-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, OPIbcnQNgZgEtC4pnC69rC0D1QVKEiXs1x6r4pB9dP1MFWXDTNnxAGyuOxNs+eR6 6w0j8vFYsIaZPRGhJjCb0A== 0000950123-94-000632.txt : 19940330 0000950123-94-000632.hdr.sgml : 19940330 ACCESSION NUMBER: 0000950123-94-000632 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANDY & HARMAN CENTRAL INDEX KEY: 0000045333 STANDARD INDUSTRIAL CLASSIFICATION: 3350 IRS NUMBER: 135129420 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-05365 FILM NUMBER: 94518730 BUSINESS ADDRESS: STREET 1: 250 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10177 BUSINESS PHONE: 2126612400 10-K 1 FORM 10-K 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------ FORM 10-K ------------------------------ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 1-5365 HANDY & HARMAN (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEW YORK 13-5129420 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 250 PARK AVENUE NEW YORK, NY 10177 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Registrant's telephone number, including area code (212) 661-2400 Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE NUMBER OUTSTANDING ON TITLE OF EACH CLASS AS OF MARCH 25, 1994 WHICH REGISTERED - -------------------------------------------------- -------------------- ----------------------- Common Stock Par Value $1 Per Share............... 14,023,780 New York Stock Exchange Common Stock Purchase Rights...................... 14,023,780 New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None ------------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirement for the past 90 days. Yes /X/ No / / Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / / The aggregate market value of the Common Stock outstanding and held by non-affiliates (as defined in Rule 405 under the Securities Act of 1933) of the registrant, based upon the closing sale price of the Common Stock on the New York Stock Exchange on March 25, 1994 was $210,420,497. Certain portions of the respective documents listed below have been incorporated by reference into the indicated Part of this Annual Report on Form 10-K. (1) Annual Report to Shareholders for fiscal year ended Part I, Item 1 December 31, 1993. Part II, Items 5-8 (2) Notice of Annual Meeting of Shareholders and Proxy Part III, Items 10-13 Statement dated March 30, 1994.
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PART I ITEM 1. BUSINESS GENERAL Handy & Harman (hereinafter "H&H" or the "Company"), was incorporated in the State of New York in 1905 as the successor to a partnership which commenced business in 1867. Unless the context indicates otherwise, the terms, "H&H" and the "Com- pany", refer to Handy & Harman and its consolidated subsidiaries. Historically, until commencing a diversification program in 1966, the Company was engaged primarily in the manufacture of silver and gold alloys in mill forms and the refining of precious metals from jewelry and industrial scrap. The Company's markets were largely among silversmiths and manufacturing jewelers, users of silver brazing alloys, and manufacturers who required silver and gold primarily for the properties of those metals. As part of these precious metals operations, the Company still publishes a daily New York price for its purchases of silver and gold and now also publishes a daily price for its fabricated silver and gold. The silver price is recognized, relied on and used by others throughout the world. Further, the review entitled "The Silver Market", published annually by the Company since 1916, is widely distributed in trade and financial centers in this country and abroad. 1 3 The diversification program has added lines of precious metals products and various specialty manufacturing operations, including stainless steel and specialty metal alloy products, for industrial users in a wide range of applications which include the electrical, electronic, automotive original equipment, office equipment, oil and other energy-related, refrigeration, utility, telecommunications and medical industries. The Company's business segments are (a) manufacturing and selling precious metals products and providing refining services; (b) manufacturing and selling products for the original equipment automotive industry; (c) manufacturing and selling of non-precious metal wire and tubing products; and (d) manufacturing and selling other specialty products. Three-year financial data for the Company's business segments appear under the caption "The Company's Business" on pages 18 and 19 of the Handy & Harman 1993 Annual Report to Shareholders (hereinafter referred to as the "Annual Report") and are incorporated by reference herein. One customer of the Automotive Original Equipment Group represented 10.7%, 11.3%, and 10.5% of consolidated sales and service revenues for 1993, 1992 and 1991, respectively. Export sales and revenues are not significant in the total sales and revenues of any of the Company's business segments. In June 1991 the Company announced a major restructur- ing program designed to strengthen the Company's balance sheet by reducing debt and interest expense, to provide a sound basis for improved profitability and to allow management to concentrate on 2 4 those businesses which have demonstrated potential for above average growth. The program called for divestiture of six businesses deemed to be non-core operations that no longer fit within the Company's long-term strategies. The six discontinued businesses were those involved in the manufacture of automotive replacement parts, proprietary chemicals, metal powders, pressur- ized vessels, coldheaded parts and specialized platinum group metals refinings and products. See Notes 1 and 10 to the Consol- idated Financial Statements included in the Annual Report and Management's Discussion and Analysis on page 21 of the Annual Report. PRECIOUS METALS PRODUCTS AND REFINING SERVICES The operational structure of the parent company's precious metals activities consists of two distinct profit centers: Products Operations and Refining Operations. Both of these profit centers and the activities of other precious metals subsidiaries are included in the following discussion of the precious metals segment of the Company's business. Within the precious metals segment of the Company's business, two principal classes of products are manufactured: wire products and rolled products. The table on page 19 of the Annual Report, showing percentages of gross shipments of these classes of precious metals products which contributed 10% or more to total sales and revenues, is incorporated herein by reference. 3 5 In the following discussion of the Company's precious metals products, the term "karat" refers to the amount of gold in a gold alloy. Pure gold is 24-karat, and karat golds generally range between 10-karat (41.6%) and 18-karat (75%). The usual alloy metals are silver, copper, nickel and zinc. By varying the other elements in the alloy, karat golds may be fabricated in a number of colors including white, green, yellow and red. Sterling silver is an alloy of silver, which contains a minimum of 92.5% pure silver. The Company's profits from the products manufactured in this segment are derived from the "value added" of processing and fabricating, not from the purchase and resale, of precious metals. In accordance with general practice in the industry, prices to customers are a composite of two factors, namely, (1) the value of the precious metal content of the product plus (2) an amount referred to as "fabrication values" to cover the cost of base metals, labor, overhead, financing and profit. Wire Products - In the manufacture of the Company's wire products, precious metal alloys are cast, extruded and then drawn into wire. The Company's precious metal wire products con- sist of karat golds, sterling and other alloys of silver, and other precious metal alloys in drawn and coiled wire and rod forms of differing diameters, ranging from .007 of an inch to .25 of an inch. The Company also manufactures Easy Flo(R), Sil- Fos(R) and other silver brazing alloys in wire form for making permanent, strong, leak-tight joints of the metals joined. 4 6 Brazing alloy wire is also sold in preformed rings and special shapes. The Company's precious metal alloy wire products are marketed for electrical conductive and contact applications in a wide variety of industries, including the aerospace, electronics and appliance industries. Manufacturing jewelers use the Com- pany's precious metal wire in a wide range of production applica- tions, including, for example, necklaces, bracelets, earring parts and pins and clips. Rolled Products - The Company's rolled products are manufactured from karat golds, sterling and lesser alloys of silver, and alloys of other precious metals in sheets, strips and bars of varying thicknesses, widths and lengths. These precious metal rolled products range in standard thickness from foils .0005 of an inch thick to strips or bars .375 of an inch thick, and in standard widths from strips .125 of an inch wide to fifteen inches wide. Rolled products are shipped in lengths up to many hundred feet. The Company's rolled products include precious metals bonded with other metals in bimetallic and tri- metallic strips which provide more versatile industrial applica- tions at a lower cost than would be possible if a solid precious metal or a precious metal alloy were used. Because of the physical properties of precious metals and precious metal alloys, the Company's rolled products have a wide variety of applications by the Company's industrial cus- tomers. The Company's rolled products are sold to silversmiths for use as anodes in plating operations and for flatware and 5 7 hollowware, to manufacturing jewelers for a variety of jewelry, to mints and others for coins, commemorative medals and ingots, to manufacturers of electrical and electronic devices for elec- trical contacts and circuitry, to the nuclear power industry for control assemblies, to the defense industry as foil for batter- ies, and to the aerospace industry for use in guidance systems. Powder Products - The Company produced a variety of precious metal powders and flakes which it sold under various names, including Silpowder(R) and Silflake(R), for use in the production of electronic parts and in powder metal contacts, batteries, conductive coatings and other electrical applications. It produced a line of silver oxide powders for use in chemical silver alumina catalysts and in button batteries. The Company sold this business in 1992 and effectively exited the business in December 1992. However, it continues to produce silver/tin alloy powders for use in dental applications and silver/copper alloy powders, sold under the names Easy-Flo(R) and Sil-Fos(R), for use in industrial brazing applications. Other Precious Metals Products - The Company produces grain beads of various precious metal alloys by melting the metal and then pouring it through water. Grain beads are distinguished from the Company's precious metal powders, which are not as coarse and are produced by atomization spraying. The major grain product is karat gold grain produced in a number of colors, including white, green, yellow and red. The Company also produces grain in various silver and other gold alloys. 6 8 Electronic parts are selectively electroplated in order to deposit gold, silver, palladium, and various base metals on such parts for applications in computer connectors, semi-conductor devices and telecommunication equipment. Refining Services - The Company recovers precious metals from waste and scrap generated by users of the Company's precious metals products and other industrial users of precious metals, from metal-bearing objects delivered for that purpose by non-manufacturing refining customers, and from high grade mining concentrates and bullion. The Company receives a fee for this service. After controlled sampling, assaying, weighing, deter- mination of values and settlement with the customer, the Company purchases for its own use the precious metal resulting from such refining, or, upon request by the customer, returns an equivalent amount of metal to the customer. Raw Materials - The raw materials for the Company's precious metals products consist principally of silver, gold, copper, cadmium, zinc, nickel, tin, and the platinum group metals in various forms. Gold and silver constitute the major portion of the value of the raw materials involved. In addition, the Company buys waste and scrap containing precious metals for recycling and refining, as described above. The Company purchases all of its precious metals at free market prices from either refining customers, primary producers or bullion dealers. Over the past several years, the prices of gold and silver have been subject to fluctuations, and are expected to continue to be 7 9 affected by world market conditions; however, the Company has not experienced any problem in obtaining the necessary quantities of raw materials required for this segment. In the normal course of business, the Company receives precious metals from suppliers and customers. These metals are returnable in fabricated or commercial bar form under agreed upon terms. Since precious metals are fungible, the Company does not physically segregate supplier and customer metals from its own inventories. Therefore, to the extent that supplier or customer metals are used by the Company, the amount of inventory which the Company must own is reduced. All raw materials used in this segment are readily available from several sources. For a discussion of the Company's inventory purchasing and pricing, and of the Company's practices to eliminate the economic risk of precious metal price fluctuations, see "The Company's Business" on page 18 of the Annual Report. Working Capital Items - The Company maintains a con- stant level of inventory of fine and fabricated precious metals in various stages of processing and/or refining for customer delivery requirements and for a continuous supply of raw mate- rials. Such inventories are carried under the Last-In, First- Out (LIFO) method of accounting. The LIFO carrying values are substantially less than the market values of the inventories. In the Notes to Consolidated Financial Statements, commencing on page 28 of the Annual Report, see Note 7 for a comparison of the cost and market values of the Company's precious metals invento- 8 10 ries at December 31, 1992 and December 31, 1993 and see Note 2 for a discussion of the effects of fluctuations in precious metals prices on the Company's credit requirements. Both Notes are incorporated by reference herein. Product Development, Patents and Trademarks - While the Company holds a number of patents and trademarks related to its precious metals products and processes, and is licensed under others, the precious metals business, as a whole, is not depen- dent upon such patents. The Company's trademarks are registered in the United States and in several foreign countries. The Com- pany maintains a technical laboratory and staff in connection with its precious metals operations and a portion of the work of that staff is devoted to metallurgical products and development. Distribution Facilities - The Company distributes precious metals products directly to customers from its plants and service branches, except that certain products, primarily brazing alloys, are distributed through independent distributors throughout the United States and Canada. The Company has a marketing organization trained to service its customers and dealers, to solicit orders for its precious metal and related products, and to obtain refining business. This organization markets all of the Company's refining services and precious metals products and provides special technical assistance with respect to precious metals through product engineers and other technical personnel. The Company maintains customer service and sales offices at its various manufacturing and processing plants 9 11 and in Los Angeles and Chicago. It also has warehouse facilities to support sales and distribution at each of its manufacturing and processing plants and in Chicago and Los Angeles. Competition - The Company is one of the leading fab- ricators and refiners of precious metals. The Company currently sells its precious metal fabricated products to approximately 5,000 customers throughout the United States and Canada. Al- though there are no companies in the precious metals field whose operations exactly parallel those of H&H in every area, there are a number of competitors in each of the classes of the Company's precious metals products. Many of these competitors also carry on activities in other product lines in which the Company is not involved. Competition is based on quality, service and price, each of which is of equal importance. MANUFACTURING OF AUTOMOTIVE ORIGINAL EQUIPMENT Through Handy & Harman Automotive Group, Inc. (the "Automotive Group"), a subsidiary, the Company manufactures a wide variety of parts, components and assemblies for the North American domestic automobile original equipment manufacturers (the OEM market). The Automotive Group produces a wide variety of tubular parts for the OEM market from steel, stainless steel and other metals. Formed and brazed tubing parts made from stainless and carbon steel and various other metals are produced as air pipes, 10 12 brake and fuel lines, components of fuel delivery systems, and other tubing parts. The Automotive Group also produces small diameter cables and a variety of control assemblies for automotive applications, including parking brake cables, speedometer cables, various transmission cables and other mechanical assemblies, made from steel and other materials. In addition, the Automotive Group produces plastic parts, tubing, fuel lines, plastic component manifolds and assemblies for the OEM market. Raw Materials - The raw materials used in this segment include stainless and carbon steels, tin, zinc, nickel and various plastic compositions. Raw materials are purchased at open market prices principally from domestic suppliers. The Automotive Group has not experienced any problem in obtaining sufficient quantities of raw materials. Competition - There are many companies, domestic and foreign, which manufacture products of the type manufactured by the Automotive Group. Some are larger than the Company and many are larger than the Automotive Group's operation with which they compete. Competition is based to a great extent on price, quality, service and new product introduction. The domestic automobile industry has traditionally engineered and manufactured in its own plants a high percentage of the parts used in assem- bling its automobiles. In recent years the industry has begun to purchase more parts and assemblies from outside suppliers such as the Automotive Group. Although this trend continued during 1993 there can be no assurance that it will do so in the future. 11 13 Equally as important is the industry trend to use outside suppliers to participate in the engineering and designing of some parts and assemblies. Research and Development Center - The Automotive Group operates a Research and Development Center in Auburn Hills, Michigan. The Center contains approximately 40,000 square feet of floor space and "state-of-the-art" equipment, including chassis rolls, dynamometers, vibration equipment and flow testing equipment. A number of highly-qualified personnel currently are employed at the Center which also houses automotive administrative and sales personnel. They offer the capability to design, fabricate and test complete fuel and cable control systems; to support the Automotive Group and other units of the Company in the design, fabrication and testing of automotive components; and to assist in the design and development of new components and systems for automotive purposes. Distribution - Essentially all of the Automotive Group's original equipment products is sold directly to the major domestic automobile companies through its sales and marketing employees. MANUFACTURING OF WIRE AND TUBING PRODUCTS The Company, through several subsidiaries, manufactures a wide variety of non-precious metal wire and tubing products. Small diameter precision drawn tubing fabricated from stainless steel, nickel alloy and carbon and alloy steel is produced in 12 14 many sizes and shapes to critical specifications for use in the semi-conductor, aircraft, petrochemical, automotive, appliance, refrigeration and instrumentation industries. Additionally, tubular product is manufactured for the medical industry for use as implants, surgical supplies and instrumentation. Stainless steel wire products are redrawn from rods for such diverse applications as bearings, brushes, cable lashing, hose reinforcement, nails, knitted mesh, wire cloth, air bags and antennas in the aerospace, automotive, chemical, communications, marine, medical, petrochemical and other industries. Raw Materials - The raw materials used in this segment include stainless and carbon steels, nickel alloys and a variety of high performance alloys. The Company purchases all such raw materials at open market prices from domestic and foreign suppli- ers. The Company has not experienced any problem in obtaining the necessary quantities of raw materials. Prices and availabil- ity, particularly of raw materials purchased from foreign suppli- ers, will be affected by world market conditions and governmental policies. Competition - There are many companies, domestic and foreign which manufacture wire and tubing products of the types manufactured by this segment. Competition is based on quality, service, price and new product introduction, each of which is of equal importance. Distribution - Most of the products manufactured by this segment are sold directly to customers through Company 13 15 salesmen; however, some are sold through manufacturer's represen- tatives and through distributors. MANUFACTURING OF OTHER SPECIALTY PRODUCTS Other Company subsidiaries manufacture a large number of other specialty products for industrial use. Plastic and steel fittings and connections, plastic pipe and non-ferrous thermite welding powders are produced for the natural gas, electrical and water distribution industries. In 1993 the Company sold its business which used powdered metals to make custom-molded structural parts and assemblies from ferrous and non-ferrous powdered metals for components and assemblies for office products, business machines, hand-held power tools, hydraulic motors and pumps and lawn and garden equipment. Also in 1993, the Company sold the large industrial heat exchanger business which made packaged power units for oil and gas, construction, agricultural and the skiing industries. Distribution - Most of the Company's specialty prod- ucts comprising this segment are sold directly to customers through Company salesmen, although some are sold by agents and manufacturer's representatives. In particular, gas distribution supplies and fittings, thermite welding powders and certain other products are sold primarily through manufacturer's representa- tives to the ultimate users, although some sales also are made by manufacturer's representatives to distributors. 14 16 Raw Materials - The raw materials used in this segment include various steel alloys, copper, tin, zinc, nickel and various plastic compositions. The Company purchases all such raw materials at open market prices primarily from domestic suppliers. The Company has not experienced any problem in obtaining the necessary quantities of raw materials. Prices and availability, particularly as to raw materials purchased from foreign suppliers, will continue to be affected by world market conditions and governmental policies. Competition - There are many companies, domestic and foreign, which manufacture products of the type manufactured by this segment. Some are larger than the Company, and many are larger than the Company's operations with which they compete. Competition in portions of this segment's business is based primarily on price, and significant competition has come from lower-priced foreign imports. Competition is otherwise generally based on quality, service and price, each of which is of equal importance. GOVERNMENT REGULATION During the last fiscal year, the Company spent or committed approximately $2,700,000 in complying with federal, state and local occupational safety and health, environmental control and equal employment opportunity laws and regulations. These expenditures included monies spent by the Company in the clean-up of hazardous wastes and toxic substances under Federal, 15 17 State and local laws and regulations relating to protection of the environment. Like many other large domestic manufacturing concerns, the Company's operations may affect the environment. These operations may produce, process, and dispose of materials and waste products which, under certain conditions, are toxic or hazardous under such environmental laws and regulations. The Company expects to make comparable expenditures and commitments during the current fiscal year, provided that no further changes are made in such laws and regulations or in their application. Such expenditures are not material to the competitive position or financial condition of the Company; however, such laws and regulations may require capital expenditures not now contemplated and may result in increased operating costs. See Item 3 Legal Proceedings. ENERGY The Company requires significant amounts of electrici- ty, natural gas, fuel oil and propane to operate its facilities. The Company has few contracts covering natural gas or electrici- ty, but has some one-year contracts for the delivery of fuel oil and/or propane at some facilities. These contracts are the result of competitive bidding. In an attempt to minimize the effects of any fuel shortages, the Company has made a number of process and equipment changes to allow use of alternate fuels in key processes, and the Company has equipped certain plants with alternate fuel reserves 16 18 intended to reduce any curtailment upon a local shortage. A general and continuing shortage of such fuels, however, or a government allocation of supplies resulting in a general reduc- tion in fuel supplies, could cause some curtailment of produc- tion. EMPLOYEES The Company had 4,246 employees on December 31, 1993. Of these, approximately 35% are covered by collective bargaining agreements which expire at various times during the next three years. ITEM 2. PROPERTIES The Company has 32 operating plants in the United States, Canada, Mexico, England, Brazil (50% owned) and Singapore (50% owned) with a total area of approximately 2,500,000 square feet, including warehouse, office and laboratory space, but not including the plants used by the Brazil or Singapore operations and by the discontinued operations described in Notes 1 and 10 to the Consolidated Financial Statements included in the Annual Report. The Company owns or leases sales, service and warehouse facilities at 4 other locations in the United States and Canada, which, with the Company's executive and general offices, have a total area of approximately 115,000 square feet. The Company considers its manufacturing plants and service facilities to be well maintained and efficiently 17 19 equipped, and therefore suitable for the work being done. Theproductive capacity and extent of utilization of the Company'sfacilities is dependent in some cases on general business condi-tions and in other cases on the seasonality of the utilization ofits products. Productivity can be expanded readily to meet additional demands. A description of the Company's principal plants by industry segment is as follows: Precious Metals The Company's principal precious metal products and refining services operations are conducted in Fairfield and South Windsor, Connecticut; Attleboro, Massachusetts; and East Providence, Rhode Island. Other precious metal operations are conducted in Phoenix, Arizona; North Attleboro, Massachusetts; Cudahy, Wisconsin; Indianapolis, Indiana; Toronto, Canada and Singapore (50% owned). The Company owns all these operating plants in fee. Automotive Original Equipment The headquarters of Handy & Harman Automotive Group, Inc. is located in Auburn Hills, Michigan in the same building as the sales offices and the Engineering Research and Development Center. Manufacturing facilities are in Dover and Archbold, Ohio; Kendallville and Angola, Indiana; and Martinsburg, West Virginia. All of this segment's operating plants are owned in fee. The Auburn Hills building is leased. The Automotive Group 18 20 also has operated in Mexico through a "maquiladora" arrangement and now has "National Supplier Status." Wire and Tubing The headquarters of the wire portion of this segment is in Cockeysville, Maryland and the headquarters of the tubing portion of this segment is in Norristown, Pennsylvania. Manufacturing facilities are located in Cockeysville, Maryland; Norristown, Pennsylvania; Willingboro and Middlesex, New Jersey; Oriskany, New York; Camden, Delaware; Evansville, Indiana; Salto, Sao Paulo, Brazil; Retford, Notts. and Liversedge, Yorkshire, England. All these plants are owned in fee except the Retford and Salto plants which are leased. Other Specialty Products The principal facilities currently engaged in the Company's other specialty products businesses are located in Tulsa and Broken Arrow, Oklahoma; and Bolton, England. The Oklahoma plants are owned in fee while the Bolton plant is leased. Company's Offices The Company's executive offices are in New York, New York and occupy 17,000 square feet under a lease. The Company has leased approximately 30,000 square feet in Rye, New York, for its general offices and approximately 8,500 square feet in New York, New York for its Corporate MIS Center. 19 21 ITEM 3. LEGAL PROCEEDINGS There are no pending legal proceedings to which the Company or any of its subsidiaries is a party or which any of their property is the subject, other than ordinary, routine litigation incidental to the business, none of which individually or in the aggregate is material to the business or financial condition of the Company, except as follows: Palmer Well Fields On February 25, 1991 the Massachusetts Department of Environmental Protection ("MDEP") filed a lien against the property owned by Pal-Rath Realty, Inc. (a subsidiary of the Company formerly named Rathbone Corporation) which is located in Palmer, Massachusetts and is leased to Rathbone Realty, Inc. whose affiliated corporation purchased the business and assets of Pal-Rath Realty (other than the real estate) in May 1988. The lien is for a claim in the amount of $1,131,105.31 for expenses allegedly incurred in connection with the Palmer Well Fields known as the Galaxy Well Field and Gravel Pack Well No. 2. A claim has also been made against a neighboring industry and a lien similarly filed against that industry's property. The MDEP has not allocated the alleged liability between Pal-Rath and the other industry. In June 1987, the Massachusetts Department of Environmental Quality Engineering (now called the Massachusetts Department of Environmental Protection) had issued a Notice of Responsibility to Rathbone (now Pal-Rath) relating to alleged contami- 20 22 nation of the Palmer Well Fields by Rathbone. Rathbone responded to that letter and has from time to time assisted the MDEP and also conducted an extensive investigation of the Rathbone proper- ty. In November 1990 the MDEP had issued a letter requesting submittal of good faith offers by Pal-Rath and its neighbor to pay past costs and to conduct further work. In January 1991 Pal-Rath responded that the MDEP's request for money was not supported by the law or the facts and that it would not pay past costs but would conduct or assist in further work. Discussions were continuing when the MDEP filed its liens. Agreement has been reached to submit the matter to non-binding mediation before the Massachusetts Office of Dispute Resolutions. The mediation proceedings are continuing. Although the final outcome of this matter cannot be assured, the Company believes that it will not have a materially adverse affect on the financial position of the Company. Montvale, New Jersey Facility On April 13, 1993, the Borough of Park Ridge, New Jersey sued Handy & Harman Electronic Materials Corporation, a subsidiary ("HHEM"), and Handy & Harman, in the Superior Court of New Jersey, Law Division, Bergen County, asserting that a chemical used at a formerly owned facility in Montvale, New Jersey, an adjoining municipality, had migrated and entered a drinking water supply of Park Ridge. Park Ridge seeks reimbursement of $2,190,437 expended in the construction and operation of water treatment equipment for wells alleged to have been 21 23 contaminated from the Montvale facility, and of $1,255,582 for future expenditures over a 20-year period. The lawsuit includes as additional defendants the prior owner and operator of the Montvale facility, and a vendor of the chemical involved. Evidence exists that contamination existed at Park Ridge prior to HHEM's ownership of the site and that there are other sources of the contamination of the Park Ridge wells. HHEM has worked with the New Jersey Department of Environmental Protection and Energy to investigate and implement a remedy for conditions at the site; and Park Ridge has requested the assistance of the New Jersey DEPE to investigate whether there is a connection between the contamination at the site and at the Park Ridge wells. HHEM is negotiating with Park Ridge and the other defendants to agree on a settlement of all outstanding issues. Although the final outcome of this matter cannot be assured, the Company believes that it will not have a materially adverse affect on the financial position of the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None during the fourth quarter of the year ended December 31, 1993. EXECUTIVE OFFICERS OF THE COMPANY As of March 30, 1994, the executive officers of the Company, their ages, their present positions and offices, and 22 24 their recent business experience and employment, are as follows: Richard N. Daniel - Age 58; Chairman (since 1988) and Chief Executive Officer of the Company (since 1983); a Director (since 1974). Frank E. Grzelecki - Age 56; President and Chief Operating Officer of the Company (since 1992); prior thereto Vice Chairman of the Board (since 1989); a Director (since 1988); prior thereto a Management Consultant (since 1986); Paul E. Dixon - Age 49; Vice President, General Counsel and Secretary (since 1993); prior thereto Vice President and General Counsel (since 1992); prior thereto Senior Vice President and General Counsel of Warnaco Group (since prior to 1989). Richard P. Schneider - Age 47; Vice President-Corporate Development (since 1993); prior thereto Vice President-Corporate Development of Sequa Corporation (a diversified manufacturing company) (since prior to 1989). Dennis C. Kelly - Age 42; Controller (since 1993) of the Company; prior thereto Assistant Controller (since 1989); and prior thereto Director of Internal Audit (since 1985). 23 25 James S. McElya - Age 46; Group Vice President (since 1992); prior thereto President of Handy & Harman Automotive Group, Inc. (since 1987), a subsidiary. John M. McLoone - Age 51; Vice President - Financial Services (since 1992); prior thereto Group Vice President, Information Technologies for W. R. Grace & Co. (a multinational company) (since prior to 1989). Stephen B. Mudd - Age 62; Vice President (since 1983) and Treasurer (since 1977). Robert M. Thompson - Age 61; Group Vice President (since 1984); prior thereto President of Handy & Harman Tube Company, Inc. (1976 to 1984), a subsidiary. There are no family relationships between any of the executive officers. The regular term of office for all executive officers is one year, beginning on May 1. There are no arrangements or understandings between any of the executive officers and any other person pursuant to which such officer was elected to be an officer. 24 26 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS The information for this Item is incorporated by reference to the section entitled "Stock Trading and Dividends" on page 19 of the Annual Report and to Note 5 of the Notes to Consolidated Financial Statements included in the Annual Report. ITEM 6. SELECTED FINANCIAL DATA The information for this Item is incorporated by reference to the section entitled "Five Year Selected Financial Data" on page 20 of the Annual Report. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information for this Item is incorporated by reference to the section entitled "Management's Discussion and Analysis" on pages 21 and 22 of the Annual Report. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information for this Item is incorporated by reference to the Consolidated Financial Statements contained on pages 23 through 26 of the Annual Report and by reference to the Summary of Significant Accounting Policies contained on page 27 of the Annual Report and the Notes to Consolidated Financial Statements commencing on page 28 of the Annual Report and by 25 27 reference to the Independent Auditors' Report set forth on page 34 of the Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY The information for this Item is incorporated by reference to the section entitled "Election of Directors," on pages 2 and 3 of the Company's Proxy Statement, dated March 30, 1994 (the "Proxy Statement"), for the 1994 Annual Meeting of Shareholders, and by reference to the item captioned "Executive Officers of the Company" at the end of Part I of this Annual Report on Form 10-K. No person who was during the 1993 fiscal year a director, officer or beneficial owner of more than ten percent of any class of equity securities of the registrant failed to file on a timely basis reports required by Section 16(a) of the Exchange Act of 1934, as amended. ITEM 11. EXECUTIVE COMPENSATION The information for this Item is incorporated by reference to the sections entitled "Executive Compensation," "Base Salaries," "Annual Incentive Awards for 1993," "Stock Options," "Long-Term Incentive Plan," "Compensation Committee 26 28 Report on Executive Compensation," "Pensions," "Compensation of Directors," "Employment Contracts and Termination of Employment and Change-in- Control Agreements" on pages 4 to 10 of the Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information for this Item is incorporated by reference to the sections entitled "Voting Rights and Principal Holders Thereof" and "Election of Directors" on page 1 and pages 2 and 3, respectively, of the Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information for this Item is incorporated by reference to the section entitled "Election of Directors" on pages 2 and 3 of the Proxy Statement. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Documents Filed as a Part of This Report 1. Financial Statements The Consolidated Financial Statements, the Summary of Significant Accounting Policies and Notes to Consolidated Finan- cial Statements, the Independent Auditors' Report thereon and the items of Supplementary Information incorporated by reference in 27 29 Part II, Item 8 of this Report are set forth at the respective pages of the Annual Report indicated in the list contained on page 17 of the Annual Report, which list is incorporated herein by reference to the Annual Report. 2. Financial Statement Schedules The following Financial Statement Schedules are filed as a part of this Report, beginning herein at the respective pages indicated: (i) Report and Consent of Independent Auditors (page F-1). (ii) Schedule V - Property, Plant and Equipment (page S-1). (iii) Schedule VI - Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment (page S-2). (iv) Schedule VIII - Valuation and Qualifying Accounts and Reserves (page S-3). (v) Schedule X - Supplementary Income Statement Information (page S-4). All other Schedules are omitted because they are not applicable or not required, or because the required information is included in the Consolidated Financial Statements or Notes thereto. 3. Exhibits Required To Be Filed The following exhibits required to be filed as part of this Report have been included: (3) Certificate of Incorporation and By-Laws. 28 30 (a) The Restated Certificate of Incorporation of Handy & Harman (Filed as Exhibit 3(a) to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference). (b) The By-Laws as amended (Filed as Exhibit 3(b) to the Company's 1990 Annual Report on Form 10-K and incorporated herein by reference). (4) Instruments defining the rights of security holders, including indentures. (a) Revolving Credit Agreement dated as of March 16, 1992 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia as the Administrative Agent (Filed as Exhibit 4(a) to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference). (b) Short Term Revolving Credit Agreement dated as of March 16, 1992 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemi- cal Bank, as Co-Agents and The Bank of Nova Scotia, as the Administrative Agent (Filed as Ex- hibit 4(b) to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference). 29 31 (c) Amendment to Revolving Credit Agreement dated as of March 16, 1992 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia as the Administrative Agent (filed as Exhibit 4(e) to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference). (d) Amendment to Short Term Revolving Credit Agreement dated as of March 16, 1992 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia, as the Administrative Agent (filed as Exhibit 4(d) to the Company's Annual Report on Form 10- K and incorporated herein by reference). (e) Amendment to Revolving Credit Agreement dated February 4, 1993 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia as the Administrative Agent. (f) Amendment to Short Term Revolving Credit Agreement dated February 4, 1993 among the Company, certain financial institutions as lenders, The Bank of 30 32 Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and the Bank of Nova Scotia, as the Administrative Agent. (g) Amendment to Revolving Credit Agreement dated July 1, 1993 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia as the Administrative Agent. (h) Amendment to Short Term Revolving Credit Agreement dated July 1, 1993 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and the Bank of Nova Scotia, as the Administrative Agent. No other required to be filed. The Company agrees to furnish to the Securities and Exchange Commission upon its request therefor a copy of each instrument omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. (10) Material contracts. (a) 1982 Stock Option Plan (Filed as Exhibit 1 to the Company's Registration Statement on Form S-8 (Registration No. 2-78264) under the Securities Act of 1933 and incorporated herein by reference). 31 33 (b) Amendment to 1982 Stock Option Plan approved in December 1988 (Filed as Exhibit 10(a) to the Company's Report on Form 8-K for December 1988 and incorporated herein by reference). (c) Management Incentive Plan, as amended February 26, 1981 (Filed as Exhibit 10(b) to the Company's 1980 Annual Report on Form 10-K and incorporated herein by reference thereto). (d) Amendment to Management Incentive Plan approved in December 1988 (Filed as Exhibit 10(d) to the Company's Report on Form 8-K for December 1988 and incorporated herein by reference). (e) Amendment to Management Incentive Plan approved in October 1991 (Filed as Exhibit 10(e) to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference). (f) Deferred Fee Plan For Directors, as amended February 26, 1981 (Filed as Exhibit 10(c) to the Company's 1980 Annual Report on Form 10-K and incorporated herein by reference thereto). (g) Form of Executive Agreement entered into with the Company's executive officers in September 1986 (Filed as Exhibit 10(d) to the Company's 1986 Annual Report on Form 10-K and incorporated herein by reference thereto). 32 34 (h) Amendment to Executive Agreement approved in December 1988 (Filed as Exhibit 10(b) to the Company's Report on Form 8-K for December 1988 and incorporated herein by reference). (i) 1988 Long-Term Incentive Plan (Filed as Exhibit 10(h) to the Company's 1988 Annual Report on Form 10-K and incorporated herein by reference). (j) Amendment to 1988 Long-Term Incentive Plan approved in December 1988 (Filed as Exhibit 10(c) to the Company's Report on Form 8-K for December 1988 and incorporated herein by reference). (k) Amendment to 1988 Long-Term Incentive Plan approved in June 1989 (Filed as Exhibit 10(j) to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference). (l) Agreement dated as of May 1, 1989 between the Company and R. N. Daniel (Filed as Exhibit 10(k) to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference). (m) Amendment to Agreement between the Company and R. N. Daniel approved by the Company on May 11, 1993. (n) Supplemental Executive Retirement Plan approved by the Company in September, 1989 (Filed as Exhibit 10(l) to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference). 33 35 (o) Outside Directors Stock Option Plan (Filed as Exhibit 10(m) to the Company's 1990 Annual Report on Form 10-K and incorporated herein by reference. (p) Amended and Restated Joint Venture Agreement dated as of June 1, 1990 by and between Allen Heat Transfer Products Inc. and Handy & Harman Radiator Corporation (Filed as Exhibit (2) to the Company's Report on Form 8-K for June 1990 and incorporated herein by reference). (q) Handy & Harman Long-Term Incentive Stock Option Plan (Filed as Exhibit 10(p) to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference). (r) Handy & Harman Supplemental Executive Plan (Filed as Exhibit 10(q) to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference). (11) Statement re computation of per share earnings. Incorporated by reference to item (g) of Summary of Significant Accounting Policies on page 27 of the Annual Report. (13) Pages 17 through 34 of the Company's Annual Report to Shareholders for 1993. Except for those portions which are expressly incorporated by reference in this Annual Report on Form 10-K, this exhibit is furnished for the information of the 34 36 Commission and is not deemed to be filed as part of this Annual Report on Form 10-K. (22) List of Subsidiaries of the Company is filed as Exhibit 22 to this Annual Report on Form 10-K. (24) Report and Consent of Independent Auditors. Included as part of the Report and Consent of Independent Auditors on page F-1 filed with the Financial Statement Schedules as part of this Annual Report on Form 10-K pursuant to Part IV hereof and incorporated herein by reference thereto. (b) Reports on Form 8-K The Company did not file a Report on Form 8-K during the fourth quarter of the fiscal year ended December 31, 1993. For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby under- takes as follows, which undertaking shall be incorporated by reference into registrant's Registration Statements on Form S-8 Nos. 2-78264 (filed July 1, 1982), 33-37919 (filed November 21, 1990) 33-43709 (filed October 31, 1991): Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange 35 37 Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the regis- trant in the successful defense of any action, suit or proceed- ing) is asserted by such director, officer or controlling person in connection with the securities being registered, the regis- trant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnifica- tion by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 36 38 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Handy & Harman has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HANDY & HARMAN Dated: March 24, 1994 By /s/ R. N. Daniel ---------------------- R.N. Daniel Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company, in the capacities and on the respective dates indicated.
Signature Title Date --------- ----- ---- /s/ R.N. Daniel Chairman and Director 3/24/94 - ------------------ (Principal Executive Officer) (R.N. Daniel) /s/ F.E. Grzelecki President and Director 3/24/94 - ------------------- (Chief Operating Officer) (F.E. Grzelecki) /s/ J.M. McLoone Vice President - Financial 3/24/94 - ----------------- Services (J.M. McLoone) (Principal Financial Officer) /s/ D.C. Kelly Controller (Principal 3/24/94 - ------------------- (D.C. Kelly) Accounting Officer) /s/ C.A. Abramson Director 3/24/94 - ------------------ (C.A. Abramson) /s/ R.E. Cornelia Director 3/24/94 - ------------------ (R.E. Cornelia) /s/ G.G. Garbacz Director 3/24/94 - ------------------- (G.G. Garbacz) Director - ------------------- (G.M. Nichols) /s/ H.P. Sotos Director 3/24/94 - ------------------- (H.P. Sotos) /s/ L.M. Woods Director 3/24/94 - ------------------ (L.M. Woods)
37 39 F-1 REPORT AND CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders Handy & Harman: Under the date of February 18, 1994 we reported on the consolidated balance sheet of Handy & Harman and Subsidiaries as of December 31, 1993 and 1992 and the related consolidated statements of income, shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1993, as contained in the 1993 Annual Report to Shareholders. These consolidated financial statements and our report thereon are incorporated by reference in the Annual Report on Form 10-K for the year 1993. In connection with our audit of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedules on pages S-1, S-2, S-3 and S-4. These consolidated financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statement schedules based on our audits. In our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in the Registration Statements on Form S-8 (Registration Nos. 2-78264, 33-37919 and 33-43709) of Handy & Harman of our report dated February 18, 1994. KPMG PEAT MARWICK New York, New York March 24, 1994 40 HANDY & HARMAN AND SUBSIDIARIES S-1 SCHEDULE V PROPERTY, PLANT AND EQUIPMENT (Thousands of Dollars)
Balance, Additions - at Cost Balance, ------------------------- Beginning Other Retirements Translation Close of Period Changes Expenditures or Sales Adjustment(b) of Period - ------------------------------------------------------------------------------------------------------------------------------------ Classification Year ended December 31, 1993 Land $ 5,309 $ 13 $ 371 $ (18) $ 4,933 Buildings and improvements 60,664 1,163 549 (115) 61,163 Machinery and equipment 158,726 (94) 9,883 12,527 (193) 155,795 Furniture and fixtures (includes business machines) 14,151 (11) 2,146 670 (31) 15,585 Automotive 1,009 136 174 (1) 970 Improvements to leased property 4,013 88 56 (6) 4,039 Construction in progress 5,221 (40) 1,718 - - 6,899 - ------------------------------------------------------------------------------------------------------------------------------------ $249,093 (145)(c) $15,147 $14,347 $ (364) $249,384 ==================================================================================================================================== Classification Year ended December 31, 1992 Land $ 5,491 - - $ 132 $ (50) $ 5,309 Buildings and improvements 61,358 $ (1,105) $ 2,091 1,337 (343) 60,664 Machinery and equipment 152,090 (167) 14,258 6,335 (1,120) 158,726 Furniture and fixtures (includes business machines) 13,868 27 1,964 1,538 (170) 14,151 Automotive 851 8 351 192 (9) 1,009 Improvements to leased property 4,177 153 799 1,053 (63) 4,013 Construction in progress 9,866 431 (5,023)(a) 53 - 5,221 - ------------------------------------------------------------------------------------------------------------------------------------ $247,701 $ (653)(d) $14,440 $10,640(e) $ (1,755) $249,093 ==================================================================================================================================== Classification Year ended December 31, 1991 Land $ 9,017 $( 2,748) $ 11 $ 787 $ ( 2) $ 5,491 Buildings and improvements 76,392 (10,389) 369 4,998 ( 16) 61,358 Machinery and equipment 167,534 ( 8,824) 7,391 13,899 (112) 152,090 Furniture and fixtures (includes business machines) 14,943 ( 534) 1,011 1,532 ( 20) 13,868 Automotive 874 ( 93) 276 206 - 851 Improvements to leased property 5,133 ( 258) 21 708 ( 11) 4,177 Construction in progress 6,719 ( 390) 3,649 112 - 9,866 - ------------------------------------------------------------------------------------------------------------------------------------ $280,612 $(23,236)(c) $12,728 $22,242 $ (161) $247,701 ====================================================================================================================================
(a) Amounts represent transfers to depreciable assets in excess of new construction in progress. (b) The translation adjustment results from restating the property, plant and equipment of the Company's Canadian and British subsidiaries in U.S. dollars. (c) Amounts represent reclass of discontinued operations property, plant and equipment. (d) Amounts represent reclass of discontinued operations property, plant and equipment and contribution of machinery and equipment to Joint Venture. (e) Amounts include reclass of machinery and equipment to assets held for resale. Note: The depreciation and amortization policy is to provide for retirement of property at the end of its estimated useful life, determined as follows:
Company Subsidiaries -------- ------------ Buildings 50 years 10-40 years Building improvements 10 years 10-20 years Machinery and equipment 14 years 3-20 years Furniture and fixtures 20 years 2-13 years Business machines 8 years 7-10 years Automotive 4 years 2-8 years Improvements to leased property Life of lease Life of lease
41 HANDY & HARMAN AND SUBSIDIARIES S-2 SCHEDULE VI ACCUMULATED DEPRECIATION, DEPLETION, AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT (Thousands of Dollars)
Additions --------------------- Balance, Charged to Balance, Beginning Other Costs and Retirements Translation Close of Period Changes Expenses or Sales Adjustment(a) of Period - ---------------------------------------------------------------------------------------------------------------------------- Classification Year ended December 31, 1993 Buildings and improvement $ 24,252 $ 2,072 $ 523 (44) 25,757 Machinery and equipment 102,816 10,666 9,521 (137) 103,824 Furniture and fixtures (includes business machines) 9,409 1,491 520 (22) 10,358 Automotive 637 193 154 (1) 675 Improvements to leased property 2,374 237 56 (5) 2,550 - ---------------------------------------------------------------------------------------------------------------------------- $139,488 $14,659 $10,774 $ (209) $143,164 ============================================================================================================================ Year ended December 31, 1992 Buildings and improvements $ 22,862 $ 2,132 $ 654 $ ( 88) $ 24,252 Machinery and equipment 99,367 $ (1,058) 10,094 4,948 (639) 102,816 Furniture and fixtures (includes business machines) 9,510 27 1,413 1,442 ( 99) 9,409 Automotive 523 8 269 158 ( 5) 637 Improvements to leased property 3,076 153 249 1,053 ( 51) 2,374 - ---------------------------------------------------------------------------------------------------------------------------- $135,338 $ 870)(c) $14,157 $ 8,255(d) $( 882) $139,488 ============================================================================================================================ Year ended December 31, 1991 Buildings and improvement $ 26,252 $ (5,487) $ 2,535 $441 $3 $ 22,862 Machinery and equipment 104,126 (8,121) 11,147 7,734 (51) 99,367 Furniture and fixtures (includes business machines 9,271 (478) 1,409 687 (5) 9,510 Automotive 660 (78) 110 168 (1) 523 Improvements to leased property 3,053 (255) 312 27 (7) 3,076 - ---------------------------------------------------------------------------------------------------------------------------- $143,362 $(14,419)(b) $15,513 $ 9,057 $ (61) $135,338 ============================================================================================================================
(a) The translation adjustment results from restating the accumulated depreciation of the Company's Canadian and British subsidiaries in U.S. dollars. (b) Amounts represent reclass for discontinued operations property, plant and equipment. (c) Amounts represent reclass for discontinued operations property, plant and equipment and contribution of machinery and equipment to Joint Venture. (d) Amounts include reclass of machinery and equipment to assets held for resale. 42 HANDY & HARMAN AND SUBSIDIARIES S-3 SCHEDULE VIII VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Thousands of Dollars)
Balance, Balance, Beginning Additions Deductions Close of Period (a) from Reserve of Period ========================================================================================================================= Description Allowance for doubtful accounts receivable (deducted from accounts receivable): Year ended December 31, 1993 $3,325 $1,195 $ 799 $3,721 ========================================================================================================================= Year ended December 31, 1992 $3,347 $ 627 $ 649 $3,325 ========================================================================================================================= Year ended December 31, 1991 $1,165(c) $3,400 $2,482 $1,370(b) $3,347 ========================================================================================================================= 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------------- (a) Provision for doubtful accounts - charged to costs and expenses $1,195 $ 627 $2,482(1) =========================================================================================================================
(1) 1,530 of the provision for doubtful accounts was part of continuing operations' reserve for restructuring, nonrecurring and unusual charges. (b) Items determined to be uncollectible, less recovery of amounts reviously written off. (c) $1,165 of allowance for doubtful accounts receivable reclassed to current assets of discontinued operations. 43 HANDY & HARMAN AND SUBSIDIARIES S-4 SCHEDULE X SUPPLEMENTARY INCOME STATEMENT INFORMATION Three Years Ended December 31, 1993 (Thousands of Dollars)
Charged to Costs and Expenses 1993 1992 1991 - --------------------------------------------------------------------------------------------------- Item (a) Maintenance and repairs $11,065 $11,589 $11,712 ===================================================================================================
44 EXHIBIT INDEX Exhibit Number Description ------- ----------- (3) Certificate of Incorporation and By-Laws. (a) The Restated Certificate of Incorporation of Handy & Harman (Filed as Exhibit 3(a) to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference). (b) The By-Laws as amended (Filed as Exhibit 3(b) to the Company's 1990 Annual Report on Form 10-K and incorporated herein by reference). (4) Instruments defining the rights of security holders, including indentures. (a) Revolving Credit Agreement dated as of March 16, 1992 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia as the Administrative Agent (Filed as Exhibit 4(a) to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference). (b) Short Term Revolving Credit Agreement dated as of March 16, 1992 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemi- cal Bank, as Co-Agents and The Bank of Nova Scotia, as the Administrative Agent (Filed as Ex- hibit 4(b) to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference). (c) Amendment to Revolving Credit Agreement dated as of March 16, 1992 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia as the Administrative Agent (filed as Exhibit 4(e) to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference). (d) Amendment to Short Term Revolving Credit Agreement dated as of March 16, 1992 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia, as the Administrative Agent (filed as Exhibit 4(d) to the Company's Annual Report on Form 10- K and incorporated herein by reference). (e) Amendment to Revolving Credit Agreement dated February 4, 1993 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia as the Administrative Agent. (f) Amendment to Short Term Revolving Credit Agreement dated February 4, 1993 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and the Bank of Nova Scotia, as the Administrative Agent. (g) Amendment to Revolving Credit Agreement dated July 1, 1993 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and The Bank of Nova Scotia as the Administrative Agent. (h) Amendment to Short Term Revolving Credit Agreement dated July 1, 1993 among the Company, certain financial institutions as lenders, The Bank of Nova Scotia, The Chase Manhattan Bank, N.A. and Chemical Bank, as Co-Agents and the Bank of Nova Scotia, as the Administrative Agent. No other required to be filed. The Company agrees to furnish to the Securities and Exchange Commission upon its request therefor a copy of each instrument omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. 45 (10) Material contracts. (a) 1982 Stock Option Plan (Filed as Exhibit 1 to the Company's Registration Statement on Form S-8 (Registration No. 2-78264) under the Securities Act of 1933 and incorporated herein by reference). (b) Amendment to 1982 Stock Option Plan approved in December 1988 (Filed as Exhibit 10(a) to the Company's Report on Form 8-K for December 1988 and incorporated herein by reference). (c) Management Incentive Plan, as amended February 26, 1981 (Filed as Exhibit 10(b) to the Company's 1980 Annual Report on Form 10-K and incorporated herein by reference thereto). (d) Amendment to Management Incentive Plan approved in December 1988 (Filed as Exhibit 10(d) to the Company's Report on Form 8-K for December 1988 and incorporated herein by reference). (e) Amendment to Management Incentive Plan approved in October 1991 (Filed as Exhibit 10(e) to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference). (f) Deferred Fee Plan For Directors, as amended February 26, 1981 (Filed as Exhibit 10(c) to the Company's 1980 Annual Report on Form 10-K and incorporated herein by reference thereto). (g) Form of Executive Agreement entered into with the Company's executive officers in September 1986 (Filed as Exhibit 10(d) to the Company's 1986 Annual Report on Form 10-K and incorporated herein by reference thereto). (h) Amendment to Executive Agreement approved in December 1988 (Filed as Exhibit 10(b) to the Company's Report on Form 8-K for December 1988 and incorporated herein by reference). (i) 1988 Long-Term Incentive Plan (Filed as Exhibit 10(h) to the Company's 1988 Annual Report on Form 10-K and incorporated herein by reference). (j) Amendment to 1988 Long-Term Incentive Plan approved in December 1988 (Filed as Exhibit 10(c) to the Company's Report on Form 8-K for December 1988 and incorporated herein by reference). (k) Amendment to 1988 Long-Term Incentive Plan approved in June 1989 (Filed as Exhibit 10(j) to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference). (l) Agreement dated as of May 1, 1989 between the Company and R. N. Daniel (Filed as Exhibit 10(k) to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference). (m) Amendment to Agreement between the Company and R. N. Daniel approved by the Company on May 11, 1993. (n) Supplemental Executive Retirement Plan approved by the Company in September, 1989 (Filed as Exhibit 10(l) to the Company's 1989 Annual Report on Form 10-K and incorporated herein by reference). (o) Outside Directors Stock Option Plan (Filed as Exhibit 10(m) to the Company's 1990 Annual Report on Form 10-K and incorporated herein by reference. (p) Amended and Restated Joint Venture Agreement dated as of June 1, 1990 by and between Allen Heat Transfer Products Inc. and Handy & Harman Radiator Corporation (Filed as Exhibit (2) to the Company's Report on Form 8-K for June 1990 and incorporated herein by reference). (q) Handy & Harman Long-Term Incentive Stock Option Plan (Filed as Exhibit 10(p) to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference). (r) Handy & Harman Supplemental Executive Plan (Filed as Exhibit 10(q) to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference). 46 (11) Statement re computation of per share earnings. Incorporated by reference to item (g) of Summary of Significant Accounting Policies on page 27 of the Annual Report. (13) Pages 17 through 34 of the Company's Annual Report to Shareholders for 1993. Except for those portions which are expressly incorporated by reference in this Annual Report on Form 10-K, this exhibit is furnished for the information of the Commission and is not deemed to be filed as part of this Annual Report on Form 10-K. (22) List of Subsidiaries of the Company is filed as Exhibit 22 to this Annual Report on Form 10-K. (24) Report and Consent of Independent Auditors. Included as part of the Report and Consent of Independent Auditors on page F-1 filed with the Financial Statement Schedules as part of this Annual Report on Form 10-K pursuant to Part IV hereof and incorporated herein by reference thereto. EX-4.E 2 AMENDMENT TO REVOLVING CREDIT AGREEMENT 2/4/93 1 [EXECUTION COPY] SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT This SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT, dated as of February 4, 1993 (this "Amendatory Agreement"), among HANDY & HARMAN, a New York corporation ("the Borrower"), certain financial institutions signatories hereto (the "Lenders"), THE BANK OF NOVA SCOTIA, THE CHASE MANHATTAN BANK, N.A. and CHEMICAL BANK, as the co-agents (collectively referred to herein as the "Co-Agents") and THE BANK OF NOVA SCOTIA, as administrative agent (the "Administrative Agent"), W I T N E S S E T H : WHEREAS, the Borrower, the Lenders, the Co-Agents and the Administrative Agent are parties to a Revolving Credit Agreement, dated as of March 16, 1992 (as amended or otherwise modified to the date hereof, the "Existing Credit Agreement"); and WHEREAS, the parties hereto have agreed, subject to the conditions and terms hereinafter set forth, to amend the Existing Credit Agreement in certain respects as herein provided (the Existing Credit Agreement, as so amended by this Amendatory Agreement, being referred to as the "Credit Agreement"); NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereto agree as follows: PART I DEFINITIONS SUBPART 1.1. Certain Definitions. The following terms (whether or not underscored) when used in this Amendatory Agreement shall have the following meanings (such meanings to be equally applicable to the singular and plural form thereof): "Administrative Agent" is defined in the preamble. "Amendatory Agreement" is defined in the preamble. "Borrower" is defined in the preamble. "Co-Agents" is defined in the preamble. "Credit Agreement" is defined in the second recital. "Existing Credit Agreement" is defined in the first recital. "Second Amendment Effective Date" is defined in Subpart 3.1. "Lenders" is defined in the preamble. 2 SUBPART 1.2. Other Definitions. Terms for which meanings are provided in the Existing Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Amendatory Agreement with such meanings. PART II AMENDMENTS TO THE EXISTING CREDIT AGREEMENT Effective on (and subject to the occurrence of) the Second Amendment Effective Date, the Existing Credit Agreement is hereby amended in accordance with Subparts 2.1 through 2.3; except as so amended, the Existing Credit Agreement shall continue in full force and effect. SUBPART 2.1. Amendment to Article I. Article I of the Existing Credit Agreement is hereby amended in accordance with Subparts 2.1.1 through 2.1.2. SUBPART 2.1.1. Section 1.1 of the Existing credit Agreement is hereby amended by inserting the following definition in such Section in the appropriate alphabetical sequence: "Second Amendment" means the Second Amendment, dated as of February 4, 1993, to this Agreement among the Borrower, the Lenders party thereto, the Co-Agents and the Administrative Agent. SUBPART 2.1.2. Section 1.1 in its entirety, of the Existing Credit Agreement is further amended by deleting in its entirety the definition of "Stated Maturity Date" appearing in such Section, and inserting the following definition in place thereof: "Stated Maturity Date" means March 16, 1995, as such date may be extended pursuant to Section 2.7. SUBPART 2.2. Amendments to Article II. Article II of the Existing Credit Agreement is hereby amended in accordance with Subparts 2.2.1 through 2.2.2. SUBPART 2.2.1. Section 2.7.1 of the Existing Credit Agreement is hereby amended in its entirety to read as follows: "SECTION 2.7.1 Request for Extension of Commitment Termination Dates and Maturity of Loans. Any term or provision of this Agreement to the contrary notwithstanding, not later than 45 days nor more than 60 days before each anniversary of the Effective Date (if the Revolving Loan Commitment then remains in effect), the Borrower may, by delivery of a duly completed Extension Request to the Administrative Agent, irrevocably request that each Lender and each Issuer -2- 3 (a) extend for a one year period the then existing Loan Commitment Termination Date relating to such Lender's Revolving Loan Commitment; and (b) extend for a one year period the then existing Letter of Credit Commitment Termination Date relating to such Issuer's Letter of Credit Commitment and each Lender's obligation to participate, pursuant to Section 2.6.7, in the Letters of Credit." SUBPART 2.2.2. Clauses (b) and (c) of Section 2.7.2 of the Existing Credit Agreement are hereby amended in their entirety to read as follows: "(b) Each Lender and Issuer shall, within 30 days of receipt of the notice described in clause (a), notify the Administrative Agent whether or not it consents to the requests of the Borrower set forth in such Extension Request, such consent to be in the sole discretion of such Lender or Issuer, as the case may be. Each Lender hereby acknowledges and agrees that its consent to the Borrower's request to extend the Loan Commitment Termination Date (and therefore, the then existing Stated Maturity Date) shall also be deemed to be a consent by such Lender to an extension of its obligations to participate, pursuant to Section 2.6.7, in the Letters of Credit. If any Lender or Issuer does not so notify the Administrative Agent of its decision within such 30 day period, such Lender or Issuer, as the case may be, shall be deemed not to have consented to such requests of the Borrower. (c) The Administrative Agent shall promptly notify the Borrower whether the Lenders and Issuers have consented to such request. If the Administrative Agent does not so notify the Borrower within 5 days prior to the next occurring anniversary of the Effective Date, the Administrative Agent shall be deemed to have notified the Borrower that the Lenders and Issuers have not consented to the Borrower's request." SUBPART 2.3. Amendment to Article VII. Clause (a) of Section 7.2.4 of the Existing Credit Agreement is hereby amended by deleting the last two lines contained in such clause, and substituting the following under the column headings "Period" and "Adjusted Consolidated Tangible Net Worth", respectively: "10/01/94 through 12/31/94 130,000,000 01/01/95 and thereafter 130,000,000 plus 25% of the Borrower's Net Income for the immediately preceding Fiscal Year;" -3- 4 PART III CONDITIONS TO EFFECTIVENESS SUBPART 3.1. Second Amendment Effective Date. This Amendatory Agreement shall become effective on the date (the "Second Amendment Effective Date") when all of the conditions set forth in this Subpart 3.1 shall have been satisfied. SUBPART 3.1.1. Execution of Counterparts. The Administrative Agent shall have received counterparts of this Amendatory Agreement, duly executed on behalf of the Borrower and the Required Lenders. SUBPART 3.1.2. Legal Details, etc. All documents executed or submitted pursuant hereto shall be satisfactory in form and substance to the Administrative Agent and its counsel. The Administrative Agent and its counsel shall have received all information and such counterpart originals or such certified or other copies or such materials, as the Administrative Agent or its counsel may reasonably request, and all legal matters incident to the transactions contemplated by this Amendatory Agreement shall be satisfactory to the Administrative Agent and ,its counsel. PART IV MISCELLANEOUS SUBPART 4.1. Cross-References. References in this Amendatory Agreement to any Part or Subpart are, unless otherwise specified or otherwise required by the context, to such Part or Subpart of this Amendatory Agreement. SUBPART 4.2. Loan Document Pursuant to Existing Credit Agreement. This Amendatory Agreement is a Loan Document executed pursuant to the Existing Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Existing Credit Agreement. SUBPART 4.3. Successors and Assigns. This Amendatory Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. SUBPART 4.4. Counterparts. This Amendatory Agreement may be executed by the parties hereto in several counterparts, each of which when executed and delivered shall be deemed to be an original and all of which shall constitute together but one and the same agreement. SUBPART 4.5. Costs and Expenses. The Borrower agrees to pay all costs and expenses incurred by the Administrative Agent (including fees and out-of-pocket expenses of counsel to the Administrative Agent) incurred in connection with the preparation, execution and delivery of this Amendatory Agreement and the other agreements entered into in connection herewith. -4- 5 SUBPART 4.6. Representations, No Default, etc. As of the Second Amendment Effective Date, the Borrower hereby represents and warrants that (a) the representations and warranties set forth in Article VI of the Credit Agreement (excluding, however, those contained in Section 6.7) are true and correct in all material respects (unless stated to relate solely to an earlier date, in which case such representations and warranties were true and correct as of such earlier date); (b) except as disclosed by the Borrower to the Administrative Agent and the Lenders pursuant to Section 6.7 of the Credit Agreement, (i) no litigation, arbitration or governmental investigation or proceeding is pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries which may reasonably be expected to materially adversely affect the Borrower's, or the Borrower and its Subsidiaries' taken as a whole, businesses, operations, assets, revenues, properties or prospects or which purports to affect the legality, validity or enforceability of the Credit Agreement, the Notes or any other Loan Document; and (ii) no development has occurred in any litigation, arbitration or governmental investigation or proceeding disclosed pursuant to Section 6.7 of the Credit Agreement which may reasonably be expected to materially adversely affect the businesses, operations, assets, revenues, properties or prospects of the Borrower or the Borrower and its Subsidiaries, taken as a whole; and (c) no Default has occurred and is continuing. SUBPART 4.7. Limited Waiver, etc. No amendment, waiver or approval by the Issuer or any Lender under this Amendatory Agreement shall, except as may be otherwise stated in this Amendatory Agreement, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval to be granted after the date hereof, and except as expressly modified by this Amendatory Agreement, the provisions of the Existing credit Agreement shall -5- 6 remain in full force and effect, without amendment or other modification. SUBPART 4.8. Governing Law. THIS AMENDATORY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the parties hereto have caused this Amendatory Agreement to be executed by their respective authorized officers as of the day and year first above written. HANDY & HARMAN By /s/ Stephen B. Mudd ----------------------- Title: Vice President and Treasurer THE BANK OF NOVIA SCOTIA, in its capacity as Administrative Agent, Co-Agent and Lender By /s/ Stephen Lockart ----------------------- Title: Vice President THE CHASE MANHATTAN BANK, N.A., in its capacity as Co-Agent and Lender By /s/ Edward J. McNulty ----------------------- Title: Managing Director CHEMICAL BANK, in its capacity as Co-Agent and Lender By /s/ Raymond G. Dunning ----------------------- Title: Vice President -6- 7 THE BANK OF NEW YORK By /s/ Ken Sneider ----------------------- Title: Vice President LTCB TRUST COMPANY By /s/ Fumi Kamoshia ----------------------- Title: Senior Vice President THE BANK OF TOKYO TRUST COMPANY By /s/ Jeffrey Millar ----------------------- Title: Vice President NBD BANK, N.A. By /s/ Anna R. Hoffman ----------------------- Title: Vice President WESTPAC BANKING CORPORATION By /s/ Joan F. Clarke ----------------------- Title: Vice President SHAWMUT BANK, CONNECTICUT By /s/ John Raleigh ----------------------- Title: Vice President -7- 8 THE FUJI BANK LTD. By /s/ Takashi Nagao ----------------------- Title: Vice President and Manager GIROCREDIT BANK, FKA GIROZENTRALE UND BANK DER OSTERREICHISCHEN SPARKASSEN AG" By /s/ Dhuane G. Stephens ----------------------- Title: Vice President By /s/ Lalit Malhorta ----------------------- Title: Senior Vice President IBJ SCHRODER BANK & TRUST COMPANY By /s/ David G. Goodall ----------------------- Title: Assistant Vice President -8- EX-4.F 3 AMEND. TO SHORT TERM REVOLVING CREDIT AGMT. 2/4/93 1 [EXECUTION COPY] SECOND AMENDMENT TO SHORT TERM REVOLVING CREDIT AGREEMENT This SECOND AMENDMENT TO SHORT TERM REVOLVING CREDIT AGREEMENT, dated as of February 4, 1993 (this "Amendatory Agreement"), among HANDY & HARMAN, a New York corporation (the "Borrower"), certain financial institutions signatories hereto (the "Lenders"), THE BANK OF NOVA SCOTIA, THE CHASE MANHATTAN BANK, N.A. and CHEMICAL BANK, as the co-agents (collectively referred to herein as the "Co-Agents") and THE BANK OF NOVA SCOTIA, as administrative agent (the "Administrative Agent"), W I T N E S S E T H : WHEREAS, the Borrower, the Lenders, the Co-Agents and the Administrative Agent are parties to a Short Term Revolving Credit Agreement, dated as of March 16, 1992 (as amended or otherwise modified to the date hereof, the "Existing Credit Agreement"); and WHEREAS, the parties hereto have agreed, subject to the conditions and terms hereinafter set forth, to amend the Existing Credit Agreement in certain respects as herein provided (the Existing Credit Agreement, as so amended by this Amendatory Agreement, being referred to as the "Credit Agreement"); NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereto agree as follows: PART I DEFINITIONS SUBPART 1.1. Certain Definitions. The following terms (whether or not underscored) when used in this Amendatory Agreement shall have the following meanings (such meanings to be equally applicable to the singular and plural form thereof): "Administrative Agent" is defined in the preamble. "Amendatory Agreement" is defined in the preamble. "Borrower" is defined in the preamble. "Co-Agents" is defined in the preamble. "Credit Agreement" is defined in the second recital. "Existing Credit Agreement" is defined in the first recital. -1- 2 "Second Amendment Effective Date" is defined in Subpart 3.1. "Lenders" is defined in the preamble. SUBPART 1.2. Other Definitions. Terms for which meanings are provided in the Existing Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Amendatory Agreement with such meanings. PART II AMENDMENTS TO THE EXISTING CREDIT AGREEMENT Effective on (and subject to the occurrence of) the Second Amendment Effective Date, the Existing Credit Agreement is hereby amended in accordance with Subparts 2.1 through 2.3; except as so amended, the Existing Credit Agreement shall continue in full force and effect. SUBPART 2.1. Amendment to Article I. Section 1.1 of the Existing Credit Agreement is hereby amended by inserting the following definition in such Section in the appropriate alphabetical sequence: "Second Amendment" means the Second Amendment, dated as of February 4, 1993, to this Agreement among the Borrower, the Lenders party thereto, the Co-Agents and the Administrative Agent. SUBPART 2.2. Amendment to Article II. Article II of the Existing Credit Agreement is hereby amended in accordance with Subparts 2.2.1 through 2.2.2. SUBPART 2.2.1. Section 2.6.1 of the Existing Credit Agreement is hereby amended in its entirety to read as follows: "SECTION 2.6.1. Request for Extension of Loan Commitment Termination Dates and Maturity of Loans. Any term or provision of this Agreement to the contrary notwithstanding, not later than 45 days nor more than 60 days before each anniversary of the Effective Date (if the Revolving Loan Commitment then remains in effect), the Borrower may, by delivery of a duly completed Extension Request to the Administrative Agent, irrevocably request that each Lender and the Swing Line Lender extend for an additional 364 day period (such period to commence on the day immediately following the then Stated Maturity Date) the Loan Commitment Termination Date relating to such Lender's Revolving Loan Commitment (which shall also be deemed to be a request that the Swing Line Lender extend for such period -2- 3 the Swing Line Loan Commitment); provided, that the Loan Commitment Termination Date shall not be extended beyond the Commitment Termination Date (as such term is defined in the Long Term Credit Agreement). The failure of the Borrower to request such an extension hereunder shall automatically terminate the Borrower's rights to request additional such extensions." SUBPART 2.2.2. Clause (b) of Section 2.6.2 of the Existing Credit Agreement is hereby amended by deleting the number "20" each time it appears in such clause, and inserting the number "30" in place thereof. SUBPART 2.3. Amendment to Article VII. Clause (a) of Section 7.2.4 of the Existing Credit Agreement is hereby amended by deleting the last two lines contained in such clause, and substituting the following under the column headings "Period" and "Adjusted Consolidated Tangible Net Worth", respectively: "10/01/94 through 12/31/94 130,000,000 01/01/95 and thereafter 130,000,000 plus 25% of the Borrower's Net Income for the immediately preceding Fiscal Year;"
PART III CONDITIONS TO EFFECTIVENESS SUBPART 3.1. Second Amendment Effective Date. This Amendatory Agreement shall become effective on the date (the "Second Amendment Effective Date") when all of the conditions set forth in this Subpart 3.1 shall have been satisfied. SUBPART 3.1.1. Execution of Counterparts. The Administrative Agent shall have received counterparts of this Amendatory Agreement, duly executed on behalf of the Borrower, the Required Lenders and the Swing Line Loan Lender. SUBPART 3.1.1. Legal Details, etc. All documents executed or submitted pursuant hereto shall be satisfactory in form and substance to the Administrative Agent and its counsel. The Administrative Agent and its counsel shall have received all information and such counterpart originals or such certified or other copies or such materials, as the Administrative Agent or its counsel may reasonably request, and all legal matters incident to the transactions contemplated by this Amendatory Agreement shall be satisfactory to the Administrative Agent and its counsel. -3- 4 PART IV MISCELLANEOUS SUBPART 4.1. Cross-References. References in this Amendatory Agreement to any Part or Subpart are, unless otherwise specified or otherwise required by the context, to such Part or Subpart of this Amendatory Agreement. SUBPART 4.2. Loan Document Pursuant to Existing Credit Agreement. This Amendatory Agreement is a Loan Document pursuant to the Existing Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Existing Credit Agreement. SUBPART 4.3. Successors and Assigns. This Amendatory Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. SUBPART 4.4. Counterparts. This Amendatory Agreement may be executed by the parties hereto in several counterparts, each of which when executed and delivered shall be deemed to be an original and all of which shall constitute together but one and the same agreement. SUBPART 4.5. Costs and Expenses. The Borrower agrees to pay all costs and expenses incurred by the Administrative Agent (including fees and out-of-pocket expenses of counsel to the Administrative Agent) incurred in connection with the preparation, execution and delivery of this Amendatory Agreement and the other agreements entered into in connection herewith. SUBPART 4.6. Representations, No Default, etc. As of the Second Amendment Effective Date, the Borrower hereby represents and warrants that (a) the representations and warranties set forth in Article VI of the Credit Agreement (excluding, however, those contained in Section 6.7) are true and correct in all material respects (unless stated to relate solely to an earlier date, in which case such representations and warranties were true and correct as of such earlier date); (b) except as disclosed by the Borrower to the Administrative Agent and the Lenders pursuant to Section 6.7 of the Credit Agreement, (i) no litigation, arbitration or governmental investigation or proceeding is pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries which may reasonably be expected to materially adversely affect -4- 5 (ii) no development has occurred in any litigation, arbitration or governmental investigation or proceeding disclosed pursuant to Section 6.7 of the Credit Agreement which may reasonably be expected to materially adversely affect the businesses, operations, assets, revenues, properties or prospects of the Borrower or the Borrower and its Subsidiaries, taken as a whole; and (c) no Default has occurred and is continuing. SUBPART 4.7. Limited Waiver, etc. No amendment, waiver or approval by any Lender under this Amendatory Agreement shall, except as may be otherwise stated in this Amendatory Agreement, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval to be granted after the date hereof, and except as expressly modified by this Amendatory Agreement, the provisions of the Existing Credit Agreement shall remain in full force and effect, without amendment or other modification. SUBPART 4.8. Governing Law. THIS AMENDATORY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the parties hereto have caused this Amendatory Agreement to be executed by their respective authorized officers as of the day and year first above written. HANDY & HARMAN By /s/ Stephen B. Mudd ---------------------------- Title: Vice President and Treasurer THE BANK OF NOVIA SCOTIA, in its capacity as Administrative Agent, Co-Agent and Lender By /s/ Stephen Lockart ----------------------- Title: Vice President -5- 6 THE CHASE MANHATTAN BANK, N.A., in its capacity as Co-Agent and Lender By /s/ Edward J. McNulty ----------------------- Title: Managing Director CHEMICAL BANK, in its capacity as Co-Agent and Lender By /s/ Raymond G. Dunning ----------------------- Title: Vice President THE BANK OF NEW YORK By /s/ Ken Sneider ----------------------- Title: Vice President LTCB TRUST COMPANY By /s/ Fumi Kamoshia ----------------------- Title: Senior Vice President THE BANK OF TOKYO TRUST COMPANY By /s/ Jeffrey Millar ----------------------- Title: Vice President NBD BANK, N.A. By /s/ Anna R. Hoffman ----------------------- Title: Vice President -6- 7 WESTPAC BANKING CORPORATION By /s/ Joan F. Clarke ---------------------------- Title: Vice President SHAWMUT BANK, CONNECTICUT By /s/ John Raleigh ----------------------- Title: Vice President THE FUJI BANK LTD. By /s/ Takashi Nagao ----------------------- Title: Vice President and Manager GIROCREDIT BANK, FKA GIROZENTRALE UND BANK DER OSTERREICHISCHEN SPARKASSEN AG" By /s/ Dhuane G. Stephens ----------------------- Title: Vice President By /s/ Lalit Malhorta ----------------------- Title: Senior Vice President IBJ SCHRODER BANK & TRUST COMPANY By /s/ David G. Goodall ----------------------- Title: Assistant Vice President -7- EX-4.G 4 AMENDMENT TO REVOLVING CREDIT AGREEMENT 7/1/93 1 [EXECUTION COPY] THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT This THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT, dated as of July 1, 1993 (this "Amendatory Agreement"), among HANDY & HARMAN, a New York corporation ("the Borrower"), certain financial institutions signatories hereto (the "Lenders"), THE BANK OF NOVA SCOTIA, THE CHASE MANHATTAN BANK, N.A. and CHEMICAL BANK, as the co-agents (collectively referred to herein as the "Co-Agents") and THE BANK OF NOVA SCOTIA, as administrative agent (the "Administrative Agent"), W I T N E S S E T H : WHEREAS, the Borrower, the Lenders, the Co-Agents and the Administrative Agent are parties to a Revolving Credit Agreement, dated as of March 16, 1992 (as amended or otherwise modified to the date hereof, the "Existing Credit Agreement"); and WHEREAS, the parties hereto have agreed, subject to the conditions and terms hereinafter set forth, to amend the Existing Credit Agreement in certain respects as herein provided and to add Fleet National Bank as a Lender (the Existing Credit Agreement, as so amended by this Amendatory Agreement, being referred to as the "Credit Agreement"); NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereto agree as follows: PART I DEFINITIONS SUBPART 1.1. Certain Definitions. The following terms (whether or not underscored) when used in this Amendatory Agreement shall have the following meanings (such meanings to be equally applicable to the singular and plural form thereof): "Administrative Agent" is defined in the preamble. "Amendatory Agreement" is defined in the preamble. "Borrower" is defined in the preamble. "Co-Agents" is defined in the preamble. "Credit Agreement" is defined in the second recital. "Existing Credit Agreement" is defined in the first recital. "Lenders" is defined in the preamble. 2 SUBPART 1.2. Other Definitions. Terms for which meanings are provided in the Existing Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Amendatory Agreement with such meanings. PART II AMENDMENTS TO THE EXISTING CREDIT AGREEMENT Effective on (and subject to the occurrence of) the Third Amendment Effective Date, the Existing Credit Agreement is hereby amended in accordance with SUBPARTS 2.1 through 2.2; except as so amended, the Existing Credit Agreement shall continue in full force and effect. SUBPART 2.1. Amendment to Article I. Article I of the Existing Credit Agreement is hereby amended in accordance with Subparts 2.1.1 through 2.1.3. SUBPART 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby amended by inserting the following definition in such Section in the appropriate alphabetical sequence: "Third Amendment" means the Third Amendment, dated as of July 1, 1993, to this Agreement among the Borrower, the Lenders party thereto (including Fleet National Bank), the Co-Agents and the Administrative Agent. SUBPART 2.1.2. Section 1.1 in its entirety, of the Existing Credit Agreement is further amended by deleting in their entirety the definitions of "Loan Commitment Amount", "Percentage" and "Stated Maturity Date" appearing in such Section, and inserting the following definitions in place thereof: "Loan Commitment Amount" means, on any day, $161,250,000, as such amount may be reduced from time to time pursuant to Section 2.2. "Percentage" means, relative to any Lender, the percentage set forth on Schedule I attached to the Third Amendment, as such percentage may be adjusted from time to time pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) pursuant to Section 10.11.1. "Stated Maturity Date" means June 30, 1996, as such date may be extended pursuant to Section 2.7. SUBPART 2.2. Amendments to Article X. Article X of the Existing Credit Agreement is hereby amended in accordance with Subpart 2.2.1. -2- 3 SUBPART 2.2.1. The tenth line following Clause (c) of Section 10.11.1 of the Existing Credit Agreement is hereby amended by adding the phrase ", or if less, all of such Lender's Loans and Commitment" immediately after the parenthetical "(such amount to be reduced pro rata by any permanent reductions in the amount of the Commitment)". PART III CONDITIONS TO EFFECTIVENESS SUBPART 3.1. Third Amendment Effective Dates. This Amendatory Agreement shall become effective as set forth below when each of the applicable conditions set forth in this SUBPART 3.1 shall have been satisfied. SUBPART 3.1.1. Execution of Counterparts. (a) With respect to the effectiveness of SUBPART 2.1 hereof the Administrative Agent shall have received counterparts of this Amendatory Agreement, duly executed on behalf of the Borrower and all of the Lenders. (b) With respect to the effectiveness of SUBPART 2.2 hereof the Administrative Agent shall have received counterparts of this Amendatory Agreement, duly executed on behalf of the Borrower and the Required Lenders. SUBPART 3.1.2. Addition of Fleet National Bank as Lender SUBPART 2.1 shall become effective only upon (i) the receipt by the Administrative Agent of an executed counterpart of this Amendatory Agreement from Fleet National Bank signifying its agreement to become a Lender under the Credit Agreement and (ii) payment by Fleet National Bank to the Administrative Agent for the account of the other Lenders an amount of funds necessary that, after giving effect to a pro rata distribution of such funds to the other Lenders, each Lender's Percentage (after giving effect to the effectiveness of SUBPART 2.1 hereof) of all outstanding Loans and participations in Letters of Credit shall not be exceeded. SUBPART 3.1.3. New Revolving Notes. SUBPART 2.1 hereof shall only become effective upon the receipt by Fleet Bank, N.A. and The Daiwa Bank, Limited from the Borrower of a new Revolving Loan Note in a principal amount equal to such Lender's new Percentage of the Loan Commitment Amount. SUBPART 3.1.4. Legal Details, etc. All documents executed or submitted pursuant hereto shall be satisfactory in form and substance to the Administrative Agent and its counsel. The Administrative Agent and its counsel shall have received all information and such counterpart originals or such certified or other copies or such materials, as the Administrative Agent or its counsel may reasonably request, and all legal matters incident to the transactions contemplated by this Amendatory Agreement shall be satisfactory to the Administrative Agent and its counsel. -3- 4 PART IV MISCELLANEOUS SUBPART 4.1. Cross-References. References in this Amendatory Agreement to any Part or Subpart are, unless otherwise specified or otherwise required by the context, to such Part or Subpart of this Amendatory Agreement. SUBPART 4.2. Loan Document Pursuant to Existing Credit Agreement. This Amendatory Agreement is a Loan Document executed pursuant to the Existing Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Existing Credit Agreement. SUBPART 4.3. Successors and Assigns. This Amendatory Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. SUBPART 4.4. Counterparts. This Amendatory Agreement may be executed by the parties hereto in several counterparts, each of which when executed and delivered shall be deemed to be an original and all of which shall constitute together but one and the same agreement. SUBPART 4.5. Costs and Expenses. The Borrower agrees to pay all costs and expenses incurred by the Administrative Agent (including fees and out-of-pocket expenses of counsel to the Administrative Agent) incurred in connection with the preparation, execution and delivery of this Amendatory Agreement and the other agreements entered into in connection herewith. SUBPART 4.6. Representations, No Default, etc. As of the date of effectiveness of the respective SUBPARTS hereof, the Borrower hereby represents and warrants that (a) the representations and warranties set forth in Article VI of the Credit Agreement (excluding, however, those contained in Section 6.7) are true and correct in all material respects (unless stated to relate solely to an earlier date, in which case such representations and warranties were true and correct as of such earlier date); (b) except as disclosed by the Borrower to the Administrative Agent and the Lenders pursuant to Section 6.7 of the Credit Agreement, (i) no litigation, arbitration or governmental investigation or proceeding is pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries which may reasonably be expected to materially adversely affect the Borrower's, or the Borrower and its Subsidiaries' taken as a whole, businesses, operations, assets, revenues, properties or prospects or which purports to -4- 5 affect the legality, validity or enforceability of the Credit Agreement, the Notes or any other Loan Document; and (ii) no development has occurred in any litigation, arbitration or governmental investigation or proceeding disclosed pursuant to Section 6.7 of the Credit Agreement which may reasonably be expected to materially adversely affect the businesses, operations, assets, revenues, properties or prospects of the Borrower or the Borrower and its Subsidiaries, taken as a whole; and (c) no Default has occurred and is continuing. SUBPART 4.7. Limited Waiver, etc. No amendment, waiver or approval by the Issuer or any Lender under this Amendatory Agreement shall, except as may be otherwise stated in this Amendatory Agreement, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval to be granted after the date hereof, and except as expressly modified by this Amendatory Agreement, the provisions of the Existing Credit Agreement shall remain in full force and effect, without amendment or other modification. SUBPART 4.8. Governing Law. THIS AMENDATORY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. -5- 6 IN WITNESS WHEREOF, the parties hereto have caused this Amendatory Agreement to be executed by their respective authorized officers as of the day and year first above written. HANDY & HARMAN By /s/ Stephen B. Mudd --------------------------------------- Title: Vice President & Treasurer THE BANK OF NOVA SCOTIA, in its capacity as Administrative Agent, Co-Agent and Lender By /s/ Stephen Lockart --------------------------------------- Title: Vice President THE CHASE MANHATTAN BANK, N.A. in its capacity as Co-Agent and Lender By /s/ Edward J. McNulty --------------------------------------- Title: Managing Director CHEMICAL BANK, in its capacity as Co-Agent and Lender By /s/ Raymond G. Dunning --------------------------------------- Title: Vice President THE BANK OF NEW YORK By /s/ Ken Sneider --------------------------------------- Title: Vice President -6- 7 LTCB TRUST COMPANY By /s/ Ichiro Murakami --------------------------------------- Title: Vice President THE BANK OF TOKYO TRUST COMPANY By /s/ Jeffrey Millar --------------------------------------- Title: Vice President NBD BANK, N.A. By /s/ Anna R. Hoffman --------------------------------------- Title: Vice President WESTPAC BANKING CORPORATION By /s/ Mark S. Olin --------------------------------------- Title: Vice President SHAWMUT BANK CONNECTICUT By /s/ Robert M. Surdam, Jr. --------------------------------------- Title: Vice President THE FUJI BANK LTD. By /s/ Y. Shiotsugu --------------------------------------- Title: Vice President and Manager -7- 8 GIROCREDIT BANK (FKA GIROZENTRALE UND BANK DER OSTERREICHISCHEN SPARKASSEN AG) By /s/ Dhuane G. Stephens --------------------------------------- Title: Vice President By /s/ Lalit Malhotra --------------------------------------- Title: Senior Vice President IBJ SCHRODER BANK & TRUST COMPANY By /s/ David G. Goodall --------------------------------------- Title: Assistant Vice President FLEET BANK, N.A. By /s/ John V. Rubin --------------------------------------- Title: Vice President -8- 9 SCHEDULE I (to Third Amendment)
NAME OF LENDER PERCENTAGE - -------------- ---------- The Bank of Nova Scotia 11.627906977% The Chase Manhattan Bank, N.A. 11.627906977% Chemical Bank 11.627906977% The Bank of New York 9.302325581% LTCB Trust Company 9.302325581% The Bank of Tokyo Trust Company 6.976744186% NBD Bank, N.A. 6.976744186% Westpac Banking Corporation 6.976744186% Fleet Bank, N.A. 6.976744186% Shawmut Bank Connecticut 4.651162791% The Fuji Bank Ltd. 4.651162791% Girocredit Bank (FKA Girozentrale und Bank der Osterreichischen Sparkassen AG 4.651162791% IBJ Schroder Bank & Trust Company 4.651162791%
EX-4.H 5 AMEND. TO SHORT TERM REVOLVING CREDIT AGMT. 7/1/93 1 [EXECUTION COPY] THIRD AMENDMENT TO SHORT TERM REVOLVING CREDIT AGREEMENT This THIRD AMENDMENT TO SHORT TERM REVOLVING CREDIT AGREEMENT, dated as of July 1, 1993 (this "Amendatory Agreement"), among HANDY & HARMAN, a New York corporation ("the Borrower"), certain financial institutions signatories hereto (the "Lenders"), THE BANK OF NOVA SCOTIA, THE CHASE MANHATTAN BANK, N.A. and CHEMICAL BANK, as the co-agents (collectively referred to herein as the "Co-Agents") and THE BANK OF NOVA SCOTIA, as administrative agent (the "Administrative Agent"), W I T N E S S E T H: WHEREAS, the Borrower, the Lenders, the Co-Agents and the Administrative Agent are parties to a Short Term Revolving Credit Agreement, dated as of March 16, 1992 (as amended or otherwise modified to the date hereof, the "Existing Credit Agreement"); and WHEREAS, the parties hereto have agreed, subject to the conditions and terms hereinafter set forth, to amend the Existing Credit Agreement in certain respects as herein provided and to add Fleet National Bank as a Lender (the Existing Credit Agreement, as so amended by this Amendatory Agreement, being referred to as the "Credit Agreement"); NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereto agree as follows: PART I DEFINITIONS SUBPART 1.1. Certain Definitions. The following terms (whether or not underscored) when used in this Amendatory Agreement shall have the following meanings (such meanings to be equally applicable to the singular and plural form thereof): "Administrative Agent" is defined in the preamble. "Amendatory Agreement" is defined in the preamble. "Borrower" is defined in the preamble. "Co-Agents" is defined in the preamble. "Credit Agreement" is defined in the second recital. 2 "Existing Credit Agreement" is defined in the first recital. "Lenders" is defined in the preamble. SUBPART 1.2. Other Definitions. Terms for which meanings are provided in the Existing Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Amendatory Agreement with such meanings. PART II AMENDMENTS TO THE EXISTING CREDIT AGREEMENT Effective on (and subject to the occurrence of) the Third Amendment Effective Date, the Existing Credit Agreement is hereby amended in accordance with SUBPARTS 2.1 through 2.2; except as so amended, the Existing Credit Agreement shall continue in full force and effect. SUBPART 2.1. Amendment to Article I. Article I of the Existing Credit Agreement is hereby amended in accordance with Subparts 2.1.1. through 2.1.3. SUBPART 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby amended by inserting the following definition in such Section in the appropriate alphabetical sequence: "Third Amendment" means the Third Amendment, dated as of July 1, 1993, to this Agreement among the Borrower, the Lenders party thereto (including Fleet National Bank), the Co-Agents and the Administrative Agent. SUBPART 2.1.2. Section 1.1 in its entirety, of the Existing Credit Agreement is further amended by deleting in their entirety the definitions of "Loan Commitment Amount", "Percentage" and "Stated Maturity Date" appearing in such Section, and inserting the following definitions in place thereof: "Loan Commitment Amount" means, on any day, $53,750,000, as such amount may be reduced from time to time pursuant to Section 2.2. "Percentage" means, relative to any Lender, the percentage set forth on Schedule I attached to the Third Amendment to this Credit Agreement, as such percentage may be adjusted from time to time pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) pursuant to Section 10.11.1. "Stated Maturity Date" means June 30, 1994, as such date may be extended pursuant to Section 2.6; provided, that -2- 3 in no event shall the Stated Maturity Date be extended beyond the Stated Maturity Date (as such term is defined in the Long Term Credit Agreement) of the Indebtedness outstanding under the Long Term Credit Agreement. SUBPART 2.2. Amendments to Article X. Article X of the Existing Credit Agreement is hereby amended in accordance with Subpart 2.2.1. SUBPART 2.2.1. The tenth line following Clause (c) of Section 10.11.1 of the Existing Credit Agreement is hereby amended by adding the phrase ", or if less, all of such Lender's Loans and Commitment" immediately after the parenthetical "(such amount to be reduced pro rata by any permanent reductions in the amount of the Commitment)". PART III CONDITIONS TO EFFECTIVENESS SUBPART 3.1. Third Amendment Effective Dates. This Amendatory Agreement shall become effective as set forth below when each of the applicable conditions set forth in this SUBPART 3.1 shall have been satisfied. SUBPART 3.1.1. Execution of Counterpartys. (a) With respect to the effectiveness of SUBPART 2.1 hereof the Administrative Agent shall have received counterparts of this Amendatory Agreement, duly executed on behalf of the Borrower and all of the Lenders. (b) With respect to the effectiveness of SUBPART 2.2 hereof the Administrative Agent shall have received counterparts of this Amendatory Agreement, duly executed on behalf of the Borrower and the Required Lenders. SUBPART 3.1.2. Addition of Fleet National Bank as Lender. SUBPART 2.1 shall become effective only upon (i) the receipt by the Administrative Agent of an executed counterpart of this Amendatory Agreement from Fleet National Bank signifying its agreement to become a Lender under the Credit Agreement and (ii) payment by Fleet National Bank to the Administrative Agent for the account of the other Lenders an amount of funds necessary that, after giving effect to a pro rata distribution of such funds to the other Lenders, each Lender's Percentage (after giving effect to the effectiveness of SUBPART 2.1 hereof) of all outstanding Loans and participations in Letters of Credit shall not be exceeded. SUBPART 3.1.3. New Revolving Loan Notes. SUBPART 2.1 hereof shall only become effective upon the receipt by Fleet Bank, N.A. and The Daiwa bank, Limited from the Borrower of a new Revolving -3- 4 Loan Note in a principal amount equal to such Lender's new Percentage of the Loan Commitment Amount. SUBPART 3.1.4. Legal Details, etc. All documents executed or submitted pursuant hereto shall be satisfactory in form and substance to the Administrative Agent and its counsel. The Administrative Agent and its counsel shall have received all information and such counterpart originals or such certified or other copies or such materials, as the Administrative Agent or its counsel may reasonably request, and all legal matters incident to the transactions contemplated by this Amendatory Agreement shall be satisfactory to the Administrative Agent and its counsel. PART IV MISCELLANEOUS SUBPART 4.1. Cross-References. References in this Amendatory Agreement to any Part or Subpart are, unless otherwise specified or otherwise required by the context, to such Part or Subpart of this Amendatory Agreement. SUBPART 4.2. Loan Document Pursuant to Existing Credit Agreement. This Amendatory Agreement is a Loan Document executed pursuant to the Existing Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Existing Credit Agreement. SUBPART 4.3. Successors and Assigns. This Amendatory Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. SUBPART 4.4. Counterparts. This Amendatory Agreement may be executed by the parties hereto in several counterparts, each of which when executed and delivered shall be deemed to be an original and all of which shall constitute together but one and the same agreement. SUBPART 4.5. Costs and Expenses. The Borrower agrees to pay all costs and expenses incurred by the Administrative Agent (including fees and out-of-pocket expenses of counsel to the Administrative Agent) incurred in connection with the preparation, execution and delivery of this Amendatory Agreement and the other agreements entered into in connection herewith. SUBPART 4.6. Representations, No Default, etc. As of the date of effectiveness of the respective SUBPARTS hereof, the Borrower hereby represents and warrants that (a) the representations and warranties set forth in Article VI of the Credit Agreement (excluding, however, those contained in Section 6.7) are true and correct in all -4- 5 material respects (unless stated to relate solely to an earlier date, in which case such representations and warranties were true and correct as of such earlier date); (b) except as disclosed by the Borrower to the Administrative Agent and the Lenders pursuant to Section 6.7 of the Credit Agreement, (i) no litigation, arbitration or governmental investigation or proceeding is pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries which may reasonably be expected to materially adversely affect the Borrower's, or the Borrower and its Subsidiaries' taken as a whole, businesses, operations, assets, revenues, properties or prospects or which purports to affect the legality, validity or enforceability of the Credit Agreement, the Notes or any other Loan Document; and (ii) no development has occurred in any litigation, arbitration or governmental investigation or proceeding disclosed pursuant to Section 6.7 of the Credit Agreement which may reasonably be expected to materially adversely affect the businesses, operations, assets, revenues, properties or prospects of the Borrower or the Borrower and its Subsidiaries, taken as a whole; and (c) no Default has occurred and is continuing. SUBPART 4.7. Limited Waiver, etc. No amendment, waiver or approval by the Issuer or any Lender under this Amendatory Agreement shall, except as may be otherwise stated in this Amendatory Agreement, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval to be granted after the date hereof, and except as expressly modified by this Amendatory Agreement, the provisions of the Existing Credit Agreement shall -5- 6 remain in full force and effect, without amendment or other modification. SUBPART 4.8. Governing Law. THIS AMENDATORY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. -6- 7 IN WITNESS WHEREOF, the parties hereto have caused this Amendatory Agreement to be executed by their respective authorized officers as of the day and year first above written. HANDY & HARMAN By /s/ Stephen B Mudd ------------------------- Title: Vice-President & Treasurer THE BANK OF NOVA SCOTIA, in its capacity as Administrative Agent, Co-Agent and Lender By /s/ Stephen Lockhart ------------------------- Title: Vice-President THE CHASE MANHATTAN BANK, N.A., in its capacity as Co-Agent and Lender By /s/ Edward J. McNulty ------------------------- Title: Managing Director CHEMICAL BANK, in its capacity as Co-Agent and Lender By /s/ Raymond G. Dunning ------------------------- Title: Vice President THE BANK OF NEW YORK By /s/ Ken Sneider ------------------------- Title: Vice President -7- 8 LTCB TRUST COMPANY By /s/ Ichiro Murakami ----------------------------- Title: Vice President THE BANK OF TOKYO TRUST COMPANY By /s/ Jeffrey Millar ----------------------------- Title: Vice President NBD BANK, N.A. By /s/ Anna R. Hoffman ----------------------------- Title: Vice President WESTPAC BANKING CORPORATION By /s/ Mark S. Olin ----------------------------- Title: Vice President SHAWMUT BANK CONNECTICUT By /s/ Robert M. Surdam, Jr. ------------------------------ Title: Vice President THE FUJI BANK LTD. By /s/ Y. Shiotsuga ------------------------------ Title: Vice President and Manager -8- 9 GIROCREDIT BANK (FKA GIROZENTRALE UND BANK DER OSTERREICHISCHEN SPARKASSEN AG) By /s/ Dhuane G. Stephens ---------------------------- Title: Vice President By /s/ Lalit Malhotra ----------------------------- Title: Lalit Malhotra Senior Vice President IBJ SCHRODER BANK & TRUST COMPANY By /s/ David G. Goodall ------------------------------- Title: Assistant Vice President FLEET BANK, N.A. By /s/ John V. Rubin ------------------------------- Title: Vice President -9- 10 SCHEDULE I (to Third Amendment)
NAME OF LENDER PERCENTAGE - -------------- ---------- The Bank of Nova Scotia 11.627906977% The Chase Manhattan Bank, N.A. 11.627906977% Chemical Bank 11.627906977% The Bank of New York 9.302325581% LTCB Trust Company 9.302325581% The Bank of Tokyo Trust Company 6.976744186% NBD Bank, N.A. 6.976744186% Westpac Banking Corporation 6.976744186% Fleet Bank, N.A. 6.976744186% Shawmut Bank Connecticut 4.651162791% The Fuji Bank Ltd. 4.651162791% Girocredit Bank (FKA Girozentrale und Bank der Osterreichischen Sparkassen AG 4.651162791% IBJ Schroder Bank & Trust Company 4.651162791%
EX-10.M 6 AMEND. TO EMPLOYMENT AGMT. BET. COMPANY AND DANIEL 1 SECRETARY'S CERTIFICATE I, PAUL E. DIXON, being the duly elected and acting Secretary of Handy & Harman, a New York corporation (hereinafter the "Company") DO HEREBY CERTIFY that the following is a true and complete copy of certain resolutions which were duly adopted by the Board of Directors of this Company, at a Meeting which was duly called and held on the 11th day of May 1993, and at which a quorum was present and acting throughout, AND I DO FURTHER CERTIFY that said resolutions have not been rescinded or amended and remain in full force and effect at the date hereof: RESOLVED, that in order for the Company to continue to benefit from the knowledge and experience of Richard N. Daniel, Chairman of the Board and Chief Executive Officer of the Company, and in the best interests of the Company, the Agreement dated as of May 1, 1989 for the employment of Mr. Daniel for a 3-year period, be, and it hereby is, extended for an additional year pursuant to Section 1.2 thereof so that the term of employment thereunder shall continue through April 30, 1996; and further RESOLVED, that the Agreement between Richard N. Daniel and Handy & Harman dated May 1, 1989, be amended in part by adding to Section 4. Termination, a paragraph (e) on page 6 to read as follows: "(e) From the end of the Employment Period, the Company will continue to provide Medical Benefits equivalent to those received by other Officers of the Company through the year in which the Executive reaches his 65th Birthday. Thereafter, the Executive will be eligible for the normal retiree benefits." IN WITNESS WHEREOF I have hereunto affixed my signature and the seal of the Company this 19th day of May 1993. /s/ Paul E Dixon ----------------- Secretary EX-13 7 PORTIONS OF ANNUAL REPORT 1 FINANCIAL REVIEW The Company's Business . . . . . . . . . . . . . . . . . . . 18 Stock Trading and Dividends . . . . . . . . . . . . . . . . . 19 Selected Quarterly Data . . . . . . . . . . . . . . . . . . . 19 Five Year Selected Financial Data . . . . . . . . . . . . . . 20 Management's Discussion and Analysis . . . . . . . . . . . . 21 FINANCIAL STATEMENTS Consolidated Statement of Income . . . . . . . . . . . . . . 23 Consolidated Balance Sheet . . . . . . . . . . . . . . . . . 24 Consolidated Statement of Shareholders' Equity . . . . . . . 25 Consolidated Statement of Cash Flows . . . . . . . . . . . . 26 Summary of Significant Accounting Policies . . . . . . . . . 27 Notes to Consolidated Financial Statements . . . . . . . . . 28 Independent Auditors' Report . . . . . . . . . . . . . . . . 34 Responsibility for Financial Statements . . . . . . . . . . . 34
17 2 THE COMPANY'S BUSINESS The Company's industry segments are: manufacturing of precious metals products and refining services, manufacturing of automotive original equipment (OEM), manufacturing of specialty wire and tubing, and manufacturing of other non-precious metal products. The table below presents information about the segments with additional segment information for 1993, 1992 and 1991 found in Note 6 of the Notes to Consolidated Financial Statements on page 30. A further analysis of the industry segments can be found under "Management's Discussion and Analysis" beginning on page 21. The precious metals segment is engaged in the manufacturing of a variety of products, generally in mill forms, containing silver, gold and other precious metals in combination (alloys) with non-precious metals, and the sale of such products to users in a wide range of industries, including silverware and jewelry, electrical and electronic, automotive and appliance. The Company also provides metal refining services for the recovery of precious metals from jewelry and industrial scrap as well as the recovery of high grade mining concentrates and bullion. It is the Company's operating policy to maintain constant inventory levels under the last-in, first-out (LIFO) method of accounting. Precious metals are purchased at the same prices and quantities as selling commitments to customers. In the normal course of business, the Company accepts precious metals from suppliers and customers, which quantities are returnable in fabricated or commercial bar form under agreed upon terms. Since precious metals are fungible, the Company does not physically segregate the supplier and customer metals. Therefore, to the extent such metals are used by the Company to meet its operating requirements, the amount of inventory which the Company must own is reduced. The Company's inventory positions are sufficient to protect against any losses in connection with these supplier and customer accounts. To the extent that additional inventory is required to support operations, precious metals are purchased and immediately sold for future delivery, eliminating the economic risk of price fluctuations. Such purchases and sales are not included in either sales or cost of sales. From time to time, management reviews the appropriate inventory levels and may elect to make adjustments. A high percentage of the selling price for precious metals products is the cost of the precious metal content. Therefore, both sales and cost of sales are influenced by fluctuations in the prices of precious metals. Service revenues, which represent charges to customers for processing refining lots, do not include the value of precious metals. In addition, certain customers choose to do business on a "toll" basis, that is, to furnish bullion to Handy & Harman for fabrication. When the metals are returned to the customer in fabricated form, the customer pays only a fabrication charge, and the precious metal value of this consignment business is not included in sales or cost of sales. The automotive OEM segment manufactures a variety of products for the automotive industry. These products include fuel lines and fuel injection hardware, cables, tubular parts and assemblies, plastic and metal controls and control assemblies, as well as air pipes and power steering cylinder tubing. The wire and tubing segment has two basic product types. Stainless steel wire is drawn from rod to a wide range of smaller diameters. Applications are widespread and include springs, telecommunication support cables, antennas, brushes, and belts. Tubing is manufactured from carbon steel, stainless steel, and a variety of specialty alloys. Applications are similarly numerous including refrigeration, automotive, hydraulic, medical and aerospace. In the other non-precious metal businesses segment, a number of subsidiaries manufacture a variety of specialty metal products using copper, steel, nickel, plastics and other raw materials. These products are sold, generally in a finished product state, to substantially the same industries as are the products of the other business segments. The following table provides details of sales and service revenues from continuing operations, as well as profit contribution by each reportable segment, before general corporate and interest expenses. See "Management's Discussion and Analysis" on page 21.
(Thousands of dollars) 1993 1992 1991 ==================================================================================================== Sales and service revenues: Precious metals $340,582 $267,333 $258,032 Automotive (OEM) 156,607 140,739 118,193 Wire/Tubing 136,079 128,433 117,160 Other non-precious metal businesses 24,985 35,705 38,141 - ---------------------------------------------------------------------------------------------------- $658,253 $572,210 $531,526 ==================================================================================================== Profit contribution before unallocated expenses: Precious metals $ 10,301 $ 14,830 $ 5,833 Automotive (OEM) 12,400 10,369 7,052 Wire/Tubing 12,617 11,908 9,822 Other non-precious metal businesses (2,512) 94 387 - ---------------------------------------------------------------------------------------------------- 32,806 37,201 23,094 General corporate expenses (2,075) (1,805) (12,048) Interest expense (net) (15,484) (16,329) (22,199) - ---------------------------------------------------------------------------------------------------- Income (loss) from continuing operations before taxes $ 15,247 $ 19,067 ($11,153) ====================================================================================================
Handy & Harman Electronic Materials Corporation, previously included in the "Other non-precious metal businesses" segment, has been classified within the "Precious metals" segment. Figures for prior years have been restated accordingly. 18 3 The effect of the restructuring, nonrecurring and unusual charges on continuing operations, as discussed in Note 1 to the Consolidated Financial Statements, on the above segments' profit contribution before unallocated expenses for the period ended December 31, 1991, is as follows: ===================================================== Precious metals $ 5,684 Automotive (OEM) 1,220 Wire/Tubing 1,211 Other non-precious metal businesses 1,772 - ----------------------------------------------------- 9,887 General corporate expenses 10,452 - ----------------------------------------------------- Total $20,339 =====================================================
The following table segregates identifiable assets to the four reported segments, Corporate and discontinued operations.
Assets ================================================================================== (Thousands of dollars) 1993 1992 1991 - ---------------------------------------------------------------------------------- Precious metals $221,783 $169,502 $155,740 Automotive (OEM) 62,834 64,604 60,763 Wire/Tubing 80,442 73,518 73,792 Other non-precious metal businesses 17,160 28,695 28,207 Corporate 3,987 3,468 2,383 Discontinued operations 26,713 31,564 37,823 - ---------------------------------------------------------------------------------- $412,919 $371,351 $358,708 ==================================================================================
The comparison of Handy & Harman's precious metals segment sales dollars from year to year is affected by changing market values of the silver, gold and other precious metals which comprise a substantial portion of the sales price. The table below shows all classes of similar precious metals products (measured by gross weight of shipments as a percentage of total segment shipments) which contributed 10% or more to total sales and revenues during 1993, 1992 and 1991.
Percent of shipments ================================================================================== 1993 1992 1991 - ---------------------------------------------------------------------------------- Rolled Products 50% 40% 46% Wire Products 33% 27% 31% Bullion 1% 3% 3% ==================================================================================
STOCK TRADING AND DIVIDENDS Handy & Harman Common Stock is traded on the New York Stock Exchange. The table below sets forth, for the quarterly periods indicated, the reported high and low sales prices for the Common Stock on the New York Stock Exchange and the dividends paid on the Common Stock during such periods. At February 15, 1994, there were 2,238 holders of record of Common Stock of Handy & Harman. Dividend payments are subject to the restrictions described in Note 2 to the Consolidated Financial Statements.
Common Stock Dividend Paid on Sales Prices Common Stock High Low Per Share ======================================================================================== 1993 January 1-March 31 $15 7/8 $12 7/8 5c. April 1-June 30 17 5/8 14 5/8 5c. July 1-September 30 16 3/4 11 3/4 5c. October 1-December 31 15 3/4 12 1/8 5c. - ---------------------------------------------------------------------------------------- 1992 January 1-March 31 $12 5/8 $10 1/8 5c. April 1-June 30 13 1/8 10 1/4 5c. July 1-September 30 13 1/8 11 3/4 5c. October 1-December 31 14 5/8 12 1/8 5c. ========================================================================================
SELECTED QUARTERLY DATA Summarized financial data for interim periods of 1993 and 1992 (expressed in thousands of dollars, except per share data) are shown below. The first quarter of 1993 includes the cumulative effect of a change in accounting for income taxes in accordance with FASB No. 109, a benefit of $576,000 or $.04 per share.
1993 Quarter Ended Mar.31 June 30 Sept. 30 Dec. 31 ======================================================================================== Sales $157,809 $161,991 $162,017 $176,436 Gross profit 24,396 23,781 18,578 20,122 Net income 3,702 3,332 213 2,229 - ---------------------------------------------------------------------------------------- Net income per share $ .26 $ .24 $ .02 $ .16 ========================================================================================
1992 Quarter Ended Mar.31 June 30 Sept. 30 Dec. 31 ======================================================================================== Sales $138,346 $147,822 $141,473 $144,569 Gross profit 23,114 25,294 21,625 22,899 Net income 2,815 3,205 2,792 2,885 - ---------------------------------------------------------------------------------------- Net income per share $ .20 $ .23 $ .20 $ .21 ========================================================================================
19 4 HANDY & HARMAN AND SUBSIDIARIES FIVE YEAR SELECTED FINANCIAL DATA
Dollars in thousands except per share figures 1993 1992 1991 1990 1989 ============================================================================================================================ OPERATIONS Sales and service revenues $658,253 $572,210 $531,526 $572,002 $580,720 After tax earnings (loss)-excluding net LIFO gains(b) 9,476(a) 11,697 (8,653) 12,060 11,805 Net LIFO gains(b) -- -- -- 5,430 2,536 Income (loss) from continuing operations 9,476(a) 11,697 (8,653) 17,490 14,341 Net loss from discontinued operations -- -- (25,856) (7,764) (6,575) Net income (loss) 9,476(a) 11,697 (34,509) 9,726 7,766 Dividends 2,803 2,801 6,013 9,225 9,206 - ---------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA After tax earnings (loss)- excluding net LIFO gains(b) .68(a) .84 (.62) .86 .85 Net LIFO gains(b) -- -- -- .39 .18 Net income (loss) from continuing operations .68(a) .84 (.62) 1.25 1.03 Net loss from discontinued operations -- -- (1.85) (.55) (.47) Net income (loss) .68(a) .84 (2.47) .70 .56 Dividends .20 .20 .43 .66 .66 Average shares outstanding (thousands) 14,021 14,001 13,985 13,973 13,944 - ---------------------------------------------------------------------------------------------------------------------------- FINANCIAL POSITION (AT DECEMBER 31) Current assets 233,200 200,613 191,072 274,290 272,102 Current liabilities 121,293 92,444 96,004 222,295 208,926 Working capital 111,907 108,169 95,068 51,995 63,176 Property, plant and equipment-net 106,220 109,605 112,363 137,250 150,826 Total assets 412,919 371,351 358,708 472,451 455,731 Long-term debt 188,750 186,287 181,329 113,988 115,037 Deferred income taxes 11,276 7,681 4,059 18,420 15,332 Shareholders' equity 91,600 84,939 77,316 117,748 116,436 LIFO reserve(c) 141,273 105,416 111,209 125,271 167,656 - ---------------------------------------------------------------------------------------------------------------------------- STATISTICAL DATA Property, plant and equipment acquired through capital expenditures 15,147 14,440 12,728 16,042 24,007 Depreciation and amortization 15,816 14,854 16,372 18,493 18,833 Interest expense (net)-continuing operations 15,484 16,329 22,199 22,313 23,652 Number of shareholders 2,238 3,046 3,218 3,214 3,116 Number of employees at December 31 4,246 4,478 4,333 4,594 5,022 - ---------------------------------------------------------------------------------------------------------------------------- FINANCIAL RATIOS Return on average shareholders' equity-excluding net LIFO gains(b) 10.7% 14.4% (35.4%) 3.7% 4.5% Current ratio 1.9 2.2 2.0 1.2 1.3 =============================================================================================================================
(a) Includes a benefit of $576,000 or $.04 per share, from cumulative effect of accounting change. (b) Net LIFO gains (after tax) are due to change in levels of precious metal inventories stated at LIFO cost. (c) Excess of year-end market value of LIFO inventory over cost. 20 5 HANDY & HARMAN AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES The Company's precious metal inventories, consisting principally of gold and silver, may be considered as an equivalent to cash. Furthermore, these precious metals inventories which are stated in the balance sheet at LIFO cost have a market value substantially in excess of such cost. It is the Company's policy to obtain funds necessary to finance inventories and receivables from various banks under commercial lines of credit. Trade accounts receivable resulting from sales of fabricated precious metals are financed primarily by bank borrowings. Fluctuations in the market prices of gold and silver have a direct effect on the dollar volume of sales and the corresponding amount of customer receivables. In addition, receivables resulting from sales of precious metals for future delivery are also financed by bank borrowings. The Company adjusts the level of its credit facilities from time to time in accordance with its borrowing needs for receivables, as well as other working capital items, and maintains bank lines of credit well in excess of anticipated requirements. During the first quarter of 1992 the Company finalized a $200,000,000 credit facility with twelve banks which was used to replace the existing lines of credit at December 31, 1991. This credit facility was increased by $15,000,000 in 1993 and provides $161,250,000 for a three year period (extended an additional year in 1993) and $53,750,000 for 364 days, of which $133,000,000 was utilized at December 31, 1993. In the third quarter of 1992 the Company completed arrangements with four institutional lenders for $50,000,000 of long-term borrowings maturing in ten years. The proceeds are currently used to reduce portions of the previously mentioned credit facility. The Company's program to expand productive capacity through acquisition of new businesses and expenditures for new property, plant and equipment will continue to be financed with internally generated funds and long-term debt, if necessary. For additional information with regard to the Company's cash requirements and commitments, see Notes 2 and 4 of the Notes to Consolidated Financial Statements. The Company's foreign operations consist of four wholly owned subsidiaries (one in Canada, two in the United Kingdom and one in Mexico) and three equity investments (one in Asia, one in Mexico, and one in Brazil). Substantially all unremitted earnings of such entities are free from legal or contractual restrictions. On June 27, 1991, the Company announced a major restructuring program which called for the divestiture of six businesses deemed to be non-core operations that no longer fit within the Company's long-term strategies and the liquidation of certain precious metals inventories in a manner that resulted in no material change in the Company's LIFO reserve. The Company was able to reduce total borrowings by $68,000,000 during 1991 primarily as a result of this restructuring program. OPERATIONS RESTRUCTURING, NONRECURRING AND UNUSUAL CHARGES The restructuring program strengthens the Company's balance sheet, reduces debt and interest expense, provides a sound basis for improved profitability and allows management to concentrate on those businesses which have demonstrated potential for above average growth. As a result of this program, the Company recorded restructuring, nonrecurring and unusual charges of $54,330,000 ($38,130,000 after tax, or $2.73 per share) in the second quarter of 1991. These charges are summarized as follows: * Restructuring and nonrecurring charges for write-down of certain facilities, equipment and other assets - $13,181,000 ($8,904,000 after tax, or $.64 per share). * Other unusual charges to operating expenses for estimated additional environmental remediation expenses, reserves for certain receivables from jewelry industry customers, and health care charges, including those associated with the recently adopted Financial Accounting Standards Board Statement No. 106 which requires recognition of post retirement health benefits on an accrual basis - $7,158,000 ($4,835,000 after tax, or $.34 per share). * Costs associated with discontinued operations - $33,991,000 ($24,391,000 after tax, or $1.75 per share). 21 6 COMPARISON OF 1993 VERSUS 1992 Sales for the precious metal segment increased $73,249,000 (27%). Sales of refining outturn in bullion form increased from $26,355,000 in 1992 to $102,018,000 in 1993. The profit margin on this business is less than the margins on fabricated products. The average price for gold was $359.84 per ounce and the average price of silver was $4.30 per ounce representing increases of 5% and 9%, respectively from the previous year. Benefits from higher precious metal prices and higher volumes in 1993 were offset by competitive pricing pressures in 1993 which was the primary reason for the decreased profit contribution (pre-tax income before deducting interest and Corporate expense) of $4,529,000 (31%). Although some improvement is anticipated in 1994, any earnings increase in this segment will be modest unless there is a significant advance in the price of precious metals. The automotive (OEM) segment sales increased by $15,868,000 (11%) and the profit contribution increased $2,031,000 (20%) due to the rising North American production rate over 1992. Continued increases in this North American production rate in 1994, along with our commitment of funds to our technical facility personnel and equipment, should enhance operating profits in this segment. Sales for the wire/tubing segment increased $7,646,000 (6%) and the profit contribution increased $709,000 (6%) primarily due to the demand from the telecommunications industry in the first half of 1993. This cyclical demand is expected again in 1994, however it will be partially offset by the continued lower levels in surgical orders and the interruption of orders for refrigeration tubing from mainland China experienced in the second half of 1993. Resumption of these orders are anticipated in the latter part of 1994 and a modest improvement in contribution is expected overall from this segment in 1994. In the other non-precious metal segment, sales decreased $10,720,000 (30%) primarily due to the sale of three businesses in 1993. Profit contribution decreased $2,606,000 due to the charge of $2,800,000 relating to the sale of New Industrial Techniques, Inc. and Valley Metals, Inc. The remaining subsidiary in this segment (Continental Industries, Inc. and its United Kingdom division, Kontite, Ltd.) has relatively unique product lines. This, along with the substantial capital investment in 1993, should improve future operating results. Interest expense decreased $845,000 (5%) primarily due to decreased levels of borrowings in 1993, offset by higher effective interest rates. The effective tax rate for 1993 was 41.6% compared to 38.7% in 1992. Note 3 of the Notes to Consolidated Financial Statements analyzes the components of the effective rate. COMPARISON OF 1992 VERSUS 1991 Sales for the precious metals segment increased $9,301,000 (4%). Sales of refining outturn in bullion form increased from $24,869,000 in 1991 to $26,355,000 in 1992. The average price for gold was $343.83 per ounce and the average price for silver was $3.94 representing a decrease of 5% for gold and 3% for silver. The profit contribution increased by $8,997,000 (154%). Excluding $5,684,000 of restructuring, nonrecurring and unusual charges in 1991 described previously, the profit contribution increased $3,313,000 (29%) primarily due to the higher level of sales of industrial products. The automotive (OEM) segment sales increased by $22,546,000 (19%). The profit contribution increased $3,317,000 (47%). Excluding $1,220,000 of restructuring, nonrecurring and unusual charges discussed previously, the profit contribution increased $2,097,000 (25%) primarily due to the increased sales brought about by the increases in the industry's North American production rate during 1992 as well as sales of new product. Sales for the wire/tubing segment increased by $11,273,000 (10%) resulting from increased demand for wire products from customers in the communications industry as well as increased demand in both fabricated tubulars for the medical industry and refrigeration tubing. The profit contribution increased $2,086,000 (21%). Excluding $1,211,000 of restructuring, nonrecurring and unusual charges discussed previously, the profit contribution increased $875,000 (8%) due to the above mentioned sales increase. The sales of the other non-precious metal businesses segment decreased $2,436,000 (6%) primarily due to lower volumes from oil field services and aerospace related customers. The profit contribution decreased $293,000 (76%). Excluding the charge for restructuring, nonrecurring and unusual charges in 1991 previously discussed, the profit contribution decreased $2,065,000 (96%) due to lower volumes described above. Interest expense decreased $5,870,000 principally due to decreased levels of borrowings primarily brought about by the sale of precious metal in 1991 previously described and lower interest rates in 1992. The effective income tax rate in 1992 was a 38.7% expense compared to a 22.4% benefit in 1991. The lower effective rate for 1991 was due in part to the Company's inability to recognize certain state tax benefits. Note 3 of the Notes to Consolidated Financial Statements analyzes the components of the effective tax rate. 22 7 HANDY & HARMAN AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME
Year ended December 31 1993 1992 1991 ================================================================================================================================= Sales and service revenues $658,253,000 $572,210,000 $531,526,000 Cost of sales and service 571,376,000 479,278,000 446,993,000 - --------------------------------------------------------------------------------------------------------------------------------- Gross profit 86,877,000 92,932,000 84,533,000 - --------------------------------------------------------------------------------------------------------------------------------- Selling, general, and administrative expenses 53,900,000 56,394,000 59,753,000 Restructuring and nonrecurring charges -- -- 13,181,000 - --------------------------------------------------------------------------------------------------------------------------------- Income from operations 32,977,000 36,538,000 11,599,000 - --------------------------------------------------------------------------------------------------------------------------------- Other deductions: Interest expense (net) 15,484,000 16,329,000 22,199,000 Other (net) 2,246,000 1,142,000 553,000 - --------------------------------------------------------------------------------------------------------------------------------- 17,730,000 17,471,000 22,752,000 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations before income taxes and cumulative effect of accounting change 15,247,000 19,067,000 (11,153,000) Income tax provision (benefit) 6,347,000 7,370,000 (2,500,000) - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) before cumulative effect of accounting change 8,900,000 11,697,000 (8,653,000) Cumulative effect of accounting change 576,000 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations 9,476,000 11,697,000 (8,653,000) - ---------------------------------------------------------------------------------------------------------------------------------- Discontinued operations: Loss from discontinued operations (less applicable tax benefit of $770,000) -- -- (1,465,000) Provision for loss on disposal (including $1,000,000 in 1991 for operating losses during phase-out period), net of income tax benefits of $9,600,000 -- -- (24,391,000) - --------------------------------------------------------------------------------------------------------------------------------- -- -- (25,856,000) - --------------------------------------------------------------------------------------------------------------------------------- Net income (loss) $ 9,476,000 $ 11,697,000 ($34,509,000) ================================================================================================================================= Earnings (loss) per share: Continuing operations: Income (loss) before cumulative effect of accounting change $.64 $.84 ($.62) Cumulative effect of accounting change .04 -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total continuing operations .68 .84 (.62) Discontinued operations -- -- (1.85) - --------------------------------------------------------------------------------------------------------------------------------- Net income (loss) $.68 $.84 ($2.47) =================================================================================================================================
The accompanying summary of significant accounting policies and notes are an integral part of the financial statements. 23 8 HANDY & HARMAN AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
December 31 1993 1992 ========================================================================================================================== ASSETS Current assets: Cash $ 3,320,000 $ 2,812,000 Receivables 127,743,000 80,706,000 Refundable income taxes 500,000 1,000,000 Inventories 88,692,000 87,668,000 Prepaid expenses and deposits 9,946,000 10,709,000 Assets held for sale -- 1,632,000 Current assets of discontinued operations (net) 2,999,000 16,086,000 - -------------------------------------------------------------------------------------------------------------------------- Total current assets 233,200,000 200,613,000 - -------------------------------------------------------------------------------------------------------------------------- Investment in 50% or less owned companies 1,824,000 1,520,000 Property, plant and equipment 249,384,000 249,093,000 Less accumulated depreciation and amortization 143,164,000 139,488,000 - -------------------------------------------------------------------------------------------------------------------------- 106,220,000 109,605,000 Prepaid retirement costs (net) 43,627,000 38,834,000 Intangibles, net of amortization 1,120,000 1,694,000 Deferred charges 1,696,000 1,978,000 Other assets 1,518,000 1,629,000 Noncurrent assets of discontinued operations 23,714,000 15,478,000 - -------------------------------------------------------------------------------------------------------------------------- $412,919,000 $371,351,000 ========================================================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 28,000,000 $ 22,500,000 Current maturities of long-term debt 7,000,000 10,057,000 Accounts payable 53,739,000 28,571,000 Advances from smelter 8,935,000 -- Other current liabilities 20,389,000 26,281,000 Restructuring accruals 3,230,000 5,035,000 - -------------------------------------------------------------------------------------------------------------------------- Total current liabilities 121,293,000 92,444,000 - -------------------------------------------------------------------------------------------------------------------------- Long-term debt, less current maturities 188,750,000 186,287,000 Deferred income taxes 11,276,000 7,681,000 Commitments - -------------------------------------------------------------------------------------------------------------------------- Shareholders' equity: Common stock - par value $1; 60,000,000 shares authorized; 14,611,432 shares issued 14,611,000 14,611,000 Capital surplus 11,296,000 11,213,000 Retained earnings 70,414,000 63,741,000 Foreign currency translation adjustment (951,000) (693,000) - -------------------------------------------------------------------------------------------------------------------------- 95,370,000 88,872,000 Less: Treasury stock 1993 - 588,252 shares; 1992 - 596,318 shares - at cost 3,770,000 3,797,000 Unearned compensation -- 136,000 - -------------------------------------------------------------------------------------------------------------------------- Total shareholders' equity 91,600,000 84,939,000 - -------------------------------------------------------------------------------------------------------------------------- $412,919,000 $371,351,000 ==========================================================================================================================
The accompanying summary of significant accounting policies and notes are an integral part of the financial statements. 24 9 HANDY & HARMAN AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Three Years Ended December 31, 1993 Foreign Par Value $1 Currency Total Common Capital Retained Translation Treasury Unearned Shareholders' Stock Surplus Earnings Adjustment Stock Compensation Equity =============================================================================================================================== Balance, January 1, 1991 $14,611,000 $10,987,000 $95,367,000 $923,000 ($3,950,000) ($190,000) $117,748,000 Net loss (34,509,000) (34,509,000) Cash dividends on common stock-$.43 per share (6,013,000) (6,013,000) Remeasurement and amortization of stock issued under restricted stock option plan (42,000) 190,000 148,000 Stock awarded under outside director stock option plan (awarded 5,600 - issued 1,413 shares) 39,000 7,000 46,000 Translation adjustment (104,000) (104,000) - ------------------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1991 14,611,000 10,984,000 54,845,000 819,000 (3,943,000) 77,316,000 Net income 11,697,000 11,697,000 Cash dividends on common stock-$.20 per share (2,801,000) (2,801,000) Stock issued under restricted stock option plan (20,600 shares net of 1,400 shares forfeited) 181,000 104,000 (136,000) 149,000 Stock awarded under outside director stock option plan (awarded 8,532 - issued 8,405 shares) 48,000 42,000 90,000 Translation adjustment (1,512,000) (1,512,000) - ------------------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1992 14,611,000 11,213,000 63,741,000 (693,000) (3,797,000) (136,000) 84,939,000 Net income 9,476,000 9,476,000 Cash dividends on common stock-$.20 per share (2,803,000) (2,803,000) Remeasurement and amortization of stock issued under restricted stock option plan 12,000 136,000 148,000 Stock awarded under outside director stock option plan (awarded 5,236-issued 5,553 shares) 71,000 28,000 99,000 Stock issued under the 1991 long-term incentive plan (2,513 shares) (1,000) (1,000) Translation adjustment (258,000) (258,000) - ------------------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1993 $14,611,000 $11,296,000 $70,414,000 ($951,000) ($3,770,000) -- $91,600,000 ===============================================================================================================================
The accompanying summary of significant accounting policies and notes are an integral part of the financial statements. 25 10 HANDY & HARMAN AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash -------------------------------------------------------- Year Ended December 31, 1993 1992 1991 ============================================================================================================================= Cash flows from operating activities: Net income (loss) $ 9,476,000 $ 11,697,000 ($34,509,000) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 15,816,000 14,854,000 16,372,000 Provision for doubtful accounts 1,195,000 627,000 952,000 Loss (gain) on disposal of property, plant and equipment (7,000) 274,000 (97,000) Loss on sale of business units 2,800,000 537,000 -- Net prepaid retirement costs (4,793,000) (4,652,000) (6,190,000) Equity in earnings of 50% or less-owned companies (117,000) (206,000) (128,000) Earned compensation-1988 long-term incentive and outside director stock option plans 225,000 226,000 214,000 Continuing operations-reserves for restructuring, nonrecurring and unusual charges, net of $6,600,000 in taxes -- -- 13,739,000 Discontinued operations reserves, net of $9,600,000 in taxes -- -- 24,391,000 Changes in assets and liabilities, net of effects from divestitures, investments and reserves for continuing and discontinued operations: Accounts receivable (49,031,000) (14,111,000) 10,032,000 Refundable income taxes 500,000 -- (1,000,000) Inventories (3,714,000) 2,115,000 59,838,000 Prepaid expenses 556,000 (2,425,000) 222,000 Deferred financing costs -- (1,699,000) -- Deferred charges and other assets 380,000 (250,000) (383,000) Accounts payable and other current liabilities 18,772,000 1,564,000 (7,213,000) Advances from smelter 8,935,000 -- -- Deferred income taxes 3,595,000 3,622,000 1,666,000 - ----------------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 4,588,000 12,173,000 77,906,000 - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Proceeds from sale of property, plant and equipment 945,000 2,428,000 335,000 Capital expenditures (15,002,000) (13,829,000) (12,158,000) Divestitures, net of cash sold 5,072,000 -- -- Investment in 50% or less-owned companies (179,000) -- -- Net investing activities of discontinued operations 3,031,000 800,000 6,341,000 - ----------------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (6,133,000) (10,601,000) (5,482,000) - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Short-term borrowings 5,500,000 (98,663,000) (45,399,000) Current maturities of long-term debt (3,057,000) 8,576,000 (2,222,000) Increase (decrease) in long-term debt 2,463,000 92,654,000 (20,355,000) Dividends paid (2,803,000) (2,801,000) (6,013,000) - ----------------------------------------------------------------------------------------------------------------------------- Net cash provided/(used) in financing activities 2,103,000 (234,000) (73,989,000) - ----------------------------------------------------------------------------------------------------------------------------- Effect of exchange rate changes on net cash (50,000) (172,000) (4,000) - ----------------------------------------------------------------------------------------------------------------------------- Net change in cash 508,000 1,166,000 (1,569,000) Cash at beginning of year 2,812,000 1,646,000 3,215,000 - ----------------------------------------------------------------------------------------------------------------------------- Cash at end of year $ 3,320,000 $ 2,812,000 $ 1,646,000 ============================================================================================================================= Cash paid during the year for: Interest, net of contango on futures and forward contracts and interest rate swap $ 15,719,000 $ 17,112,000 $ 25,051,000 Income taxes $ 2,668,000 $ 537,000 $ 2,925,000 =============================================================================================================================
The accompanying summary of significant accounting policies and notes are an integral part of the financial statements. 26 11 HANDY & HARMAN AND SUBSIDIARIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A -- PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany items have been eliminated. Investments in 20%-50% owned companies are accounted for by the equity basis of accounting. B -- INVENTORIES Precious metals inventories are valued at cost as computed under the last-in, first-out (LIFO) method, which is lower than market. Non-precious metals inventories are stated at the lower of cost (principally average) or market. For precious metals inventories no segregation among raw materials, work in process and finished goods is practicable. C -- PROPERTY, PLANT AND EQUIPMENT, AND DEPRECIATION Property, plant and equipment are stated at cost. Depreciation and amortization are provided principally on the straight-line method for financial reporting purposes and on accelerated methods for tax purposes. D -- INTANGIBLES AND AMORTIZATION Purchased patents are stated at cost, which is amortized over the respective remaining lives of the patents. The excess of purchase price over net assets acquired in business combinations is being amortized on the straight-line method over 40 years. E -- SALES, SERVICE REVENUES AND FUTURE CONTRACTS A high percentage of the sales prices for the Company's precious metals products (see "The Company's Business," Page 18) is the value of the precious metals content. Changes in the unit sales price of such precious metals result in corresponding changes in sales and cost of sales. The Company includes in both sales and cost of sales the precious metal value of sales of fabricated products if the customer purchased the precious metal from the Company, whether or not the precious metal is sold at the same time as the fabricated product. Consistent with the Company's policy of maintaining constant inventory levels under the last-in, first-out (LIFO) method of accounting, precious metals are purchased at the same prices and quantities as shipments to customers. To the extent that additional inventory is required to support operations, precious metals are purchased and immediately sold for future delivery, eliminating the economic risk of price fluctuations. Sales of precious metals for future delivery executed on the Commodity Exchange are excluded from sales and cost of sales in the accompanying income statement. The amount receivable arising from such sales for future delivery and the related margin deposits are included in receivables (see Note 7a). The income from sales of precious metals for future delivery is netted over the contract period against the interest on short-term borrowing used to finance receivables from these sales. Service revenues, which represent charges to customers for processing refining lots, are recognized in income when the lots are settled with the customer as to precious metal content. Additional costs and smelter charges relating to the settled lots are accrued at that time. F -- TAXES ON INCOME The Financial Accounting Standards Board Statement No. 109 ("SFAS 109"), "Accounting for Income Taxes", was issued in February 1992 and was adopted by the Company in the first quarter of 1993. Although SFAS No. 109 superseded SFAS No. 96, "Accounting for Income Taxes" adopted by the Company in 1987, it maintained the same requirement, among other things, that deferred tax liabilities or assets at the end of each period be determined using the tax rate expected to be in effect when taxes are actually paid or recovered. The significant change in SFAS No. 109 over SFAS No. 96 was the recognition of deferred tax assets with measurement based on the likelihood of realization of a tax benefit in future years. The cumulative effect of this change to January 1, 1993 amounts to $576,000 and is shown as a separate item in the Consolidated Statement of Income on page 23. G -- INCOME PER SHARE Per share amounts are based on the weighted average number of shares outstanding during the year. Outstanding stock options are considered common stock equivalents using the treasury stock method and are included in the calculation when their effect would be dilutive; however they had no dilutive effect in 1993, 1992 and 1991. H -- POSTEMPLOYMENT BENEFITS In 1993, the Company adopted Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits." The adoption of this standard did not have a material effect on the Company's financial position or results of operations. I -- RECLASSIFICATIONS Certain reclassifications have been made to the 1992 consolidated financial statements to conform to the 1993 presentation. 27 12 HANDY & HARMAN AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 -- RESTRUCTURING AND DIVESTITURES In 1993 the Company received $5,072,000 in cash and $800,000 in notes for the sale of Valley Metals Inc., O&M Manufacturing Co. Division and New Industrial Techniques, Inc. These businesses were not part of the restructuring program described below. The assets sold amounted to $8,294,000 and the liabilities assumed by the purchasers amounted to $1,233,000. A loss of $2,800,000 was recorded in 1993 on the sale of two of these units. These businesses are not material to the revenues of the Company. During 1992 the Company identified three businesses for sale (Chemical Products Division - sold in 1992, Valley Metals Inc. - and O&M Manufacturing Co. Division both sold in 1993). A net charge of $537,000 was recorded in 1992 for the sale of these three businesses. A reclass of assets held for sale was made at December 31, 1992 for the sale of Valley Metals Inc. in January 1993. Also included in Other Deductions is the loss on sale of a building amounting to $319,000. As a result of the restructuring program announced on June 27, 1991, the Company recorded restructuring, nonrecurring and unusual charges amounting to $54,330,000. Continuing operations recorded restructuring and nonrecurring charges for the write-down of certain facilities, equipment and other assets amounting to $13,181,000 and also other unusual charges amounting to $7,158,000 for operating expenses estimated for additional environmental remediation expenses; reserves for certain receivables from jewelry industry customers; and health care charges, including those associated with the Financial Accounting Standards Board Statement No. 106 which requires recognition of postretirement health benefits on an accrual basis. Divestiture of six businesses deemed to be non-core operations that no longer fit with the Company's long-term strategies were also part of this restructuring program and costs associated with these discontinued operations amounted to $33,991,000. For further analysis of discontinued operations see Note 10. NOTE 2 -- DEBT AND CREDIT AGREEMENTS The Company's borrowing requirements are primarily related to the market value of precious metals and the resulting changes in the Company's receivables. The Company adjusts the level of its credit facilities from time to time in accordance with its borrowing needs. At December 31, 1993, the Company had various agreements with banks whereby credit facilities of approximately $53,750,000 were available; short-term bank borrowing under these lines amounted to $28,000,000. The corresponding amounts for December 31, 1992 were: credit facilities--$50,000,000 and bank borrowings--$22,500,000. At December 31, 1993, 1992, and 1991 the interest rate for outstanding short-term borrowing was 4.0%, 4.9%, and 6.4%, respectively. During 1993, the average month-end short-term borrowing was $15,688,000; the weighted average interest rate 4.3% computed on the basis of the number of days the borrowings were outstanding; and the maximum month-end short-term borrowing was $36,000,000. The corresponding amounts for the years ended December 31, 1992 and 1991 were: average month-end borrowing--$44,273,000 and $147,598,000 weighted average interest rate 7.4% and 7.6%, and maximum month-end borrowing--$137,662,500 and $165,500,000. Long-term debt at December 31, 1993 and 1992 is summarized as follows:
1993 1992 ================================================================ Credit facility $105,000,000 $ 95,000,000 8.83% notes due 2002 50,000,000 50,000,000 9.37% note due 1999 21,500,000 25,000,000 10.20% note due 1998 11,750,000 18,000,000 Industrial revenue bonds, floating rate, due 2004-2005 7,500,000 7,500,000 Other debt -- 844,000 - ---------------------------------------------------------------- 195,750,000 196,344,000 Less installments due within year 7,000,000 10,057,000 - ---------------------------------------------------------------- Total long-term debt $188,750,000 $186,287,000 ================================================================
Maturities of long-term debt in each of the next five years are as follows (in thousands): $7,000, $7,000, $112,000, $4,750 and $3,500. During the first quarter of 1992 the Company finalized a $200,000,000 credit facility with twelve banks which was used to replace the existing lines of credit at December 31, 1991. This credit facility was increased by $15,000,000 in 1993 and provides $161,250,000 for a three year period (extended an additional year in 1993) and $53,750,000 for 364 days. The Company used a portion of the proceeds to pay $91,688,000 of short-term borrowings, accordingly this amount had been classified as long-term debt at December 31, 1991. Under this credit facility interest is payable at the prime rate or LIBOR plus 1%, at the Company's option. In the third quarter of 1992 the Company completed arrangements with four institutional lenders for $50,000,000 of long-term borrowings at a rate of 8.83% maturing in ten years. The proceeds were used to reduce portions of the above mentioned credit facilities. Under the most restrictive covenants of the Company's long-term loan agreements, $7,405,000 of consolidated retained earnings were unrestricted at December 31, 1993, as to the declaration of cash dividends and the acquisition of capital stock by the Company. Additionally, the agreements require the maintenance of specified ratios and a minimum tangible net worth of $120,000,000. At December 31, 1993, the Company was in compliance with all covenants. 28 13 NOTE 3 -- INCOME TAXES The components of income (loss) from continuing operations before income taxes consisted of the following (in thousands):
1993 1992 1991 ================================================================= Domestic $14,852 $18,841 ($11,060) Foreign 395 226 (93) - ----------------------------------------------------------------- $15,247 $19,067 ($11,153) =================================================================
The provision for taxes on income was comprised of the following (in thousands):
1993 ================================================================ Currently Payable Deferred Total - ---------------------------------------------------------------- State and local $1,800 ($300) $1,500 Foreign 160 91 251 Federal -- 4,596 4,596 - ---------------------------------------------------------------- $1,960 $4,387 $6,347 ================================================================
1992 ================================================================ Currently Payable Deferred Total - ---------------------------------------------------------------- State and local $2,230 ($ 330) $1,900 Foreign 150 (110) 40 Federal -- 5,430 5,430 - ---------------------------------------------------------------- $2,380 $4,990 $7,370 ================================================================
1991 ================================================================ Currently Payable Deferred Total - ---------------------------------------------------------------- State and local $1,375 ($375) $1,000 Foreign 85 (65) 20 Federal -- (3,520) (3,520) - ---------------------------------------------------------------- $1,460 ($3,960) ($2,500) ================================================================
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 1993 follow (in thousands):
Deferred Tax Deferred Tax Net Deferred Assets Liabilities Liability - ----------------------------------------------------------------------------- Prepaid retirement costs $15,270 ($15,270) Property, plant and equipment 9,486 (9,486) Restructuring and discontinued operations $ 7,355 7,355 Foreign tax credit carryforwards 1,184 1,184 Investment tax credit carryforwards 1,502 1,502 All other 4,425 986 3,439 - ----------------------------------------------------------------------------- Total $14,466 $25,742 ($11,276) =============================================================================
Included in the deferred tax liability at December 31, 1992 are investment and foreign tax credit carryforwards available to reduce income tax liabilities in future years. Principal items making up the deferred U.S. Federal income tax provisions follow (in thousands):
1993 1992 1991 ======================================================================= Book over tax depreciation ($1,372) ($1,360) ($1,090) Restructuring 2,510 4,191 (5,555) Employee benefits 1,643 1,655 2,300 Other (net) 1,815 944 825 - ----------------------------------------------------------------------- $4,596 $5,430 ($3,520) =======================================================================
The major elements contributing to the difference between the U.S. Federal statutory tax rate and the consolidated effective tax rate are as follows:
1993 1992 1991 ======================================================================= U.S. Federal effective statutory tax rate 34.3% 34.0% (34.0%) State and local income taxes, net of Federal income tax benefit 6.5 6.4 5.9 Foreign tax credit (2.2) (1.7) -- Current year effect of income tax rate change on deferred taxes 1.8 -- -- Net effect of foreign tax rates 0.4 0.2 0.5 Other 0.8 (0.2) 5.2 - ----------------------------------------------------------------------- 41.6% 38.7% (22.4%) =======================================================================
NOTE 4 -- COMMITMENTS Commitments at December 31, 1993 for the purchase of additional property, plant and equipment approximated $609,000. Rent expense for 1993, 1992, and 1991 was $3,363,000, $4,444,000, and $5,276,000, respectively. Operating lease and rental commitments for continuing operations for future years are as follows: ============================================================ 1994 $ 2,972,000 1995 2,741,000 1996 2,688,000 1997 2,010,000 1998 1,594,000 1999 and beyond 8,196,000 - ------------------------------------------------------------ Total lease and rental commitments $20,201,000 ============================================================
NOTE 5 -- STOCK OPTION AND LONG-TERM INCENTIVE PLANS 1982 STOCK OPTION PLAN At December 31, 1993, 43,000 shares of common stock held in the treasury were reserved for issuance under the Company's 1982 Stock Option Plan. No more options may be granted under this plan. Transactions under this Plan are summarized below:
Shares under option Shares ----------------------- Available Range of for Option Shares Price ================================================================================== Balance, January 1, 1991 162,900 107,000 $15.437-20.875 Options expired 51,000 (51,000) $15.437-20.875 - ---------------------------------------------------------------------------------- Balance, December 31, 1991 213,900 56,000 $16.625-18.687 Options expired 4,000 (4,000) $16.625 Shares not granted (217,900) -- -- - ---------------------------------------------------------------------------------- Balance, December 31, 1992 -- 52,000 $16.625-18.687 Options expired -- (9,000) $16.625-17.000 - ---------------------------------------------------------------------------------- Balance, December 31, 1993 -- 43,000 $16.625-18.687 ==================================================================================
29 14 HANDY & HARMAN LONG-TERM INCENTIVE STOCK OPTION PLAN The number of shares subject to award under this plan adopted in 1991 shall not exceed 1,000,000 shares of Common Stock. No stock appreciation rights are outstanding under this plan. Commencing one year after the date of grant each option will become exercisable cumulatively at the rate of 20% per year and will expire 10 years from the date such option was granted. Transactions under this Plan are summarized below:
Shares under option Shares ------------------------------- Available Range of for Option Shares Price ============================================================================= Balance, January 1, 1991 -- -- -- Shares subject to award 1,000,000 Options granted (494,000) 494,000 $ 9.625 - 14.125 - ----------------------------------------------------------------------------- Balance, December 31, 1991 506,000 494,000 $ 9.625 - 14.125 Options granted (32,000) 32,000 $11.312 -12.5625 - ----------------------------------------------------------------------------- Balance, December 31, 1992 474,000 526,000 $ 9.625 - 14.125 Options granted (171,000) 171,000 $12.937 -15.3125 Options exercised -- (3,800) $ 9.625 - 12.625 Options expired 31,200 (31,200) $12.625 - ----------------------------------------------------------------------------- Balance, December 31, 1993 334,200 662,000 $ 9.625 -15.3125 =============================================================================
OUTSIDE DIRECTOR STOCK OPTION PLAN Under the Outside Director Stock Option Plan each outside director is awarded fully and immediately exercisable options, on an annual basis, to purchase Common Stock at an option price of $1. The market value of the Company's shares at date of grant less the option price is amortized to compensation expense during the year. A maximum of 100,000 shares are subject to award under this Plan. Transactions under this Plan are summarized below:
1993 1992 1991 ============================================================ Options outstanding January 1 7,379 7,252 3,065 Options awarded 5,236 8,532 5,600 Options exercised (5,553) (8,405) (1,413) - ------------------------------------------------------------ Options outstanding December 31 7,062 7,379 7,252 ============================================================ Shares subject to award December 31 76,954 82,190 90,722 ============================================================
1988 LONG-TERM INCENTIVE PLAN Shares issued under the 1988 Long-Term Incentive Plan are in the name of the employee, who has all the rights of a shareholder, subject to certain restrictions or forfeitures. Of the 400,000 shares which may be awarded under this Plan 28,700 shares were issued in 1990, of which 400 shares were forfeited, and 22,000 shares were issued in 1992, of which 1,400 shares were forfeited. The market value of shares issued under the Plan is recorded as unearned compensation and shown as a separate component of shareholders' equity. This compensation is amortized to expense over the period the employees become vested. Compensation expense for both the Outside Director Stock Option Plan and the 1988 Long-Term Incentive Plan amounted to $214,000, $226,000 and $214,000 in 1993, 1992 and 1991, respectively. NOTE 6 -- SEGMENT INFORMATION Information regarding the Company's industry segments and discontinued operations is contained on page 18 under the heading "The Company's Business" and is incorporated herein by reference. Additional information concerning industry segments, corporate and discontinued operations is as follows:
1993 1992 1991 ======================================================================= Depreciation and amortization expense: Precious metals $ 4,645,000 $ 4,327,000 $ 5,166,000 Automotive (OEM) 4,713,000 4,120,000 3,810,000 Wire/Tubing 4,046,000 3,734,000 3,787,000 Other non-precious metal businesses 1,748,000 1,810,000 1,967,000 Discontinued operations -- -- 1,213,000 Corporate 664,000 863,000 429,000 - ----------------------------------------------------------------------- $15,816,000 $14,854,000 $16,372,000 ======================================================================= Property, plant and equipment additions: Precious metals: Expenditures $ 5,650,000 $ 3,717,000 $ 2,916,000 Transfer -- 1,389,000 (1,630,000) - ----------------------------------------------------------------------- 5,650,000 5,106,000 1,286,000 - ----------------------------------------------------------------------- Automotive (OEM): Expenditures 1,895,000 3,204,000 5,192,000 Transfer -- -- (642,000) - ----------------------------------------------------------------------- 1,895,000 3,204,000 4,550,000 - ----------------------------------------------------------------------- Wire/Tubing: Expenditures 6,310,000 4,727,000 3,031,000 - ----------------------------------------------------------------------- 6,310,000 4,727,000 3,031,000 - ----------------------------------------------------------------------- Other non-precious metal businesses: Expenditures 932,000 937,000 1,019,000 Transfer -- -- 761,000 - ----------------------------------------------------------------------- 932,000 937,000 1,780,000 - ----------------------------------------------------------------------- Discontinued operations: Expenditures 145,000 611,000 570,000 Transfer -- (1,389,000) 1,511,000 - ----------------------------------------------------------------------- 145,000 (778,000) 2,081,000 - ----------------------------------------------------------------------- Corporate: Expenditures 215,000 1,244,000 -- - ----------------------------------------------------------------------- $15,147,000 $14,440,000 $12,728,000 =======================================================================
30 15 NOTE 7 -- SUPPLEMENTAL INFORMATION
1993 1992 ================================================================ a-Receivables: Trade accounts $ 70,761,000 $ 75,146,000 Notes 221,000 223,000 Allowance for doubtful accounts (3,721,000) (3,325,000) - ---------------------------------------------------------------- 67,261,000 72,044,000 Sales of precious metals for future delivery 60,482,000 8,662,000 - ---------------------------------------------------------------- $127,743,000 $ 80,706,000 ================================================================ b-Inventories: Precious metals: Fine and fabricated metals in various stages of completion $ 38,879,000 $ 37,406,000 Non-precious metals: Base metals, factory supplies and raw materials 25,635,000 24,775,000 Work in process 14,893,000 16,257,000 Finished goods 9,285,000 9,230,000 $ 88,692,000 $ 87,668,000 - ---------------------------------------------------------------- Precious metals stated at LIFO cost $ 32,797,000 $ 32,783,000 ================================================================ LIFO inventory-excess of year-end market value over LIFO cost $141,273,000 $105,416,000 ================================================================ Dec. 31 market value per ounce: Silver $ 5.08 $ 3.67 Gold $391.75 $333.30 Market value of precious metals due suppliers or held for customers and returnable in commercial bar or fabricated form $259,627,000 $165,789,000 ================================================================ c-Property, plant and equipment: Land $ 4,933,000 $ 5,309,000 Buildings and improvements 61,163,000 60,664,000 Machinery and equipment 155,795,000 158,726,000 Furniture and fixtures 15,585,000 14,151,000 Automotive 970,000 1,009,000 Improvements to leased property 4,039,000 4,013,000 Construction in progress 6,899,000 5,221,000 - ---------------------------------------------------------------- $249,384,000 $249,093,000 ================================================================
Depreciation and amortization of property, plant and equipment charged to operations for 1993, 1992 and 1991 was $14,659,000, $14,157,000 and $15,513,000, respectively.
1993 1992 ============================================================== d-Intangibles (net of amortization): Patents and other $ 729,000 $ 785,000 Excess of purchase price over net assets acquired in business combinations 391,000 909,000 - -------------------------------------------------------------- $1,120,000 $1,694,000 ==============================================================
e- Major Customer: A customer from the automotive (OEM) segment represented 10.7%, 11.3% and 10.5% of consolidated sales and service revenues for 1993, 1992 and 1991, respectively. NOTE 8 -- RETIREMENT PLANS AND OTHER BENEFITS RETIREMENT PLANS The Company and substantially all of its subsidiaries have noncontributory defined benefit plans covering most of their employees. The benefits are based on years of service and employee's compensation at the time of retirement. Contributions are made by the Company as necessary to provide assets sufficient to meet the benefits payable to plan participants, and are determined in accordance with applicable minimum funding standard requirements as promulgated by the Internal Revenue Service. Such contributions are based on actuarial computations of the amount sufficient to fund normal (current service) cost plus an amortization of the unfunded actuarial accrued liability over periods of up to 30 years. The components of net periodic pension cost (credit) for 1993, 1992 and 1991 are as follows:
1993 1992 1991 ================================================================= Service cost-benefits earned during the period $ 3,546,000 $ 4,572,000 $ 3,715,000 Interest cost on the projected benefits obligation 7,253,000 8,130,000 7,205,000 Return on plan assets (15,563,000) (16,738,000) (16,050,000) Net amortization and deferral (106,000) (987,000) (1,060,000) - ----------------------------------------------------------------- Net periodic pension cost (credit) ($ 4,870,000) ($ 5,023,000) ($ 6,190,000) =================================================================
Assumptions used in the accounting at December 31 are:
1993 1992 1991 ============================================================ Discount rate: Beginning of year 7.0% 7.5% 8.0% End of year 6.5% 7.0% 7.5% Compensation increase 5.0% 5.0% 5.0% Expected asset return 8.5% 9.5% 9.5% to 10.5% ============================================================
31 16 The plans' funded status as of December 31 and the amounts recognized in the accompanying financial statements are as follows:
1993 1992 ==================================================================== Actuarial present value of benefit obligations: Vested benefit obligation $ 95,980,000 $ 85,709,000 - -------------------------------------------------------------------- Accumulated benefit obligation $100,139,000 $ 90,161,000 - -------------------------------------------------------------------- Projected benefit obligation $114,490,000 $104,333,000 Plan assets at fair value 156,295,000 146,567,000 - -------------------------------------------------------------------- Plan assets in excess of projected benefit obligation 41,805,000 42,234,000 Unrecognized net loss 24,584,000 21,955,000 Unrecognized prior service cost (3,740,000) ( 4,332,000) Unrecognized net asset (15,944,000) (19,066,000) - -------------------------------------------------------------------- Prepaid pension cost $ 46,705,000 $ 40,791,000 ====================================================================
The plans' assets are invested primarily in stocks and insurance contracts. The cost of living provision in effect for a certain Company pension plan was eliminated with respect to benefits credited after October 31, 1992 and the definition of average pay was changed from a final five year average to career average pay starting January 1, 1993 for all units covered under the plan. The result was a decrease in the projected benefit obligation and a reduction in unrecognized prior service cost of $7,130,000. This amount is being amortized over 16 years. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS Certain operations of the Company provide postretirement medical benefits to current and retired employees. In 1991 the Company adopted the provisions of Statement of Financial Accounting Standards No. 106 ("SFAS 106"), "Employers' Accounting for Postretirement Benefits Other than Pensions", to account for these provided benefits. Certain employees of these operations become eligible for postretirement medical benefits after fulfilling minimum age and service requirements. Postretirement benefit costs were determined assuming discount rates of 7%, 7.5% and 8% for the years ended 1993, 1992 and 1991, respectively. The components of net periodic postretirement benefit cost are as follows:
1993 1992 1991 ==================================================================== Service cost $ 261,000 $ 324,000 $ 305,000 Interest cost 694,000 698,000 695,000 Amortization of transition obligation 574,000 417,000 432,000 - -------------------------------------------------------------------- $1,529,000 $1,439,000 $1,432,000 ====================================================================
The Company's funding policy with respect to these benefits is to pay the amounts required to provide the benefits during each year. The following table presents the Company's postretirement medical benefits funded status as of December 31, 1993 and 1992.
Accumulated Postretirement Benefit Obligation: - --------------------------------------------------------------------- 1993 1992 ===================================================================== Retirees $ 4,576,000 $ 3,403,000 Future retirees 6,376,000 5,722,000 - --------------------------------------------------------------------- Total accumulated postretirement benefit obligation 10,952,000 9,125,000 Unrecognized transition obligation (6,340,000) (6,711,000) Unrecognized actuarial loss (1,534,000) (457,000) - --------------------------------------------------------------------- Net postretirement benefit liability -- classified with prepaid retirement costs $ 3,078,000 $ 1,957,000 =====================================================================
The assumed discount rate used to measure the accumulated postretirement benefit obligation was 6.5% for 1993 and 7% for 1992. The unrecognized transition obligation amortization period is 20 years beginning on January 1, 1991, the implementation date. For measurement purposes, a 15% annual rate of increase in the health care cost trend rate was assumed for 1992 through 1994; the rate was assumed to decrease gradually to 6% by the year 2003 and remain at that level thereafter. A 1% increase in the assumed health care trend rate would not have a significant impact on the accumulated postretirement benefit obligation as of December 31, 1993 and 1992. Effective July 1, 1992 all participating union employees who are not eligible to retire by June 30, 1995 were eliminated from receiving postretirement medical benefits. The present value of this change reduced the unrecognized transition obligation by $1,726,000 in 1992. SAVINGS PLAN During 1991 the Company established the Handy & Harman Savings Plan under Section 401(k) of the Internal Revenue Code. This savings plan allows eligible employees to contribute from 1% to 12% of their income on a pretax basis to this savings plan. The Company matches 50% of the first 3% of the employee's contribution. Such matching Company contributions are invested in shares of the Company's common stock and becomes immediately vested. The charge to operations for the Company's matching contribution amounted to $862,000, $581,000, and $418,000 for 1993, 1992 and 1991, respectively. 32 17 NOTE 9 -- COMMON STOCK PURCHASE RIGHTS In 1989, the Board of Directors declared a dividend of one Common Stock Purchase Right on each outstanding share of Handy & Harman Common Stock to holders of record on February 6, 1989. If the rights become exercisable, the rights will separate from the common stock and each right will entitle the holder to purchase from the Company a share of common stock at a predefined price. The rights are not exercisable until either ten days after certain changes in ownership of the Company occurs or ten days following the commencement of a tender offer for at least 20% of the Company's common stock. The rights are redeemable by the Company at a fixed price after certain defined events or at any time prior to the expiration of the rights on January 26, 1999, if such events do not occur. Through December 31, 1993, the Company had reserved common shares as issuable pursuant to these rights. At the present time, the rights have no dilutive effects on the earnings per share calculation. NOTE 10 -- DISCONTINUED OPERATIONS On June 27, 1991, the Company announced its planned divestiture of six businesses which are involved in the manufacture of automotive replacement parts, proprietary chemicals, metal powders, pressurized vessels, coldheaded parts, and specialized platinum group metals refining and products. Accordingly, the consolidated financial statements of the Company have been reclassified to report separately the net assets and operating results of these businesses. Financial results for periods prior to the date of discontinuance have been restated to reflect continuing operations. The net assets related to discontinued operations, primarily working capital and property, plant and equipment, have been recorded at their estimated net realizable value, as adjusted for estimated cash flows from operations and estimated interest expense during the holding period (estimated at one year). Included in assets of discontinued operations is the Company's investment in, and receivable from, GO/DAN Industries (GDI), a joint venture partnership. Approximately $1,000,000 of operating losses of the discontinued operations from the date of discontinuance to December 31, 1993 were charged against the reserve for operating losses established in the second quarter of 1991. Interest expense of $827,000 and $3,192,000 was allocated to the discontinued operations based on net assets expected to be realized and the value of precious metals used in their operations for 1992 and 1991 respectively. 33 18 INDEPENDENT AUDITORS' REPORT KPMG Peat Marwick 345 Park Avenue New York, NY 10154 To the Board of Directors and Shareholders of Handy & Harman: We have audited the consolidated balance sheets of Handy & Harman and Subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1993. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Handy & Harman and Subsidiaries as of December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1993 in conformity with generally accepted accounting principles. As discussed in the Summary of Significant Accounting Policies, the Company adopted Statement of Financial Accounting Standard No. 109, "Accounting for Income Taxes" in 1993. /S/ KPMG PEAT MARWICK - --------------------- February 18, 1994 RESPONSIBILITY FOR FINANCIAL STATEMENTS The financial statements presented in this Annual Report were prepared by Handy & Harman which is responsible for their fairness. Such statements include, in some instances, judgments as to those amounts which are estimates and approximations. The Company believes that the consolidated financial statements are in conformity with generally accepted accounting principles. The Company depends upon an accounting system, including internal accounting controls, administered by a staff of corporate accountants. The controls are designed to provide reasonable assurance that the Company's financial records are reliable, that the corporate assets are safeguarded and that transactions are executed in accordance with the appropriate corporate authorizations and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. It must be recognized, however, that errors and irregularities may nevertheless occur, so the effectiveness of such a financial system depends to a great extent upon the careful selection of financial and other responsible managers. Also, estimates and judgments are required to assess and balance the relative cost and expected benefits of the Company's controls. The Company believes that its accounting controls provide reasonable assurance that errors or irregularities which could be material to the financial statements are prevented or would be detected within a timely period by employees in the normal course of performing their assigned functions. KPMG Peat Marwick, independent certified public accountants, has been engaged by the Company to conduct quarterly reviews and an audit of the Company's financial statements in accordance with generally accepted auditing standards. Such standards provide for numerous procedures, including obtaining an understanding of the Company's accounting systems and performing reviews of internal accounting control systems and tests of transactions deemed appropriate by the auditors. KPMG Peat Marwick is a member of the SEC Practice Section of the AICPA Division of CPA firms. For many years the Company has had an Audit Committee of the Board of Directors consisting exclusively of outside Directors of the Company. The Committee meets periodically with the independent auditors, internal auditors, management and corporate staff accountants to review and evaluate their accounting, auditing and financial reporting activities and responsibilities. The independent auditors as well as the internal auditors and the Corporate Controller have full and free access to the Audit Committee. The independent auditors meet with the Audit Committee, with and without Company employees present, to discuss their audit plan and at a later date the results of their audits. 34 EX-22 8 LIST OF SUBSIDIARIES 1 Exhibit (22) HANDY & HARMAN SUBSIDIARIES AS OF DECEMBER 31, 1993 A-1 Sales Inc. Alloy Ring Service, Inc. American Chemical & Refining Company, Incorporated H&H Fabrications, Inc. (Formerly Brunner Engineering & Mfg., Inc.) Camdel Metals Corporation Con-Ind Limited Continental Industries, Inc. Daniel Radiator Corporation Exxtrusions Corporation Greenback Industries, Inc. Handy & Harman Automotive Group, Inc. Handy & Harman Automotive de Mexico, S.A. De C.V. Handy & Harman Electronic Materials Corporation Handy & Harman Envirotech Systems, Ltd. (Formerly Monico Manufacturing & Supply Co., Inc.) Handy & Harman of Canada, Limited Handy & Harman International, Ltd. Handy & Harman International (Korea) Limited Handy & Harman Peru, Inc. Handy & Harman Radiator Corporation Handy & Harman Tube Company, Inc. Handy & Harman Indiana Tube Corporation, Inc. Indiana Tube Corporation Jackson Industries, Inc. 2 Jet Tool Company, Inc. KJ-VMI Realty, Inc. (Formerly Valley Metals Inc.) Kontite U.K. Limited Lexington Tube Co., Inc. Lucas-Milhaupt, Inc. Maryland Specialty Wire, Inc. Micro-Tube Fabricators, Inc. H&H Powdered Metals, Inc. (Formerly New Industrial Techniques, Inc.) Northvale Design & Development Company, Inc. Pal-Rath Realty, Inc. (Formerly Rathbone Corporation) Platina Laboratories, Inc. Rigby-Maryland (Stainless), Ltd. South Windsor Metallurgical, Inc. U.S. Auto Radiator Manufacturing Corporation Willing B Wire Corporation In addition to the wholly-owned subsidiaries listed above, the Company has a 50% interest in GO/DAN Industries, a joint venture partnership, and has a 5% interest in Muzuno Handy Harman, Ltd. and a 50% interest in Handy & Harman (Asia), S.A. Handy & Harman (Asia), S.A. owns 100% of Handy & Harman (HK) Limited and 75% of Handy & Harman Manufacturing (Singapore) Pte. Ltd. The Company owns 12_1/2% of Handy & Harman Manufacturing (Singapore) Pte. Ltd. The Company also has a 5% interest in Ravel Inc., formerly named R.V.L. Investments, Inc. -----END PRIVACY-ENHANCED MESSAGE-----