SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)
[ ] Definitive Information Statement
WHX CORPORATION
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
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WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
-----------------
NOTICE OF SPECIAL MEETING OF PREFERRED STOCKHOLDERS
TO BE HELD JUNE 27, 2002
-----------------
To Our Holders of Preferred Stock:
We invite you to attend a special meeting of the holders of
preferred stock on Thursday, June 27, 2002 at the [Dupont Hotel, 11th & Market
Streets, Wilmington, Delaware 19801 at 11:00 a.m]. At the meeting, you will have
the option to elect up to two directors to our Board of Directors.
This booklet includes a formal notice of the special meeting and the
information statement. The information statement tells you more about the agenda
and procedures for the special meeting. It also describes how our Board of
Directors operates.
Only preferred stockholders of record at the close of business on
June 5, 2002 will be entitled to vote at the special meeting. 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
June 6, 2002
WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
-----------------
INFORMATION STATEMENT
GENERAL INFORMATION
This information statement is being furnished by WHX Corporation, a
Delaware corporation ("WHX" or the "Company"), in connection with the special
meeting of the holders of its Series A Convertible Preferred Stock ("Series A
Preferred Stock") and Series B Convertible Preferred Stock ("Series B Preferred
Stock," and together with Series A Preferred Stock, "Preferred Stock") to be
held on Thursday, June 27, 2002, beginning at [11:00 a.m., at the Dupont Hotel,
11th & Market Streets, Wilmington, Delaware 19801], and at any postponements or
adjournments thereof (the "Special Meeting").
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
ABOUT THE MEETING
DESCRIPTION OF THE PREFERRED STOCK VOTING RIGHTS
The Certificates of Designation for each of the Series A Preferred
Stock and the Series B Preferred Stock (the "Certificates of Designation")
provide for voting rights upon the occurrence of certain events. Each of the
Certificates of Designation provide that upon the Company's failure to declare
and pay six quarterly dividends, whether or not consecutive, the number of
directors of the Company shall be increased by two and the holders of
outstanding shares of the Series A Preferred Stock and the Series B Preferred
Stock, voting together as a class, shall be entitled to elect such additional
directors. The holders of the Series A Preferred Stock shall be entitled to vote
and elect directors as provided in its Certificate of Designation until the full
dividends accumulated on all outstanding shares of the Series A Preferred Stock
have been declared and paid or set apart for payment and the holders of the
Series B Preferred Stock shall be entitled to vote and elect directors as
provided in its Certificate of Designation until the full dividends accumulated
on all outstanding shares of the Series B Preferred Stock have been declared and
paid or set apart for payment.
Pursuant to Section 4(d) of each of the Certificates of Designation,
directors properly and validly elected at the Special Meeting to the Board of
Directors of the Company shall serve until the earlier of (i) the next annual
meeting of the stockholders of the Company and the election (by the holders of
the Preferred Stock) and qualification of their respective successors and (ii)
the date upon which all dividends in default on the shares of the Preferred
Stock shall have been paid in full.
All shares of Preferred Stock have equal voting rights of one vote
per share. Dividends on the Preferred Stock have not been paid since the
dividend payment of October 1, 2000, and the regularly scheduled dividend
payment that was due April 1, 2002 was the sixth dividend non-payment.
Accordingly, the holders of Preferred Stock have the right to elect up to two
directors to the Board of Directors. In connection with such right, the Board of
Directors of the Company has called this special meeting of the holders of the
shares of the Preferred Stock.
WHAT IS THE PURPOSE OF THE SPECIAL MEETING?
The purpose of the Special Meeting is to allow the holders of
Preferred Stock to elect up to two directors to the Board of Directors of the
Company.
WHO MAY VOTE
Holders of Preferred Stock, as recorded in the Company's stock
register on June 5, 2002 (the "Record Date"), may vote at the meeting. As of
this date, there were [2,573,926] shares of Series A Preferred Stock outstanding
and [2,950,000] shares of Series B Preferred Stock outstanding.
NOMINATIONS
Nominees for election of director shall be made at the Special
Meeting, in person or by proxy. The Board of Directors of the WHX does not take
any position with respect to the election of any potential nominees for election
as directors, is not soliciting any proxies in connection with the Special
Meeting and does not make any recommendation "For" or "Against" the election of
any nominee. As of the Record Date, the Company has not received any nominations
for the election of directors, nor does it know of any person's intent to make
such nomination.
Applicable rules of the Securities and Exchange Commission (the
"SEC") require that, if proxies are solicited from the holders of Preferred
Stock in support of or in opposition to the election of any nominee to the Board
of Directors of the Company, the person soliciting such holders must provide
them with a proxy statement containing certain prescribed information, including
information concerning the nominees. The Company assumes no responsibility for
the accuracy or completeness of any information contained in any proxy material
furnished to any holder of Preferred Stock concerning the election of any
director.
QUORUM
In order to carry on the business of the Special Meeting, there must
be 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
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purpose. If there is not a quorum, no action may be conducted at the Special
Meeting, and the Company will have no requirement to call an additional Special
Meeting. The next opportunity to elect directors will be at the Company's 2003
Annual Meeting of Stockholders.
MEETING
The Special Meeting will be conducted by a representative of the
Company in accordance with such rules and procedures as the Company shall
determine in its sole discretion. The Chairman of the Board of Directors of the
Company, or his designee, may adjourn the Special Meeting at his discretion.
Pursuant to Section 2.4 of the Company's By-laws, no business may be conducted
at the Special Meeting other than the election of up to two directors to the
Board of Directors of the Company as provided herein.
VOTES NEEDED
The director nominees receiving a plurality of the votes cast during
the meeting will be elected to the board of directors. Abstentions and broker
non-votes count for quorum purposes; otherwise they have no impact in the
election of directors. Broker non-votes occur when a broker returns a proxy but
does not have the authority to vote on a particular proposal. Brokers that do
not receive instructions are entitled to vote on the election of directors.
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 Preferred Stock
as of June 5, 2002 as acceptable proof of ownership.
3
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of
the common stock, $.01 par value of WHX Corporation (the "Common Stock")
outstanding at June 5, 2002, 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 PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER (1) BENEFICIALLY OWNED OF CLASS(2)
- ---------------------------------------- ------------------ -----------
Deutsche Bank A.G.(3)
TaunusanIage 12, D-60325
Frankfurt am Main, Federal Republic of Germany..................... 4,972,470 [23.9]%
Founders Financial Group, L.P.(4)
53 Forest Avenue
Old Greenwich, Connecticut 06870................................... 1,034,706 [6.4]%
WPN Corp.(5)
110 E. 59th Street
New York, New York 10022.......................................... 1,694,150 [9.5]%
Dimensional Fund Advisors Inc.(6)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401.................................... 1,307,225 [8.1]%
Gabelli Funds, LLC(7)
One Corporate Center,
Rye, New York 10580............................................... 2,049,009 [12.6]%
Alliance Capital Management L.P.(8)
1290 Avenue of the Americas
New York, New York 10104.......................................... 1,162,100 [7.2]%
Dewey Square Investors Corporation(9)
One Financial Center
Boston, Massachusetts 02111....................................... 866,419 [5.3]%
Ronald LaBow....................................................... 1,694,150(5) [9.5]%
Neil D. Arnold..................................................... 186,656(10) [1.1]%
Robert A. Davidow.................................................. 184,128(11) [1.1]%
William Goldsmith.................................................. 100,000(10) *
Robert D. LeBlanc.................................................. 398,123(12) [2.4]%
Marvin L. Olshan................................................... 104,330(13) *
Raymond S. Troubh.................................................. 142,000(14) *
James G. Bradley................................................... 261,654(15) [1.6]%
Robert K. Hynes.................................................... 52,945(16) *
Arnold G. Nance.................................................... 17,775(17) *
4
All Directors and Executive Officers as a Group
(10 persons) 2,972,127(18) [15.7]%
- -------------------
* 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 June 4, 2002 of
[16,215,120] shares.
(3) Based on a Schedule 13G/A filed in February 2002, Deutsche Bank A.G.
beneficially holds 871,000 shares of Series A Convertible Preferred Stock
and 738,360 shares of Series B Convertible Preferred Stock convertible into
2,759,850 and 1,809,720 shares of Common Stock, respectively, and 402,900
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 541,656 shares of Common
Stock.
(6) 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 1,307,225 shares of WHX
Corporation stock as of December 31, 2001. The Portfolios own all
securities reported in this statement, and Dimensional disclaims beneficial
ownership of such securities.
(7) Based on a Schedule 13D/A filed in July 2001, Gabelli Funds, LLC, GAMCO
Investors, Inc., Gabelli International Limited, Gabelli Advisers, Inc. and
Gabelli Performance Partnership L.P. collectively beneficially hold
2,049,009 shares of Common Stock. This amount includes Common Stock
issuable upon their conversion of 390,931 shares of Series A Convertible
Preferred Stock and 286,031 shares of Series B Convertible Preferred Stock.
5
(8) 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 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.
(9) 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.
(10) Consists of shares of Common Stock issuable upon their exercise of options
within 60 days hereof.
(11) Includes 103,330 shares of Common Stock issuable upon their exercise of
options within 60 days hereof, and approximately 80,798 shares of Common
Stock issuable upon conversion of 25,500 shares of Series A Convertible
Preferred Stock.
(12) Includes 366,656 shares of Common Stock issuable upon their exercise of
options within 60 days hereof, 24,016 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.
(13) Includes 103,330 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(14) Includes 90,000 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(15) Includes 260,000 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(16) Includes 49,996 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(17) Includes 10,000 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 3,690
shares of Common Stock.
(18) Includes 2,682,484 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
6
DIRECTORS
The Company's Certificate of Incorporation and By-laws provide for
the classification of the Board of Directors into three classes. The two Class I
Directors have a term that expires at the 2003 Annual Meeting of Stockholders of
the Company, the two Class II Directors have a term that expires at the 2004
Annual Meeting of Stockholders of the Company and the three Class III Directors,
which are nominated for election at the Company's 2002 Annual Meeting of
Stockholders of the Company to be held June 18, 2002, in the event they are
elected will have a term that expires at the 2005 Annual Meeting of Stockholders
of the Company.
The names of the directors 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)
- ---- -------- -------------------------------- --- -------------
Neil D. Arnold III DIRECTOR AND VICE CHAIRMAN OF THE 53 1992
BOARD. Officer of WPN Corp., a
financial consulting company, since
August 2001. Private Investor since
May 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. Davidow III DIRECTOR. Private investor since 60 1992
January 1990. Director of Arden Group,
Inc., a supermarket holding company.
William Goldsmith I DIRECTOR. Management and Marketing 83 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. from 1993 to
1997. Chairman and Chief Executive
Officer of Fiber Fuel International,
Inc., from 1994 to 1997. Life Trustee
to Carnegie Mellon University since
1980.
7
Ronald LaBow III CHAIRMAN OF THE BOARD. President of 66 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.
Robert D. LeBlanc I DIRECTOR. Executive Vice President of 52 1999
the Company since April 1998.
President and Chief Executive Officer
of Handy & Harman ("H&H") since April
1998. The Company acquired (H&H 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. Director
of Church & Dwight Co., Inc., a
consumer products and specialty
chemical company, since July 1998.
Marvin L. Olshan II Director. Secretary of the Company 74 1991
since 1991. Partner, Olshan Grundman
Frome Rosenzweig & Wolosky LLP, from
1956 to 2002, and Of Counsel since
2002.
Raymond S. Troubh II Director. Financial Consultant for in 76 1992
excess of past five years. Mr. Troubh
is also a director of ARIAD
Pharmaceuticals, Inc., Diamond
Offshore Drilling, Inc., Enron Corp.,
General American Investors Company,
Gentiva Health Services, Inc., Health
Net, Inc., Hercules Incorporated,
Starwood Hotels & Resorts, and Triarc
Companies, Inc., a holding company.
Trustee of Petrie Stores Liquidating
Trust.
- ------------------
(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.
8
MEETINGS AND COMMITTEES
The Board of Directors met on 4 occasions and took action by
unanimous written consent on 1 occasion during the fiscal year ended December
31, 2001. 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 Incentive and
Nonqualified Stock Option Plan and the 2001 Stock 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, 2001. 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 Raymond S.
Troubh, Robert A. Davidow and William Goldsmith. The Audit Committee met on 4
occasions and took action by unanimous written consent on 1 occasion during the
fiscal year ended December 31, 2001. 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 2
occasions during the fiscal year ended December 31, 2001. The Compensation
Committee reviews compensation arrangements and personnel matters. The members
of the Nominating Committee are Ronald LaBow, Marvin L. Olshan and Robert A.
Davidow. The Nominating Committee took action by unanimous written consent on 1
occasion during the fiscal year ended December 31, 2001. 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 Incentive and Nonqualified Stock Option Plan (the "1991 Plan")
and the 2001 Stock Option Plan (the "2001 Plan"). The Stock Option Committee
took action by unanimous written consent on 2 occasions during the fiscal year
ended December 31, 2001.
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
9
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 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.
On July 13, 2001, directors William Goldsmith and Raymond S. Troubh
received options to purchase 30,000 shares of Common Stock, directors Robert A.
Davidow and Marvin L. Olshan received options to purchase 35,000 shares of
Common Stock, and directors Robert D. LeBlanc and Neil D. Arnold received
options to purchase 160,000 shares of Common Stock. 33.33% of these options vest
on the date of grant, 33.33% on the first anniversary of the grant date and
33.34% on the second anniversary of the grant date.
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 2001, 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 2001, 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."
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent (10%) of a registered class of the Company's equity
securities, to file reports of ownership and changes in
10
ownership with the Securities and Exchange Commission. In addition, under
Section 16(a), trusts for which a reporting person is a trustee and a
beneficiary (or for which a member of his immediate family is a beneficiary) may
have a separate reporting obligation with regard to ownership of the Common
Stock and other equity securities of the Company. Such reporting persons are
required by rules of the Securities and Exchange Commission to furnish the
Company with copies of all Section 16(a) reports they file. Based solely upon a
review of the copies of such forms furnished to the Company and written
representations from the Company's executive officers, directors and greater
than ten percent (10%) beneficial stockholders, the Company believes that during
the year ended December 31, 2001, all persons subject to the reporting
requirements of Section 16(a) filed the required reports on a timely basis,
except for a Form 5 which was inadvertently filed late by one director.
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 Officer of WPSC and WPC since April 1998. 57
President and Chief Operating Officer
of Keppel 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.
Robert K. Hynes VICE PRESIDENT--FINANCE. Vice President--Finance
since June 2001. Vice President of H&H since March 47
2000. Director of Audit and Financial Standards of
H&H from April 1995 to March 2000.
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 December 31, 1999, 2000 and
2001: (i) individuals who served as, or acted in the capacity of, the Company's
principal executive officer for the fiscal year ended December 31, 2001 (Mr.
LeBlanc served as the Company's Principal Executive Officer in 2001); (ii) the
11
Company's other most highly compensated executive officers, which together with
the Principal Executive Officer are the most highly compensated officers of the
Company whose salary and bonus exceeded $100,000 with respect to the fiscal year
ended December 31, 2001 and who were employed at the end of fiscal year 2001;
and (iii) up to two additional individuals for whom disclosure would have been
provided but for the fact that the individual was not serving as an executive
officer of the Company at the end of fiscal year 2001. Please note that the
executive officers identified in (i), (ii) and (iii) above are collectively
referred to as the "Named Executive Officers."
SUMMARY COMPENSATION TABLE
Long Term
Name and Principal Position Annual Compensation Compensation
- --------------------------- --------------------------------------- ---------------
Other Annual Securities All Other
Salary Bonus Compensation Underlying Compensation
Year ($) ($)(1) ($)(2) Options (#) ($)(3)
----- -------- -------- ------------ ------------- ------------
Robert D. LeBlanc 2001 460,000 -- -- 160,000 2,771(4)
Executive Vice President 2000 433,500 175,000 -- -- 2,496(4)
(Principal Executive Officer) 1999 410,774 300,000 -- -- 1,640(4)
James G. Bradley 2001 385,000 -- -- -- 14,350
Executive Vice President 2000 400,000 -- -- -- 12,350
1999 400,000 125,000 -- -- 10,767
Robert K. Hynes 2001 174,277 15,000 -- 50,000 716(4)
Vice President-Finance(5) 2000 138,882 55,000 -- 10,000 462(4)
1999 121,164 90,000 -- -- 491(4)
Arnold G. Nance(6) 2001 214,852 -- -- -- 368,535(7)
2000 364,525 75,000 -- 10,000 8,628(8)
1999 355,654 150,000 -- -- 8,718(9)
- ---------------------------
(1) Messrs. LeBlanc, Hynes and Nance were granted bonuses pursuant to the H&H
Management Incentive Plan in 2001 and 2000 for services performed in the
prior year. Mr. Hynes was granted a bonus by the Company in 2002 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.
(3) Amounts shown, unless otherwise noted, reflect employer contributions to
pension plans.
(4) Represents insurance premiums paid by the Company.
12
(5) Mr. Hynes' employment as an officer of the Company commenced June 2001.
Prior to such time, he was an employee of Handy & Harman, a subsidiary of
the Company since the Handy & Harman acquisition in April 1998.
(6) Mr. Nance's employment with the Company terminated August 1, 2001.
(7) Represents insurance premiums paid by the Company in the amount of $1,035
and a severance payment to Mr. Nance regarding the termination of his
employment in the amount of $367,500.
(8) Includes insurance premiums paid by the Company in 2000 of $928.
(9) Includes insurance premiums paid by the Company in 1999 of $1,018.
OPTION GRANTS TABLE. The following table sets forth certain
information regarding stock option grants made to each of the Named Executive
Officers during the fiscal year ended December 31, 2001.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
----------------- ------------------------------
% of
Total Options
Number of Securities Granted to Exercise
Underlying Options Employees in Price Expiration
Name Granted (1) Fiscal Year ($/Sh) Date 5%($) 10%($)
- ---- -------------------- --------------- --------- ----------- ----- ------
Robert D. LeBlanc...... 160,000 20.65% $1.63 7/13/11 $164,016 $415,648
Robert K. Hynes........ 50,000 6.45% $1.63 7/13/11 $51,255 $129,890
- -------------------
(1) All options were granted under the Company's 2001 Stock Option Plan on July
13, 2001. 33.33% of such options vested upon the grant date, 33.33% vest on
the first anniversary of the grant date, and 33.34% vest on the second
anniversary of the grant date.
13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as of December
31, 2001.
Number of Securities Underlying Value of Unexercised
Unexercised Options at 2001 In-the-Money Options at
Fiscal Year-End(#) 2001 Fiscal Year-End ($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
Robert D. LeBlanc............ 313,328/106,672 0/0
James G. Bradley............. 260,000/0 0/0
Robert K. Hynes.............. 29,998/40,002 0/0
Arnold G. Nance.............. 10,000/0 0/0
- -------------------
(1) On December 31, 2001, the last reported sales price of the Common Stock as
reported on the New York Stock Exchange Composite Tape was $1.54.
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 Hynes 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 WHX 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 WHX Pension
Plan formula to the Career Average Pay after including 100
14
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 current rate of salary as plan compensation for Messrs. LeBlanc and
Hynes of $460,000 and $200,000, respectively, and includes the benefits payable
under both the WHX 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 on average over the prior 3 fiscal years.
EXECUTIVE PENSION BENEFITS
NORMAL RETIREMENT ANNUAL RETIREMENT BENEFITS FROM:
Name Date (NRD) Service at NRD Salary Bonus Total
- ---- ---------- -------------- ------ ----- -----
R.D. LeBlanc July 1, 2014 17 yrs. 8 mos. $155,708 $57,648 $213,556
R. K. Hynes Sept. 1, 2019 30 yrs. 1 mos. $91,823 $27,476 $119,299
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. LeBlanc, Bradley
and Hynes, 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 is 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 a bonus of $175,000 in 2001 for services performed in 2000.
Mr. LeBlanc was not granted a bonus in 2002 for services performed in 2001. 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.
15
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 is 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 not granted bonuses in 2002 and 2001 for services
performed in 2001 and 2000. 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. Robert K. Hynes became Vice President-Finance of the Company
pursuant to a one-year employment agreement dated July 1, 2001, which will be
automatically 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. Hynes of no less than $200,000 and an annual bonus to be
awarded at the Company's sole discretion. Mr. Hynes was granted a bonus of
$15,000 in 2002 for services performed in 2001. In the event that Mr. Hynes'
employment is terminated by the Company other than with cause, he will receive a
payment of one year's base salary at the highest rate in effect for the twelve
preceding months plus bonus plan and compensation accrued.
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 2001.
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,
2001. Mr. Olshan is Of Counsel to 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 $695,000 during the fiscal
year ended December 31, 2001.
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 2001, 2000 and 1999,
WPN received a monthly fee of $520,833.33. In addition, in October 1999 the
Board of Directors also awarded a $3,280,000 bonus to WPN 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,
16
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 2001. 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 2001, 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Marvin L. Olshan, a director and Secretary of the Company, is Of
Counsel to 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, 2001, the Company paid OGFR&W
approximately $695,000.
Neil D. Arnold, a director of the Company, joined WPN Corp. as an
officer in August 2001. WPN Corp. is wholly-owned by Ronald LaBow, Chairman of
the Board of the Company, and is party to a management agreement with the
Company - see below. Mr. Arnold was paid $187,500 by WPN for his services in
2001. Prior to joining WPN, Mr. Arnold performed consulting services for the
Company during 2001 and received compensation in the amount of $38,000 for such
services.
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.
17
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."
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the proxy materials to be
distributed in connection with the 2003 Annual Meeting of Stockholders of the
Company, stockholder proposals for such meeting must be submitted to the Company
no later than January 14, 2003.
OTHER MATTERS
Pursuant to Section 2.4 of the Company's By-laws, no business may be
conducted at the Special Meeting other than the election of up to two directors
to the Board of Directors of the Company as provided herein.
By Order of the Company,
MARVIN L. OLSHAN, Secretary
Dated: New York, New York
June 6, 2002
THE COMPANY WILL FURNISH A FREE COPY OF ITS ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 (WITHOUT EXHIBITS) TO ALL OF
ITS PREFERRED STOCKHOLDERS OF RECORD AS OF JUNE 5, 2002 WHO WILL MAKE A WRITTEN
REQUEST TO MR. MARVIN L. OLSHAN, SECRETARY, WHX CORPORATION, 110 EAST 59TH
STREET, NEW YORK, NEW YORK 10022.
