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:
[ ] Preliminary Information Statement
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14c-5(d)(2)
[x] Definitive Information Statement
WHX CORPORATION
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(Name of Registrant as Specified in its Charter)
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WHX CORPORATION
110 East 59th Street
New York, New York 10022
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 3, 2003
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To Our Holders of Preferred Stock:
We invite you to attend our annual stockholders meeting on Tuesday,
June 3, 2003 at the Dupont Hotel, 11th & Market Streets, Wilmington, Delaware
19801 at 11:00 a.m. At the meeting, you will have the right to elect up to two
directors to our Board of Directors.
This booklet includes a formal notice of the annual 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
April 14, 2003 will be entitled to vote at the annual meeting for the election
of the two directors referenced above. 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 5, 2003
WHX CORPORATION
110 East 59th Street
New York, New York 10022
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INFORMATION STATEMENT
GENERAL INFORMATION
This information statement is being furnished by WHX Corporation, a
Delaware corporation ("WHX" or the "Company"), in connection with the 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
Tuesday, June 3, 2003, beginning at 11:00 a.m., at the Dupont Hotel, 11th &
Market Streets, Wilmington, Delaware 19801, and at any postponements or
adjournments thereof (the "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 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 Meeting of the holders of the shares of
the Preferred Stock.
WHAT IS THE PURPOSE OF THE MEETING?
The Meeting is the Company's Annual Meeting of its Stockholders.
Holders of Preferred Stock shall be eligible to elect up to two directors to the
Board of Directors of the Company, as described herein. In addition, holders of
common stock of the Company shall be eligible to act on certain proposals
subject to the requirements and procedures set forth in a Notice of Annual
Meeting of Stockholders and Proxy Statement which is being mailed separately to
the holders of the Company's common stock.
WHO MAY VOTE
Holders of Preferred Stock, as recorded in the Company's stock
register on April 14, 2003 (the "Record Date"), may vote at the meeting with
respect to the election of the two directors described above. As of this date,
there were 2,573,926 shares of Series A Preferred Stock outstanding and
2,949,000 shares of Series B Preferred Stock outstanding.
NOMINATIONS
Nominees for election of directors by the holders of Preferred Stock
may be made at or before the 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 Preferred Stock nominees for election as directors, is not
soliciting any proxies in connection with the election of directors by the
holders of Preferred Stock at the Meeting and does not make any recommendation
"For" or "Against" the election of any Preferred Stock 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 proceed with the election of directors by the holders of
Preferred Stock at the Meeting, there must be a quorum of the holders of
Preferred Stock. This means at least a majority of the outstanding shares of
Preferred Stock as a single class eligible to vote must be represented at the
Meeting, either by proxy or in person. Shares that we own are not voted and
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do not count for this purpose. If there is not a quorum of the holders of
Preferred Stock, no action may be conducted at the Meeting by the holders of
Preferred Stock, and the Company will have no requirement to call an additional
special meeting. The next opportunity for the holders of Preferred Stock to
elect directors will be at the Company's 2004 Annual Meeting of Stockholders or
as provided in the respective Certificates of Designation.
MEETING
The 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 Meeting at his discretion.
VOTES NEEDED
The two director nominees receiving a plurality of the votes cast
during the meeting by the holders of Preferred Stock 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 beneficially owned WHX
Preferred Stock as of April 14, 2003 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 (the "Company") outstanding at April 14,
2003, 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(2) of Class(2)
- ---------------------------------------- -------- -----------
Deutsche Bank A.G.(3)
TaunusanIage 12, D-60325
Frankfurt am Main, Federal Republic of Germany 1,657,490 23.9%
WPN Corp.(4)
110 E. 59th Street
New York, New York 10022 ..................... 568,413 9.6%
Dimensional Fund Advisors Inc.(5)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 ............... 406,736 7.5%
Gabelli Asset Management, Inc.(6)
One Corporate Center,
Rye, New York 10580 .......................... 795,910 13.9%
Alliance Capital Management L.P.(7)
1290 Avenue of the Americas
New York, New York 10104 ..................... 387,366 7.2%
Dewey Square Investors Corporation(8)
One Financial Center
Boston, Massachusetts 02111 .................. 288,806 5.3%
Ronald LaBow .................................. 568,413(4) 9.6%
Neil D. Arnold ................................ 61,879(9) 1.1%
Robert A. Davidow ............................. 61,372(10) 1.1%
William Goldsmith ............................. 33,329(9) *
Robert D. LeBlanc ............................. 101,559(11) 1.9%
Marvin L. Olshan .............................. 37,772(12) *
Raymond S. Troubh ............................. 48,995(13) *
James G. Bradley .............................. 86,666(9) 1.6%
Robert K. Hynes ............................... 22,609(14) *
Louis Klein Jr ................................ 2,000 *
Garen W. Smith ................................ 63,397(15) 1.2%
All Directors and Executive Officers as a Group
(11 persons) .................................. 1,087,991(16) 17.1%
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* 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.
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(2) Based upon shares of Common Stock outstanding at April 14, 2003 of
5,405,856 shares. Share totals are adjusted to reflect the one-for-three
reverse stock split effectuated on August 22, 2002.
(3) Based on a Schedule 13G/A filed in May 2002, Deutsche Bank A.G.
beneficially holds 871,000 shares of Series A Preferred Stock and 738,360
shares of Series B Preferred Stock convertible into 919,950 and 603,240
shares of Common Stock, respectively, and 134,300 shares of Common Stock.
(4) Based on a Schedule 13D filed jointly in December 1997 by WPN Corp., Ronald
LaBow, Stewart E. Tabin and Neale X. Trangucci. Includes 527,500 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 133,332 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
133,332 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 180,549 shares of Common
Stock.
(5) 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 commingled group trusts and separate accounts. (These
investment companies, trusts and accounts are the "Funds.") In its role as
investment advisor or manager, Dimensional possesses voting and/or
investment power over 406,736 shares of WHX Corporation Stock as of
December 31, 2002. The Funds own all securities reported in this statement,
and Dimensional disclaims beneficial ownership of such securities.
(6) Based on a Schedule 13D/A filed in December 2002, Gabelli Funds, LLC, GAMCO
Investors, Inc., Gabelli Securities, Inc., MJG Associates Inc. and Gabelli
Advisors, Inc. collectively beneficially hold 795,910 shares of Common
Stock. This amount includes 154,809 shares of Series A Preferred Stock and
168,056 shares of Series B Preferred Stock convertible into 163,509 and
137,301 shares of Common Stock, respectively.
(7) 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 387,366 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.
(8) Based on a Schedule 13G/A filed in January 1999, Dewey Square Investors
Corp. beneficially holds 288,806 shares of Common Stock. This amount
includes Common Stock issuable upon their conversion of Preferred Stock.
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(9) Consists of shares of Common Stock issuable upon their exercise of options
within 60 days hereof.
(10) Includes 34,439 shares of Common Stock issuable upon their exercise of
options within 60 days hereof, and approximately 26,933 shares of Common
Stock issuable upon conversion of 25,500 shares of Series A Preferred
Stock.
(11) Includes 86,666 shares of Common Stock issuable upon their exercise of
options within 60 days hereof, 12,077 shares of Common Stock, and 817
shares of Common Stock issuable upon conversion of 1,000 shares of Series B
Preferred Stock owned directly by Mr. LeBlanc, 333 shares of Common Stock
held by Mr. LeBlanc's wife and 1,666 shares of Common Stock held by Mr.
LeBlanc's children. Mr. LeBlanc resigned from his positions with the
Company effective March 14, 2003.
(12) Includes 34,439 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(13) Includes 31,662 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(14) Includes 20,274 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(15) Includes 53,914 shares of Common Stock issuable upon their exercise of
options within 60 days hereof, and 817 shares of Common Stock issuable upon
conversion of 1,000 shares of Series B Preferred Stock.
(16) Includes 970,968 shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
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The following table sets forth information concerning ownership of
the Preferred Stock of WHX Corporation outstanding at April 14, 2003, by (i)
each person known by the Company to be the beneficial owner of more than five
percent of the outstanding Series A Preferred Stock and Series B Preferred Stock
voting together as a class, (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.
Preferred Shares
Beneficially Percentage
Name and Address of Beneficial Owner (1) Owned(2) of Class(3)
- ---------------------------------------- -------- -----------
Deutsche Bank A.G.(4)
Taunusanlage 12, D-60325
Frankfurt am Main, Federal Republic of Germany ............ 1,609,360 29.1%
Gabelli Asset Management, Inc.(5)
One Corporate Center,
Rye, New York 10580 ...................................... 322,865 5.8%
Robert A. Davidow ......................................... 25,500(6) *
Robert D. LeBlanc ......................................... 1,000(7) *
Garen W. Smith ............................................ 1,000(7) *
All Directors and Executive Officers as a Group (3 persons) 27,500 *
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* than one percent.
(1) Each preferred 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) Directors and executive offers that are named in the summary compensation
table which are not listed below, to the Company's knowledge, do not
beneficially own any shares of Preferred Stock.
(3) Based upon the shares of Series A Preferred Stock outstanding at April 14,
2003 of 2,573,926 shares and Series B Preferred Stock outstanding at April
14, 2003 of 2,949,000 shares for a total of 5,522,926 shares of Preferred
Stock outstanding.
(4) Based on a Schedule 13G/A filed in May 2002, Deutsche Bank A.G.
beneficially holds 871,000 shares of Series A Preferred Stock and 738,360
shares of Series B Preferred Stock.
(5) Based on a Schedule 13D/A filed in December 2002, Gabelli Funds, LLC, GAMCO
Investors, Inc., Gabelli Securities, Inc., MJG Associates Inc. and Gabelli
Advisors, Inc. collectively beneficially hold 154,809 shares of Series A
Preferred Stock and 168,056 shares of Series B Preferred Stock.
(6) Consists of 25,500 shares of Series A Preferred Stock.
(7) Consists of 1,000 shares of Series B Preferred Stock.
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DIRECTORS
The Company's Certificate of Incorporation and Bylaws provide for
the classification of the Board of Directors into three classes. Class II
Directors have a term that expires at the 2004 Annual Meeting of Stockholders of
the Company, the three Class III Directors have a term that expires at the 2005
Annual Meeting of Stockholders, and the three Class I Directors, which are
nominated for election at the Company's 2003 Annual Meeting of Stockholders of
the Company, in the event they are elected will have a term that expires at the
2006 Annual Meeting of Stockholders of the Company.
The names of the directors and certain information concerning them
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 Consultant since 83 1987
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. Director of Skidaway Heath and Living
Services Inc. since 2002.
Louis Klein Jr. I DIRECTOR. Trustee of Manville Personal Injury 67 2002
Settlement Trust since 1991. Trustee of WT Mutual
Fund and WT Investment Trust I (Wilmington Trust)
since 1998.
Howard Mileaf I Director. Consultant since 2001. Vice President and 66 2002
General Counsel of the Company from 1993 to 2001.
Director of Web Financial Corporation.
Marvin L. Olshan II Director. Secretary of the Company since 1991. 74 1991
Partner, Olshan Grundman Frome Rosenzweig & Wolosky
LLP, from 1956 to 2002, and Of Counsel since 2002.
Garen W. Smith II Director. Chairman of the Board of Handy & Harman, 60 2002
a subsidiary of the Company, since 2003. Vice
President, Secretary and Treasurer of Abundance
Corp., a consulting company, since 2002. President
and Chief Executive Officer of Unimast Incorporated
from 1991 to 2002.
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Raymond S. Troubh II Director. Financial Consultant for in excess of 76 1992
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.,
Hercules Incorporated and Triarc Companies, Inc., a
holding company. Trustee of Petrie Stores
Liquidating Trust.
Neil D. Arnold III Director and Vice Chairman of the Board. Officer of 54 1992
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.
Robert A. Davidow III Director. Private investor since January 1990. 61 1992
Director of Arden Group, Inc., a supermarket
holding company.
Ronald LaBow III Chairman of the Board. President of Stonehill 67 1991
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.
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(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.
MEETINGS AND COMMITTEES
The Board of Directors met on 5 occasions and took action by
unanimous written consent on 3 occasions during the fiscal year ended December
31, 2002. 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
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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 2 occasions during the fiscal year ended December
31, 2002. 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 Louis Klein Jr.,
Robert A. Davidow and William Goldsmith. The Audit Committee met on 6 occasions
during the fiscal year ended December 31, 2002. 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 selects 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 2 occasions and took action by unanimous written consent on 2 occasions
during the fiscal year ended December 31, 2002. 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 3 occasions
during the fiscal year ended December 31, 2002. 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 1 occasion during the fiscal year ended December
31, 2002.
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 the Audit 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 (other than the Stock Option
Committee and the Audit Committee). Each Audit Committee member receives a
payment of $20,000 per year, and the chairman of the Audit Committee receives a
payment of $25,000 per year. 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 except for Messrs. Klein and Mileaf
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 2002, 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 2002, 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 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, 2002, all persons subject to the reporting requirements of Section
16(a) filed the required reports on a timely basis.
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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 58
Officer of WPSC and WPC since April 1998. President and Chief
Operating Officer of Keppel Steel Company from October 1997
through April 1998. Vice President of WHX from October 1995
through October 1997. Executive Vice President-Operations of
WPSC from October 1995 through October 1997.
Robert K. Hynes Chief Financial Officer. Chief Financial Officer since 48
January 2003. Vice President--Finance from June 2001 through
January 2003. Vice President of H&H since March 2000.
Director of Audit and Financial Standards of H&H from April
1995 through March 2000.
Daniel P. Murphy President, Handy & Harman. President of Handy & Harman since 42
February 2003. Vice President of Handy & Harman Engineered
Materials Group from January 2002 through February 2003.
President of Olympic Manufacturing Group, Inc. from February
1994 through December 2001.
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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, 2000, 2001 and
2002: (i) individuals who served as, or acted in the capacity of, the Company's
principal executive officer for the fiscal year ended December 31, 2002 (Mr.
LeBlanc served as the Company's Principal Executive Officer in 2002); (ii) the
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 $100,000 with respect to the fiscal year
ended December 31, 2002 and who were employed at the end of fiscal year 2002;
and (iii) up to two additional individuals for whom disclosure would have been
provided but for the fact that the individual was not serving as an executive
officer of the Company at the end of fiscal year 2002. Please note that the
executive officers identified in (i), (ii) and (iii) above are collectively
referred to as the "Named Executive Officers."
Summary Compensation Table
Long Term
Name and Principal Position Annual Compensation Compensation
- ------------------------------ --------------------------------------- -------------------
Other Annual Securities All Other
Salary Bonus Compensation Underlying Compensation
Year ($) ($)(1) ($)(2) Options (#) ($)(3)
---- ------- -------- ------------ ----------- -------------
Robert D. LeBlanc(4) 2002 486,615 -- -- 17,500 3,045(5)
Executive Vice President 2001 460,000 -- -- 53,333 2,771(5)
(Principal Executive Officer) 2000 433,500 175,000 -- -- 2,496(5)
James G. Bradley 2002 357,917 17,500
Executive Vice President 2001 385,000 -- -- -- 14,350
2000 400,000 -- -- -- 12,350
Robert K. Hynes 2002 219,961 -- -- 7,500 715(5)
Chief Financial Officer (6) 2001 174,277 15,000 -- 16,666 716(5)
2000 138,882 55,000 -- 3,333 462(5)
- ---------------------------
(1) Messrs. LeBlanc and Hynes were granted bonuses pursuant to the H&H
Management Incentive Plan in 2001 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. 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 $50,000 or 10% of
the total of annual salary and bonus reported for such Named Executive
Officer.
(3) Amounts shown, unless otherwise noted, reflect employer contributions to
pension plans.
(4) Mr. LeBlanc resigned from his positions with the Company effective March
14, 2003.
(5) Represents insurance premiums paid by the Company.
-13-
(6) Mr. Hynes' employment as an officer of the Company commenced June 2001.
Prior to such time, he was an employee of Handy & Harman, a subsidiary of
the Company.
OPTION GRANTS TABLE. The following table sets forth certain information
regarding stock option grants made to each of the Named Executive Officers
during the fiscal year ended December 31, 2002.
Option Grants in Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
----------------- -----------
% of Total
Options
Number of Securities Granted to Exercise
Underlying Options Employees in Price Expiration
Name Granted(1) Fiscal Year ($/Sh) Date 5%($) 10%($)
- ---- ---------- ----------- ------ ---- ----- ------
Robert D. LeBlanc... 17,500 20.3% $2.30 Expired -- --
James G. Bradley.... 0 -- -- -- -- --
Robert K. Hynes..... 7,500 8.7% $2.30 9/9/12 $10,848 $27,492
- -------------------
(1) All options were granted under the Company's 2001 Stock Option Plan on
September 10, 2002. 33.33% of such options vested upon the grant date,
33.33% vest on the first anniversary of the grant date and 33.34% vest on
the second anniversary of the grant date.
-14-
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as of December
31, 2002.
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at 2002 Money Options at 2002
Fiscal Year-End(#) Fiscal Year-End($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- -------------------------------
Robert D. LeBlanc.................................. 110,273/47,226 13,413.60/26,836.40
James G. Bradley................................... 86,666/0 0/0
Robert K. Hynes.................................... 20,274/10,558 5,750/11,500
- -------------------
(1) On December 31, 2002, the last reported sales price of the Common Stock as
reported on the New York Stock Exchange Composite Tape was $2.45.
-15-
EQUITY COMPENSATION PLAN SUMMARY
The following table sets forth information as of December 31, 2002
regarding the number of shares of Common Stock issued and available for issuance
under the Company's existing equity compensation plans:
Number of
securities remaining
available for future
issuance
Number of securities under equity
to be issued upon Weighted-average compensation plans
exercise of exercise price of (excluding securities
outstanding options, outstanding options, reflected
Plan category warrants and rights warrants and rights in column (a))
(a) (b) (c)
Equity compensation plans
approved by security 2,013,298 $27.805 670,035
holders
Equity compensation
plans not approved by
security holders __ __ __
Total 2,013,298 $27.805 670,035
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.
-16-
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 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 $500,000 and $250,000, 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. Robert LeBlanc resigned
from his positions with the Company effective March 14, 2003. Accordingly,
certain of the assumptions and calculations from the chart below will be
effected.
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. $165,685 $31,493 $197,178
R. K. Hynes Sept. 1, 2019 30 yrs. 1 mos. $111,141 $17,060 $128,201
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,
Hynes and Murphy, 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 was automatically extended for successive two-year
periods unless earlier terminated pursuant to the provisions of such agreement.
The agreement provided 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.
-17-
Mr.LeBlanc was granted a bonus of $175,000 in 2001 for services performed in
2000. Mr. LeBlanc was not granted a bonus in 2003 or 2002 for services performed
in 2002 or 2001, respectively. Mr. LeBlanc resigned from his positions with the
Company effective March 14, 2003. In connection with such resignation, Mr.
LeBlanc received a payment of $1,316,667, as required pursuant to the terms of
his employment agreement, as well as other amounts pursuant to Handy & Harman's
benefit plans.
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 2003, 2002 and 2001 for
services performed in 2002, 2001 and 2000. The Agreement also provides for Mr.
Bradley to receive a retirement benefit under certain circumstances. 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. Mr. Hynes was promoted to Chief
Financial Officer in January 2003. 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 affect for the twelve preceding
months plus bonus plan and compensation accrued.
Mr. Garen W. Smith became a consultant of the Company pursuant to a
one-year consulting agreement between the Company and Abundance Corporation
("Abundance"), of which Mr. Smith is an officer and an employee, dated February
12, 2003, 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 payment of $200,000. In the event that the
agreement is terminated by the Company other than with cause, Abundance will
receive the remainder of the annual payment.
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 2002.
All options were reduced by two-thirds and the exercise price of each option was
multiplied by three, pursuant to the one-for-three reverse stock split of the
Common Stock effectuated on August 22, 2002.
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,
2002. Mr. Olshan is Of Counsel of Olshan Grundman Frome Rosenzweig & Wolosky
LLP, which the Company has retained as its outside general counsel since January
1991. The fees paid such firm by the Company do not exceed 5% of such firm's
gross revenues for the fiscal year ended December 31, 2002.
-18-
MANAGEMENT AGREEMENT WITH WPN CORP. 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 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 2002, 2001 and 2000, WPN received a monthly fee of $520,833.33. In
August 1997, the Company granted WPN options to acquire 333,333 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 200,000, 66,666 and 66,666 shares, respectively, of Common
Stock. WPN additionally beneficially owns options to purchase 327,500 shares of
Common Stock. The weighted average exercise price of all such options is $30.69.
None of these options were exercised in 2002. 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 2002, 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.
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
Louis Klein Jr., Robert A. Davidow and William Goldsmith. 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.
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 six times during
fiscal 2002. The Audit Committee members reviewed and discussed the audited
-19-
financial statements for the fiscal year ending December 31, 2002 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
filed with the SEC.
Audit Committee
---------------
Louis Klein, Jr., Chairman
Robert A. Davidow
William Goldsmith
2002 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 Incentive and
Nonqualified Stock Option Plan and the 2001 Stock Option Plan. Messrs. Davidow
and Troubh serve as members of the Stock Option Committee. Both Messrs. Davidow
and Troubh are non-employee directors of the Company, as defined under Rule
16b-3 of the Securities Exchange Act of 1934, as amended. Mr. Davidow serves as
Chairman of the Compensation Committee. The Compensation Committee met two times
during the fiscal year ended December 31, 2002.
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 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 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
-20-
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 ratified 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 H&H. None of the Named
Executive Officers received any award under the MIP in 2002.
2002 WPSC INCENTIVE PLANS
-------------------------
WPSC had three principal incentive plans in 2002: the Gainsharing
Plan, the Sales Incentive Plan and the Corporate Bonus Plan. Benefits and
payments under these plans have been suspended in connection with the Chapter 11
filings. See "Certain Relationships and Related Transactions - Chapter 11
Bankruptcy Filing of Wheeling-Pittsburgh Corporation and its Subsidiaries."
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, 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.
-21-
Mr. LeBlanc, the Company's Principal Executive Officer, was
President and Chief Executive Officer of H&H and Executive Vice President of the
Company in 2002 with an annual base salary of $486,615. As described in the
Employment Agreements section above, Mr. LeBlanc's annual base salary was
determined by contract. In determining such amount, the Board of Directors had
considered the responsibilities performed by Mr. LeBlanc as Executive Vice
President of the Company, Mr. LeBlanc's responsibilities as President and Chief
Executive Officer of H&H, the performance of Mr. LeBlanc in managing and
directing the Company's operations, the efforts by Mr. 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 did
not grant Mr. LeBlanc a bonus for his services in 2002.
Mr. LeBlanc resigned from his positions with the Company effective
March 14, 2003. In connection with such resignation, Mr. LeBlanc received a
payment pursuant to the terms of his employment contract.
STOCK OPTION AND OTHER PLANS
The Company awarded options to two Named Executive Offices in 2002:
Robert K. Hynes and Robert D. LeBlanc. 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. The options granted to Mr. LeBlanc in 2002 have expired following
his resignation on March 14, 2003.
Compensation Committee
----------------------
Robert A. Davidow, Chairman
William Goldsmith
Marvin L. Olshan
-22-
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) Metal Fabricating Industry Group Index.
[PERFORMANCE GRAPH]
1997 1998 1999 2000 2001 2002
WHX CORPORATION 100.00 83.85 75.00 6.25 12.83 6.81
METALS FABRICATION INDEX 100.00 83.99 103.45 84.72 99.60 66.34
S&P 500 INDEX 100.00 128.58 155.64 141.46 124.65 97.10
There can be no assurance that the Common Stock's performance will
continue with the same or similar trends depicted in the graph above.
-23-
-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, 2003. Although the selection of accountants does not require
ratification, the Audit Committee has 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 Audit Committee 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, 2002, 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.
THE FOLLOWING FEES WERE BILLED BY PRICEWATERHOUSECOOPERS LLP TO THE COMPANY FOR
SERVICES PERFORMED ON BEHALF OF THE COMPANY (EXCLUDING THE WPC GROUP), AS
DESCRIBED BELOW:
AUDIT FEES: The aggregate fees for professional services rendered by
PricewaterhouseCoopers LLP for the audit of the Company's annual financial
statements for the fiscal year ended December 31, 2002 and the reviews of the
financial statements included in the Company's Form 10-Qs for such fiscal year
were approximately $566,000 (including expenses), of which $282,000 was billed
in fiscal 2002. In addition, during fiscal 2002, PricewaterhouseCoopers LLP
billed the Company for fees of $60,000 (including expenses) relating to the
audit of the Company's annual financial statements for the fiscal year ended
December 31, 2001.
The aggregate fees for professional services rendered by
PricewaterhouseCoopers LLP for the audit of the Company's annual financial
statements for the fiscal year ended December 31, 2001 and the reviews of the
financial statements included in the Company's Form 10-Qs for such fiscal year
were approximately $564,000 (including expenses), of which $268,000 was billed
in fiscal 2001. In addition, during fiscal 2001, PricewaterhouseCoopers LLP
billed the Company for fees of $319,000 (including expenses) relating to the
audit of the Company's annual financial statements for the fiscal year ended
December 31, 2000.
AUDIT-RELATED FEES: The aggregate fees billed by
PricewaterhouseCoopers LLP for audit-related services for the years ended
December 31, 2001 and December 31, 2002 were approximately $17,500 and $97,000,
respectively. Audit related fees consist principally of fees for audits of
financial statements of certain employee benefit plans and due diligence related
to divestitures.
TAX FEES: The aggregate fees for professional services rendered by
PricewaterhouseCoopers LLP for tax compliance, tax advice and tax planning for
the combined fiscal years ended December 31, 2001 and December 31, 2002 were
$77,000 and $145,000, respectively.
ALL OTHER FEES: No other fees were incurred or billed by
PricewaterhouseCoopers LLP during the years ended December 31, 2001 and December
31, 2002.
-24-
THE FOLLOWING FEES WERE BILLED BY PRICEWATERHOUSECOOPERS LLP TO THE WPC GROUP
FOR SERVICES PERFORMED ON BEHALF OF THE WPC GROUP, AS DESCRIBED BELOW:
AUDIT FEES: The aggregate fees for professional services rendered by
PricewaterhouseCoopers LLP for the audit of the WPC Group's annual financial
statements for the fiscal years ended December 31, 2001 and December 31, 2002,
respectively, were approximately $269,000 and $300,000 (including expenses),
respectively, of which $114,000 and $205,000 were billed in 2001 and 2002.
Wheeling-Pittsburgh Corporation and its subsidiaries are unconsolidated
subsidiaries of the Company.
AUDIT-RELATED FEES: The aggregate fees billed by
PricewaterhouseCoopers LLP for audit-related services for the years ended
December 31, 2001 and December 31, 2002 were approximately $63,000 and $69,000,
respectively. These fees are for audits of certain employee benefit plans.
TAX FEES: The aggregate fees for professional services rendered by
PricewaterhouseCoopers LLP for tax compliance, tax advice and tax planning for
the fiscal year ended December 31, 2001 was $32,000. There were no tax services
rendered in 2002.
ALL OTHER FEES: The aggregate fees billed for services rendered by
PricewaterhouseCoopers LLP, other than the services referred to above, for the
fiscal years ended December 31, 2001 and December 31, 2002 were approximately
$1,884,000 and $2,000,000, respectively, for services performed on behalf of the
WPC Group primarily for advice and assistance relating to the WPC Group's
bankruptcy proceedings and related regulatory filings.
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.
-25-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Marvin L. Olshan, a director and Secretary of the Company, is Of
Counsel of Olshan Grundman Frome Rosenzweig & Wolosky LLP ("OGFR&W"). The
Company has retained OGFR&W as its outside general counsel since January 1991.
The fees paid such firm by the Company do not exceed 5% of such firm's gross
revenues for the fiscal year ended December 31, 2002.
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 $500,000 by WPN for his services in
2002.
Garen W. Smith, a director of the Company and former president and
chief executive officer of Unimast Incorporated, a former wholly-owned
subsidiary of the Company until its sale in 2002, received a payment $2,734,700
in 2002 relating to his efforts in connection with the sale of Unimast
Incorporated by the Company prior to the time he became a director of the
Company.
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."
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.
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 5, 2004.
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OTHER MATTERS
No business may be conducted by the holders of Preferred Stock at
the Meeting other than the election of up to two directors to the Board of
Directors of the Company as provided herein.
ANNUAL REPORT
The Company is concurrently sending all of its preferred
stockholders of record as of April 14, 2003 a copy of its Annual Report on Form
10-K/A for the fiscal year ended December 31, 2002. Such report contains the
Company's certified consolidated financial statements for the fiscal year ended
December 31, 2002, including that of the Company's subsidiaries.
By Order of the Company,
MARVIN L. OLSHAN, Secretary
Dated: New York, New York
May 5, 2003
The Company will furnish a free copy of its Annual Report on Form
10-K/A for the fiscal year ended December 31, 2002 (without exhibits) to all of
its preferred stockholders of record as of April 14, 2003 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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