SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3 TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
Handy & Harman
(Name of Subject Company)
Handy & Harman
(Name of Person(s) Filing Statement)
Common Stock, par value $1.00 per share
(Title of Class of Securities)
410306104
(CUSIP Number of Class of Securities)
Paul E. Dixon, Esq.
Senior Vice President, General
Counsel and Secretary
Handy & Harman
250 Park Avenue
New York, New York 10177
(212) 661-2400
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
With a Copy to:
Milton G. Strom, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
This Amendment supplements and amends as Amendment No. 3 the
Solicitation/Recommendation Statement on Schedule 14D-9, originally
filed on December 24, 1997 (as amended, the "Schedule 14D-9"), by Handy &
Harman, a New York corporation ("Handy & Harman"), relating to the tender
offer (the "WHX Offer") by HN Acquisition Corp., a New York corporation
(the "Purchaser") and wholly owned subsidiary of WHX Corporation, a
Delaware corporation ("Parent"), disclosed in a Tender Offer Statement on
Schedule 14D-1, dated December 16, 1997, to purchase any and all
outstanding shares of common stock, par value $1.00 per share (the
"Shares"), of Handy & Harman, including the associated Common Stock
Purchase Rights issued pursuant to the Rights Agreement, dated as of
January 26, 1989, as amended on April 25, 1996 and October 22, 1996 (as
so amended, the "Rights Agreement"), of Handy & Harman at a price of
$30.00 per Share, net to the seller in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated December 16,
1997, and the related Letter of Transmittal. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in the
Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
On January 7, 1998, Harbor Finance Partners, on behalf of itself
and all other shareholders of Handy & Harman similarly situated (the
"Plaintiff"), filed a purported class action complaint (the "Complaint")
in the Supreme Court of the State of New York for the County of New York
(the "Court") against Handy & Harman and certain of Handy & Harman's
directors (the "Defendants"). The Complaint alleges, among other things,
that the individual Defendants have breached their fiduciary duties to
Handy & Harman and its shareholders by (i) failing to properly consider
the WHX Offer on a fully informed basis, (ii) failing and refusing to
negotiate with representatives of WHX and (iii) impairing the franchise
rights of Handy & Harman's shareholders by, among other things, amending
Handy & Harman's By-laws to permit the Board of Directors to schedule the
date and time of the annual meeting of shareholders. The Plaintiff seeks
as relief, among other things, (i) an order from the Court requiring that
the individual Defendants (a) cooperate fully with any entity or person,
including WHX, having a bona fide interest in proposing any transaction
that would maximize shareholder value, (b) immediately undertake an
appropriate evaluation of, and take appropriate steps to enhance, Handy &
Harman's value as a merger or acquisition candidate, (c) take certain
steps to expose Handy & Harman to the marketplace in an effort to create
an active auction of Handy & Harman, (d) act independently so that the
interests of Handy & Harman's public shareholders will be protected, and
(e) ensure that no conflicts of interest exist between the individual
Defendants' own interests and their fiduciary obligation to maximize
shareholder value or, if such conflicts of interest exist, ensure that
such conflicts of interest are resolved in the best interests of Handy &
Harman's public shareholders; and (ii) unspecified monetary damages,
including a reasonable allowance for attorneys' and experts' fees. The
Defendants believe that the lawsuit is without merit and intend to defend
themselves vigorously.
The foregoing description of the Complaint is qualified in its
entirety by reference to the full text of the Complaint which is filed
herewith as Exhibit 30 and is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit
No. Description
------- -----------
30 Complaint filed in the Supreme Court of the State
of New York, New York County, in an action titled
Harbor Finance Partners, on behalf of itself and
all others similarly situated v. Handy & Harman
et al.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: January 8, 1998 HANDY & HARMAN
By: /s/ Paul E. Dixon
Name: Paul E. Dixon
Title: Senior Vice President,
General Counsel and
Secretary
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
30 Complaint filed in the Supreme Court of the State
of New York, New York County, in an action titled
Harbor Finance Partners, on behalf of itself and
all others similarly situated v. Handy & Harman
et al.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- ------------------------------------------x Index No. 98-600059
HARBOR FINANCE PARTNERS, on behalf :
of itself and all others similarly : Purchased and filed on:
situated, : January 7, 1998
:
Plaintiff, : Plaintiff designates New York
: County as the place for trial
v. :
:
CLARENCE A. ABRAMSON, ROBERT E. : The basis of venue is
CORNELIA, RICHARD N. DANIEL, : place of business of
GERALD G. GARBACZ, FRANK E. : defendants
GRZELECKI, GOUVERNEUR M. NICHOLAS, :
HERCULES P. SOTOS, ELLIOT J. : Plaintiff resides in
SUSSMAN, ROGER E. TETRAULT, : Dade County, Florida
and HANDY & HARMAN, :
Defendants. :
- ------------------------------------------x S U M M O N S
To the above named defendants:
YOU ARE HEREBY SUMMONED to answer the complaint in this action
and to serve a copy of your answer, or, if the complaint is not served
with this summons, to serve a notice of appearance, on the Plaintiffs'
Attorneys within 20 days after service of this summons, exclusive of the
day of service (or within 30 days after the service is complete if this
summons is not personally delivered to you within the State of New York);
and in case of your failure to appear or answer, judgment will be taken
against you by default for the relief demanded in the complaint.
Defendants' address:
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
Dated: January 7, 1998
WECHSLER HARWOOD HALEBIAN
& FEFFER LLP
By: /s/ Robert I. Harwood
-------------------------
Robert I. Harwood
488 Madison Avenue
New York, New York 10022
(212) 935-7400
Attorneys for Plaintiff
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- -----------------------------------------x Index No. 1998/600059
HARBOR FINANCE PARTNERS, on behalf :
of itself and all others similarly :
situated, :
:
Plaintiff, :
: CLASS ACTION COMPLAINT
v. :
:
CLARENCE A. ABRAMSON, ROBERT E. :
CORNELIA, RICHARD N. DANIEL, : JURY TRIAL DEMANDED
GERALD G. GARBACZ, FRANK E. :
GRZELECKI, GOUVERNEUR M. NICHOLAS, :
HERCULES P. SOTOS, ELLIOT J. :
SUSSMAN, ROGER E. TETRAULT, :
and HANDY & HARMAN, :
:
Defendants. :
- -----------------------------------------x
Plaintiff, by its attorneys, alleges upon personal knowledge as
to its own acts and upon information and belief as to all other matters,
as follows:
NATURE OF THE ACTION
1. This is a shareholders' class action lawsuit brought
on behalf of the public shareholders of Handy & Harman ("Handy & Harman"
or the "Company") who have been, and continue to be, deprived of the
opportunity to realize fully the benefits of their investment in the
Company. The individual defendants have wrongfully refused to properly
consider a bona fide offer for the Company from WHX Corporation ("WHX"),
announced on December 15, 1997. Their actions constitute a breach of
fiduciary duty to maximize shareholder value. The individual defendants
are using their fiduciary positions of control over Handy & Harman to
thwart others in their legitimate attempts to acquire the Company, and
the individual defendants are trying to entrench themselves in their
positions with Handy & Harman.
PARTIES
2. Plaintiff is and, at all relevant times, has been the
owner of shares of Handy & Harman common stock.
3. Handy & Harman is a corporation duly organized and
existing under the laws of the State of New York. The Company is a
diversified manufacturing company with operations in materials
engineering and specialty manufacturing. Handy & Harman products include
electronic components, specialty fasteners, engineered materials,
specialty wire, and tubing and fabricated precious metals. Handy & Harman
maintains its principal executive offices at 250 Park Avenue, New York,
New York 10177. Handy & Harman has approximately 12.0 million shares of
common stock outstanding and approximately 2800 stockholders of record.
Handy & Harman stock trades on the NYSE.
4. Defendant Richard N. Daniel ("Daniel") has been the
Chief Executive Officer and Chairman of the Board of the Company since
1992, and prior thereto Chairman of the Board, President and Chief
Executive Officer. Daniel has served on the Board of Directors since
1974.
5. Defendant Frank E. Grzelecki ("Grzelecki") has been, at
all times material hereto, the President and Chief Operating Officer of
Handy & Harman, and has served as a director of the Company since 1988.
6. Defendants Clarence A. Abramson, Robert E. Cornelia, Gerald
G. Garbacz, Governeur M. Nichols, Hercules P. Sotos, Elliot J. Sussman
and Robert E. Tetrault have been, at all times material hereto, directors
of Handy & Harman.
7. The individuals identified in Paragraphs 4 through 6 are
collectively referred to throughout this complaint as the "Individual
Defendants."
8. All directors and executive officers as a group own
approximately 5% of Handy & Harman.
9. The Individual Defendants, by reason of their corporate
directorship and/or executive positions, stand in a fiduciary position
relative to the Company's shareholders, which fiduciary relationship, at
all times relevant herein, required the defendants to exercise their best
judgment, and to act in a prudent manner and in the best interests of the
Company's shareholders.
CLASS ACTION ALLEGATIONS
10. Plaintiff brings this case in its own behalf and as a class
action, pursuant to Section 901 et seq. of the CPLR, on behalf of all
shareholders of the Company, except defendants herein and any person,
firm, trust, corporation, or other entity related to or affiliated with
any of the defendants, who will be threatened with injury arising from
defendants' actions as is described more fully below (the "Class").
11. This action is properly maintainable as a class action.
12. The Class is so numerous that joinder of all members is
impracticable. The Company has approximately 2,800 shareholders, who are
located throughout this State and the United States.
13. There are questions of law and fact common to the Class,
which predominate over individual ones, including, inter alia, whether:
a. defendants have breached their fiduciary duties owed
by them to plaintiff and other members of the Class by failing and
refusing to attempt in good faith to maximize shareholder value in the
sale of Handy & Harman;
b. defendants have breached or aided and abetted the
breach of the fiduciary duties owed by them to plaintiff and other
members of the Class; and
c. plaintiff and the other members of the Class are being,
and will continue to be, injured by the wrongful conduct alleged herein
and, if so, what is the proper remedy and/or measure of damages.
14. Plaintiff is committed to prosecuting the action and has
retained competent counsel experienced in litigation of this nature.
Plaintiff's claims are typical of the claims of the other members of the
Class and plaintiff has the same interests as the other members of the
Class. Plaintiff is an adequate representative of the Class.
15. The prosecution of separate actions by individual members of
the Class would create the risk of inconsistent or varying adjudications
with respect to individual members of the Class which would establish
incompatible standards of conduct for defendants, or adjudications with
respect to individual members of the Class which would as a practical
matter be dispositive of the interests of the other members not parties
to the adjudication or substantially impair or impede their ability to
protect their interests.
16. The defendants have acted, or refused to act, on grounds
generally applicable to, and causing injury to, the Class and, therefore,
preliminary and final injunctive relief on behalf of the Class as a whole
is appropriate.
SUBSTANTIVE ALLEGATIONS
17. On December 15, 1997, WHX announced that it had sent a
1etter to the Chairman of the Board of Handy & Harman to have Handy &
Harman's Board of Directors (the "Board") consider a stock acquisition by
WHX valued at $360 million. Under the terms of the proposal, Handy &
Harman shareholders would receive $30.00 per share in cash representing a
34.8% premium over the trading price of the Company's stock on the day
prior to the announcement. According to the letter, Ronald LaBow
("LaBow"), the Chairman of the Board of WHX, sought to have "an amicable
and productive dialogue on the merits of this offer and the benefits
which a combination of [the] companies would bring to [the] senior
management team, employees at large, and the [C]ompany's shareholders."
LaBow also outlined his plan to commence a cash tender offer on December
16, 1997 for any and all shares of Handy & Harman common stock at $30.00
per share.
18. Handy & Harman responded to WHX's offer only to say that the
Board will consider WHX's offer.
19. According to the Dow Jones Wire on December 23, 1997, LaBow
had tried to negotiate with the defendants, but was rebuffed in his
efforts.
20. On December 24, 1997, defendants announced over the PR
Newswire that they had unanimously voted to recommend that shareholders
reject WHX's tender offer, and not tender any of their shares pursuant to
the offer. In recommending that shareholders reject the offer, as
reported by Reuters, the Board took a "just say no" defense, citing a
number of reasons that ignore the strength of a combined WHX/Handy &
Harman company, including the Company's recent strategic repositioning
and business and financial prospects, and the Board's familiarity with
the financial condition, business opportunities and current business
plans of Handy & Harman.
21. Analysts have commented on the positive financial condition
of WHX, and LaBow's stewardship of that company. Barry Vogel, an industry
analyst with Vogel & Associates, described LaBow's running of WHX as
"extremely conservative," and cited the executive's rescue of
Wheeling-Pittsburgh Steel from bankruptcy over the past decade, turning
WHX into the nation's fourth-largest steelmaker and more recently
refinancing $266 million worth of long-term debt. Vogel concluded by
saying, "I think (LaBow's) just trying to improve the value of the steel
company."
22. In addition to taking a "just say no defense," defendants
have other defensive measures at their disposal to thwart WHX or any
other third party interested in an acquisition of or merger with the
Company.
23. For example, the Company has in place a Common Stock
Purchase Rights plan (commonly known as a "Poison Pill"), which entitles
each holder of common stock to one purchase right ("Rights") for each
common share held. Under the plan, the Rights are exercisable ten days
after a person or group acquires 20% or announces or makes a tender offer
for 20% or more of the Company's common shares. Each right would entitle
the holder to buy one common share of Company stock for $58.00.
24. The purpose, intent, and effect of the Poison Pill is to
thwart, impede, and delay any acquisition of Handy & Harman so that the
Individual Defendants can remain in control of the Company.
25. The rights plan has the force and effect of entrenching the
Individual Defendants in their corporate offices against any real or
perceived threat to their control, and dramatically impairs the rights of
Class members to exercise freedom of choice in a proxy contest or to
avail themselves of a bona fide offer to purchase their shares by an
acquiror, such as WHX, unfavored by incumbent management. This
fundamental shift of control of the Company's destiny from the hands of
its shareholders to the hands of the Individual Defendants results in a
heightened fiduciary duty of the Individual Defendants to consider, in
good faith, a third party bid, such as WHX, and further requires the
Individual Defendants to pursue a third party's interest in acquiring the
Company and to negotiate in good faith with a bidder on behalf of the
Company's shareholders.
26. Further, on December 23, 1997, defendants approved an
amendment to Handy & Harman's by-laws to allow the Board the right to
schedule the time and date of the annual shareholders' meeting and,
therefore, the election of directors, instead of its previous fixed date.
In amending the by-laws, defendants have manipulated the corporate
machinery to make it virtually impossible for third parties interested in
an acquisition of or merger with the Company to wage a proxy contest or
elect or remove incumbent directors.
27. Defendants' recalcitrance to consider and promptly act upon
WHX's offer has no valid business purpose, and simply evidences their
disregard for the benefits of a combined WHX/Handy & Harman company. By
refusing to consider WHX's offer, defendants are depriving plaintiff and
the Class of the right to share in the assets and businesses of Handy &
Harman and receive the maximum value for their shares.
28. Handy & Harman represents a highly attractive acquisition
candidate. Defendants' conduct would ensure their continued positions
within the Company but deprive the Company's public shareholders of a
premium that WHX, or any other bidder, is prepared to pay, or of the
enhanced premium that further negotiation or exposure of Handy & Harman
to the market could provide.
29. Defendants owe fundamental fiduciary obligations to Handy &
Harman's shareholders to take all necessary and appropriate steps to
maximize the value of their shares. In addition, the Individual
Defendants have the responsibility to act independently so that the
interests of the Company's public shareholders will be protected, to
seriously consider all bona fide offers for the Company, and to conduct
fair and active bidding procedures or other mechanisms for checking the
market to assure that the highest possible price is achieved. Further,
the directors of Handy & Harman must adequately ensure that no conflict
of interest exists between the Individual Defendants' own interests and
their fiduciary obligations to maximize shareholder value or, if such
conflicts exist, to insure that all such conflicts will be resolved in
the best interests of the Company's stockholders.
30. Because defendants dominate and control the business and
corporate affairs of Handy & Harman, and because they are in possession
of private corporate information concerning Handy & Harman's assets,
businesses, and future prospects, there exists an imbalance and disparity
of knowledge of economic power between defendants and Handy & Harman's
public shareholders. This discrepancy makes it grossly and inherently
unfair for defendants to entrench themselves at the expense of its public
stockholders.
31. The Individual Defendants have breached their fiduciary and
other common law duties owed to plaintiff and other members of the Class
in that they have not and are not exercising independent business
judgment and have acted and are acting to the detriment of the Class.
32. In connection with the conduct described therein, the
Individual Defendants breached their fiduciary duties by, among other
things:
a. failing to properly consider the WHX proposal without
fully informing themselves about or intentionally
ignoring the future prospects of a combined Handy &
Harman/WHX company, or the intrinsic worth of WHX;
b. failing and refusing to negotiate with representatives
of WHX; and
c. impairing the franchise rights of Handy & Harman's
shareholders.
33. Defendants have refused to take those steps necessary to
ensure that Handy & Harman's shareholders will receive maximum value for
their shares of Handy & Harman stock. Defendants have thus refused to
seriously consider the pending offer, and have failed to announce any
active auction or open bidding procedures best calculated to maximize
shareholder value in selling the Company.
34. By the acts, transactions and courses of conduct alleged
herein, the Individual Defendants, individually and as part of a common
plan and scheme in breach of their fiduciary duties and obligations, are
attempting unfairly to deprive plaintiff and other members of the Class
of the premium they could realize in an acquisition transaction and to
ensure continuance of their positions as directors and officers, all to
the detriment of Handy & Harman's public shareholders. The Individual
Defendants have been engaged in a wrongful effort to entrench themselves
in their offices and positions of control and prevent the acquisition of
Handy & Harman, except on terms that would further their own personal
interests.
35. As a result of the actions of the Individual Defendants,
plaintiff and the other members of the Class have been and will be
damaged in that they have not and will not receive their fair proportion
of the value of Handy & Harman's assets and businesses and/or have been
and will be prevented from obtaining a fair and adequate price for their
shares of Handy & Harman's common stock, and have been and will be
prevented from fully and freely exercising their franchise rights.
36. Plaintiff seeks preliminary and permanent injunctive relief
and declaratory relief preventing defendants from inequitably and
unlawfully depriving plaintiff and the Class of their right to realize a
full and fair value for their stock at a premium over the market price,
by unlawfully entrenching themselves in their positions of control, and
to compel defendants to carry out their fiduciary duties to maximize
shareholder value.
37. Only through the exercise of this Court's equitable powers
can plaintiff be fully protected from the immediate and irreparable
injury which defendants' actions threaten to inflict. Defendants are
precluding the shareholders' enjoyment of their franchising rights and
the full economic value of their investment by failing to proceed
expeditiously and in good faith to evaluate and pursue a premium
acquisition proposal that would provide consideration for all shares at
an attractive price.
38. Unless enjoined by the Court, defendants will continue to
breach their fiduciary duties owed to plaintiff and the members of the
Class, and/or aid and abet and participate in such breaches of duty, and
will prevent the sale of Handy & Harman, all to the irreparable harm of
plaintiff and other members of the Class.
39. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(a) Declaring this to be a proper class action and
certifying p1aintiff as a class representative;
(b) Ordering the Individual Defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by
announcing their intention to:
(i) cooperate fully with any entity or person,
including WHX, having a bona fide interest in proposing any transaction
that would maximize shareholder value, including but not limited to, a
merger or acquisition of Handy & Harman;
(ii) immediately undertake an appropriate evaluation
of Handy & Harman's worth as a merger/acquisition candidate;
(iii) take all appropriate steps to enhance Handy &
Harman's value and attractiveness as a merger/acquisition candidate;
(iv) take all appropriate steps to effectively expose
Handy & Harman to the marketplace in an effort to create an active
auction of the Company;
(v) act independently so that the interests of the
Company's public shareholders will be protected; and
(vi) adequately ensure that no conflicts of interest
exist between the Individual Defendants' own interest and their fiduciary
obligation to maximize shareholder value or, in the event such conflicts
exist, to ensure that all conflicts of interest are resolved in the best
interests of the public stockholders of Handy & Harman;
(c) Ordering the Individual Defendants, jointly and
severally to account to plaintiff and the Class for all damages suffered
and to be suffered by them as a result of the acts and transactions
alleged herein;
(d) Awarding plaintiff the costs and disbursements of this
action, including a reasonable allowance for plaintiff's attorneys' and
expert's fees; and
(e) Granting such other and further relief as may be just
and proper.
Dated: New York, New York
January 7, 1998
WECHSLER KARWOOD HALEBIAN
& FEFFER LLP
By: /s/ Robert I. Harwood
------------------------
Robert I. Harwood
488 Madison Avenue
New York, New York 10022
(212) 935-7400
Attorneys for Plaintiff
