<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
HARNISCHFEGER INDUSTRIES, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
------------------------
HARNISCHFEGER INDUSTRIES, INC.
3600 SOUTH LAKE DRIVE
ST. FRANCIS, WISCONSIN 53201
REVOCATION OF CONSENT STATEMENT BY THE
BOARD OF DIRECTORS OF HARNISCHFEGER INDUSTRIES, INC.
IN OPPOSITION TO TRINITY I FUND, L.P.
------------------------
Dear Shareholder:
This Revocation of Consent Statement (this "Consent Revocation Statement")
and the enclosed yellow form of revocation of consent are furnished by the Board
of Directors (the "Board") of Harnischfeger Industries, Inc. (the "Company") to
the holders of shares of Common Stock of the Company (the "Common Shares"), par
value $1.00 per share, in connection with the Board's opposition to the
solicitation (the "Trinity Solicitation") of written consents by and on behalf
of Trinity I Fund, L.P., Portfolio Genpar, LLC, and Portfolio FF Investors, L.P.
(collectively, the "Trinity Group") to take action without a shareholders'
meeting. Portfolio Genpar, LLC is wholly owned by Trinity I Fund, L.P. and is
the sole general partner of Portfolio FF Investors, L.P., which was formed to
hold Trinity I Fund L.P.'s investment in the Company.
THE MEMBERS OF THE BOARD PRESENT UNANIMOUSLY VOTED TO OPPOSE THE TRINITY
SOLICITATION. THE BOARD URGES YOU NOT TO SIGN ANY BLUE CONSENT CARDS SENT TO YOU
BY THE TRINITY GROUP.
IF YOU HAVE PREVIOUSLY SIGNED AND RETURNED ANY SUCH CONSENT CARD TO THE
TRINITY GROUP, YOU HAVE EVERY RIGHT TO CHANGE YOUR MIND. THE BOARD URGES YOU TO
SIGN, DATE AND MAIL THE ENCLOSED YELLOW REVOCATION OF CONSENT CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
EVEN IF YOU HAVE NOT PREVIOUSLY SIGNED AND RETURNED ANY SUCH CONSENT TO THE
TRINITY GROUP, YOU MAY SEND A YELLOW REVOCATION OF CONSENT CARD TO THE COMPANY,
WHICH WILL HAVE NO LEGAL EFFECT BUT WHICH WOULD ASSIST US IN MONITORING THE
PROGRESS OF THE CONSENT SOLICITATION.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER NOMINEE,
ONLY YOUR BANK, BROKER OR NOMINEE CAN VOTE YOUR SHARES AND ONLY PURSUANT TO YOUR
SPECIFIC VOTING INSTRUCTIONS. ACCORDINGLY, YOU ARE URGED TO REJECT THE TRINITY
SOLICITATION BY SIGNING, DATING AND RETURNING THE ENCLOSED YELLOW CONSENT
REVOCATION CARD PROMPTLY, USING THE ACCOMPANYING POSTAGE-PAID ENVELOPE PROVIDED
BY YOUR BANK, BROKER OR NOMINEE.
If you have any questions about revoking your consent or require
assistance, please call:
MACKENZIE PARTNERS, INC.
156 FIFTH AVENUE
NEW YORK, NY 10010
(212) 929-5500 (COLLECT)
OR
CALL TOLL FREE 1-800-322-2885
This Revocation of Consent Statement and Form of Revocation of Consent Card is
first being
sent to shareholders on or about May 5, 1999.
<PAGE> 3
THE PROPOSALS
SUMMARY
The Trinity Group has proposed amending the Company's by-laws (the
"Bylaws") as follows (the "Trinity Proposals"):
(i) The first proposal would amend the Bylaws to require the Board to
submit a merger, restructuring, joint venture or similar transaction having
a transaction value of in excess of $100 million to a vote of shareholders
for their prior approval.
(ii) The second proposal would amend the Bylaws to separate the
offices of Chairman and Chief Executive Officer and would provide that the
Chairman must be a non-management (i.e., not a current or former employee
of the Company) director.
(iii) The third proposal would amend the Bylaws to permit shareholders
holding not less than 25% of the Company's voting stock to call a meeting
between all shareholders of the Company and the non-management directors.
The Board carefully considered each of the Trinity Proposals and determined
that it was in the best interest of the Company and its shareholders to amend
the Bylaws in a way that addresses each of the concerns raised by the Trinity
Proposals but in a way that is not disruptive to the operations of the Company.
The Board met on Monday April 19, 1999 and in light of the Board's concerns that
the Bylaws proposed by Trinity were not in the best interest of the Company and
that the Trinity Solicitation would be disruptive to the Company, attempted that
evening to arrange a meeting between Thomas M. Taylor of the Trinity Group and
two independent directors designated by the Board, Stephen M. Peck and L. Donald
LaTorre, to discuss the Board's Bylaw amendments and other matters in an effort
to resolve the issues raised by the Trinity Group. The Board offered to hold the
meeting at any time convenient to the Trinity Group prior to Friday April 23,
1999 (the latest date that the Board could set a record date under the Company's
Bylaws). The Board believed that its proposed Bylaw amendments addressed the
concerns of the Trinity Group in a meaningful way and that termination of the
Trinity Solicitation would best enable the Company to pursue its initiative with
Chase Securities to enhance shareholder value without further disruption. After
Mr. Taylor declined to meet with the independent directors, the Board adopted
its amendments to the Bylaws on Thursday April 22, 1999 and filed preliminary
proxy materials in opposition to the Trinity Solicitation. The few differences
between the Trinity Proposals and the Bylaw amendments adopted by the Board have
been carefully considered and in the Board's opinion they are appropriate,
reasonable and in the best interests of shareholders. The Company continues to
work with its bank group, led by Chase Manhattan Bank, to seek to provide
additional liquidity for the Company's operations and with Chase Securities
(which it retained on its own initiative) to explore alternatives to enhance
shareholder value. The Board had hoped that the Trinity Group would join the
Company in a constructive effort and continues to believe that the Trinity
Solicitation is disruptive to the Company's ability to proceed with the process
it has initiated with Chase Securities. We believe that in light of the
amendments to the Bylaws already adopted by the Board and discussed below
addressing each of the concerns raised by the Trinity Group, the Trinity
Proposals should be rejected.
The Board is committed to good corporate governance and enhancing
shareholder value. The Board has responded to shareholder concerns in the past
and will continue to do so in the future. In October 1998, Thomas Taylor of the
Trinity Group suggested that the Company consider adding an additional
independent director to the Board and subsequently the Company appointed Stephen
M. Peck to the Board in December 1998. Although Mr. Peck was not nominated or
suggested by the Trinity Group, Jeffery Grade, Chairman and Chief Executive
Officer of the Company, did review Mr. Peck's background and qualifications with
Mr. Taylor prior to the announcement of Mr. Peck's appointment to the Board. On
April 12, 1999, the Company announced that it had hired Chase Securities, Inc.
to help it evaluate alternatives to enhance shareholder value in an orderly
process. The Board believes that the Trinity Solicitation and the Company's
response will distract attention and energy from the process the Company has
initiated with Chase Securities (which is why it attempted to meet with the
Trinity Group prior to amending the Company's Bylaws), and accordingly, it will
be disruptive to that process. In light of the amendments already adopted, the
Board
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believes that each of the Trinity Proposals should be rejected. The members of
the Board that were present for the Board meeting held on April 22, 1999 voted
unanimously to oppose the Trinity Solicitation and to approve the Board's
amendments to the Company's Bylaws. One director was traveling and not reachable
by telephone and as a result could not participate in the meeting.
SEND A SIGNAL TO THE TRINITY GROUP THAT THE TRINITY SOLICITATION SHOULD BE
TERMINATED BY EXECUTING THE ENCLOSED YELLOW REVOCATION OF CONSENT CARD.
WE STRONGLY URGE YOU NOT TO SIGN OR RETURN ANY OF THE BLUE CONSENT CARDS OR
OTHER DOCUMENTS SENT TO YOU BY THE TRINITY GROUP OR THEIR AGENTS.
TRINITY PROPOSAL NO. 1. SIGNIFICANT TRANSACTIONS
Under the first proposal, the Trinity Group requested that the Company
amend the Bylaws to add a provision requiring that the Board submit merger,
restructuring, joint venture or similar transactions having a transaction value
in excess of $100 million to a vote of the shareholders.
In response to this proposal, the Board amended the Bylaws to add a new
Article XIII as set forth below. It is marked to show differences from the first
Trinity proposal. Language from the Trinity Proposal which was not included in
the amended Bylaw is bracketed and language in the amended Bylaw which was not
included in the Trinity Proposal is underlined.
ARTICLE XIII
SIGNIFICANT TRANSACTIONS
The affirmative vote or consent of the holders of a
majority of all shares of stock of the corporation
unconditionally entitled to vote in elections of directors,
considered for the purpose of this Article XIII as one class,
shall be required for the adoption, approval or authorization
of any significant transaction (as hereinafter defined). A
proxy statement responsive to the requirements of the
Securities Exchange Act of 1934, as amended, shall be mailed
to stockholders of the corporation for purpose of soliciting
stockholder approval of such significant transaction and shall
contain at the front thereof, in a prominent place, any
recommendation as to the advisability (or inadvisability) of
the significant transaction which the directors may choose to
make and an opinion of a reputable investment banking firm as
to the fairness (or not) of the terms of such significant
transaction from the point of view of the stockholders of the
corporation (such investment banking firm to be selected by a
majority of the directors and to be paid a reasonable fee for
their services by the corporation upon receipt of such
opinion). As used in this Article XIII, the term "significant
transaction" shall include any sale, merger, [restructuring,]
joint venture or similar transaction of the corporation or any
of its subsidiaries [having a transaction value (exclusive of
any indebtedness assumed)] of a size in excess of 25% of the
assets of the corporation and its subsidiaries, taken as a
whole, as determined in good faith by the Board[, in excess of
$100 million]. The provisions of this Article XIII shall not
be applicable to any transaction between the corporation and
any of its subsidiaries or between any subsidiaries of the
corporation.
Under the amended Bylaw adopted by the Board, shareholders will have an
opportunity to approve significant merger, joint venture or similar
transactions, as was sought by the Trinity Group. However, whereas the Trinity
Group proposed a $100 million threshold for transactions requiring a shareholder
vote, the amended Bylaw contains a threshold of 25% of the assets of the Company
and its subsidiaries, taken as a whole.
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As set forth in the Company's unaudited balance sheet dated as of January
31, 1999 included in its Form 10-Q for the fiscal quarter ended January 31,
1999, 25% of the assets was approximately $717 million. In contrast to the
Trinity Proposal, the amended Bylaw does not relate to "restructurings". The
Board believes that the Bylaw amendment appropriately covers corporate
transactions involving acquisitions, dispositions or joint ventures and that the
term restructuring is too vague. In addition, the Board believes that
significance is more appropriately measured based upon the percentage of assets
involved rather than a fixed absolute dollar amount and that the 25% threshold
addresses shareholder concerns without unduly compromising the Company's
flexibility. To place this in context, Delaware law requires a shareholder vote
for mergers and similar transactions involving the Company and for the sale or
disposition of "all or substantially" all of the Company's assets. In addition,
the Company remains subject to the rules of the New York Stock Exchange which
require shareholder approval of transactions involving the issuance of Common
Shares representing 20% of the outstanding Common Shares before such issuance.
IN LIGHT OF THE BYLAW AMENDMENT ALREADY ADOPTED BY THE BOARD AND DISCUSSED
ABOVE, THE BOARD RECOMMENDS THAT YOU REJECT THE TRINITY GROUP'S REQUEST FOR YOUR
CONSENT TO THEIR PROPOSED BYLAW AMENDMENT BY REJECTING TRINITY PROPOSAL NO. 1.
TRINITY GROUP PROPOSAL NO. 2. SEPARATION OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The second proposal of the Trinity Group would amend the Bylaws to require
the separation of the offices of Chairman of the Board and Chief Executive
Officer and require that the Chairman of the Board be a non-management director.
In light of this proposal the Board has adopted the following amendment to
Section 1 of Article IV of the Bylaws. It is marked to show differences from the
Trinity Proposal. Language from the Trinity Proposal which was not included in
the amended Bylaw is bracketed and language in the amended Bylaw which was not
included in the Trinity Proposal is underlined.
SECTION 1. Number. The officers of the corporation shall
be a Chairman of the Board (who must be a member of the Board
of Directors [other than] and who may be a current or former
employee of the [Company)] corporation), a Chief Executive
Officer, a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Directors), a
Secretary, a Treasurer and a Controller, each of whom shall be
elected by the Board of Directors. The Board of Directors may
also elect a Vice Chairman of the Board, a Chief Operating
Officer and one or more Group Presidents and may designate one
or more of the Vice Presidents as Executive Vice Presidents or
Senior Vice Presidents. Such other officers and assistant
officers and agents as may be deemed necessary may be elected
or appointed by the Board of Directors. Any two or more
offices may be held by the same person, except the offices of
[Chairman of the Board and Chief Executive Officer or any
other office, the offices of] President and Secretary, and the
offices of President and Vice President. The Corporate
Governance Committee of the Board of Directors shall consider
at least annually whether or not the Chairman of the Board
should be a past or present employee of the corporation and
shall make a recommendation to the Board of Directors based
thereon. The Chairman of the Corporate Governance Committee
will be the lead member of the non-management directors for
purposes of executive sessions of the Board of Directors when
management is not present and for directing communications
between non-management directors and stockholders, including
with respect to the matters set forth in Article XIII hereof
and for such other purposes as the Board of Directors may
determine.
Although the Board recognizes that there is considerable debate concerning
the advisability of separating the positions of Chairman and Chief Executive
Officer, it believes that no consensus currently exists with respect to this
issue. Rather, the Board's view is that the combination of the Chief Executive
Officer and Chairman positions should be periodically reexamined. The Board
believes that retaining the ability to
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examine the qualifications and attributes of its officers and directors on a
case-by-case basis is in the best interest of the Company and its shareholders.
As certain individuals may desire to be both Chairman and Chief Executive
Officer, a fixed rule could adversely affect the Company's ability to attract
and retain qualified personnel. Accordingly, rather than mandating the
separation of the positions of Chairman and Chief Executive Officer, the amended
Bylaw provides for an annual review of the issue by the Corporate Governance
Committee. This retains flexibility for the Board to separate the positions at
any time if it determines it to be appropriate.
The Board has also taken additional steps to highlight its independence and
its accessibility to shareholders. These include recognizing the Chairman of the
Corporate Governance Committee as the "lead" member of the non-management
directors for purposes of executive sessions of the Board during which time the
Company's management is not present and for dealing with communications between
non-management directors and shareholders. The Corporate Governance Committee is
a board committee consisting entirely of outside directors and the current
members of the committee are: L. Donald LaTorre (Chair), Donna M. Alvarado,
Robert M. Gerrity, Stephen M. Peck and Leonard E. Redon. Under the By-laws, the
Board has the power to designate members of board committees.
The Board believes that these changes address the concerns that motivate
seeking the separation of the positions of Chairman and Chief Executive Officer
without locking the Company into a governance structure that might not be
advantageous in all cases.
IN LIGHT OF THE BYLAW AMENDMENT ALREADY ADOPTED BY THE BOARD AND DISCUSSED
ABOVE, THE BOARD RECOMMENDS THAT YOU REJECT THE TRINITY GROUP'S REQUEST FOR YOUR
CONSENT TO THEIR PROPOSED BYLAW AMENDMENT BY REJECTING TRINITY PROPOSAL NO. 2.
TRINITY GROUP PROPOSAL NO. 3. SPECIAL MEETINGS OF NON-MANAGEMENT DIRECTORS
This proposal would amend the Bylaws to provide that meetings between all
shareholders of the Company and the non-management directors may be called by
shareholders holding not less than 25% of the Company's voting stock.
To address this proposal the Board has adopted the following amendment to
Article III of the Bylaws. It is marked to show differences from the Trinity
Proposal. Language from the Trinity Proposal which was not included in the
amended Bylaw is bracketed and language in the amended Bylaw which was not
included in the Trinity Proposal is underlined.
SECTION 16. Special Meetings of Non-Management
Directors. Notwithstanding anything to the contrary contained in
these Bylaws, a special meeting between all stockholders of the
[Company] corporation and the non-management members of the
Board of Directors may be called at any time by stockholders
holding, of record or beneficially, not less than one-quarter of
all the shares unconditionally entitled to vote in elections of
directors [by the written]. Stockholders may request a meeting
by delivering a request [or requests of such stockholders
delivered to the Secretary of the Company. Such stockholders
shall have the right, in person or by representative, to attend
any such meeting. Such stockholders may fix any place, either
within or without the State of Delaware, as the place for
holding any such special meeting of the non-management members]
to the Corporate Governance Committee of the Board of Directors
setting forth in writing with particularity (i) the names and
addresses of the stockholders requesting the meeting and of
their respective representatives; (ii) a representation and
evidence of ownership from each such stockholder regarding the
class and number of shares of stock of the corporation owned by
each such stockholder; and (iii) a description of the business
purpose of the meeting containing all material information
relating thereto. Such stockholders shall also submit such other
information as the Corporate Governance Committee of the Board
of Directors may reasonably request, including, without
limitation, additional evidence of ownership. The Corporate
Governance Committee of the Board of Directors shall be entitled
to establish reasonable procedures relating to the conduct of
such meeting
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including, without limitation, the day, time and place of such
meeting and who shall be entitled to attend such meeting in
addition to the stockholders and non-management members of the
Board of Directors. The Chairman of the Corporate Governance
Committee of the Board of Directors shall serve as chairman of
the meeting. Such meeting shall be held at the expense of the
corporation within 45 days after the later of the receipt of the
request therefor by the Corporate Governance Committee or the
receipt of any information reasonably requested by such
committee as set forth above. The directors at any such meeting
may, by resolution passed by a majority of such directors, make
recommendations to the entire Board of Directors. [Such] No
meeting [shall] called pursuant to this Section 16 shall be
required to be held at [the expense of the corporation within 30
days of the request or requests therefor] any time within six
months of any other meeting called pursuant to this Section 16
or within three months of any annual or special meeting of
stockholders.
Under the amended Bylaw adopted by the Board, shareholders holding not less
than 25% of the Company's outstanding stock will be able to call a meeting
between all shareholders of the Company and non-management directors. The
amended Bylaw differs from the Trinity Proposal principally in that it includes
certain procedural provisions to ensure that such meetings would be orderly and
productive. Among other things, the amended Bylaw requires the requesting
shareholders to submit important information with their request for a meeting,
such as evidence of ownership of Common Shares and the intended purpose of the
meeting. In addition, the Corporate Governance Committee is empowered to
establish reasonable procedures for the conduct of the meeting, such as setting
a day, time and place for the meeting and determining who will be entitled to
attend the meeting in addition to the non-management directors and shareholders,
who may include management of the Company (most of whom are shareholders of the
Company). Finally, so that the Company would not be burdened by repetitive
meetings in close succession, no meeting called pursuant to the amended Bylaw
could be called at any time within six months of any other meeting called
pursuant to the amended Bylaw or within three months of any annual or special
meeting of shareholders.
IN LIGHT OF THE BYLAW AMENDMENT ALREADY ADOPTED BY THE BOARD AND DISCUSSED
ABOVE, THE BOARD RECOMMENDS THAT YOU REJECT THE TRINITY GROUP'S REQUEST FOR YOUR
CONSENT TO THEIR PROPOSED BYLAW AMENDMENT BY REJECTING TRINITY PROPOSAL NO. 3.
BACKGROUND
The Trinity Group, according to its publically filed documents, has been a
shareholder of the Company since April 1998. In response to requests by the
Trinity Group, the Company arranged for several meetings during May and June
1998 between Jeffery Grade, Chairman and Chief Executive Officer of the Company,
and Thomas Taylor of the Trinity Group, including a meeting at which two
non-management directors were present. Mr. Taylor and Mr. Grade met again in
October 1998. At this meeting, Mr. Taylor suggested that the Company consider
adding an additional independent director to the Board. On December 7, 1998, the
Company announced the appointment of Mr. Peck to the Board. Mr. Peck was not,
however, nominated or suggested by the Trinity Group, although Mr. Grade did
review Mr. Peck's background and qualifications with Mr. Taylor prior to the
announcement of Mr. Peck's appointment to the Board.
On April 6, 1999, the Trinity Group delivered a letter to the Company
requesting a meeting with the non-management directors of the Board based on its
understanding that the Company had failed to take action with respect to an
acquisition proposal made at a premium. On April 12, 1999, the Company publicly
confirmed that it had hired Chase Securities, Inc. to help evaluate alternatives
for the Company designed to enhance shareholder value. On that day, the Company
forwarded a copy of the press release to the Trinity Group along with a letter
in which the Company noted that it believed that its actions as confirmed in the
press release substantially addressed the concerns raised in Trinity's April 6
letter and that it did not believe that a meeting with the Trinity Group was
necessary in light of the public disclosure of these actions. The Company also
attempted to call Mr. Taylor on that day but was unable to reach him and the
call was not returned.
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On the following day, the Trinity Group informed the Company that it was
initiating a consent solicitation process to approve the Trinity Proposals. The
Board carefully evaluated each of the Trinity Proposals with its advisors and
determined that it would be in the best interest of the Company and its
shareholders to amend the Bylaws as described in this Revocation of Consent
Statement. The Board attempted to arrange a meeting between Mr. Taylor and two
independent directors designated by the Board, Mr. Peck and Mr. LaTorre, to
discuss the Board's Bylaw amendments and other matters in an effort to resolve
the issues raised by the Trinity Group. The Board believed that its proposed
Bylaw amendments addressed the concerns of the Trinity Group in a meaningful way
and that termination of the Trinity Solicitation would best enable the Company
to pursue its announced initiatives without further disruption. After Mr. Taylor
declined a meeting with the independent directors, the Board adopted its
amendments to the Bylaws and filed preliminary proxy materials in opposition to
the Trinity Solicitation. The few differences between the Trinity Proposals and
the Bylaw amendments adopted by the Board have been carefully considered and are
appropriate, reasonable and in the best interests of shareholders. The Company
continues to work with its bank group, led by Chase Manhattan Bank, to seek to
provide additional liquidity for the Company's operations and with Chase
Securities to explore alternatives to enhance shareholder value. The Board had
hoped that Trinity would join the Company in a constructive effort and continues
to believe that the Trinity Solicitation is disruptive to the Company's ability
to proceed with these announced initiatives. In light of the Bylaw amendments
already adopted, the Board urges shareholders to reject the Trinity Proposals.
GENERAL INFORMATION
CONSENT PROCEDURE, EFFECTIVENESS AND RECORD DATE
Section 228 of the Delaware General Corporation Law (the "DGCL") states
that, unless otherwise provided in the certificate of incorporation, any action
required to be taken at any annual or special meeting of shareholders, or any
action that may be taken at any annual or special meeting of shareholders, may
be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action to be so taken, are
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted, and
those consents are delivered to the Company by delivery to its registered office
in Delaware, its principal place of business or an officer or agent of the
Company having custody of the books in which proceedings of meetings of
shareholders are recorded. The Company's Certificate of Incorporation does not
prohibit shareholder action by written consent.
Section 13 of Article II of the Bylaws sets forth an orderly process that
shareholders must follow in order to seek action by written consent without a
meeting. Pursuant to Section 13(a) thereof, a shareholder seeking to have the
shareholders of the Company authorize or take action by written consent is
required to request, by written notice to the Secretary of the Company, that the
Board fix a record date. The close of business on April 30, 1999 (the "Record
Date") has been established as the record date for determining shareholders
entitled to consent to corporate action in writing without a meeting. As of the
Record Date, there were 47,941,690 Common Shares issued and outstanding.
For the Trinity Solicitation to succeed, the Trinity Group must obtain and
deliver to the Company properly completed, effective, unrevoked consents signed
by the holders of record as of the Record Date of a majority of the Common
Shares outstanding as of the Record Date. Pursuant to the Bylaws, to ensure a
fair and orderly process, nationally recognized independent inspectors of
elections retained by the Company will perform a review of the validity of the
consents and revocations to determine whether the consents delivered in
accordance with Section 13(a) of Article II of the Bylaws represent at least the
minimum number of votes that would be necessary to take the corporate action.
Under Section 228 of the DGCL, in order to be effective, consents must be
delivered within 60 days of the date of the earliest dated consent delivered to
the Company. A shareholder may revoke any previously signed consent by signing,
dating and returning a YELLOW Revocation of Consent Card. If the Trinity
Proposals are adopted pursuant to the consent procedure, the Company will
promptly issue a press release following receipt of certification from the
inspectors of election that the Trinity Proposals have been adopted.
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If you are a shareholder of record on the Record Date you will retain your
voting rights even if you sell your shares after the Record Date. Accordingly,
it is important that you execute a Revocation of Consent with respect to the
Common Shares held by you on the Record Date, even if you sell your Common
Shares after the Record Date.
If your Common Shares are held in the name of a brokerage firm, bank, or
other institution on the Record Date, only it can execute a Revocation of
Consent with respect to your shares and only after receiving your specific
instructions. Accordingly, you should contact the person responsible for your
account and give instructions for the YELLOW Revocation of Consent Card to be
signed representing your shares. The Board urges you to confirm in writing your
instructions to the person responsible for your account and to provide a copy of
those instructions to the Company, care of MacKenzie Partners, Inc., at the
address set forth above, so that the Company will be aware of all instructions
given and can attempt to ensure that such instructions are followed.
For purposes of permitting the inspectors of elections to perform their
review, no action by written consent without a meeting shall be effective until
such date as the inspectors certify to the Company that the consents delivered
to the Company in accordance with Section 13 of Article II of the Bylaws
represent at least the minimum number of votes that would be necessary to take
the corporate action. Notwithstanding such review, the Board and/or any
shareholder is entitled to contest the validity of any consent or revocation,
whether before or after such certification by the inspector of elections, or to
take any other action (including, without limitation, the commencement,
prosecution or defense of any litigation with respect thereto, and the seeking
of injunctive relief in such litigation).
CONSENTS REQUIRED
Each Common Share outstanding as of the Record Date entitles the holder
thereof to one vote on each of the Trinity Proposals. Accordingly, written
consents by holders representing a majority of the issued and outstanding Common
Shares as of the Record Date, that is approximately 23,970,000 Common Shares
(not including abstentions and broker non-votes), will be required to adopt and
approve each of the Trinity Proposals. Each abstention and broker non-vote with
respect to any of the Trinity Proposals will have the same effect as a vote
against such Trinity Proposal.
EFFECT OF THE YELLOW REVOCATION OF CONSENT CARD
Any shareholder may revoke any previously signed consent at any time before
the time that the action authorized by the executed consent becomes effective by
duly signing, dating and returning the enclosed YELLOW Revocation of Consent
Card or by executing a later-dated instrument expressly revoking the consent. If
a shareholder who has executed and returned the YELLOW Revocation of Consent
Card fails to check a box marked "REVOKE CONSENT" or "DO NOT REVOKE CONSENT"
with respect to any of the Trinity Proposals, such shareholder will be deemed to
have revoked all previous consents with respect to such Trinity Proposals.
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<PAGE> 10
VOTING SECURITIES OUTSTANDING
The following table lists the beneficial ownership of Common Shares as of
April 20, 1999 by (1) any person known to the Company to own beneficially more
than 5% of the Common Shares, (2) each of the Company's directors and the
Company's five most highly compensated executive officers at the end of the last
fiscal year and (3) all the Company's executive officers and directors as a
group. Beneficial ownership consists of sole voting power and sole investment
power except as noted below. All Common Shares beneficially owned by executive
officers and the directors under the Directors Stock Compensation Plan and the
Supplemental Retirement and Stock Funding Plan are voted by the trustee of the
Company's Deferred Compensation Trust as directed by the Company's Management
Policy Committee.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
BENEFICIAL OWNER SHARES OWNED PERCENT OF CLASS(1)
------------------- ------------ -------------------
<S> <C> <C>
Trinity................................................ 3,834,150(2) 7.7%
201 Main Street, Suite 3200
Fort Worth, Texas 76102
Trimark Financial Corporation.......................... 5,000,300(3) 10.1%
One First Canadian Place
Suite 5600, P. O. Box 487
Toronto, Ontario
Canada M5X 1E5
Brinson Partners, Inc.................................. 4,135,040(4) 8.3%
209 South LaSalle
Chicago, Illinois 60604-1295
Morgan Stanley, Dean Witter,
Discover & Co........................................ 3,590,010(5) 7.3%
1585 Broadway
New York, New York 10036
ICM Asset Management, Inc.............................. 2,629,750 5.3%
601 West Main Avenue
Suite 600
Spokane, Washington 99201
Jeffery T. Grade....................................... 1,119,611(7) 2.2%
John N. Hanson......................................... 229,858(8) *
Francis M. Corby, Jr................................... 486,266(9) *
Mark E. Readinger...................................... 24,744(10) *
James A. Chokey........................................ 68,130(11) *
Larry D. Brady......................................... 7,212(12) *
Robert M. Gerrity...................................... 3,747(13) *
John D. Correnti....................................... 5,745(14) *
Robert B. Hoffman...................................... 5,261(15) *
Jean-Pierre Labruyere.................................. 8,145(14) *
L. Donald LaTorre...................................... 5,304(16) *
Leonard Redon.......................................... 4,456(14) *
Donna M. Alvarado...................................... 6,388(17) *
Harry L. Davis......................................... 15,200(14) *
Stephen M. Peck........................................ 12,000(18) -0-
All executive officers and directors (19 persons)...... 2,098,910(19) 4.2% as a group
</TABLE>
- ---------------
* Less than 1%.
(1) The percent of class is based on 47,941,690 shares of Common Stock
outstanding and 1,582,066 shares which are subject to options currently
exercisable or which will become exercisable within 60 days of April 20,
1999.
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<PAGE> 11
(2) Shares are held by Portfolio FF Investors, L.P., the sole general partner
of which is Portfolio Genpar, LLC, which is wholly owned by Trinity I Fund,
L.P. Trinity I Fund, L.P.'s sole general partner is TF Investors, L.P.,
whose sole general partner, in turn, is Trinity Capital Management, Inc.,
all of whose stock is owned by Thomas M. Taylor.
(3) Based on information contained in a Schedule 13G, Amendment No. 4, filed
with the Securities Exchange Commission on February 1, 1999 by Trimark
Financial Corporation.
(4) Based on information contained in a Schedule 13G, Amendment No. 1, filed
with the Securities Exchange Commission on February 3, 1999 by Brinson
Partners, Inc. ("Brinson"). Brinson, an investment adviser registered under
Section 203 of the Investment Advisors Act of 1940, reported shared voting
power and shared dispositive power as to these shares. The report was also
filed on behalf of Brinson Holdings, Inc., SBC Holding (USA), Inc. and
Swiss Bank Corporation.
(5) Based on information contained in a Schedule 13G, Amendment No. 1, filed
with the Securities Exchange Commission on February 5, 1999 by Morgan
Stanley, Dean Witter, Discover & Co. and its wholly-owned subsidiary,
Miller, Anderson & Sherrerd, LLP, investment advisers registered under
Section 203 of the Investment Advisors Act of 1940. Morgan Stanley, Dean
Witter, Discover & Co. reported shared voting power as to 3,136,150 shares
and shared dispositive power as to 3,590,010 shares. Miller, Anderson &
Sherrerd, LLP reported shared voting power as to 2,539,300 shares and
shared dispositive power as to 2,931,860 shares.
(6) Based on information contained in a Schedule 13G filed with the Securities
Exchange Commission on February 10, 1999 by ICM Asset Management, Inc. ICM
reported sole voting power as to 1,871,900 shares and sole dispositive
power as to 2,629,750 shares.
(7) Includes 347,113 shares Mr. Grade has a right to acquire upon exercise of
stock options, 934 shares beneficially owned under the Profit Sharing Plan,
405,974 shares held under the Supplemental Retirement and Stock Funding
Plan and 105,205 shares Mr. Grade has agreed not to sell as long as he
remains employed by the Company.
(8) Includes 68,057 shares Mr. Hanson has a right to acquire upon exercise of
stock options and 21,964 shares held under the Supplemental Retirement and
Stock Funding Plan.
(9) Includes 209,660 shares Mr. Corby has a right to acquire upon exercise of
stock options, 934 shares beneficially owned under the Profit Sharing Plan,
45 shares beneficially owned under the 401(k) Plan, 115,330 shares held
under the Supplemental Retirement and Stock Funding Plan and 52,550 shares
Mr. Corby has agreed not to sell so long as he remains employed by the
Company. Also includes 10,200 shares owned by Mr. Corby's three sons.
(10) Shares Mr. Readinger has a right to acquire upon exercise of stock options.
(11) Includes 10,879 shares Mr. Chokey has a right to acquire upon exercise of
stock options and 49,333 shares held under the Supplemental Retirement and
Stock Funding Plan.
(12) Includes 500 shares held jointly with his wife and 6,712 shares
beneficially owned under the Directors Stock Compensation Plan.
(13) Includes 2,747 shares beneficially owned under the Directors Stock
Compensation Plan.
(14) Shares beneficially owned under the Directors Stock Compensation Plan.
(15) Includes 4,261 shares beneficially owned under the Directors Stock
Compensation Plan.
(16) Includes 4,304 shares beneficially owned under the Directors Stock
Compensation Plan.
(17) Includes 5,888 shares beneficially owned under the Directors Stock
Compensation Plan.
(18) Includes 5,000 shares held by his wife.
(19) Includes the following shares held by executive officers who are not named
in the table: 95,394 shares which four executive officers have a right to
acquire upon exercise of stock options, 2,446 shares beneficially owned by
three executive officers under the Profit Sharing Plan, 108 shares
beneficially owned by one executive officer under the 401(k) Plan and 400
shares held by the wife of an executive officer as custodian for their
minor children.
9
<PAGE> 12
SOLICITATION OF REVOCATIONS OF CONSENT
The cost of the solicitation of revocations of consent will be borne by the
Company. The Company estimates that the total expenditures relating to such
solicitation (other than salaries and wages of officers and employees) will be
approximately $350,000. In addition to solicitation by mail, directors, officers
and other employees of the Company may, without additional compensation, solicit
revocations of consents by mail, in person, by telecommunication or by other
electronic means.
The Company has retained MacKenzie Partners, Inc. at an estimated fee of
not more than $75,000, plus reasonable out-of-pocket expenses, to assist in the
solicitation of revocations. Approximately 40 persons will be utilized by such
firm in its efforts. The Company will reimburse brokerage houses, banks,
custodians and other nominees and fiduciaries for out-of-pocket expenses
incurred in forwarding the Company's consent revocation materials to, and
obtaining instructions relating to such materials from, beneficial owners of
capital stock. The Company has also agreed to indemnify MacKenzie Partners, Inc.
against certain liabilities and expenses in connection with their respective
engagements, including certain liabilities under the federal securities laws.
SUBMISSION OF SHAREHOLDER PROPOSALS
All shareholder proposals to be presented at the 2000 Annual Meeting must
be received by the Company not later than September 22, 1999 in order to be
considered for inclusion in the Company's proxy statement and proxy for that
meeting under Rule 14a-8 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). In addition, the Bylaws require that shareholder proposals
must be received by the Company not less than 90 days nor more than 120 days
before the first anniversary of the previous year's annual meeting in order to
be submitted at the meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during the last fiscal year and Forms 5 and amendments
thereto furnished to the Company with respect to the last fiscal year, the
Company is not aware that any director, officer or beneficial owner of more than
10% of the Common Shares failed to file on a timely basis reports required by
Section 16(a) of the Exchange Act during the last fiscal year and current fiscal
year.
IMPORTANT
1. If your shares are registered in your own name(s), please sign, date and
promptly mail the enclosed YELLOW Revocation of Consent Card, using the
post-paid envelope provided.
2. If you have previously signed and returned a consent card to the Trinity
Group, you have every right to change your mind. Only your latest dated card
will count. You may revoke any earlier card to the Trinity Group by signing,
dating and mailing the enclosed YELLOW Revocation of Consent Card in the
post-paid envelope provided.
3. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can sign a YELLOW Revocation of Consent Card with
respect to your shares and only after receiving your specific instructions.
Accordingly, please sign, date and mail the enclosed YELLOW Revocation of
Consent Card in the post-paid envelope provided. To ensure that your shares are
voted, you should also contact the person responsible for your account and give
instructions for a YELLOW Revocation of Consent Card to be issued representing
your shares.
4. After signing the enclosed YELLOW Revocation of Consent Card, do not
sign any other cards. Do not even vote "against" on the Trinity Group's blue
consent card.
10
<PAGE> 13
If you have any questions about giving your revocation of consent or
require assistance, please call:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, NY 10010
(212) 924-5500 (COLLECT)
OR
CALL TOLL-FREE 1-800-322-2885
PLEASE ACT PROMPTLY -- SIGN, DATE AND MAIL THE YELLOW
REVOCATION OF CONSENT CARD TODAY!
11
<PAGE> 14
HARNISCHFEGER INDUSTRIES, INC.
THIS REVOCATION OF CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF HARNISCHFEGER INDUSTRIES, INC. IN OPPOSITION TO THE SOLICITATION BY TRINITY I
FUND, L.P., PORTFOLIO GENPAR, LLC, AND PORTFOLIO FF INVESTORS, L.P.
(COLLECTIVELY, "TRINITY").
THE UNDERSIGNED, the record holder of shares of Common Stock, par value
$1.00 per share (the "Common Shares"), of Harnischfeger Industries, Inc. (the
"Company"), hereby acts as follows concerning the following three proposals of
Trinity. Unless otherwise indicated below, the action taken on the following
proposals relates to all Common Shares held by the undersigned.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU "REVOKE CONSENT"
TO EACH OF THE FOLLOWING PROPOSALS.
1. BYLAW AMENDMENT: relating to the addition of a provision requiring that the
board of directors submit merger, restructuring, joint venture or similar
transactions having a transaction value of in excess of $100 million to a
vote of the shareholders.
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT
2. BYLAW AMENDMENT: relating to the separation of the offices of Chairman of the
Board and Chief Executive Officer and providing that the Chairman of the
Board must be a non-management (i.e., not a current or former employee of the
Company) director.
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT
3. BYLAW AMENDMENT: relating to the addition of a provision providing that a
meeting between all shareholders of the Company and the non-management
directors may be called by shareholders holding not less than 25% of the
corporation's outstanding voting stock.
[ ] REVOKE CONSENT [ ] DO NOT REVOKE CONSENT
Please see the Revocation of Consent Statement for additional information
regarding the above Proposals.
(Continued And To Be Signed On the Other Side)
REVOCATION OF CONSENT (Continued From Other Side)
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU SIGN, DATE AND
MAIL THIS CARD TODAY AND THEREBY REVOKE ANY CONSENT THAT YOU MAY HAVE GIVEN TO
THE TRINITY GROUP. If no direction is made, this revocation card will be deemed
to revoke all previously executed consents. If you mark any of the boxes "do not
revoke consent," any consent you may have given to that particular proposal of
the Trinity Group will not be revoked.
Dated:-------------------
-------------------------
(Signature)
-------------------------
(Title or authority, if
applicable)
-------------------------
(Signature, if held
jointly)
Please sign exactly as
your name appears hereon.
When shares are held by
joint tenants, both
should sign. When signing
as attorney, executor,
administrator, trustee,
guardian, corporate
officer or partner,
please give full title as
such. If a corporation,
please sign in corporate
name by authorized
officer. If a
partnership, please sign
in partnership name by
authorized person.
PLEASE SIGN, DATE AND MAIL THIS CARD TODAY. IF YOU NEED ASSISTANCE,
PLEASE CALL MACKENZIE PARTNERS, INC. TOLL FREE AT 1-800-322-2885.
