dated as of May 1,
1998, which was amended as of December 21, 1998 and which will automatically be
extended for successive one-year periods unless earlier terminated pursuant to
the provisions of such agreement. The agreement provides for an annual salary to
Mr. Nance of no less than $210,000 and an annual bonus to be awarded at the
Company's sole discretion. Mr. Nance was granted bonuses of $75,000 and $150,000
in 2001 and 2000, respectively, for services performed in 2000 and 1999. In the
event that Mr. Nance's employment is terminated by the Company other than with
cause, he will receive a payment of one year's salary at the highest rate in
effect during the 12 preceding months.
-16-
Mr. Paul J. Mooney is Executive Vice President and Chief Financial
Officer of WPC and WPSC and Vice President of WHX pursuant to a three-year
employment agreement dated as of December 24, 1998, which will be automatically
extended for successive three-year periods unless earlier terminated pursuant to
the provisions of such agreement. The agreement provides for an annual salary to
Mr. Mooney of $275,000 and an annual bonus to be granted in accordance with the
terms of WPSC's management incentive program. Mr. Mooney was granted a bonus of
$35,000 in 2000. Upon the occurrence of a change of control of the Company, or
in the event that Mr. Mooney's employment is terminated by the Company other
than with cause, Mr. Mooney will receive a payment of $825,000. Upon the sale of
WPC or WPSC, subject to certain conditions, Mr. Mooney will receive a payment of
$1,825,000.
REPORT ON REPRICING OF OPTIONS. None of the stock options granted under
any of the Company's plans were repriced in the fiscal year ended 2000.
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION. Messrs.
Davidow, Goldsmith and Olshan each served as a member of the Compensation
Committee of the Board of Directors during the fiscal year ended December 31,
2000. Mr. Olshan is a member of Olshan Grundman Frome Rosenzweig & Wolosky LLP,
which the Company has retained as outside general counsel since January 1991.
The Company has paid such firm approximately $524,584 during the fiscal year
ended December 31, 2000.
MANAGEMENT AGREEMENT WITH WPN CORP. Pursuant to the Management
Agreement, approved by a majority of the Company's disinterested directors, WPN,
of which Ronald LaBow, the Chairman of the Board of the Company, is the sole
stockholder and an officer and director, provides financial, management,
advisory and consulting services to the Company, subject to the supervision and
control of the disinterested directors. Such services include, among others,
identification, evaluation and negotiation of acquisitions, responsibility for
financing matters, review of annual and quarterly budgets, supervision and
administration, as appropriate, of all the Company's accounting and financial
functions and review and supervision of the Company's reporting obligations
under Federal and state securities laws. For fiscal year 2000 and 1999, WPN
received a monthly fee of $520,833.33. In 1998, WPN received a monthly fee of
$458,333.33 from January 1 until April 13 and $520,833.33 from April 14 until
December 31. In addition, in October 1999 the Board of Directors also awarded a
$3,280,000 bonus to WPN and in September 1998 the Board of Directors awarded WPN
a bonus of $3,750,000, each in recognition of the extraordinary returns earned
by WPN on behalf of the Company in its management of the Company's cash and
marketable securities. In August 1997, the Company granted WPN options to
acquire 1,000,000 shares of Common Stock. Such options are held by WPN as
nominee for Ronald LaBow, Stewart E. Tabin and Neale X. Trangucci, each of whom
is an officer of WPN, and has the right to acquire 600,000, 200,000 and 200,000
shares, respectively, of Common Stock. WPN additionally beneficially owns
options to purchase 982,500 shares of Common Stock. The weighted average
exercise price of all such options is $10.23. None of these options were
exercised in 2000. The Company provides indemnification for WPN's employees,
officers and directors against any liability, obligation or loss resulting from
their actions pursuant to the Management Agreement. The Management Agreement has
a two year term and is renewable automatically for successive two year periods,
unless terminated by either party upon 60 days' notice prior to the renewal
date. WPN Corp. also receives certain benefits from financial intermediaries
which it transacts business with on behalf of the Company in the form of
research materials and services, which are used by WPN Corp. on behalf of the
Company and in connection with its other activities. For the fiscal year 2000,
the amount of such reimbursement was approximately $75,000. WPN has not derived
any other income and has not received reimbursement of any of its expenses
(other than health benefits and standard directors' fees) from the Company in
connection with the performance of services described above. The Company
believes that the cost of obtaining the type and quality of services rendered by
WPN under the Management Agreement is no less favorable than the cost at which
the Company could obtain from unaffiliated entities.
-17-
AUDIT COMMITTEE REPORT
The Board of Directors appoints an Audit Committee each year to review
the Company's financial matters. The members of the Audit Committee are Neil D.
Arnold, Robert A. Davidow and Raymond S. Troubh. Each member of the Company's
audit committee meets the independence requirements set by the Securities and
Exchange Commission ("SEC") and the New York Stock Exchange. The Audit Committee
operates under a written charter adopted by the Board of Directors. A copy of
the Company's Audit Committee charter has been included as Exhibit A to this
proxy statement.
The primary purpose of the Audit Committee is to assist the Board of
Directors in fulfilling its responsibility to oversee the Company's financial
reporting activities. The Audit Committee meets with the Company's independent
accountants and reviews the scope of their audit, report and recommendations.
The Audit Committee also recommends to the Board of Directors the selection of
the Company's independent accountants. The Audit Committee met four times during
fiscal 2000. The Audit Committee members reviewed and discussed the audited
financial statements for the fiscal year ending December 31, 2000 with
management. The Audit Committee also discussed all the matters required to be
discussed by Statement of Auditing Standard No. 61 with the Company's
independent auditors, PricewaterhouseCoopers LLP. The Audit Committee received
the written disclosures and the letter from PricewaterhouseCoopers LLP as
required by Independence Standards Board Standard No. 1 and has discussed the
independence of PricewaterhouseCoopers LLP with representatives of such firm.
Based on their review and the discussions described above, the Audit
Committee recommended to the Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-K to
be filed with the SEC.
Audit Committee
---------------
Neil D. Arnold, Chairman
Robert A. Davidow
Raymond S. Troubh
2000 COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION:
GENERAL
The Compensation Committee determines the cash and other incentive
compensation, if any, to be paid to the Company's executive officers and key
employees. Messrs. Davidow, Olshan and Goldsmith serve as members of the
Compensation Committee. The Stock Option Committee is responsible for the
administration and award of stock options under the 1991 Option Plan. Messrs.
Davidow and Troubh serve as members of the Stock Option Committee. Both Messrs.
Davidow and Troubh are non-empl directors of the Company, as defined under Rule
16b-3 of the 1934 Exchange Act, as amended. Mr. Davidow serves as Chairman of
the Compensation Committee. The Compensation Committee met 4 times during the
fiscal year ended December 31, 2000.
COMPENSATION PHILOSOPHY
The Compensation Committee's executive compensation philosophy is to
base management's pay, in part, on achievement of the Company's annual and
long-term performance goals, to provide competitive
-18-
levels of compensation, to recognize individual initiative, achievement and
length of service to the Company, and to assist the Company in attracting and
retaining qualified management. The Compensation Committee also believes that
the potential for equity ownership by management is beneficial in aligning
management's and stockholders' interests in the enhancement of stockholder
value. The Company has not established a policy with regard to Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code").
SALARIES
Base salaries for the Company's executive officers are determined
initially by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive marketplace
for management talent, including a comparison of base salaries for comparable
positions at other comparable companies. Base salary compensation of executive
officers is reviewed annually by the Compensation Committee, and recommendations
of the Compensation Committee in that regard are acted upon by the Board of
Directors. Annual salary adjustments are determined by evaluating the
competitive marketplace; the performance of the Company which includes in
descending level of importance, operating income of the Company and cash
management, production efficiency and quality of products; the performance of
the executive; the length of the executive's service to the Company and any
increased responsibilities assumed by the executive. The Company places itself
between the low and medium levels in determining salaries compared to the other
comparable holding companies of industrial businesses.
INCENTIVE COMPENSATION
H&H Management Incentive Plan
-----------------------------
H&H, which the Company acquired in April 1998 and which is now a wholly
owned subsidiary of the Company, maintains a Management Incentive Plan ("MIP")
which is an annual incentive program that rewards selected officers and key
employees each year based on their contributions to the profits of H&H.
Participants in the MIP are designated by the Chief Executive Officer
of H&H and approved by the Compensation Committee of the Board of Directors of
the Company at the beginning of each fiscal year. Awards granted under the MIP
are approved by the Board of Directors of the Company. Messrs. LeBlanc and
Nance, the only Named Executive Officers who are participants in the MIP,
received awards of $175,000 and $75,000, respectively, in 2001 for their
services in 2000.
2000 WPSC Incentive Plans
-------------------------
WPSC had three principal incentive plans in 2000: the Gainsharing Plan,
the Sales Incentive Plan and the Corporate Bonus Plan. The purpose of the
Gainsharing Plan was to reward employees in the production facilities of WPSC
for attaining and exceeding business plan related productivity, cost and safety
goals. The purpose of the Sales Incentive Plan was to reward employees in the
sales areas of WPSC for attaining and exceeding business plan related sales
goals. These plans cover WPSC management employees (aggregating approximately
658 employees) in the production and sales areas other than the Vice-Presidents,
division managers and general managers of those areas. Payments are made
quarterly under such plans, with amounts which are withheld paid at the end of
the year, provided annual goals are met. Payments made under these plans totaled
$1.6 million for 2000. None of the Named Executive Officers are eligible for
participation in either of the Gainsharing or Sales Incentive Plans. The purpose
of the Corporate Bonus Plan was to reward WPSC management employees (aggregating
approximately 297 employees) not covered by the Gainsharing and Sales Incentive
Plans. Under the Corporate Bonus Plan,
-19-
a bonus pool is available for distribution if specific semi-annual operating
income goals are met. No bonuses were paid under this plan for 2000.
Other Incentive Compensation
----------------------------
The Company from time to time considers the payment of discretionary
bonuses to its executive officers. Bonuses would be determined based, first,
upon the level of achievement by the Company of its strategic and operating
goals and, second, upon the level of personal achievement by participants. The
achievement of goals by the Company includes, in descending order, among other
things, the performance of the Company as measured by return on assets and the
operating income of the Company, production efficiency and quality of products.
The achievement of personal goals includes the actual performance of the unit of
the Company for which the executive officer has responsibility as compared to
the planned performance thereof, the level of cost savings achieved by such
executive officer, other individual contributions, the ability to manage and
motivate employees and the achievement of assigned projects. Bonuses are
determined annually after the close of each fiscal year. Despite achievement of
personal goals, bonuses may not be given based upon the performance of the
Company as a whole. In connection with his performance in resolving certain of
the Company's outstanding claims against insurance carriers, as a result of
which the Company received gross proceeds of in excess of an aggregate of
approximately $38 million, Mr. Mileaf, who is not a participant in the WPSC
Bonus Plan or the MIP, was awarded a bonus of $480,000 in 2000.
Mr. Bradley was the Company's Executive Vice President and President
and Chief Executive Officer of WPSC in 2000, with an annual salary of $400,000.
Mr. LeBlanc was President and Chief Executive Officer of H&H and Executive Vice
President of the Company in 2000 with an annual base salary of $433,500. Mr.
Bradley and Mr. LeBlanc currently serve as the Company's Co-Principal Executive
Officers, with Mr. Bradley having primary responsibility for the operations of
WPSC and Mr. LeBlanc having primary responsibility for the operations of H&H. As
described in the Employment Agreements section above, Mr. Bradley's and Mr.
LeBlanc's annual base salaries are determined by contract. In determining such
amount, the Board of Directors considered the responsibilities performed by
Messrs. Bradley and LeBlanc as Executive Vice Presidents of the Company, Mr.
Bradley's responsibilities as President and Chief Executive Officer of WPSC, Mr.
LeBlanc's responsibilities as President and Chief Executive Officer of H&H, the
performance of Messrs. Bradley and LeBlanc in managing and directing the
Company's operations, the efforts by Messrs. Bradley and LeBlanc in assisting
the Company to improve its capital base and financial condition, a competitive
assessment of survey data of other industrial companies as it relates to the
Company's performance versus other industrial companies, and the evaluation of
the other factors described in "Salaries" above.
The Compensation Committee considered Messrs. Bradley and LeBlanc for
cash performance bonuses in accordance with the following terms: the factors
discussed in the above paragraph; the bonuses paid to other senior executives of
the Company; the overall performance of the Company, WPSC and H&H as measured by
guidelines used to determine the bonuses of other senior executives including
the operating results of the Company, production efficiency and quality of
products; Mr. LeBlanc's impact on the improved operating results of H&H and Mr.
Bradley's impact on operating results at the Company's steel division in an
industry adversely impacted by pricing levels; and the transactions effected for
the benefit of the Company that are outside of the ordinary course of business
and directly or indirectly accomplished through the efforts of Messrs. Bradley
and/or LeBlanc, respectively (e.g., business combinations, corporate partnering
and other similar transactions). The Board of Directors awarded Mr. LeBlanc a
bonus of $175,000 in 2001 for his services in 2000. Mr. Bradley was not awarded
a bonus by the Board of Directors.
-20-
STOCK OPTION AND OTHER PLANS
The Company did not award options to any of the Named Executive
Officers in 2000 other than a grant of options to purchase 10,000 shares of
common stock, which was granted to Mr. Nance on February 9, 2000. It is the
philosophy of the Stock Option Committee that stock options should be awarded to
employees of the Company to promote long-term interests between such employees
and the Company's stockholders through an equity interest in the Company and
assist in the retention of such employees. The Stock Option Committee also
considered the amount and terms of options previously granted to executive
officers. The Stock Option Committee believes the potential for equity ownership
by management is beneficial in aligning management's and stockholders' interest
in the enhancement of stockholder value. Participation in restricted stock,
profit sharing and incentive plans is offered, pursuant to their terms, to
provide incentive to executive officers to contribute to corporate growth and
profitability.
Compensation Committee:
----------------------
Robert A. Davidow, Chairman
William Goldsmith
Marvin L. Olshan
-21-
COMMON STOCK PERFORMANCE: The following graph compares, for each of the
fiscal years indicated, the yearly percentage change in the Company's cumulative
total stockholder return on the Company's common stock with the cumulative total
return of a) the Standard and Poor's Index, a broad equity market index, and b)
an index consisting of the following industrial companies: Bethlehem
Corporation, Ispat Inland, Inc., LTV Corporation and Weirton Steel Corp.
[PERFORMANCE GRAPH]
1995 1996 1997 1998 1999 2000
WHX CORPORATION 100.00 81.61 110.34 92.53 82.76 6.90
PEER GROUP 100.00 86.81 72.30 31.14 52.35 7.22
S&P 500 INDEX 100.00 122.96 163.98 210.84 255.22 231.98
There can be no assurance that the Common Stock's performance will
continue with the same or similar trends depicted in the graph above.
-22-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Paul W. Bucha, a director of the Company, is WPSC's designee to the
Board of Wheeling- Nisshin. James D. Hesse, a former Vice President of the
Company, is President, Chief Executive Officer and a director of
Wheeling-Nisshin. The WPC Group (as defined below) currently holds a 35.7%
equity interest in Wheeling-Nisshin. Mr. Bucha is also (i) the Chairman and a
director of Ohio Coatings Company, a joint venture 50% owned by WPSC and (ii)
the director and a vice president of Wheeling Downs Racing Association, which is
50% owned by WHX Entertainment Corp., a wholly-owned subsidiary of the Company.
Marvin L. Olshan, a director and Secretary of the Company, is a member
of Olshan Grundman Frome Rosenzweig & Wolosky LLP ("OGFR&W"). The Company has
retained OGFR&W as their outside general counsel since January 1991. For the
fiscal year ended December 31, 2000, the Company paid OGFR&W approximately
$524,584.
CHAPTER 11 BANKRUPTCY FILING OF WHEELING-PITTSBURGH CORPORATION AND ITS
SUBSIDIARIES
On November 16, 2000, Wheeling-Pittsburgh Corporation and its
subsidiaries, including Wheeling-Pittsburgh Steel Corporation (together, the
"WPC Group") filed voluntary petitions (the "Chapter 11 Filings") to reorganize
their businesses under Chapter 11 of the U.S. Code. The Chapter 11 Filings were
made in the United States Bankruptcy Court for the Northern District of Ohio.
The WPC Group is in possession of its properties and assets and continues to
manage its businesses with its existing directors and officers as
debtors-in-possession subject to the supervision of the bankruptcy court.
MANAGEMENT AGREEMENT
Pursuant to the Management Agreement approved by a majority of the
Company's disinterested directors, WPN, of which Ronald LaBow, the Company's
Chairman, is the sole stockholder and an officer and a director, provides the
Company with financial, management, advisory and consulting services to the
Company, subject to the supervision and control of the disinterested directors.
The Management Agreement has a two year term and is renewable automatically for
successive two 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 WPN under the Management
Agreement is no less favorable than the cost at which the Company could obtain
from unaffiliated entities. See "Executive Compensation-Management Agreement
with WPN Corp."
-23-
PROPOSAL NO. 2
PROPOSED 2001 STOCK OPTION PLAN
On April 12, 2001, the Board of Directors of the Company adopted the
2001 Option Plan, which is set forth in Exhibit B to this Proxy Statement. The
2001 Option Plan will not become effective unless it is approved by the holders
of record of a majority of the shares of Common Stock present in person or
represented by proxy at the Meeting.
The Company currently has three existing stock option plans - the 1991
Option Plan, the 1993 Directors and Non-Employee Officers Stock Option Plan (the
"1993 Plan") and the 1997 Directors Stock Option Plan (the "1997 Plan"). The
1991 Option Plan was originally adopted in 1991 and operates as the Company's
principal method of granting options to employees. It will expire September 23,
2001 unless the 1991 Option Plan Amendment is approved, in which case it will
expire September 23, 2006. The 1993 Plan and 1997 Plan are formula based option
plans which provide for options to be granted to the Company's directors and
certain non-employee officers. All persons currently eligible for options under
the 1993 Plan and 1997 Plan have received the maximum allowed under such plans.
The 2001 Option Plan will provide a means for the Company to continue its
program of offering equity based compensation to certain key persons.
The 2001 Option Plan is intended to assist the Company in securing and
retaining employees, directors, officers, consultants and advisors (the
"Optionees") by allowing them to participate in the ownership and growth of the
Company through the grant of incentive and nonqualified stock options. The
granting of such options serves as partial consideration for and gives the
Optionees an additional inducement to remain in the service of the Company and
its subsidiaries and provides them with an increased incentive to work towards
the Company's success. Shares of Common Stock may be issued under the 2001
Option Plan upon the exercise of incentive stock options, as defined in Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
nonqualified stock options.
The Board of Directors believes it is in the Company's and its
stockholders' best interests to approve the 2001 Option Plan because it would
(i) allow the Company to grant options which facilitates the benefits of the
additional incentive inherent in the ownership of Common Stock by the Optionees
and helps the Company retain the services of these Optionees and (ii) enable
compensation received under the 2001 Option Plan to qualify as
"performance-based" for purposes of Section 162(m) of the Code.
ADMINISTRATION
The 2001 Option Plan will be administered by a Stock Option Committee
(the "2001 Option Committee"), consisting ___ of not less than two members of
the Board of Directors appointed by the Board of Directors. The 2001 Option
Committee will select the employees, directors, officers, consultants and
advisors who will be granted options to purchase shares of Common Stock under
the 2001 Option Plan and, subject to the provisions of the 2001 Option Plan,
will determine the terms and conditions and number of shares of Common Stock
subject to each such option. The 2001 Option Committee will also make any other
determinations necessary or advisable for the administration of the 2001 Option
Plan. The determinations by the 2001 Option Committee will be final and
conclusive. In the event that for any reason the 2001 Option Committee is unable
to act or if the 2001 Option Committee at the time of any grant, award or other
acquisition under the 2001 Option Plan does not consist of two or more
Non-Employee Directors (as such term is defined in Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended), or if there shall be no such
committee, then the plan shall be administered by the Board of
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Directors, provided that options granted to the Company's Chief Executive
Officer or to any of the Company's other four most highly compensated officers
that are intended to qualify as performance based compensation under Section
162(m) of the Code may only be granted by such 2001 Option Committee. Options
granted under the 2001 Option Plan shall vest and become exercisable at such
times as shall be determined by the 2001 Option Committee. The 2001 Option Plan
will terminate on April 11, 2011, but may be terminated by the Board of
Directors at any time before that date.
SHARES SUBJECT TO THE 2001 OPTION PLAN
The shares of Common Stock to be issued under the 2001 Option Plan will
be either currently authorized but unissued shares of common stock, treasury
stock or previously issued shares held by any subsidiary of the Company. An
aggregate of 1,500,000 shares of Common Stock have been reserved for issuance
under the 2001 Option Plan. The number of shares of Common Stock available under
the 2001 Option Plan will be subject to adjustment to prevent dilution in the
event of a stock split, combination of shares, stock dividend or certain other
events. Shares of Common Stock subject to unexercised Options that expire or are
terminated prior to the end of the period during which options may be granted
will be restored to the aggregate number of shares of Common Stock available for
issuance under the 2001 Option Plan.
OPTIONS
Upon the grant of an option to purchase shares of Common Stock to an
employee, the 2001 Option Committee will fix the number of shares of the
Company's Common Stock that the optionee may purchase upon exercise of such
option and the price at which the shares may be purchased. The option price for
options shall not be less than 100% of the "fair market value" of the shares of
Common Stock at the time such option is granted; provided, however, that with
respect to an incentive stock option in the case of an optionee, who, at the
time such option is granted, owns more than 10% of the voting stock of the
Company or its subsidiaries, then the purchase price per share shall be at least
110% of the fair market value. "Fair market value" is deemed to be the closing
price of shares of Common Stock on such date, on the New York Stock Exchange
("NYSE"), or if the shares of Common Stock are not listed on the NYSE, in the
principal market in which such shares of Common Stock are traded. The aggregate
fair market value of shares of Common Stock (determined at the time the
incentive stock option is granted) subject to incentive stock options granted to
an Optionee under all stock option plans of the Company, and of the Company's
subsidiaries (if any), that become exercisable for the first time by such
Optionee during any calendar year may not exceed $100,000. The maximum number of
shares of Common Stock that may be subject to options granted under the 2001
Option Plan to any individual in any calendar year shall not exceed 500,000.
Payment of the exercise price for shares of Common Stock subject to options may
be made with cash, check or such other instrument as may be acceptable to the
Company. Full payment for shares of Common Stock exercised must be made at the
time of exercise.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. Incentive stock options granted under the 2001
Option Plan are intended to be "incentive stock options" as defined by Section
422 of the Code. Under present law, the grantee of an incentive stock option
will not realize taxable income upon the grant or the exercise of the incentive
stock option and the Company will not receive an income tax deduction at either
such time. If the grantee does not sell the shares acquired upon exercise of an
incentive stock option within either (i) two years after the grant of the
incentive stock option or (ii) one year after the date of exercise of the
incentive stock option, the gain upon a subsequent sale of the shares will be
taxed as long-term capital gain. If the grantee,
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within either of the above periods, disposes of the shares acquired upon
exercise of the incentive stock option, the grantee will recognize as ordinary
income an amount equal to the lesser of (i) the gain realized by the grantee
upon such disposition or (ii) the difference between the exercise price and the
fair market value of the shares on the date of exercise. In such event, the
Company would be entitled to a corresponding income tax deduction equal to the
amount recognized as ordinary income by the grantee. The gain in excess of such
amount recognized by the grantee as ordinary income would be taxed as a
long-term capital gain or short-term capital gain (subject to the holding period
requirements for long-term or short-term capital gain treatment).
Unless the shares subject to an incentive stock option are subject to a
risk of forfeiture at the time the option is exercised, the exercise of the
incentive stock option will result in the excess of the stock's fair market
value on the date of exercise over the exercise price being included in the
optionee's alternative minimum taxable income (AMTI). If the shares are subject
to a risk of forfeiture and are nontransferable, the excess described above will
be included in AMTI when the risk of forfeiture lapses or the shares become
transferable, whichever occurs sooner. Liability for the alternative minimum tax
is complex and depends upon an individual's overall tax situation. Before
exercising an incentive stock option, a grantee should discuss the possible
application of the alternative minimum tax with his tax advisor in order to
determine the tax's impact.
Non-Qualified Stock Options. Upon exercise of a non-qualified stock
option granted under the 2001 Option Plan, the grantee will recognize ordinary
income in an amount equal to the excess of the fair market value of the shares
received over the exercise price of such shares. That amount increases the
grantee's basis in the stock acquired pursuant to the exercise of the
non-qualified option. Upon a subsequent sale of the stock, the grantee will
incur short-term or long-term gain or loss depending upon his holding period for
the shares and upon the shares' subsequent appreciation or depreciation in the
value. The Company will be allowed a federal income tax deduction for the amount
recognized as ordinary income by the grantee upon the grantee's exercise of the
option.
Summary of Tax Consequences. The foregoing outline is no more than a
summary of the federal income tax provisions relating to the grant and exercise
of options and stock appreciation rights under the 2001 Option Plan and the sale
of shares acquired under the 2001 Option Plan. Individual circumstances may vary
these results. The federal income tax laws and regulations are constantly being
amended, and each participant should rely upon his own tax counsel for advice
concerning the federal income tax provisions applicable to the 2001 Option Plan.
The Board of Directors believes it is in the Company's best interests
to approve the 2001 Option Plan which would allow the Company to continue to
grant options under the 2001 Option Plan to secure for the Company the benefits
of the additional incentive inherent in the ownership of shares of the Company's
Common Stock by employees, directors, officers, consultants and advisors and to
help the Company secure and retain the services of employees, directors,
officers, consultants and advisors and to enable compensation under the 2001
Option Plan to qualify as "performance-based" for purposes of Section 162(m) of
the Code.
Section 162(m) of the Code provides that a publicly traded company may
not deduct for federal income tax purposes compensation paid to the chief
executive officer or any of the four most highly compensated other officers
("Covered Employees") to the extent such compensation exceeds $1,000,000 in any
one tax year, unless the payments, among other things, are made based upon the
attainment of objective performance goals established by a committee of the
Board of Directors, comprised solely of two or more outside directors, and based
upon business criteria and other material terms approved by
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stockholders of such publicly traded company. The 2001 Option Plan is designed
so that options may be granted to Covered Employees in a manner considered
performance-based and hence fully deductible. If such stockholder approval is
not obtained as may be necessary in order to satisfy the requirements of Section
162(m) of the Code, it is possible that options granted under the 2001 Option
Plan to Covered Employees may not be fully deductible for federal tax purposes.
The affirmative vote of the holders of record of a majority of the
shares of Common Stock present in person or by proxy at the Meeting is required
for approval of the 2001 Option Plan.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 2001
OPTION PLAN.
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PROPOSAL NO. 3
APPROVAL OF AMENDMENTS TO THE 1991 INCENTIVE
AND NONQUALIFIED STOCK OPTION PLAN
The Board of Directors proposes that the 1991 Option Plan Amendment be
approved, whereby (i) the term of the 1991 Option Plan is extended until
September 23, 2006, (ii) the definition of persons eligible to receive grants of
options under the 1991 Option Plan is expanded to include employees, directors,
officers, consultants and advisors and (iii) the minimum size of the committee
administering the 1991 Option Plan (the "1991 Option Committee") is reduced to
two persons, in certain circumstances the Board may act in lieu of the 1991
Option Committee and members of the 1991 Option Committee may receive options
under the 1991 Option Plan (the "Administrative Amendments").
As of the Record Date, 153,823 Options were available for grant under
the 1991 Option Plan and 2,847,838 Options were issued and outstanding, with a
weighted average exercise price of approximately $11.75. All such issued options
vest over a three-year period.
The Board of Directors believes it is in the Company's and its
stockholders' best interests to approve the 1991 Option Plan Amendment because
it would (i) allow the Company to continue to grant options under the 1991
Option Plan which facilitates the benefits of the additional incentive inherent
in the ownership of Common Stock by employees, directors, officers, consultants
and advisors and helps the Company retain the services of employees, directors,
officers, consultants and advisors and (ii) enable compensation received under
the 1991 Option Plan to qualify as "performance-based" for purposes of Section
162(m) of the Code. The 1991 Option Plan, as proposed to be amended hereby, is
intended to assist the Company in securing and retaining employees, directors,
officers, consultants and advisors by allowing them to participate in the
ownership and growth of the Company through the grant of incentive, to the
extent permitted, and nonqualified stock options. The granting of such options
serves as partial consideration for and gives optionees an additional inducement
to remain in the service of the Company and its subsidiaries and provides them
with an increased incentive to work towards the Company's success.
On September 24, 1991, the Board of Directors of WPC, the Company's
predecessor, adopted the 1991 Option Plan. The 1991 Option Plan was approved at
the 1992 Annual Meeting of WPC Stockholders. In April 1993, the Board of
Directors of WPC voted to amend the 1991 Option Plan, subject to stockholder
approval, to increase the number of shares to 2,500,000 shares of Common Stock,
which amendment was approved at the July 22, 1994 Special Meeting of WPC
Stockholders. In 1998, the Board of Directors of WHX voted to amend the 1991
Option Plan, subject to stockholder approval, to increase the number of shares
to 3,500,000 shares of Common Stock, which amendment was approved at the June
29, 1998 Annual Meeting of Stockholders. In 2000, the Board of Directors of WHX
voted to amend the 1991 Option Plan, subject to stockholder approval, to
increase the number of shares to 3,750,000 shares of Common Stock, which
amendment was approved at the March 15, 2000 Annual Meeting of Stockholders.
Shares of Common Stock may be issued under the 1991 Option Plan upon the
exercise of incentive stock options, as defined in Section 422 of the Code, and
nonqualified stock options. Pursuant to the amendment approved at the 2000
Annual Meeting of Stockholders, the 1991 Option Plan currently authorizes the
issuance of a maximum of 3,750,000 shares of Company Common Stock pursuant to
the exercise of options granted thereunder, of which 153,823 Options are
available for grant, 2,847,838 Options are issued and outstanding and the
remainder have been exercised or have lapsed. The maximum number of options that
may be granted to any person under the 1991 Option Plan is 750,000 Options.
The proposed 1991 Option Plan Amendment is attached as Exhibit C to
this Proxy Statement.
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No options to purchase shares of Common Stock were exercised in 2000 or
2001 through the Record Date. No Named Executive Officer received grants of any
stock options in the fiscal year ended December 31, 2000 other than Arnold
Nance, who received a grant of options to purchase 10,000 shares of Common Stock
on February 9, 2000. During the last completed fiscal year and through the
Record Date, options to purchase shares of Common Stock have been granted
pursuant to the 1991 Option Plan to (i) the Named Executive Officers, (ii) all
current executive officers as a group and (iii) all employees, including all
current officers who are not executive officers, as a group, as set forth below
(options to purchase shares of Common Stock have not been granted to any
directors who are not executive officers of the Company pursuant to the 1991
Option Plan):
NUMBER OF OPTIONS (#)(1)(2)
Named Executive Officers 10,000
Executive Group 10,000
Non-Executive Officer Employee Group 260,000
(1) On the Record Date, the last reported sales price of the Common Stock
as reported on the New York Stock Exchange Composite Tape was $1.13 per
share.
(2) Information contained in this table is duplicative of information
contained in "Executive Compensation" and does not signify additional
grants of options to purchase shares of Common Stock.
If approved, the 1991 Option Plan Amendment would (i) extend the
termination date of the 1991 Option Plan from September 23, 2001 to September
23, 2006, (ii) expand the definition of eligible optionees from full-time key
employees of the Company or its subsidiaries to employees, officers and
directors of, and consultants and advisors to, the Company or its subsidiaries,
and (iii) clarify that the minimum size of the 1991 Option Committee is reduced
from three persons to two persons, explicitly provide that in the event the 1991
Option Committee is unable to act or does not consist of two or more
Non-Employee Directors or if there is not 1991 Option Committee then the 1991
Option Plan shall be administered by the Board of Directors and permit members
of the 1991 Option Committee to receive options.
ADMINISTRATION
The 1991 Option Plan is administered by the 1991 Option Committee whose
members are Raymond S. Troubh and Robert A. Davidow. The 1991 Option Committee
selects the optionees who will be granted options to purchase shares of Common
Stock under the 1991 Option Plan and, subject to the provisions of the 1991
Option Plan, determines the terms and conditions and number of shares of Common
Stock subject to each such option. The 1991 Option Committee also makes any
other determinations necessary or advisable for the administration of the 1991
Option Plan. The determinations by the 1991 Option Committee are final and
conclusive. Upon the approval of the 1991 Option Plan Amendment, in the event
that for any reason the 1991 Option Committee is unable to act or if the 1991
Option Committee at the time of any grant, award or other acquisition under the
1991 Option Plan does not consist of two or more Non-Employee Directors (as such
term is defined in Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended), or if there shall be no such 1991 Option Committee, then the
1991 Option Plan shall be administered by the Board of Directors, provided that
options granted to the Company's Chief Executive Officer or to any of the
Company's other four most highly compensated
-29-
officers that are intended to qualify as performance based compensation under
Section 162(m) of the Code may only be granted by such 1991 Option Committee.
Options granted under the 1991 Option Plan shall vest and become exercisable at
such times as shall be determined by the 1991 Option Committee. Generally,
options granted under the 1991 Option Plan vest and become exercisable in
one-third increments on the first, second and third anniversary of the date of
grant, respectively. If the 1991 Option Plan Amendment is approved, the 1991
Option Plan will terminate on September 23, 2006, but may be terminated by the
Board of Directors at any time before that date.
OPTIONS
Upon the grant of an option to purchase shares of Common Stock under
the 1991 Option Plan, the 1991 Option Committee will fix the number of shares of
the Company's Common Stock that the optionee may purchase upon exercise of such
option and the price at which the shares may be purchased. The option price for
options shall not be less than 100% of the "fair market value" of the shares of
Common Stock at the time such option is granted; provided, however, that with
respect to an incentive stock option in the case of an optionee, who, at the
time such option is granted, owns more than 10% of the voting stock of the
Company or its subsidiaries, then the purchase price per share shall be at least
110% of the fair market value. "Fair market value" is deemed to be the closing
price of shares of Common Stock on such date, on the NYSE, or if the shares of
Common Stock are not listed on the NYSE, in the principal market in which such
shares of Common Stock are traded. The aggregate fair market value of shares of
Common Stock (determined at the time the incentive stock option is granted)
subject to incentive stock options granted to a key employee, director, officer,
consultant or advisor under all stock option plans of the Company, and of the
Company's subsidiaries (if any), that become exercisable for the first time by
such key employee during any calendar year may not exceed $100,000. Payment of
the exercise price for shares of Common Stock subject to options may be made
with cash, check or such other instrument as may be acceptable to the Company.
Full payment for shares of Common Stock exercised must be made at the time of
exercise.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. Incentive stock options granted under the 1991
Option Plan are intended to be "incentive stock options" as defined by Section
422 of the Code. Under present law, the grantee of an incentive stock option
will not realize taxable income upon the grant or the exercise of the incentive
stock option and the Company will not receive an income tax deduction at either
such time. If the grantee does not sell the shares acquired upon exercise of an
incentive stock option within either (i) two years after the grant of the
incentive stock option or (ii) one year after the date of exercise of the
incentive stock option, the gain upon a subsequent sale of the shares will be
taxed as long-term capital gain. If the grantee, within either of the above
periods, disposes of the shares acquired upon exercise of the incentive stock
option, the grantee will recognize as ordinary income an amount equal to the
lesser of (i) the gain realized by the grantee upon such disposition or (ii) the
difference between the exercise price and the fair market value of the shares on
the date of exercise. In such event, the Company would be entitled to a
corresponding income tax deduction equal to the amount recognized as ordinary
income by the g The gain in excess of such amount recognized by the grantee as
ordinary income would be taxed as a long-term capital gain or short-term capital
gain (subject to the holding period requirements for long-term or short-term
capital gain treatment). Pursuant to the Code, Incentive Stock options will not
be permitted to be granted under the 1991 Option Plan following September 23,
2001.
Unless the shares subject to an incentive stock option are subject to a
risk of forfeiture at the time the option is exercised, the exercise of the
incentive stock option will result in the excess of the stock's fair
-30-
market value on the date of exercise over the exercise price being included in
the optionee's alternative minimum taxable income (AMTI). If the shares are
subject to a risk of forfeiture and are nontransferable, the excess described
above will be included in AMTI when the risk of forfeiture lapses or the shares
become transferable, whichever occurs sooner. Liability for the alternative
minimum tax is complex and depends upon an individual's overall tax situation.
Before exercising an incentive stock option, a grantee should discuss the
possible application of the alternative minimum tax with his tax advisor in
order to determine the tax's impact.
Non-Qualified Stock Options. Upon exercise of a non-qualified stock
option granted under the 1991 Option Plan, the grantee will recognize ordinary
income in an amount equal to the excess of the fair market value of the shares
received over the exercise price of such shares. That amount increases the
grantee's basis in the stock acquired pursuant to the exercise of the
non-qualified option. Upon a subsequent sale of the stock, the grantee will
incur short-term or long-term gain or loss depending upon his holding period for
the shares and upon the shares' subsequent appreciation or depreciation in the
value. The Company will be allowed a federal income tax deduction for the amount
recognized as ordinary income by the grantee upon the grantee's exercise of the
option.
Summary of Tax Consequences. The foregoing outline is no more than a
summary of the federal income tax provisions relating to the grant and exercise
of options and stock appreciation rights under the 1991 Option Plan and the sale
of shares acquired under the 1991 Option Plan. Individual circumstances may vary
these results. The federal income tax laws and regulations are constantly being
amended, and each participant should rely upon his own tax counsel for advice
concerning the federal income tax provisions applicable to the 1991 Option Plan.
The Board of Directors believes it is in the Company's best interests
to approve the 1991 Option Plan Amendment which would allow the Company to
continue to grant options under the 1991 Option Plan to secure for the Company
the benefits of the additional incentive inherent in the ownership of shares of
the Company's Common Stock by key employees, directors, officers, consultants
and advisors and to help the Company secure and retain the services of key
employees, directors, officers, consultants and advisors and to enable
compensation under the 1991 Option Plan to qualify as "performance-based" for
purposes of Section 162(m) of the Code. The affirmative vote of the holders of
record of a majority of the shares of Common Stock present in person or by proxy
at the Meeting is required for approval of the 1991 Option Plan Amendment.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE 1991 OPTION PLAN
AMENDMENT.
-31-
PROPOSAL NO. 4
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of PricewaterhouseCoopers LLP has been selected as
the independent public accountants for the Company for the fiscal year ending
December 31, 2001. Although the selection of accountants does not require
ratification, the Board of Directors have directed that the appointment of
PricewaterhouseCoopers LLP be submitted to stockholders for ratification due to
the significance of their appointment by the Company. If stockholders do not
ratify the appointment of PricewaterhouseCoopers LLP, the Board of Directors
will consider the appointment of other certified public accountants. A
representative of that firm, which served as the Company's independent public
accountants for the fiscal year ended December 31, 2000, is expected to be
present at the Meeting and, if he so desires, will have the opportunity to make
a statement, and in any event will be available to respond to appropriate
questions.
AUDIT FEES: The aggregate fees billed for professional services rendered by
PricewaterhouseCoopers LLP for the audit of the Company's annual financial
statements for the fiscal year ended December 31, 2000 and the reviews of the
financial statements included in the Company's Form 10-Qs for such fiscal year
were approximately $787,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES: No fees were
billed for professional services rendered by PricewaterhouseCoopers LLP for
financial information systems design and implementation services for the fiscal
year ended December 31, 2000.
ALL OTHER FEES: The aggregate fees billed for services rendered by
PricewaterhouseCoopers LLP, other than the services referred to above, for the
fiscal year ended December 31, 2000 were approximately $1,011,800.
The audit committee has considered whether the provision by
PricewaterhouseCoopers LLP of the services covered by the fees other than the
audit fees is compatible with maintaining PricewaterhouseCoopers LLP's
independence and believes that it is compatible.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE SELECTION OF THE INDEPENDENT
PUBLIC ACCOUNTANTS.
SOLICITATION STATEMENT
The Company will bear all expenses in connection with the solicitation
of proxies. In addition to the use of the mails, solicitations may be made by
the Company's regular employees, by telephone, telegraph or personal contact,
without additional compensation. The Company has retained Innisfree M & A, Inc.
to assist the Company in the solicitation of proxies for a fee of $7,500 plus
expenses. The Company will, upon their request, reimburse brokerage houses and
persons holding shares of Common Stock in the names of the Company's nominees
for their reasonable expenses in sending solicited material to their principals.
-32-
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the proxy materials to be
distributed in connection with the next annual meeting of stockholders of the
Company, stockholder proposals for such meeting must be submitted to the Company
no later than January 19, 2002.
OTHER MATTERS
So far as now known, there is no business other than that described
above to be presented for action by the stockholders at the Meeting, but it is
intended that the proxies will be voted upon any other matters and proposals
that may legally come before the Meeting or any adjournment thereof, in
accordance with the discretion of the persons named therein.
ANNUAL REPORT
The Company has sent, or is concurrently sending, all of its
stockholders of record as of May 14, 2001 a copy of its Annual Report on Form
10-K for the fiscal year ended December 31, 2000. Such report contains the
Company's certified consolidated financial statements for the fiscal year ended
December 31, 2000, including that of the Company's subsidiaries.
By Order of the Company,
MARVIN L. OLSHAN, Secretary
Dated: New York, New York
May 21, 2001
THE COMPANY WILL FURNISH A FREE COPY OF ITS ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 (WITHOUT EXHIBITS) TO ALL OF ITS
STOCKHOLDERS OF RECORD AS OF MAY 14, 2001 WHO WILL MAKE A WRITTEN REQUEST TO MR.
MARVIN L. OLSHAN, SECRETARY, WHX CORPORATION, 110 EAST 59TH STREET, NEW YORK,
NEW YORK 10022.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WHX CORPORATION
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
JULY 9, 2001
The undersigned, a stockholder of WHX Corporation, a Delaware
corporation (the "Company"), does hereby appoint Ronald LaBow and Marvin L.
Olshan, 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 2001 Annual Meeting of
Stockholders of the Company to be held at the Dupont Hotel, 11th & Market
Streets, Wilmington, Delaware 19801, on July 9, 2001, at 11:00 a.m., Local Time,
or at any adjournment or postponements thereof.
The undersigned hereby revokes any proxy or proxies heretofore given
and acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated May 21, 2001, and a copy of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREIN GIVEN. UNLESS
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE DIRECTORS, APPROVE
THE 2001 STOCK OPTION PLAN, APPROVE AN AMENDMENT TO THE 1991 INCENTIVE AND
NONQUALIFIED STOCK OPTION PLAN AND TO RATIFY THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
VOTE BY TELEPHONE VOTE BY INTERNET
It is fast, convenient and immediate. It is fast, convenient and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed and posted.
1-877-PRX-VOTE (1-877-779-8883)
Follow these 4 easy steps: Follow these 4 easy steps:
1. Read the accompanying proxy 1. Read the accompanying proxy statement
statement and proxy card. and proxy card.
2. Call the Toll-Free Number 1-877- 2. Go to the Web site
PRX-VOTE (1-877-779-8883). http://www.eproxyvote.com/whx
3. Enter your 14-digit Voter Control 3. Enter your 14-digit Voter Control
Number located on your Proxy Card above Number located on your Proxy Card above your
your name. name.
4. Follow the recorded instructions. 4. Follow the instructions provided.
Your vote is important! Your vote is important.
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/whx anytime.
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DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET.
PROXIES VOTED BY TELEPHONE OR INTERNET MUST BE RECEIVED BY 11:59 P.M. ON JULY 7, 2001.
1. To elect the following Class II directors: Paul W. Bucha, Marvin L.
Olshan and Raymond S. Troubh, to serve as directors until the 2004
Annual Meeting of Stockholders of the Company and in each case until
their successors have been duly elected and qualified.
______________ FOR ALL NOMINEES ________________ WITHHELD FROM ALL NOMINEES
WITHHELD ____________________________________________________________________
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEES(S), PRINT NAME ABOVE
2. To adopt our 2001 Stock Option Plan.
FOR ___________ AGAINST ___________ ABSTAIN ___________
3. To approve an amendment to our 1991 Incentive and Nonqualified Stock
Option Plan whereby the term of the Plan is extended until September
23, 2006, the definition of persons eligible to receive grants of
options under the 1991 Option Plan is expanded and certain other
administrative matters are amended.
FOR ___________ AGAINST ___________ ABSTAIN ___________
4. To ratify the appointment of PricewaterhouseCoopers LLP as the
independent public accountants of the Company for the fiscal year
ending December 31, 2001.
FOR ___________ AGAINST ___________ ABSTAIN ___________
5. DISCRETIONARY AUTHORITY: To vote with discretionary authority with
respect to all other matters which may come before the Meeting.
NOTE: Your signature should appear the same as your name appears hereon. In
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 by an authorized officer and the corporate seal affixed. No
postage is required if mailed in the United States.
Signature: _________________________ Date___________
Signature: _________________________ Date___________
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW: _____________
-35-
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
OF WHX CORPORATION
-----------------
JANUARY 2001
ORGANIZATION
This charter governs the operations of the Audit Committee. The Audit Committee
shall review and reassess the charter at least annually and obtain the approval
of the Board of Directors. The Audit Committee shall be appointed by the Board
of Directors and shall comprise at least three directors, each of whom shall
meet the independence and experience requirements of the New York Stock
Exchange. In general, members of the Audit Committee shall be considered
independent if they have no relationship that may interfere with the exercise of
their independence from management and the Company. All Audit Committee members
shall be financially literate, or shall become financially literate within a
reasonable period of time after appointment to the Audit Committee, and at least
one member shall have accounting or related financial management expertise.
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the stockholders, potential
stockholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the Board. In so
doing, it is the responsibility of the Audit Committee to maintain free and open
communication between the Audit Committee, the independent auditors, the
internal auditors and management of the Company. In discharging its oversight
role, the Audit Committee is empowered to investigate any matter brought to its
attention with full access to all books, records, facilities, and personnel of
the Company and the power to retain outside counsel, or other experts for this
purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The Audit Committee in carrying out its
responsibilities believes its policies and procedures should remain flexible, in
order to best react to changing conditions and circumstances. The Audit
Committee should take the appropriate actions to set the overall corporate tone
for quality financial reporting, sound business risk practices, and ethical
behavior.
The following shall be the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Audit Committee may supplement them as
appropriate, including to comply with all New York Stock Exchange and securities
law requirements applicable to the Audit Committee.
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o The Audit Committee shall have a clear understanding with management
and the independent auditors that the independent auditors are
ultimately accountable to the Board and the Audit Committee, as
representatives of the Company's stockholders. The Audit Committee
shall have the ultimate authority and responsibility to evaluate and,
where appropriate, recommend the replacement of the independent
auditors. The Audit Committee shall discuss with the auditors their
independence from management and the Company and the matters included
in the written disclosure required by the Independence Standards Board.
Annually, the Audit Committee shall review and recommend to the Board
the selection of the Company's independent auditors, subject to
stockholders' approval.
o The Audit Committee shall discuss with the internal auditors and the
independent auditors the overall scope and plans for their respective
audits including the adequacy of staffing and compensation. Also, the
Audit Committee shall discuss with management, the internal auditors,
and the independent auditors, to the extent applicable, the adequacy
and effectiveness of the accounting and financial controls, including
the Company's system to monitor and manage business risk, and legal and
ethical compliance programs. Further, the Audit Committee shall meet
separately with the internal auditors and the independent auditors,
with and without management present, to discuss the results of their
examinations.
o The Audit Committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Reports on Form 10-Q. Also, the Audit Committee
shall discuss the results of the quarterly review and any other matters
required to be communicated to the Audit Committee by the independent
auditors under generally accepted auditing standards. The chairman of
the Audit Committee may represent the entire Audit Committee for the
purposes of this review.
o The Audit Committee shall review with management and the independent
auditors the financial statements to be included in the Company's
Annual Report on Form 10-K (or the annual report to stockholders if
distributed prior to the filing of Form 10-K), including their judgment
about the quality, not just acceptability, of accounting principles and
the clarity of the disclosures in the financial statements. Also, the
Audit Committee shall discuss the results of the annual audit and any
other matters required to be communicated to the Audit Committee by the
independent auditors under generally accepted auditing standards.
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APPENDIX B
WHX CORPORATION
2001 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
This 2001 Stock Option Plan (the "Plan") is intended as an
incentive, to retain in the employ of and as directors, officers, consultants,
advisors and employees to WHX CORPORATION, a Delaware corporation (the
"Company") and any Subsidiary of the Company, within the meaning of Section
424(f) of the United States Internal Revenue Code of 1986, as amended (the
"Code"), persons of training, experience and ability, to attract new employees,
directors, officers, consultants and advisors whose services are considered
valuable, to encourage the sense of proprietorship and to stimulate the active
interest of such persons in the development and financial success of the Company
and its Subsidiaries.
It is further intended that certain options granted pursuant
to the Plan shall constitute incentive stock options within the meaning of
Section 422 of the Code (the "Incentive Options") while certain other options
granted pursuant to the Plan shall be nonqualified stock options (the
"Nonqualified Options"). Incentive Options and Nonqualified Options are
hereinafter referred to collectively as "Options."
The Company intends that the Plan meet the requirements of
Rule 16b-3 ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and that transactions of the type specified in
subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers and directors of
the Company pursuant to the Plan will be exempt from the operation of Section
16(b) of the Exchange Act. Further, the Plan is intended to satisfy the
performance-based compensation exception to the limitation on the Company's tax
deductions imposed by Section 162(m) of the Code. In all cases, the terms,
provisions, conditions and limitations of the Plan shall be construed and
interpreted consistent with the Company's intent as stated in this Section 1.
2. ADMINISTRATION OF THE PLAN.
The Board of Directors of the Company (the "Board") shall
appoint and maintain as administrator of the Plan a Committee (the "Committee")
consisting of two or more directors who are "Non-Employee Directors" (as such
term is defined in Rule 16b-3) and "Outside Directors" (as such term is defined
in Section 162(m) of the Code), which shall serve at the pleasure of the Board.
The Committee, subject to Sections 3 and 5 hereof, shall have full power and
authority to designate recipients of Options, to determine the terms and
conditions of respective Option agreements (which need not be identical) and to
interpret the provisions and supervise the administration of the Plan. The
Committee shall have the authority, without limitation, to designate which
Options granted under the Plan shall be Incentive Options and which shall be
Nonqualified Options. To the extent any Option does not qualify as an Incentive
Option, it shall constitute a separate Nonqualified Option.
Subject to the provisions of the Plan, the Committee shall
interpret the Plan and all Options granted under the Plan, shall make such rules
as it deems necessary for the proper administration of the Plan, shall make all
other determinations necessary or advisable for the administration of the Plan
and shall correct any defects or supply any omission or reconcile any
inconsistency in the Plan or in any Options granted under the Plan in the manner
and to the extent that the Committee deems desirable to carry into effect the
Plan or any Options. The act or determination of a majority of the Committee
shall be the act or determination of the Committee and any decision reduced to
writing and signed by all of the members of the Committee shall be fully
effective as if it had
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been made by a majority at a meeting duly held. Subject to the provisions of the
Plan, any action taken or determination made by the Committee pursuant to this
and the other Sections of the Plan shall be conclusive on all parties.
In the event that for any reason the Committee is unable to
act or if the Committee at the time of any grant, award or other acquisition
under the Plan of Options or Stock as hereinafter defined does not consist of
two or more Non-Employee Directors, or if there shall be no such Committee, then
the Plan shall be administered by the Board, and references herein to the
Committee (except in the proviso to this sentence) shall be deemed to be
references to the Board, and any such grant, award or other acquisition may be
approved or ratified in any other manner contemplated by subparagraph (d) of
Rule 16b-3; provided, however, that options granted to the Company's Chief
Executive Officer or to any of the Company's other four most highly compensated
officers that are intended to qualify as performance-based compensation under
Section 162(m) of the Code may only be granted by the Committee.
3. DESIGNATION OF OPTIONEES.
The persons eligible for participation in the Plan as
recipients of Options (the "Optionees") shall include employees, officers and
directors of, and consultants and advisors to, the Company or any Subsidiary;
provided that Incentive Options may only be granted to employees of the Company
and the Subsidiaries. In selecting Optionees, and in determining the number of
shares to be covered by each Option granted to Optionees, the Committee may
consider any factors it deems relevant, including without limitation, the office
or position held by the Optionee or the Optionee's relationship to the Company,
the assistance provided to the Company or any Subsidiary by the Optionee, the
Optionee's degree of responsibility for and contribution to the growth and
success of the Company or any Subsidiary, and the Optionee's length of service,
age, promotions and potential. An Optionee who has been granted an Option
hereunder may be granted an additional Option or Options, if the Committee shall
so determine.
4. STOCK RESERVED FOR THE PLAN.
Subject to adjustment as provided in Section 7 hereof, a total
of 1,500,000 shares of the Company's Common Stock, $.01 par value per share (the
"Stock"), shall be subject to the Plan. The maximum number of shares of Stock
that may be subject to options granted under the Plan to any individual in any
calendar year shall not exceed 500,000, and the method of counting such shares
shall conform to any requirements applicable to performance-based compensation
under Section 162(m) of the Code. The shares of Stock subject to the Plan shall
consist of unissued shares, treasury shares or previously issued shares held by
any Subsidiary of the Company, and such amount of shares of Stock shall be and
is hereby reserved for such purpose. Any of such shares of Stock that may remain
unsold and that are not subject to outstanding Options at the termination of the
Plan shall cease to be reserved for the purposes of the Plan, but until
termination of the Plan the Company shall at all times reserve a sufficient
number of shares of Stock to meet the requirements of the Plan. Should any
Option expire or be canceled prior to its exercise in full or should the number
of shares of Stock to be delivered upon the exercise in full of an Option be
reduced for any reason, the shares of Stock theretofore subject to such Option
may be subject to future Options under the Plan, except where such reissuance is
inconsistent with the provisions of Section 162(m) of the Code.
5. TERMS AND CONDITIONS OF OPTIONS.
Options granted under the Plan shall be subject to the
following conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
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(a) Option Price. The purchase price of each share of Stock
purchasable under an Incentive Option shall be determined by the Committee at
the time of grant, but shall not be less than 100% of the Fair Market Value (as
defined below) of such share of Stock on the date the Option is granted;
provided, however, that with respect to an Optionee who, at the time such
Incentive Option is granted, owns (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company or of any Subsidiary, the purchase price per share of Stock shall
be at least 110% of the Fair Market Value per share of Stock on the date of
grant. The purchase price of each share of Stock purchasable under a
Nonqualified Option shall not be less than 100% of the Fair Market Value of such
share of Stock on the date the Option is granted. The exercise price for each
Option shall be subject to adjustment as provided in Section 7 below. "Fair
Market Value" means the closing price of publicly traded shares of Stock on the
principal securities exchange on which shares of Stock are listed (if the shares
of Stock are so listed), or on the NASDAQ Stock Market (if the shares of Stock
are regularly quoted on the NASDAQ Stock Market), or, if not so listed or
regularly quoted, the mean between the closing bid and asked prices of publicly
traded shares of Stock in the over-the-counter market, or, if such bid and asked
prices shall not be available, as reported by any nationally recognized
quotation service selected by the Company, or as determined by the Committee in
a manner consistent with the provisions of the Code. Anything in this Section
5(a) to the contrary notwithstanding, in no event shall the purchase price of a
share of Stock be less than the minimum price permitted under the rules and
policies of any national securities exchange on which the shares of Stock are
listed.
(b) Option Term. The term of each Option shall be fixed by the
Committee, but no Option shall be exercisable more than ten years after the date
such Option is granted and in the case of an Incentive Option granted to an
Optionee who, at the time such Incentive Option is granted, owns (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or of any Subsidiary, no
such Incentive Option shall be exercisable more than five years after the date
such Incentive Option is granted.
(c) Exercisability. Subject to Section 5(j) hereof, Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee.
Upon the occurrence of a "Change in Control" (as
hereinafter defined), the Committee may accelerate the vesting and
exercisability of outstanding Options, in whole or in part, as determined by the
Committee in its sole discretion. In its sole discretion, the Committee may also
determine that, upon the occurrence of a Change in Control, each outstanding
Option shall terminate within a specified number of days after notice to the
Optionee thereunder, and each such Optionee shall receive, with respect to each
share of Company Stock subject to such Option, an amount equal to the excess of
the Fair Market Value of such shares immediately prior to such Change in Control
over the exercise price per share of such Option; such amount shall be payable
in cash, in one or more kinds of property (including the property, if any,
payable in the transaction) or a combination thereof, as the Committee shall
determine in its sole discretion.
For purposes of the Plan, a Change in Control shall
be deemed to have occurred if:
(i) a tender offer (or series of related offers)
shall be made and consummated for the ownership of 50% or more
of the outstanding voting securities of the Company, unless as
a result of such tender offer more than 50% of the outstanding
voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the shareholders of the
Company (as of the time immediately prior to the commencement
of such offer), any employee benefit plan of the Company or
its Subsidiaries, and their affiliates;
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(ii) the Company shall be merged or consolidated with
another corporation, unless as a result of such merger or
consolidation more than 50% of the outstanding voting
securities of the surviving or resulting corporation shall be
owned in the aggregate by the shareholders of the Company (as
of the time immediately prior to such transaction), any
employee benefit plan of the Company or its Subsidiaries, and
their affiliates;
(iii) the Company shall sell substantially all of its
assets to another corporation that is not wholly owned by the
Company, unless as a result of such sale more than 50% of such
assets shall be owned in the aggregate by the shareholders of
the Company (as of the time immediately prior to such
transaction), any employee benefit plan of the Company or its
Subsidiaries and their affiliates; or
(iv) a Person (as defined below) shall acquire 50% or
more of the outstanding voting securities of the Company
(whether directly, indirectly, beneficially or of record),
unless as a result of such acquisition more than 50% of the
outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the
shareholders of the Company (as of the time immediately prior
to the first acquisition of such securities by such Person),
any employee benefit plan of the Company or its Subsidiaries,
and their affiliates.
For purposes of this Section 5(c), ownership of
voting securities shall take into account and shall include ownership as
determined by applying the provisions of Rule 13d-3(d)(I)(i) (as in effect on
the date hereof) under the Exchange Act. In addition, for such purposes,
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof; however, a Person shall
not include (A) the Company or any of its Subsidiaries; (B) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its Subsidiaries; (C) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (D) a corporation owned, directly
or indirectly, by the shareholders of the Company in substantially the same
proportion as their ownership of stock of the Company.
(d) Method of Exercise. Options to the extent then exercisable
may be exercised in whole or in part at any time during the option period, by
giving written notice to the Company specifying the number of shares of Stock to
be purchased, accompanied by payment in full of the purchase price, in cash, or
by check or such other instrument as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may be made at the election of the Optionee (i) in the form
of Stock owned by the Optionee (based on the Fair Market Value of the Stock on
the trading day before the Option is exercised) which is not the subject of any
pledge or security interest, (ii) in the form of shares of Stock withheld by the
Company from the shares of Stock otherwise to be received with such withheld
shares of Stock having a Fair Market Value on the date of exercise equal to the
exercise price of the Option, or (iii) by a combination of the foregoing,
provided that the combined value of all cash and cash equivalents and the Fair
Market Value of any shares surrendered to the Company is at least equal to such
exercise price and except with respect to (ii) above, such method of payment
will not cause a disqualifying disposition of all or a portion of the Stock
received upon exercise of an Incentive Option. An Optionee shall have the right
to dividends and other rights of a stockholder with respect to shares of Stock
purchased upon exercise of an Option at such time as the Optionee has given
written notice of exercise and has paid in full for such shares and (ii) has
satisfied such conditions that may be imposed by the Company with respect to the
withholding of taxes.
(e) Non-transferability of Options. Options are not
transferable and may be exercised solely by the Optionee during his lifetime or
after his death by the person or persons entitled thereto under his will or the
laws of descent and distribution. The Committee, in its sole discretion, may
permit a transfer of a Nonqualified
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Option to (i) a trust for the benefit of the Optionee or (ii) a member of the
Optionee's immediate family (or a trust for his or her benefit). Any attempt to
transfer, assign, pledge or otherwise dispose of, or to subject to execution,
attachment or similar process, any Option contrary to the provisions hereof
shall be void and ineffective and shall give no right to the purported
transferee.
(f) Termination by Death. Unless otherwise determined by the
Committee, if any Optionee's employment with or service to the Company or any
Subsidiary terminates by reason of death, the Option may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the Optionee under the will of the Optionee, for a
period of one year after the date of such death or until the expiration of the
stated term of such Option as provided under the Plan, whichever period is
shorter.
(g) Termination by Reason of Disability. Unless otherwise
determined by the Committee, if any Optionee's employment with or service to the
Company or any Subsidiary terminates by reason of total and permanent
disability, any Option held by such Optionee may thereafter be exercised, to the
extent it was exercisable at the time of termination due to Disability (or on
such accelerated basis as the Committee shall determine at or after grant), but
may not be exercised after 60 days after the date of such termination of
employment or service or the expiration of the stated term of such Option,
whichever period is shorter; provided, however, that, if the Optionee dies
within such 60-day period, any unexercised Option held by such Optionee shall
thereafter be exercisable to the extent to which it was exercisable at the time
of death for a period of one year after the date of such death or for the stated
term of such Option, whichever period is shorter.
(h) Termination by Reason of Retirement. Unless otherwise
determined by the Committee, if any Optionee's employment with or service to the
Company or any Subsidiary terminates by reason of Normal or Early Retirement (as
such terms are defined below), any Option held by such Optionee may thereafter
be exercised to the extent it was exercisable at the time of such Retirement (or
on such accelerated basis as the Committee shall determine at or after grant),
but may not be exercised after 60 days after the date of such termination of
employment or service or the expiration of the stated term of such Option,
whichever period is shorter; provided, however, that, if the Optionee dies
within such 60-day period, any unexercised Option held by such Optionee shall
thereafter be exercisable, to the extent to which it was exercisable at the time
of death, for a period of one year after the date of such death or for the
stated term of such Option, whichever period is shorter.
For purposes of this paragraph (h) "Normal Retirement"
shall mean retirement from active employment with or service to the Company or
any Subsidiary on or after the normal retirement date specified in the
applicable Company or Subsidiary pension plan or if no such pension plan, age
65, and "Early Retirement" shall mean retirement from active employment with or
service to the Company or any Subsidiary pursuant to the early retirement
provisions of the applicable Company or Subsidiary pension plan or if no such
pension plan, age 55.
(i) Other Termination. Unless otherwise determined by the
Committee, if any Optionee's employment with or service to the Company or any
Subsidiary terminates for any reason other than death, Disability or Normal or
Early Retirement, the Option shall thereupon terminate, except that the portion
of any Option that was exercisable on the date of such termination of employment
or service may be exercised for the lesser of 30 days after the date of
termination or the balance of such Option's term if the Optionee's employment or
service with the Company or any Subsidiary is terminated by the Company or such
Subsidiary without cause (the determination as to whether termination was for
cause to be made by the Committee). The transfer of an Optionee from the employ
of or service to the Company to the employ of or service to a Subsidiary, or
vice versa, or from one Subsidiary to another, shall not be deemed to constitute
a termination of employment or service for purposes of the Plan.
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(j) Limit on Value of Incentive Option. The aggregate Fair
Market Value, determined as of the date the Incentive Option is granted, of
Stock for which Incentive Options are exercisable for the first time by any
Optionee during any calendar year under the Plan (and/or any other stock option
plans of the Company or any Subsidiary) shall not exceed $100,000.
(k) Transfer of Incentive Option Shares. The stock option
agreement evidencing any Incentive Options granted under this Plan shall provide
that if the Optionee makes a disposition, within the meaning of Section 424(c)
of the Code and regulations promulgated thereunder, of any share or shares of
Stock issued to him upon exercise of an Incentive Option granted under the Plan
within the two-year period commencing on the day after the date of the grant of
such Incentive Option or within a one-year period commencing on the day after
the date of transfer of the share or shares to him pursuant to the exercise of
such Incentive Option, he shall, within 10 days after such disposition, notify
the Company thereof and immediately deliver to the Company any amount of United
States federal, state and local income tax withholding required by law.
6. TERM OF PLAN.
No Option shall be granted pursuant to the Plan on or after
April 12, 2011, but Options theretofore granted may extend beyond that date.
7. CAPITAL CHANGE OF THE COMPANY.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Stock, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares reserved for issuance under the Plan
and in the number and option price of shares subject to outstanding Options
granted under the Plan, to the end that after such event each Optionee's
proportionate interest shall be maintained as immediately before the occurrence
of such event.
8. PURCHASE FOR INVESTMENT.
Unless the Options and shares covered by the Plan have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or the Company has determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to give a
representation in writing that he is acquiring the shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.
9. TAXES.
The Company may make such provisions as it may deem
appropriate, consistent with applicable law, in connection with any Options
granted under the Plan with respect to the withholding of any taxes or any other
tax matters.
10. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on April 12, 2001, provided
however that the Plan shall subsequently be approved by majority vote of the
Company's stockholders not later than the Company's next annual meeting of
stockholders following such date.
B-6
11. AMENDMENT AND TERMINATION.
The Board may amend, suspend, or terminate the Plan, except
that no amendment shall be made that would impair the rights of any Optionee
under any Option theretofore granted without the Optionee's consent, and except
that no amendment shall be made which, without the approval of the stockholders
of the Company, as required by law, would:
(a) materially increase the number of shares that may be
issued under the Plan, except as is provided in Section 7;
(b) materially increase the benefits accruing to the Optionees
under the Plan;
(c) materially modify the requirements as to eligibility for
participation in the Plan;
(d) decrease the exercise price of an Option to less than 100%
of the Fair Market Value per share of Stock on the date of grant thereof; or
(e) extend the term of any Option beyond that provided for in
Section 5(b).
The Committee may amend the terms of any Option theretofore
granted, prospectively or retroactively, but no such amendment shall impair the
rights of any Optionee without the Optionee's consent.
12. GOVERNMENT REGULATIONS.
The Plan, and the grant and exercise of Options hereunder, and
the obligation of the Company to sell and deliver shares under such Options,
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies, national securities exchanges and
interdealer quotation systems as may be required.
13. GENERAL PROVISIONS.
(a) Certificates. All certificates for shares of Stock
delivered under the Plan shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, or other
securities commission having jurisdiction, any applicable Federal or state
securities law, any stock exchange or interdealer quotation system upon which
the Stock is then listed or traded and the Committee may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions.
(b) Employment Matters. The adoption of the Plan shall not
confer upon any Optionee of the Company or any Subsidiary any right to continued
employment or, in the case of an Optionee who is a director, continued service
as a director, with the Company or a Subsidiary, as the case may be, nor shall
it interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of any of its employees, the service of any of its
directors or the retention of any of its consultants or advisors at any time.
(c) Limitation of Liability. No member of the Board or the
Committee, or any officer or employee of the Company acting on behalf of the
Board or the Committee, shall be personally liable for any action, determination
or interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Company acting on their behalf shall, to the extent
B-7
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.
(d) Registration of Stock. Notwithstanding any other provision
in the Plan, no Option may be exercised unless and until the Stock to be issued
upon the exercise thereof has been registered under the Securities Act and
applicable state securities laws, or are, in the opinion of counsel to the
Company, exempt from such registration in the United States. The Company shall
not be under any obligation to register under applicable federal or state
securities laws any Stock to be issued upon the exercise of an Option granted
hereunder in order to permit the exercise of an Option and the issuance and sale
of the Stock subject to such Option, although the Company may in its sole
discretion register such Stock at such time as the Company shall determine. If
the Company chooses to comply with such an exemption from registration, the
Stock issued under the Plan may, at the direction of the Committee, bear an
appropriate restrictive legend restricting the transfer or pledge of the Stock
represented thereby, and the Committee may also give appropriate stop transfer
instructions with respect to such Stock to the Company's transfer agent.
WHX CORPORATION
April 12, 2001
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APPENDIX C
AMENDMENT NO. 4 TO
THE 1991 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN OF
WHX CORPORATION
1. The 1991 Incentive and Nonqualified Stock Option Plan (the "Plan")
of WHX Corporation (the "Company") is hereby amended, subject to stockholder
approval of this Amendment at the next annual meeting of the Company's
Stockholders, as follows:
A. Section 1 of the Plan is hereby amended in its entirety to read as
follows:
"1. PURPOSE OF THE PLAN
This 1991 Incentive and Nonqualified Stock Option Plan (the
"Plan") is intended as an incentive, to retain in the employ of and as
directors, officers, consultants, advisors and employees to WHX
Corporation (the "Company") and any Subsidiary of the Company (within
the meaning of Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code")), persons of training, experience and ability, to
attract new employees, directors, officers, consultants and advisors
whose services are considered valuable, to encourage the sense of
proprietorship and to stimulate the active interest of such persons in
the development and financial success of the Company and its
Subsidiaries. It is further intended that certain options granted
pursuant to the Plan shall constitute incentive stock options within
the meaning of Section 422 of the Code ("Incentive Options") while
certain other options granted pursuant to the Plan will be nonqualified
stock options ("Nonqualified Options"). Incentive Options and the
Nonqualified Options are hereinafter referred to collectively as
"Options"."
B. Section 2 of the Plan is hereby amended in its entirety to read as
follows:
"2. ADMINISTRATION OF THE PLAN
The Board of Directors of the Company (the "Board") shall
appoint and maintain as administrator of the Plan a Committee (the
"Committee") consisting of two or more directors of the Company. No
person shall be eligible to serve on the Committee unless he is then a
"disinterested person" within the meaning of Rule 16b-3 of the
Securities and Exchange Commission ("Rule 16b3") promulgated under the
Securities Exchange Act of 1934, as amended (the "Act"), if and as Rule
16b-3 is then in effect. The members of the Committee shall serve at
the pleasure of the Board.
The Committee, subject to Section 3 hereof, shall have full
power and authority to designate recipients of Options, to determine
the terms and conditions of respective Option agreements (which need
not be identical) and to interpret the provisions and supervise the
administration of the Plan. Subject to Section 7 hereof, the Committee
shall have the authority, without limitation, to designate which
Options granted under the Plan shall be Incentive Options and which
shall be Nonqualified Options. To the extent any Option does not
qualify as an Incentive Option, it shall constitute a separate
Nonqualified Option.
Subject to the provisions of the Plan, the Committee shall
interpret the Plan and all Options granted under the Plan, shall make
such rules as it deems necessary for the proper administration of the
Plan, shall make all other determinations necessary or advisable for
the administration of the Plan and shall correct any defects or supply
any omission or reconcile any inconsistency in the Plan or in any
Options granted under the Plan in the manner and to the extent that the
Committee deems desirable to carry the Plan or any Options into effect.
The act or determination of a majority of the Committee shall be deemed
to be the act or determination of the Committee and any decision
reduced to writing and signed by all of the members of the Committee
shall be fully effective as if it had been made by a majority at a
meeting duly held. Subject to
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the provisions of the Plan, any action taken or determination made by
the Committee pursuant to this and the other paragraphs of the Plan
shall be conclusive on all parties.
In the event that for any reason the Committee is unable to
act or if the Committee at the time of any grant, award or other
acquisition under the Plan of Options or Stock as hereinafter defined
does not consist of two or more "disinterested" directors, or if there
shall be no such Committee, then the Plan shall be administered by the
Board, and references herein to the Committee (except in the proviso to
this sentence) shall be deemed to be references to the Board, and any
such grant, award or other acquisition may be approved or ratified in
any other manner contemplated by subparagraph (d) of Rule 16b-3;
provided, however, that options granted to the Company's Chief
Executive Officer or to any of the Company's other four most highly
compensated officers that are intended to qualify as perfo compensation
under Section 162(m) of the Code may only be granted by the Committee."
C. Section 3 of the Plan is hereby amended in its entirety to read as
follows:
"3. DESIGNATION OF OPTIONEES.
The persons eligible for participation in the Plan as
recipients of Options ("Optionees") shall include employees, directors,
officers, consultants and advisors of the Company or any Subsidiary.
The grant of an Option to an employee, director, officer, consultant or
advisor who is an executive officer of the Company, as well as the
terms and provisions of such Option, shall require the prior approval
of a majority of the members of the Board who are "disinterested
persons." In selecting Optionees, and in determining the number of
shares to be covered by each Option granted to Optionees, the Committee
may consider the office or position held by the Optionee, the
Optionee's degree of responsibility for and contribution to the growth
and success of the Company or any Subsidiary, the Optionee's length of
service, age, promotions, potential and any other factors which the
Committee may consider relevant. Subject to the next sentence, an
employee who has been granted an Option hereunder may be granted an
additional Option or Options, if the Committee shall so determine.
Notwithstanding anything contained in the Plan to the contrary, no
recipient of Options may be granted Options to purchase in excess of
twenty percent of the maximum number of shares of Stock (as hereinafter
defined) authorized to be issued under the Plan."
D. Section 5(f) of the Plan is hereby amended in its entirety to read
as follows:
"(f) Termination by Death. Unless otherwise determined by the Committee at
grant, if any Optionee's employment with or service to the Company or any
Subsidiary terminates by reason of death, the Option may thereafter be
immediately exercised, to the extent then exercisable (or on such accelerated
basis as the Committee shall determine at or after grant), by the legal
representative of the estate or by the legatee of the Optionee under the will of
the Optionee, for a period of one year from the date of such death or until the
expiration of the stated term of such Option, whichever period is shorter."
E. Section 5(g) of the Plan is hereby amended in its entirety to read
as follows:
"(g) Termination by Reason of Disability. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with or service to the Company
or any Subsidiary terminates by reason of total and permanent disability as
determined under the Company's long term disability policy ("Disability"), any
Option held by such Optionee may thereafter be exercised, to the extent it was
exercisable at the time of termination due to Disability (or on such accelerated
basis as the Committee shall determine at or after grant), but may not be
exercised after one year from the date of such termination of employment or
service to or the expiration of the stated term of such Option, whichever period
is shorter; provided, however, that, if the Optionee dies within such one-year
period, any unexercised Option held by such Optionee shall
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thereafter be exercisable to the extent to which it was exercisable at
the time of death for a period of one year from the date of such death
or for the stated term of such Option, whichever period is shorter."
F. Section 5(h) of the Plan is hereby amended in its entirety to read
as follows:
"(h) Termination by Reason of Retirement. Unless otherwise determined
by the Committee at grant, if any Optionee's employment with or service
to the Company or any Subsidiary terminates by reason of Normal or
Early Retirement (as such terms are defined below), any Option held by
such Optionee may thereafter be exercised to the extent it was
exercisable at the time of such Retirement (as defined below) (or on
such accelerated basis as the Committee shall determine at or after
grant), but may not be exercised after three months from the date of
such termination of employment or service or the expiration of the
stated term of such Option, whichever period is shorter; provided,
however, that, if the Optionee dies within such three-month period, any
unexercised Option held by such Optionee shall thereafter be
exercisable, to the extent to which it was exercisable at the time of
death, for a period of one year from the date of such death or for the
stated term of such Option, whichever period is shorter.
For purposes of this paragraph (h), Normal Retirement shall
mean retirement from active employment with or service to the Company
or any Subsidiary on or after the normal retirement date specified in
the applicable Company or Subsidiary pension plan. Early Retirement
shall mean retirement from active employment or service to with the
Company or any Subsidiary pursuant to the early retirement provisions
of the applicable Company or Subsidiary pension plan. Retirement shall
mean Normal or Early Retirement."
G. Section 5(i) of the Plan is hereby amended in its entirety to read
as follows:
"(i) Other Termination. Unless otherwise determined by the Committee at
grant, if any Optionee's employment with or service to the Company or
any Subsidiary terminates for any reason other than death, Disability
or Retirement, the Option shall thereupon terminate, except that the
exercisable portion of any Option which was exercisable on the date of
such termination of employment or service may be exercised for the
lesser of three months from the date of termination or the balance of
such Option's term if the Optionee's employment with or service to the
Company or any Subsidiary is involuntarily terminated by the Optionee's
employer without Cause. Cause shall mean a felony conviction or the
failure of an Optionee to contest prosecution for a felony or an
Optionee's willful misconduct or dishonesty, any of which is harmful to
the business or reputation of the Company or any Subsidiary. The
transfer of an Optionee from the employ or service to the Company to a
Subsidiary, or vice versa, or from one Subsidiary to another, shall not
be deemed to constitute a termination of employment for purposes of the
Plan."
H. Section 6 of the Plan is hereby amended in its entirety to read as
follows:
"6. TERM OF PLAN.
No Option shall be granted pursuant to the Plan on or after
the fifteenth (15th) anniversary of the date the Plan is approved by
the Board, but Options granted may extend beyond that date."
2. Except as amended hereby, the Plan shall remain in full force
and effect.
Dated as of April 12, 2001
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