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. 1)
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/x/ Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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>
PRELIMINARY COPY -- SUBJECT TO COMPLETION
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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.
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May __, 1999
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.
<PAGE>
These are preliminary revocation of consent materials and accordingly do not
include a revocation of consent card. Once the materials become definitive you
will receive a copy of these materials along with our YELLOW Revocation of
Consent Card which you can use.
If you have any questions about revoking your consent or require
assistance, please call:
MACKENZIE PARTNERS, INC.
156 FIFTH AVENUE - 9TH FLOOR
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 ________, 1999.
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<PAGE>
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
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<PAGE>
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 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.
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<PAGE>
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
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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
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the assets of the corporation and its subsidiaries, taken as a whole,
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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
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transaction between the corporation and any of its subsidiaries or
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between any subsidiaries of the corporation.
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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. 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.
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<PAGE>
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
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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
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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
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Board of Directors shall consider at least annually whether or not the
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Chairman of the Board should be a past or present employee of the
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corporation and shall make a recommendation to the Board of Directors
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based thereon. The Chairman of the Corporate Governance Committee will
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be the lead member of the non-management directors for purposes of
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executive sessions of the Board of Directors when management is not
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present and for directing communications between non-management
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directors and stockholders, including with respect to the matters set
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forth in Article XIII hereof and for such other purposes as the Board
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of Directors may determine.
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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 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 share-
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<PAGE>
holders. 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.
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Notwithstanding anything to the contrary contained in these Bylaws, a
special meeting between all stockholders of the [Company] corporation
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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
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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
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<PAGE>
such special meeting of the non-management members] to the Corporate
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Governance Committee of the Board of Directors setting forth in writing
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with particularity (i) the names and addresses of the stockholders
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requesting the meeting and of their respective representatives; (ii) a
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representation and evidence of ownership from each such stockholder
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regarding the class and number of shares of stock of the corporation
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owned by each such stockholder; and (iii) a description of the business
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purpose of the meeting containing all material information relating
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thereto. Such stockholders shall also submit such other information as
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the Corporate Governance Committee of the Board of Directors may
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reasonably request, including, without limitation, additional evidence
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of ownership. The Corporate Governance Committee of the Board of
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Directors shall be entitled to establish reasonable procedures relating
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to the conduct of such meeting including, without limitation, the day,
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time and place of such meeting and who shall be entitled to attend such
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meeting in addition to the stockholders and non-management members of
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the Board of Directors. The Chairman of the Corporate Governance
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Committee of the Board of Directors shall serve as chairman of the
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meeting. Such meeting shall be held at the expense of the corporation
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within 45 days after the later of the receipt of the request therefor
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by the Corporate Governance Committee or the receipt of any information
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reasonably requested by such committee as set forth above. The
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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
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shall be required to be held at [the expense of the corporation within
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30 days of the request or requests therefor] any time within six months
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of any other meeting called pursuant to this Section 16 or within three
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months of any annual or special meeting of stockholders.
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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.
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<PAGE>
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.
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<PAGE>
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.
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 dis-
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<PAGE>
ruptive 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 fol-
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<PAGE>
lowing receipt of certification from the inspectors of election that the Trinity
Proposals have been adopted.
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
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<PAGE>
"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.
-13-
<PAGE>
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, 3,590,010 (5) 7.3%
Discover & Co.
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) *
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
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 2,098,910 (19) 4.2% as a group
(19 persons)
- -------------------
* Less than 1%.
</TABLE>
(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.
(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.
-15-
<PAGE>
(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.
-16-
<PAGE>
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 $[_____]. 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 $[_____], plus reasonable out-of-pocket expenses, to assist in
the solicitation of revocations. Approximately [___] 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.
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<PAGE>
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.
If you have any questions about giving your revocation of consent or
require assistance, please call:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue - 9th Floor
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!
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<PAGE>
PRELIMINARY COPY--FOR THE INFORMATION OF
THE SECURITIES AND EXCHANGE COMMISSION ONLY
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)
-19-
<PAGE>
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.
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