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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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HANDY & HARMAN
(NAME OF SUBJECT COMPANY)
HANDY & HARMAN
(NAME OF PERSON(S) FILING STATEMENT)
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COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
410306104
(CUSIP NUMBER OF CLASS OF SECURITIES)
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PAUL E. DIXON, ESQ.
SENIOR VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
HANDY & HARMAN
250 PARK AVENUE
NEW YORK, NEW YORK 10177
(212) 661-2400
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICE AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
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With a Copy to:
MILTON G. STROM, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022-3897
(212) 735-3000
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Handy & Harman, a New York corporation
("Handy & Harman"), and the address of the principal executive offices of Handy
& Harman is 250 Park Avenue, New York, New York 10177. The title of the class of
equity securities to which this statement relates is the common stock, par value
$1.00 per share, of Handy & Harman (the "Common Stock"), including the
associated Common Stock Purchase Rights (the "Rights" and, together with the
Common Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of
January 26, 1989, and as amended on April 25, 1996 and October 22, 1996 (the
"Rights Agreement"), between Handy & Harman and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent.
ITEM 2. TENDER OFFER OF THE BIDDER.
This Schedule 14D-9 relates to a tender offer by HN Acquisition Corp., a
New York corporation (the "Purchaser") and wholly owned subsidiary of WHX
Corporation, a Delaware corporation ("Parent" or "WHX"), disclosed in a Tender
Offer Statement on Schedule 14D-1, dated December 16, 1997 (the "Schedule
14D-1"), under which the Purchaser is offering to purchase any and all Shares at
a price of $30 per Share, net to the seller in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated December 16, 1997,
and the related Letter of Transmittal (which, as amended from time to time,
together constitute the "WHX Offer"). None of Parent, the Purchaser or any of
their affiliates is affiliated with Handy & Harman, and the WHX Offer was not
solicited by Handy & Harman.
As set forth in the Schedule 14D-1, the principal executive offices of the
Purchaser and Parent are located at 110 East 59th Street, New York, New York
10022.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and address of Handy & Harman, which is the person filing this
Schedule 14D-9, are set forth in Item 1 above.
(b) Reference is made to the information contained under the captions
"Executive Compensation," "Annual Incentive Awards for 1996," "Stock Options,"
"Long-Term Incentive Plan," "Pensions," "Compensation of Directors" and
"Employment Contracts and Termination of Employment and Change in Control
Agreements" in Handy & Harman's Proxy Statement, dated April 2, 1997, relating
to Handy & Harman's 1997 Annual Meeting of Shareholders. Except as described in
this Schedule 14D-9 or on pages 5 through 12 of Handy & Harman's Proxy
Statement, which pages are filed as Exhibit 4 to this Schedule 14D-9 and
incorporated herein by reference, to the knowledge of Handy & Harman, as of the
date hereof, there are no material contracts, agreements, arrangements or
understandings, or any actual or potential conflicts of interest between Handy &
Harman or its affiliates and (i) its executive officers, directors or affiliates
or (ii) Parent, the Purchaser or their respective executive officers, directors
or affiliates.
Reference is also made to Handy & Harman's 1988 Long-Term Incentive Plan
(the "Stock Plan"), Handy & Harman's Long-Term Incentive Stock Option Plan (the
"ISO Plan") and Handy & Harman's 1995 Omnibus Stock Incentive Plan (the "Option
Plan"), attached hereto as Exhibits 12, 21 and 23, respectively, and
incorporated herein by reference. Each of these plans provides that in the event
of a change in control of Handy & Harman (as defined in each plan), any
restrictions on restricted stock then held by a participant shall lapse and all
options then held by a participant shall vest and become immediately exercisable
and shall remain exercisable until its expiration, termination or cancellation
pursuant to the terms of the applicable plan.
Reference is further made to Handy & Harman's supplemental executive
retirement plan (the "SERP"), attached as Exhibit 24 hereto and incorporated
herein by reference. In the event of a change in control of Handy & Harman (as
defined in the SERP), each participant shall be 100% vested in the amount of the
benefits due to him or her, and Handy & Harman shall contribute the aggregate
amount of all such benefits to a grantor trust established by Handy & Harman. At
its May 1995 meeting, the Handy & Harman Board resolved to amend the SERP to
provide that upon termination of a participant's employment, such participant
can elect to receive a lump sum payment in the amount of his or her benefits,
calculated on the same basis as under the Handy & Harman Pension Plan (the
"Pension Plan"), except that the interest rate reflected in the calculation
would be 80% of the applicable interest rate used in the Pension Plan. The Board
also resolved to amend the SERP to
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provide that upon a change in control of Handy & Harman, (i) Handy & Harman
shall pay, out of the grantor trust, a lump sum to each participant in the
amount of each such participant's benefits calculated on the same basis as the
Pension Plan; provided, however, that the lump sum factor reflecting 80% of the
interest rate would be applied to the full amount of the pension determined
under the SERP before the offset for the Pension Plan, which would then be
reduced by the lump sum payment, as determined under the Pension Plan,
reflecting 100% of the interest rate, (ii) with respect to any participant who
had not yet attained the age of 60 and thus would not be eligible for an early
retirement pension, the lump sum value of the full amount of pension would
reflect commencement of the full amount of accrued pension starting at age 60,
and (iii) if any lump sum payment made to a participant under the SERP is
subject to the excise tax provisions of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), Handy & Harman will reimburse such
participant such that the net amount retained by the participant shall equal the
lump sum payment without regard to such excise tax. A copy of the amendment to
the SERP is attached hereto as Exhibit 25 and incorporated herein by reference.
In 1996, Handy & Harman entered into an employment agreement with Mr.
Robert D. LeBlanc, President of Handy & Harman (the "LeBlanc Agreement"), which
provided for a two-and-a-half year period of employment, commencing on November
11, 1996, as Executive Vice President of Handy & Harman (Mr. LeBlanc was
appointed President of Handy & Harman in July 1997). Mr. LeBlanc received a
signing bonus of $85,000, and will receive a salary under the contract of
$300,000 per annum, which amount may be increased only at the discretion of the
Board. Mr. LeBlanc is entitled to participate in the Handy & Harman Management
Incentive Plan (the "Bonus Plan"), the Stock Plan and the Option Plan, as well
as in the SERP, the Executive Post-Retirement Life Insurance Program (the "Life
Insurance Program") and in all of Handy & Harman's employee benefit plans. If
Handy & Harman should terminate the LeBlanc Agreement other than for cause or
disability (each as defined therein) or death, Handy & Harman would continue to
pay Mr. LeBlanc's salary for the longer of twelve months and the remaining life
of the agreement. Mr. LeBlanc would also continue to participate in the SERP,
the Life Insurance Program and in all other Handy & Harman employee benefit
plans for the remainder of the employment period. The LeBlanc Agreement is
attached as Exhibit 18 hereto and is incorporated herein by reference. If Mr.
LeBlanc receives payments under the LeBlanc Agreement, he would not be entitled
to receive any payments under the Supplemental Agreement (as hereinafter
defined).
In May 1997, Handy & Harman entered into an agreement (the "Supplemental
Agreement") with Mr. LeBlanc, providing that if, any time within two years
following a change in control of Handy & Harman (as defined in the Supplemental
Agreement), Handy & Harman terminates Mr. LeBlanc's employment (other than for
Disability or Cause, as such terms are defined in the Supplemental Agreement),
or if Mr. LeBlanc terminates his employment for Good Reason (as defined in the
Supplemental Agreement), Mr. LeBlanc will be entitled to receive a lump sum cash
payment equal to one year's base salary, and to receive, for twelve months
following his termination of employment, life, medical and dental insurance
benefits substantially similar to those which he was receiving immediately prior
to the notice of termination given with respect to such termination. The
Supplemental Agreement, attached as Exhibit 27 hereto and incorporated herein by
reference, also provides that if any payment made to Mr. LeBlanc under the
Supplemental Agreement is subject to the excise tax provisions of Section 4999
of the Code, Handy & Harman will reduce such payment to the extent necessary to
avoid such payment being subject to such excise tax.
In May 1997, Handy & Harman also entered into agreements (the "Change in
Control Agreements"), a form of which is attached as Exhibit 28 hereto and is
incorporated herein by reference, with each of Paul E. Dixon, Senior Vice
President, General Counsel and Secretary of Handy & Harman, Dennis C. Kelly,
Controller of Handy & Harman, and Robert F. Burlinson, Vice President and
Treasurer of Handy & Harman (each, an "Executive"), providing that if, any time
within two years following a change in control of Handy & Harman (as defined in
the Change in Control Agreements), Handy & Harman terminates the Executive's
employment (other than for Disability or Cause, as such terms are defined in the
Change in Control Agreements) or if the Executive terminates his employment for
Good Reason (as defined in the Change in Control Agreements), the Executive will
be entitled to receive a lump sum cash payment equal to one year's base salary,
and to receive, for twelve months following the Executive's termination of
employment, life, medical and dental insurance benefits substantially similar to
those which the Executive was receiving immediately prior to the notice of
termination given with respect to such termination. Each agreement also provides
that if any payment made to the Executive under the Executive's Change in
Control Agreement is subject to the excise tax provisions of Section 4999 of the
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Code, Handy & Harman will reduce such payment to the extent necessary to avoid
such payment being subject to such excise tax.
In 1992, Handy & Harman developed a supplemental executive plan (the
"Supplemental Plan") for the purpose of providing a further means by which it
may retain and encourage the productive efforts of Mr. Frank E. Grzelecki, the
current Vice Chairman of Handy & Harman. The Supplemental Plan, attached as
Exhibit 19 hereto and incorporated herein by reference, provides for the accrual
and immediate vesting of a monthly pension in the amount of $1000 per month, to
be paid for life commencing on the later of July 1, 1997 and Mr. Grzelecki's
separation from service with Handy & Harman. Under the Supplemental Plan, Handy
& Harman is required to create a grantor trust and, from time to time,
contribute amounts to accumulate an appropriate reserve against its obligations
thereunder.
At its May 1997 meeting, the Handy & Harman Board of Directors resolved to
implement a Long-Term Health Care Plan (the "Health Care Plan"), under which
Handy & Harman will provide annual premiums to each officer (and his or her
spouse) selected for participation by the Board's Compensation Committee in
order to purchase a health care policy covering such officer (and spouse), such
premiums to be paid for the life of each policyholder. In order to be eligible
for participation, an officer must have at least five (5) years of service with
Handy & Harman and have reached age 55. At the September 1997 meetings of the
Compensation Committee and the Board of Directors, the Compensation Committee
and the Board of Directors determined that following a change in control of
Handy & Harman, the Health Care Plan may not be terminated for those persons who
are eligible to participate in the Health Care Plan prior to the change in
control.
Effective as of February 1, 1995, Handy & Harman implemented the Life
Insurance Program, attached as Exhibit 26 hereto and incorporated herein by
reference, whereby each executive officer designated by the Compensation
Committee and determined to be insurable to the satisfaction of the insurance
provider shall be provided with two life insurance policies on such executive
officer's life (the "Insured Executive"). Each Insured Executive shall have one
life insurance policy on his or her life during the time that he or she is
employed by Handy & Harman (the "Pre-Retirement Policy"), which Pre-Retirement
Policy shall be in an amount equal to four (4) times the Insured Executive's
annual base salary in effect from time to time, and a second life insurance
policy on his or her life (the "Post-Retirement Policy"), which Post-Retirement
Policy shall be in an amount equal to two (2) times the Insured Executive's
annual base salary. Upon the Insured Executive's death while employed with Handy
& Harman, Handy & Harman shall pay to the designated beneficiary a lump sum cash
payment in the amount of the Pre-Retirement Policy, and upon Retirement (as
defined in the Handy & Harman Pension Plan) by the Insured Executive, Handy &
Harman shall transfer to such Insured Executive the ownership rights in such
Insured Executive's Post-Retirement Policy and, to the extent such transfer
results in federal, state or local income taxes to the Insured Executive, Hardy
& Harman will gross up such Insured Executive for such taxes.
At the September 1997 meetings of the Compensation Committee and the Handy
& Harman Board of Directors, the Compensation Committee and Board determined to
amend the Life Insurance Program to provide that if any payments made or the
value of any benefits provided to a participant under the Life Insurance Program
are subject to the excise tax provisions of Section 4999 of the Code, Handy &
Harman will reimburse such participant such that the net amount retained by the
participant shall equal the payment or the value of the benefit due to such
participant without regard to such excise tax. The Compensation Committee and
Board further determined to amend the Life Insurance Program to provide that
upon a change in control of Handy & Harman (as defined in the Life Insurance
Program) the Post-Retirement Policy may not be terminated and that Handy &
Harman shall transfer to each Insured Executive the ownership rights in each
such Insured Executive's Post-Retirement Policy.
In 1986, Handy & Harman entered into an agreement with Mr. Robert M.
Thompson, a form of which is attached as Exhibit 10 hereto and incorporated
herein by reference, providing that if, after a change in control of Handy &
Harman (as defined in the agreement), Mr. Thompson's position, duties,
responsibilities, status with Handy & Harman, base salary, employee benefits or
location are changed in a manner materially adverse to Mr. Thompson's interest,
then he may designate such change as an event which "triggers" a three-year
period of guaranteed employment by Handy & Harman. In December 1988, the Board
authorized amendments to the agreement to: (i) conform the definition of "change
in control" to the broader definition contained in Handy &
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Harman's employee benefit plans; and (ii) provide that Handy & Harman would
reimburse Mr. Thompson for any excise tax (and any income and excise tax due
with respect to such reimbursement) imposed on payments made to him in
connection with a change in control of Handy & Harman pursuant to Section 280G
of the Code.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(A) AND (B). AS MORE FULLY DESCRIBED BELOW, THE HANDY & HARMAN BOARD OF
DIRECTORS RECOMMENDS THAT HANDY & HARMAN SHAREHOLDERS REJECT THE WHX OFFER AND
NOT TENDER THEIR SHARES PURSUANT TO THE WHX OFFER.
Background.
On December 15, 1997, Ronald LaBow, Chairman of WHX, telecopied, without
any prior contact with Handy & Harman, the following unsolicited letter to
Richard N. Daniel, Chairman and Chief Executive Officer of Handy & Harman:
December 15, 1997
Richard N. Daniel, Chairman
Handy & Harman
250 Park Avenue
New York, New York 10177
Dear Mr. Daniel:
I will be calling you later this morning to discuss WHX's interest in
acquiring your company for $30.00 per share in cash. As you recognize this offer
represents a very attractive premium to the company's current and historic
market price. I hope we can have an amicable and productive dialogue on the
merits of this offer and the benefits which a combination of our companies would
bring to your senior management team, employees at large and the company's
shareholders. We also look forward to having an opportunity to discuss this
offer directly with your Board of Directors.
Attached for your information is a press release which we will be issuing
later today. It outlines our plan to commence an any and all cash tender offer
tomorrow at $30.00 per share, subject to a number of conditions including
approval by your Board of Directors under the Shareholder Rights Plan and the
Business Combination statute (Section 912) of the New York law. The tender offer
will not be subject to financing. The complete details of the tender offer will
be set forth in a filing to be made on Tuesday with the SEC.
I am available to meet with you or your representatives to discuss this
matter at your earliest convenience.
Very truly yours,
/s/ Ronald LaBow
Ronald LaBow
Chairman
On December 18, 1997, the Board of Directors of Handy & Harman held a
meeting at which the Board reviewed with Handy & Harman management and Goldman,
Sachs & Co., Handy & Harman's financial advisor ("Goldman Sachs"), and Skadden,
Arps, Slate, Meagher & Flom LLP, Handy & Harman's legal advisor
("Skadden Arps"), the WHX Offer and its terms and conditions. In addition,
Skadden Arps reviewed the legal responsibilities and duties of the Handy &
Harman Board in light of the WHX Offer.
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On December 23, 1997, the Handy & Harman Board of Directors held a meeting
at which the Board of Directors again reviewed the WHX Offer and its terms and
conditions with Handy & Harman management and Skadden Arps. The Board of
Directors reviewed Handy & Harman's business strategy and the strategic
repositioning of Handy & Harman which had occurred during the last two years and
considered the potential for benefits both with and without a merger with WHX.
At such meeting, Goldman Sachs presented its financial analysis of the WHX Offer
and reviewed the reaction of the financial markets to the WHX Offer and
potential implications for Handy & Harman and its shareholders. After lengthy
discussions, and presentations from Goldman Sachs, Skadden Arps and Handy &
Harman's senior management, the Board of Directors determined that the best
means for providing value to its shareholders was for Handy & Harman to continue
to pursue its strategic initiatives and business plans and not to be sold at
this time. The Handy & Harman Board of Directors unanimously concluded that,
given projected earnings and the strategic repositioning of Handy & Harman over
the last two years, the WHX Offer is inadequate and not in the best interests of
Handy & Harman and its shareholders. In particular, the Board of Directors
determined that Handy & Harman's current strategic initiatives and business
plans offer the potential for greater benefits for Handy & Harman's shareholders
than the WHX Offer, based on, among other things, greater opportunities for
business expansion, revenue and earnings growth, and potential acquisitions in
the markets in which Handy & Harman operates. A copy of a letter to shareholders
communicating the Board of Directors' recommendation and a form of press release
announcing such recommendation are filed as Exhibits 1 and 2 hereto,
respectively, and are incorporated herein by reference.
ACCORDINGLY, THE HANDY & HARMAN BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT HANDY & HARMAN'S SHAREHOLDERS REJECT THE WHX OFFER AND NOT TENDER THEIR
SHARES PURSUANT TO THE WHX OFFER.
Factors Considered.
In reaching the conclusions stated above, the Handy & Harman Board of
Directors took into account a variety of factors, including but not limited to
the following:
1. The Board of Directors' familiarity with the financial condition,
results of operations, prospects, business opportunities and current
strategies of Handy & Harman and the Board of Directors' confidence in
Handy & Harman's management and belief that the WHX Offer does not reflect
the fair value of Handy & Harman. Specifically, the Board of Directors
believed that the recent trading prices of the Shares, as well as the WHX
Offer, failed to reflect:
(a) Handy & Harman's leading and innovative position in the
marketplace for many of its products.
(b) The estimated overfunding of Handy & Harman's pension plans by
approximately $125 million as of December 16, 1997 (or $10.43 per
Share); in that regard, the Board noted that WHX has an underfunded
pension plan and that its unsolicited acquisition proposal may have been
prompted by a desire on the part of WHX to solve its own problems with
respect to its underfunded pension plan and its potential inability to
meet its pension obligations, and the potential adverse effect of the
WHX Offer on current and retired employees of Handy & Harman.
(c) The fact that Handy & Harman's precious metals inventory
(consisting primarily of gold and silver) is included on Handy &
Harman's balance sheet under the last-in, first-out ("LIFO") method of
accounting at $24.2 million as of December 15, 1997 and, as such, does
not reflect the fair market value of such inventory, which fair market
value amounted to approximately $131.2 million on that date (or $9 per
share before taxes); the Handy & Harman Board further considered the
fact that while silver prices have increased in recent weeks, gold is
currently trading at depressed prices compared to historical prices.
(d) The expected revenue and earnings growth based on Handy &
Harman's strategic initiatives and business plans and the competitive
positions of Handy & Harman in the markets in which it operates.
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2. Presentations by Handy & Harman's management as to the prospects
for future growth and profitability.
3. Handy & Harman's prospects for future growth and expansion, based
on the strategic repositioning of Handy & Harman, including the recent sale
of its U.S. precious metal refinery business and the acquisition of Olympic
Manufacturing Group.
4. The opinion of Goldman Sachs, Handy & Harman's financial advisor,
after reviewing with the Board of Directors of Handy & Harman many of the
factors referred to herein and other financial criteria used in assessing
the WHX Offer, that the WHX Offer is inadequate.
5. The disruptive effect of the WHX Offer on Handy & Harman's
employees, suppliers and customers.
6. The Board of Directors' belief that the marketplace and numerous
Handy & Harman shareholders do not yet fully appreciate and recognize the
benefits already achieved, and still to be achieved, as a result of the
strategic repositioning of Handy & Harman over the last two years, and its
belief that Handy & Harman is just beginning to realize for its
shareholders the values that may be unlocked as a result of Handy &
Harman's recent actions.
7. The Board of Directors' belief that the WHX Offer will deprive
Handy & Harman's shareholders (other than WHX) of the future growth in
revenue, net income, cash flow and stock price appreciation that are just
beginning to result from Handy & Harman's strategic repositioning and
operational improvements.
8. The fact that since the public announcement of the WHX Offer,
Handy & Harman has received several unsolicited inquiries from third
parties who expressed a potential interest in pursuing a transaction with
Handy & Harman.
9. The historical market prices and trading information for the
Shares.
10. The numerous conditions to which the WHX Offer is subject,
including conditions which are in the discretion of WHX, and the fact that
the WHX Offer is not subject to any minimum number of Shares being
tendered.
11. The Board of Directors' commitment to acting in the best interests
of Handy & Harman's shareholders.
In light of the numerous factors evaluated in connection with its
consideration of the WHX Offer, the Handy & Harman Board of Directors determined
that the WHX Offer is not in the best interests of Handy & Harman's
shareholders.
The foregoing discussion of the information and factors considered by the
Handy & Harman Board of Directors is not intended to be exhaustive but includes
all material factors considered by the Handy & Harman Board of Directors. In
reaching its determination to recommend rejection of the WHX Offer, the Handy &
Harman Board of Directors did not assign any relative or specific weights to the
foregoing factors, and individual directors may have given differing weights to
different factors.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Goldman Sachs was retained, pursuant to the terms of a letter agreement,
dated as of December 18, 1997 (the "Letter Agreement"), to serve as Handy &
Harman's exclusive financial advisor with respect to the WHX Offer, the possible
purchase of all or a portion of the stock or assets of Handy & Harman, a Company
Transaction (as defined below) or the sale of Handy & Harman by way of tender
offer, merger or otherwise. Goldman Sachs also agreed to render an opinion as to
the fairness of the financial consideration to be received by shareholders of
Handy & Harman or Handy & Harman, as the case may be, in connection with the
sale of 50% or more of the outstanding Shares.
Handy & Harman has agreed to pay Goldman Sachs a fee of $500,000 in cash on
the date the Letter Agreement is executed. Handy & Harman has also agreed to pay
Goldman Sachs a fee, in connection with any transaction in which at least 20% of
the outstanding Shares are acquired by WHX or any other person or group,
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including Handy & Harman, in one or a series of transactions by means of a
tender offer or merger, private or open market purchases of Shares or otherwise,
equal to $3,200,000 plus 3.5% of the amount by which the aggregate value of all
such transactions exceeds $30.00 times the number of Shares acquired in all such
transactions. If at least 50% of the outstanding Shares is acquired by WHX or
any other person or group, including Handy & Harman, the aggregate value will be
determined as if such acquisition were of 100% of the Shares (including
contingently issuable shares). Handy & Harman has also agreed to pay Goldman
Sachs a fee if Handy & Harman or any other entity formed or owned in substantial
part or controlled by Handy & Harman or one or more members of senior management
of Handy & Harman or any employee benefit plan of Handy & Harman or any of its
subsidiaries (a "Related Entity") effects a transaction or series of
transactions not covered by the second sentence of this paragraph in which (i)
at least 20% of the aggregate market value of Handy & Harman as of December 18,
1997 is transferred to the shareholders of Handy & Harman through (A) a merger
with, purchase of assets by, or other combination with, a Related Entity, (B) a
reclassification of stock, (C) a purchase of stock, (D) a distribution of cash,
securities or other assets (including, without limitation, a distribution of all
or a portion of stock in one or more of its subsidiaries), (E) a plan of partial
liquidation or (F) any similar transactions or combinations of the foregoing and
(ii) the public shareholders of Handy & Harman retain an equity interest in
Handy & Harman or, if Handy & Harman does not survive in the transactions
described above, in the surviving entity (a "Company Transaction"), equal to
$3,200,000 plus 3.5% of the amount by which the aggregate value of the Company
Transaction, defined as the per Share value in cash, securities and other assets
received by the shareholders of Handy & Harman (including Shares continued to be
held by the shareholders) times the number of Shares included in the Company
Transaction, exceeds $30.00 times the number of Shares included in the Company
Transaction. In the event that a transaction of the types described in either
the preceding sentence or the second sentence of this paragraph is not
consummated by any of March 30, 1998, June 30, 1998, September 30, 1998,
December 30, 1998, March 30, 1999, June 30, 1999, September 30, 1999 or December
30, 1999, Handy & Harman will pay to Goldman Sachs a financial advisory fee of
$337,500 on each such date, as applicable. In the event that Handy & Harman
sells, distributes or liquidates all or a portion of the assets of Handy &
Harman, including any pension-related assets, or sells or distributes securities
of Handy & Harman, whether such distribution is made by dividend or otherwise,
and no fee has become payable or been paid to Goldman Sachs with respect to a
transaction pursuant to the second and fourth sentence of this paragraph, then
Handy & Harman shall pay, or cause to be paid, a fee to Goldman Sachs based upon
the aggregate value of such transaction in accordance with the schedule
specified in the Letter Agreement. Such fee will range from 3.0% of the
aggregate value of the transaction if such aggregate value is $50 million or
less to .6% of the aggregate value of the transaction if such aggregate value is
$1 billion or more. The initial $500,000 fee payable on execution of the Letter
Agreement and any fees payable in the event no transaction is consummated by
certain specified dates (as described above) which have been previously paid
will be credited against any fee payable to Goldman Sachs in connection with any
transaction described in the second, fourth or sixth sentence of this paragraph.
Handy & Harman has also agreed to reimburse Goldman Sachs for its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of its
counsel, and to indemnify Goldman Sachs for certain liabilities arising out of
actions taken under the Letter Agreement.
In the ordinary course of its business, Goldman Sachs or its affiliates may
actively trade or otherwise effect transactions in the securities of Handy &
Harman and WHX for its own account and for the account of its customers and,
accordingly, may at any time hold long or short positions in such securities.
Goldman Sachs has provided investment banking services to Handy & Harman
from time to time in the past for which it has received customary compensation.
Handy & Harman has also retained Kekst & Company as public relations
advisor and Georgeson & Company Inc. to provide other services to Handy & Harman
in connection with the WHX Offer. Handy & Harman will pay Kekst & Company and
Georgeson & Company Inc. reasonable and customary fees for their services,
reimburse them for their reasonable out-of-pocket expenses and provide customary
indemnities.
Except as disclosed herein, neither Handy & Harman nor any person acting on
its behalf currently intends to employ, retain or compensate any other person to
make solicitations or recommendations to security holders on its behalf
concerning the WHX Offer.
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ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) To the extent currently known to Handy & Harman, no transactions in the
Shares have been effected during the past 60 days by Handy & Harman or, to the
best of Handy & Harman's knowledge, by any executive officer, director,
affiliate or subsidiary of Handy & Harman, except that on December 15, 1997,
prior to learning of the WHX Offer, Frank E. Grzelecki, Handy & Harman's Vice
Chairman, sold 1000 Shares at $22 1/8 per Share, and except that ordinary course
purchases of Shares have been made for the accounts of participating employees,
including executive officers, pursuant to Handy & Harman's 401(k) Plan and
Employee Stock Purchase Plan. Handy & Harman is currently verifying its response
to this Item 6(a), and will update its response if other information comes to
its attention.
(b) To the extent currently known to Handy & Harman, no executive officer,
director, affiliate or subsidiary of Handy & Harman currently intends to tender,
pursuant to the WHX Offer, any Shares which are held of record or beneficially
owned by such person or to otherwise sell any such Shares.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth in this Schedule 14D-9, Handy & Harman is not
engaged in any negotiation in response to the WHX Offer that relates to or would
result in (i) an extraordinary transaction, such as a merger or reorganization,
involving Handy & Harman or any subsidiary of Handy & Harman; (ii) a purchase,
sale or transfer of a material amount of assets by Handy & Harman or any
subsidiary of Handy & Harman; (iii) a tender offer for or other acquisition of
securities by or of Handy & Harman; or (iv) any material change in the present
capitalization or dividend policy of Handy & Harman.
Notwithstanding the foregoing, the Handy & Harman Board could in the future
engage in negotiations in response to the WHX Offer that could have one of the
effects specified in the preceding sentence, and the Handy & Harman Board has
determined that disclosure with respect to the parties to, and the possible
terms of, any transactions or proposals of the type referred to in the preceding
paragraph might jeopardize any discussions or negotiations that Handy & Harman
might conduct. Accordingly, the Handy & Harman Board has adopted a resolution
instructing management not to disclose the possible terms of any such
transactions or proposals, or the parties thereto, unless and until an agreement
in principle relating thereto has been reached or, upon the advice of counsel,
as may be required by law.
(b) To the best of Handy & Harman's knowledge, there are currently no
transactions, board resolutions, agreements in principle or signed contracts in
response to the WHX Offer, other than as described herein, that relate to or
would result in one or more of the matters referred to in Item 7(a).
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
By-law Amendment.
At the December 23, 1997 meeting of the Handy & Harman Board of Directors,
the Board amended Article I, Section 1 of Handy & Harman's By-laws to allow the
Board flexibility to set the date of the annual shareholders meeting, as opposed
to fixing such date on the second Tuesday in May. A copy of the Amendment to
Handy & Harman's By-laws is filed herewith as Exhibit 3.
Section 912 of the New York Business Corporation Law.
Section 912 of the New York Business Corporation Law ("Section 912")
regulates certain business combinations, including mergers, of a New York
corporation, such as Handy & Harman, with a person that has, individually or
with or through its affiliates or associates, acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding voting stock of
such corporation (an "Interested Shareholder").
Section 912 provides that no New York corporation may engage in any
business combination with any Interested Shareholder of such corporation for a
period of five years following the date on which such Interested Shareholder
becomes an Interested Shareholder (a "Stock Acquisition Date") unless such
business combination or the purchase of stock made by such Interested
Shareholder on such Interested Shareholder's Stock Acquisition
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Date is approved by the board of directors of such corporation prior to such
Interested Shareholder's Stock Acquisition Date.
If neither Parent nor the Purchaser (alone or in concert with others)
becomes the beneficial owner of at least 20% of the outstanding Shares, Section
912 would not be applicable to the Purchaser's proposed acquisition of Handy &
Harman.
Shareholder Rights Plan.
Each Right issued pursuant to the Rights Agreement entitles the holder
thereof to purchase from Handy & Harman one Share at an exercise price of $58
per Share (the "Purchase Price"), subject to adjustment, upon the occurrence of
a "Distribution Date." A Distribution Date will be deemed to occur upon the
earlier of (i) 10 business days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has become an
Interested Shareholder or (ii) 10 business days (or such later date as may be
determined by the Board of Directors) following the commencement of a tender
offer or exchange offer that would result in a person becoming an Acquiring
Person.
In the event that a person becomes an Acquiring Person (except pursuant to
an offer for all outstanding Shares that the Board of Directors of Handy &
Harman determines to be fair to and in the best interests of Handy & Harman and
its shareholders), each holder of a Right will thereafter have the right to
receive, upon exercise, the number of Shares for which such Right was
exercisable immediately prior to the first occurrence of such event at an
adjusted per share purchase price of 10% of the then current market price per
Share. Notwithstanding any of the foregoing, following the occurrence of the
event set forth in the preceding sentence, all Rights that are or (under certain
circumstances specified in the Rights Agreement) were beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable
following the occurrence of the event set forth above until such time as the
Rights are no longer redeemable by Handy & Harman in accordance with the terms
of the Rights Agreement.
In the event that, at any time following the date that a person becomes an
Acquiring Person, (i) Handy & Harman is acquired in a merger or other business
combination transaction in which Handy & Harman is not the surviving corporation
(other than a merger which follows an offer described in the preceding
paragraph), or (ii) more than 50% of Handy & Harman's assets or earning power is
sold or transferred, each holder of a Right (except Rights that previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the exercise price of the Right.
At the December 23, 1997 meeting of the Handy & Harman Board of Directors,
the Board resolved to delay any Distribution Date under the Rights Agreement,
that arises solely by virtue of the lapse of time following the public
announcement of the WHX Offer, until such time as the Board or any authorized
committee thereof shall designate, by subsequent resolution duly adopted by the
Board or such committee thereof.
For a more complete description of the Rights Agreement, see Handy &
Harman's Form 8-A, dated February 3, 1989, and Handy & Harman's Form 8-A/A,
dated May 21, 1996, and Handy & Harman's Form 8-A/A, dated October 24, 1996,
each as filed with the Securities and Exchange Commission.
Change in Control Provisions in Bank Debt.
Handy & Harman is party to a Revolving Credit Agreement, dated as of
September 29, 1997 (the "Credit Agreement"), with certain financial institutions
as lenders and The Bank of Nova Scotia as Administrative Agent. Under the Credit
Agreement, an "Event of Default" will occur if there is a "Change in Control",
which would be deemed to occur if any person, or two or more persons acting in
concert, acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of 30% or more of the outstanding shares of voting stock of Handy
& Harman. Unless waived, the occurrence of an Event of Default (i) prohibits
Handy & Harman from borrowing additional money under the Credit Agreement and
(ii) permits certain of the lenders under the Credit Agreement to declare all or
any portion of the outstanding borrowings under the Credit Agreement to be due
and payable.
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The Note Agreements relating to Handy & Harman's $125,000,000 7.31% Senior
Notes due 2001 (the "Notes"), each dated as of April 17, 1997, by and between
Handy & Harman and the purchasers listed therein (collectively, the "Note
Agreements"), do not contain any "change of control" provisions. However, under
the Note Agreements, an Event of Default will occur if (i) Handy & Harman is in
default in the performance or compliance with any term of any evidence of any
debt (other than debt under the Note Agreements) with an outstanding principal
amount of at least $5,000,000 or any other condition exists, and as a
consequence of such default or condition, such debt becomes due and payable
before its stated maturity or (ii) Handy & Harman becomes obligated to purchase
or repay any debt (other than debt under the Note Agreements) before its
regularly scheduled dates of payment in an aggregate outstanding principal
amount of at least $5,000,000 (unless Handy & Harman simultaneously offers to
purchase a proportionate amount of Notes).
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------
1 Letter to Shareholders, dated December 24, 1997.*
2 Text of Press Release issued by Handy & Harman, dated December 24,
1997.
3 Amendment to By-laws of Handy & Harman, as approved by the Handy &
Harman Board of Directors on December 23, 1997.
4 Excerpted Sections of Handy & Harman's Proxy Statement, dated
April 2, 1997, relating to Handy & Harman's Annual Meeting of
Shareholders.
5 Handy & Harman 1982 Stock Option Plan.
6 Amendment to Handy & Harman 1982 Stock Option Plan.
7 Handy & Harman Management Incentive Plan--Corporate Group
Participants, as amended and restated on December 15, 1994.
8 Subsidiary, Division, Group or Unit Management Incentive Plan, as
amended and restated on December 15, 1994.
9 Handy & Harman Deferred Fee Plan for Directors, as amended and
restated on December 15, 1994, effective as of January 1, 1995.
10 Form of Executive Agreement entered into with Handy & Harman's
executive officers in September 1986.
11 Amendments to the Form of Executive Agreement approved in
December 1988.
12 Handy & Harman 1988 Long-Term Incentive Plan.
13 Amendment to Handy & Harman 1988 Long-Term Incentive Plan approved
in December 1988.
14 Amendment to Handy & Harman 1988 Long-Term Incentive Plan approved
in June 1989.
15 Agreement dated as of May 1, 1989 between Handy & Harman and
Richard N. Daniel.
16 Amendment to Agreement dated as of May 1, 1989 between Handy &
Harman and Richard N. Daniel approved by the Handy & Harman
Board of Directors on May 11, 1993.
17 Amendment to Agreement dated as of May 1, 1989 between Handy &
Harman and Richard N. Daniel approved by the Handy & Harman
Board of Directors on September 28, 1995.
18 Employment Agreement dated as of October 22, 1996 by and between
Handy & Harman and Robert D. LeBlanc.
19 Handy & Harman Supplemental Executive Plan.
20 Handy & Harman Outside Director Stock Option Plan.
21 Handy & Harman Long-Term Incentive Stock Option Plan.
22 Amended and Restated Agreement, dated as of November 3, 1995, by
and between Handy & Harman and Frank E. Grzelecki.
23 Handy & Harman 1995 Omnibus Stock Incentive Plan.
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EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------
24 Handy & Harman Supplemental Executive Retirement Plan adopted and
established effective September 28, 1989 and amended and
restated as of January 1, 1995.
25 First Amendment to the Supplemental Executive Retirement Plan,
effective January 1, 1995.
26 Handy & Harman Executive Post-Retirement Life Insurance Program.
27 Supplemental Agreement, dated as of May 14, 1997, by and between
Handy & Harman and Robert D. LeBlanc.
28 Form of Change in Control Agreement, dated May 14, 1997, entered
into with Handy & Harman's executive officers.
- ------------------
* Included in copies of the Schedule 14D-9 mailed to shareholders.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 24, 1997
HANDY & HARMAN
By: /S/ PAUL E. DIXON
----------------------------
Paul E. Dixon
Senior Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
Exhibit
No. Description
- ------ -----------
99.1 Letter to Shareholders, dated December 24, 1997.
99.2 Text of Press Release issued by Handy & Harman, dated
December 24, 1997.
99.3 Amendment to By-laws of Handy & Harman, as approved by the Handy &
Harman Board of Directors on December 23, 1997.
99.4 Excerpted Sections of Handy & Harman's Proxy Statement, dated April
2, 1997, relating to Handy & Harman's Annual Meeting of
Shareholders.
99.5 Handy & Harman 1982 Stock Option Plan.
99.6 Amendment to Handy & Harman 1982 Stock Option Plan.
99.7 Handy & Harman Management Incentive Plan--Corporate Group
Participants, as amended and restated on December 15, 1994.
99.8 Subsidiary, Division, Group or Unit Management Incentive Plan, as
amended and restated on December 15, 1994.
99.9 Handy & Harman Deferred Fee Plan for Directors, as amended and
restated on December 15, 1994, effective as of January 1, 1995.
99.10 Form of Executive Agreement entered into with Handy & Harman's
executive officers in September 1986.
99.11 Amendments to the Form of Executive Agreement approved in December
1988.
99.12 Handy & Harman 1988 Long-Term Incentive Plan.
99.13 Amendment to Handy & Harman 1988 Long-Term Incentive Plan approved
in December 1988.
99.14 Amendment to Handy & Harman 1988 Long-Term Incentive Plan approved
in June 1989.
99.15 Agreement dated as of May 1, 1989 between Handy & Harman and
Richard N. Daniel.
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99.16 Amendment to Agreement dated as of May 1, 1989 between Handy & Harman
and Richard N. Daniel approved by the Handy & Harman Board of
Directors on May 11, 1993.
99.17 Amendment to Agreement dated as of May 1, 1989 between Handy & Harman
and Richard N. Daniel approved by the Handy & Harman Board of
Directors on September 28, 1995.
99.18 Employment Agreement dated as of October 22, 1996 by and between
Handy & Harman and Robert D. LeBlanc.
99.19 Handy & Harman Supplemental Executive Plan.
99.20 Handy & Harman Outside Director Stock Option Plan.
99.21 Handy & Harman Long-Term Incentive Stock Option Plan.
99.22 Amended and Restated Agreement, dated as of November 3, 1995, by
and between Handy & Harman and Frank E. Grzelecki.
99.23 Handy & Harman 1995 Omnibus Stock Incentive Plan.
99.24 Handy & Harman Supplemental Executive Retirement Plan adopted and
established effective September 28, 1989 and amended and restated
as of January 1, 1995.
99.25 First Amendment to Supplemental Executive Retirement Plan, effective
January 1, 1995.
99.26 Handy & Harman Executive Post-Retirement Life Insurance Program.
99.27 Supplemental Agreement, dated as of October 22, 1996, by and between
Handy & Harman and Robert D. LeBlanc.
99.28 Form of Change in Control Agreement, dated May 14, 1997, entered into
with Handy & Harman's executive officers.
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