<PAGE>
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 [_]
Filed by a Party other than the Registrant [X]
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 (S) 240.14a-11(c) or (S) 240.14a-12
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
(Name of Registrant as Specified in its Charter)
WISCONSIN CENTRAL SHAREHOLDERS COMMITTEE TO MAXIMIZE VALUE
(Name of Person(s) Filing Proxy Statement)
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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PRELIMINARY COPY; SUBJECT TO COMPLETION
DATED OCTOBER 20, 2000
CONSENT STATEMENT
TO
SHAREHOLDERS OF
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
BY
WISCONSIN CENTRAL SHAREHOLDERS COMMITTEE
TO MAXIMIZE VALUE
This Consent Statement is being furnished by the Wisconsin Central
Shareholders Committee to Maximize Value (the "Committee") to the holders of
shares of common stock, par value $0.01 per share (the "Common Stock"), of
Wisconsin Central Transportation Corporation, a Delaware corporation ("Wisconsin
Central" or the "Company"), in connection with the solicitation by the Committee
of written shareholder consents to authorize the actions described below (the
"Consent Solicitation"). This Consent Statement and the accompanying WHITE
consent card are first being sent to shareholders on or about ___________, 2000.
The Committee is soliciting shareholder consents to authorize the
following actions:
. the amendment of the Company's Amended Bylaws to eliminate provisions
establishing a classified Board of Directors and to eliminate restrictions on
the conditions under which directors may be removed from office;
. the removal from office of the nine current members of the Company's
Board of Directors; and
. the election of the eight nominees proposed by the Committee as
members of the Company's Board of Directors.
See "The Committee's Proposals" for a complete description of the
actions proposed by the Committee. See "Certain Information Concerning
Participants" for information regarding the Committee, its director nominees and
certain other persons who may be deemed to be participants in this Consent
Solicitation.
The consent of a majority of the shares of Common Stock outstanding on
___________, 2000, the record date for this Consent Solicitation (the "Record
Date"), is required to approve each of the Committee's proposals. Each share of
Common Stock outstanding on the Record Date is entitled to one vote on each of
the Committee's proposals. According to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2000, as of July 31, 2000, there were
49,153,957 shares of Common Stock outstanding.
THIS CONSENT SOLICITATION IS BEING MADE BY THE COMMITTEE AND NOT ON
BEHALF OF THE BOARD OF DIRECTORS OF WISCONSIN CENTRAL.
<PAGE>
Your consent is important, no matter how many or how few shares of
Common Stock you own. The Committee urges you to sign, date and return the
enclosed WHITE consent card promptly. Please do NOT sign any consent revocation
card you may receive.
The Committee urges you to read this entire Consent Statement
carefully.
The Committee requests that signed and dated WHITE consent cards be
returned to it on or before _________, 2000. A FAILURE TO SIGN, DATE AND RETURN
THE WHITE CONSENT CARD IN A TIMELY MANNER WILL HAVE THE SAME EFFECT AS VOTING
AGAINST THE COMMITTEE'S PROPOSALS. If you need assistance in voting your shares
of Common Stock, please call the Committee's information agent, Innisfree M&A
Incorporated, toll free at 1-888-750-5834 or the offices of the Committee at 1-
773-714-8669.
<PAGE>
WHY THE COMMITTEE WAS FORMED
The Wisconsin Central Shareholders Committee to Maximize Value has been
formed to reconstitute Wisconsin Central's Board of Directors and to replace
current management in order to implement a comprehensive program to maximize
shareholder value. If the Committee is successful in replacing the Company's
current Board of Directors, the new Board will appoint Edward A. Burkhardt as
Chief Executive Officer of Wisconsin Central to direct the implementation of the
Committee's program.
Mr. Burkhardt, age 62, was the principal founder of the Company in 1987
and served as its President and Chief Executive Officer from the Company's
formation until August 1999. In 1991 he was also elected Chairman. During his
tenure as Chairman, President and Chief Executive Officer, Wisconsin Central
went public in July 1991 at $2.75 per share, as adjusted for stock splits. In
January 1999, Railway Age, the major railroad industry trade magazine, named him
"1999 Railroader of the Year." After nearly twelve years of service, Mr.
Burkhardt announced his resignation from the Company on July 8, 1999, effective
August 31, 1999.
Since Mr. Burkhardt's departure, performance of the Company has
severely deteriorated and its share price has declined by 43%. In order to
protect his investment as a major Wisconsin Central shareholder, Mr. Burkhardt
has established the Committee to develop and implement a program to maximize
shareholder value by returning the Company to a growth management philosophy,
tightening operational performance and disposing of the Company's poorly managed
international investments. The Committee also intends to focus its efforts on
the sale of the Company's domestic operations under terms that would maximize
shareholder value.
During the last year, growth in traffic volume that was in double
digits virtually every year since the Company was established vanished while
operating fundamentals and financial performance deteriorated markedly.
Management has elected to pursue improved financial performance through cost
cutting rather than through aggressive and innovative marketing of the Company's
services, and has been patently unsuccessful in growing the Company's business.
The Company's share price has significantly declined as investors have
reassessed the Company's prospects under a no-growth scenario and have lowered
price/earnings expectations accordingly.
The period since Mr. Burkhardt's departure has also witnessed a
substantial decline in performance of the Company's international investments
and of increasing impatience on the part of stock analysts and institutional
investors with continued poor performance overseas. During this time, the
venture capital firms who are the majority owners of these overseas units have
driven management policy. Here, as in the domestic operations, management has
produced little or no growth in traffic volume and has been unable to improve
financial results through cost savings. Shareholders have been subject to a
stream of profit warnings from the Company and frequent lowering of expectations
on the part of stock analysts.
<PAGE>
Under Mr. Burkhardt's leadership as Chief Executive Officer, Wisconsin
Central experienced strong growth in sales, net income, earnings per share and
share price in the period between December 31, 1990 and December 31, 1998, as
indicated in the following table:
Year ended Year ended
December 31, December 31, Gain
1990(1) 1998(2) (Loss)
------------ ------------ ------
Sales (millions) $113.3 $344.1 203.7%
Net Income (millions) $7.5 $76.3 917.3%
Earnings per Share $0.32 $1.49 465.6%
Share Price $2.75(3) $17.19 525.1%
______________________
(1) As reported in the Company's audited consolidated financial
statements for the year ended December 31, 1990.
(2) As reported in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
(3) Based on the price per share to the public in the Company's
initial public offering of Common Stock in July 1991, as
adjusted for stock splits.
During this period, the Company's sales compounded at an average annual
rate of 25.5%, its net income increased at an average annual rate of 114.7% and
its earnings per share increased at an average annual rate of 42.2%.
Shareholder returns equaled 25.8% per year compounded from May 31, 1991
through December 31, 1998. This return compares with the 19.2% compound return
for the Standard & Poors 500 Index over the same time period.
<PAGE>
Since Mr. Burkhardt's departure, performance measures have been flat or
have deteriorated, as indicated in the following table:
Quarter ended Quarter ended Gain
June 30, 1999(1) June 30, 2000(2) (Loss)
---------------- ---------------- ------
Sales (millions) $90.8 $93.0 2.4%
Net Income (millions) $18.9 $15.7 (16.9)%
Earnings per share $0.37 $0.32 (13.5)%
Share Price $18.88 $13 (31.0)%
__________________
(1) As reported in the Company's Quarterly Report on Form 10-Q for the
year ended June 30, 1999.
(2) As reported in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2000.
On October 19, 2000, the day before the first public announcement of this
Consent Solicitation, the closing sale price for the Company's Common Stock was
$10.75 per share, representing a cumulative decline of 43% from the closing
price of $18.88 per share on June 30, 1999.
To the Committee's knowledge, Mr. Burkhardt is one of the Company's
largest individual shareholders. He owns 3,510,004 shares, representing over 7%
of the Company's outstanding shares. As a major Wisconsin Central shareholder,
Mr. Burkhardt has the same concerns as other shareholders with the Company's
recent poor financial performance and falling share price.
REASONS FOR WISCONSIN CENTRAL'S POOR PERFORMANCE
The Committee believes that the recent decline in the value of
Wisconsin Central's shares is attributable to three main factors. The first is
the failure of the Company's current Board and management to grow the Company's
business. For many years the Company improved its competitiveness and
aggressively marketed its services, and the result was strong growth in traffic
volume, revenues and profits. The market is willing to pay for growth, but
conversely will heavily discount the share price of a company that cannot
produce growth. This is what we have seen at Wisconsin Central in the last year.
The second factor is the failure of the Company's current Board and
management to successfully manage the Company's international investments. The
Committee is concerned about the poor operational and financial performance,
corporate governance structure and future potential of the Company's existing
overseas investments. In addition, despite the problems affecting the Company's
existing international businesses, the Committee is concerned that the Company
continues to waste shareholder funds in pursuing a poorly executed international
acquisition strategy.
<PAGE>
The third factor is the failure of the Company's current Board and
management to take the steps necessary to position the Company for a future sale
through a merger or similar transaction. The Committee believes the most
effective way to maximize value for Wisconsin Central's shareholders is to
prepare the Company for sale to a strategic buyer, including one of the
developing U.S./Canadian mega-rail systems, or another qualified purchaser as
soon as regulatory and market conditions permit.
The Committee is proposing a robust program to correct these
shortcomings and to restore effective management at Wisconsin Central. The
details of this program are outlined in the following section.
THE COMMITTEE'S PROGRAM TO MAXIMIZE SHAREHOLDER VALUE
The Committee has developed a program designed to maximize shareholder
value at Wisconsin Central. Each nominee proposed by the Committee for election
to the Company's Board of Directors is pledged to support the implementation of
this program. The Committee's program includes the following measures:
. Improve the Company's domestic operations by increasing revenues and
operating margins, improving competitiveness and customer service, and
restoring employee morale and productivity to historic levels.
. Discontinue efforts to invest in international privatizations, including the
pending acquisition of rail operations in Jordan. These privatization
contests are risky and highly competitive, with corresponding low returns.
Their performance in early years is typically uneven, making them
inappropriate investments for publicly traded companies being rated on
quarterly earnings.
. Liquidate or spin off existing international investments. All of the
Company's international investments are minority positions in underperforming
companies. As currently structured, with management controlled by venture
capital funds, the Company's international investments have little hope of
realizing their potential and will be a continuing drag on consolidated
earnings.
. Increase the Company's share repurchase program. This objective should be
facilitated by eliminating the need to conserve cash for international
acquisitions and by cash raised through the sale of the Company's
international holdings.
. Position domestic operations for a strategic sale to one of the developing
mega-rail systems, such as Canadian National Railway Company, Norfolk
Southern Corporation or CSX Transportation, or another qualified purchaser.
The Committee believes that substantial operational and revenue synergies
should result from an acquisition of the Company by one of these railways.
. Improve corporate governance through the election of experienced independent
Board members and eliminate the classified Board, so that all directors will
be subject to annual election by the Company's shareholders.
<PAGE>
THE COMMITTEE'S DIRECTOR NOMINEES
The Committee has proposed eight nominees (the "Nominees") for election
as members of the Company's Board of Directors. The information below concerning
age, business address, principal occupation, employment history, directorships
and beneficial ownership of Common Stock of the each of the Nominees has been
furnished by the respective Nominees.
Present Principal Occupation,
Five-Year Employment History
Name, Age and Business Address And Directorships
------------------------------ -----------------
John W. Barriger (73) Vice President, The Derson Group Ltd., since
155 Melrose Avenue 1990. Assistant to Trustee, Chicago,
Kenilworth, Illinois 60043 Missouri & Western Railway Co., 1988 - 1990.
Vice President, Corporate Development,
Venango River Corporation, 1987. Project
Leader of U.S. Department of Justice study
of Norfolk Southern's proposed acquisition
of Conrail, 1986. Employed by Santa Fe
Industries and Atchison, Topeka & Santa Fe
Railway Company in various operating,
finance and executive department positions,
1950 - 1985. BS in Mechanical Engineering
and Business Administration, Massachusetts
Institute of Technology (1949). Certificate
in Transportation, Yale University Graduate
School of Economics (1950).
Edward A. Burkhardt (62) President and Chief Executive Officer, Rail
8600 West Bryn Mawr Avenue World, Inc., since July 1999. Director, The
Suite 500N Wheeling & Lake Erie Railroad Company.
Chicago, Illinois 60631-3579 President and Treasurer, The San Luis Central
Railroad Company, since 1969. Chairman,
Baltic Rail Services (Tallinn, Estonia),
since May 2000. President, Rail Polska,
s.p. z.oo. (Warsaw, Poland), since November
1999. President, Cargo Central Europe
(Warsaw, Poland), since April 2000.
Chairman, President and Chief Executive
Officer, Wisconsin Central Transportation
Corporation and subsidiaries, 1987 - 1999.
Chairman and Chief Executive Officer,
English, Welsh & Scottish Railway Ltd. and
subsidiaries, 1995 - 1999. Chairman, Tranz
Rail Holdings, Limited and subsidiaries, 1993
- 1999. Chairman, Australian Transport
Network and subsidiaries, 1997 - 1999.
<PAGE>
Vice President Transportation, Chicago &
North Western Transportation Co. ("CNW"),
1979 - 1987. Vice President Marketing, CNW,
1976 - 1979. Various operating management
positions with CNW and Wabash Railway Co.,
1960 - 1976. BS in Industrial Administra-
tion, Yale University (1960).
Raymond C. Burton, Jr. (62) Chairman and Chief Executive Officer, TTX
680 North Lake Shore Drive Company, since June 2000. Director, TTX
Chicago, Illinois 60611 Company, since 1976. President and Chief
Executive Officer, TTX Company, 1982-June
2000. Various operating and financial
positions with Burlington Northern Santa Fe
Corporation, 1962-1982. BA, Cornell Univer-
sity (1960). MBA, Wharton School of
Business, University of Pennsylvania (1963).
Robert E. Dowdy (64) Transportation Consultant since 1993.
10422 Elderberry Lane Director of Green Bay & Western Railroad
Orland Park, Illinois 60467 Company and Fox River Valley Railroad
Company since 1991. President and Chief
Executive Officer, Fox River Valley
Railroad Corporation and Green Bay & Western
Railroad Company, 1991 - 1993. President
and General Manager, Belt Railway Company
of Chicago, 1972 - 1989. President and
General Manager, Chicago & Western Indiana
Railroad Company, 1964 - 1972. Various
operating management positions, Wabash
Railroad Company, 1958 - 1964.
Aaron J. Gellman (70) Professor of Management and Strategy,
c/o Northwestern University J.L.Kellogg Graduate School of Management,
2001 Sheridan Road Northwestern University, since 1992.
Evanston, Illinois 60201 Director, USA Floral Products, Inc., since
1998. President, Gellman Research
Associates, 1972 - 1992. Vice President
Planning, The Budd Company, 1967 - 1971.
Vice President Planning, North American Car
Corporation, 1958 - 1967. Director, Eastern
Illinois Railroad, 1961 - 1967 and
Commercial Credit Corporation 1981 - 1984.
BA in Economics, University of Virginia
(1950). MBA (Transportation), University of
Chicago (1951). PhD in Economics, Massachus-
etts Institute of
<PAGE>
Technology (1968).
Michael W. Howell (53) Chairman, FPT Group Limited, since 1998.
Smeaton House Director, Arlington Capital Management (CI)
Dalkelth, Scotland Limited, since 1991. Director, Fenner plc,
EH22 2NJ 1993-1996. Director, Railtrack Group plc,
1996-1997. General Manager, Transportation
Systems Division, General Electric Company,
Inc., 1989-1991. Vice President, General
Electric Canada, Inc. 1988-1989. Vice
President, Cummins Engine Company, Inc.,
1981-1989. Director, Cummins Engine Company
Limited, 1980-1984. Other operating positions
with Cummins Engine Company, Inc., 1976-1980,
and British Leyland Motor Corporation,
1969-1974. MA in Economics and Engineering,
Trinity College, Cambridge University (1969).
MBA, European Institute of Business - INSEAD
(1975). MBA, Harvard Business School (1976).
Henry Posner III (45) Chairman, Railroad Development Corporation,
381 Mansfield Avenue since 1987. Chairman, Iowa Interstate
Greentree Commons 500 Railroad, since 1991. Chairman of Ferrovias
Pittsburgh, Pennsylvania 15220 Guatamala since 1998. Director, Buenos
Aires al Pacifico since 1999. Various
operating and marketing management positions,
Conrail and predecessor railroads, 1977 -
1986. BS in Civil Engineering, Princeton
University (1977). MBA, Wharton School of
Business, University of Pennsylvania (1982).
Andy Sze (49) Managing Partner, Ginkgo Enterprise LP, since
8412 Evergreen Lane 1999. President and Chief Executive Officer,
Darien, Illinois 60561 Clipper Group, 1983 - 1999. Other positions
with Clipper Group, 1976 - 1983. BS in
Industrial Engineering, Illinois Institute of
Technology (1973). MS in Operations Research,
Northwestern University (1974). MBA,
University of Chicago (1982).
<PAGE>
The number of shares of Common Stock beneficially owned and percentage
beneficial ownership of each of the Nominees as of the date of this Consent
Statement are as follows:
Number of Shares Percentage
Nominee Beneficially Owned(1)(2) Ownership(3)
------- ------------------------ ------------
John W. Barriger 2,000 *
Edward A. Burkhardt 3,510,004(4) 7.14%
Raymond C. Burton, Jr. 0 *
Robert E. Dowdy 100 *
Aaron J. Gellman 2,000 *
Michael W. Howell 1,150 *
Henry Posner III 0(5) *
Andy Sze 23,000(6) 0.05
-------------- ----
Total 3,538,254 7.20%
_________________
* Represents less than 0.01% percentage ownership.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock
subject to stock options and warrants currently exercisable or
exercisable within 60 days are deemed outstanding for purposes of
computing the percentage ownership of the person holding the options
and the percentage ownership of any group of which the holder is a
member, but are not deemed outstanding for computing the percentage
ownership of any other person. Except as indicated by footnote, and
subject to community property laws where applicable, the persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them.
(2) On October 20, 2000, the Nominees filed a Schedule 13D with respect to
their beneficial ownership of shares of Common Stock. Under the rules
of the Securities and Exchange Commission, the Nominees may be deemed
to be members of a group and, as a result, each Nominee may be deemed
to beneficially own shares of Common Stock beneficially owned by each
of the other Nominees. Each of the Nominees disclaims beneficial
ownership of the shares of Common Stock beneficially owned by any of
the other Nominees.
(3) Calculated based on 49,153,957 shares of Common Stock outstanding as of
July 31, 2000 as reported in the Company's Quarterly Report on Form 10-
Q for the quarter ended June 30, 2000. The Committee believes that the
number of shares outstanding as of the date of this Consent Statement
is likely to be less than the number indicated in the Company's Form
10-Q, as the Company has announced a program to repurchase its
outstanding shares.
(4) Includes 30,000 shares of Common Stock that Mr. Burkhardt is entitled
to acquire pursuant to stock options currently exercisable or
exercisable within 60 days. Excludes 5,800 shares of Common Stock held
by Mr. Burkhardt's daughter, who has sole voting and dispositive power
with respect to such shares. Mr. Burkhardt disclaims beneficial
ownership of the shares held by his daughter.
(5) Excludes 200,000 shares held by Lyndhurst Associates, L.P. ("Lyndhurst
Associates"), a Delaware limited partnership in which Mr. Posner is a
limited partner. The Managing
<PAGE>
General Partner of Lyndhurst Associates is Henry Posner, Jr., the
father of Mr. Posner. The address of Lyndhurst Associates is 381
Mansfield Avenue, 500 Greentree Commons, Pittsburgh, Pennsylvania
15220. Mr. Posner disclaims beneficial ownership of the shares held by
Lyndhurst Associates.
(6) Includes 6,000 shares of Common Stock held in trusts for the benefit of
Mr. Sze's daughter and son. Mr. Sze has sole voting and dispositive
power with respect to such shares. Excludes 300 shares of Common Stock
held by Mr. Sze's daughter, who has sole voting and dispositive power
with respect to such shares. Mr. Sze disclaims beneficial ownership of
the shares held by his daughter.
The Committee intends to reimburse each Nominee for out-of-pocket
expenses incurred in connection with this Consent Solicitation. In addition, the
Committee intends to indemnify each Nominee, to the maximum extent not
prohibited by applicable law, against any amount that he is or becomes legally
obligated to pay relating to or arising out of any threatened, pending or
completed action, suit or proceeding made against or involving him by reason of
the fact that he has agreed to be a nominee for election as a director of the
Company or by reason of any action he is alleged to have taken or omitted to
take relating to or arising out of this Consent Solicitation. Mr. Burkhardt
intends to satisfy the expense reimbursement and indemnification obligations of
the Committee with respect to the Nominees.
In addition, it is anticipated that each Nominee, if elected, would be
entitled to receive certain directors' fees paid consistent with Wisconsin
Central's past practices. According to Wisconsin Central's proxy statement on
Schedule 14A dated April 10, 2000, under compensation arrangements adopted in
1999, directors who are not full-time employees of the Company or its
subsidiaries receive annual compensation in the form of options to purchase
6,000 shares of Common Stock and may elect to receive annual compensation of
$30,000 in either (i) phantom stock or (ii) $15,000 in cash and $15,000 in
phantom stock, with the phantom stock payable on the date of the Company's
annual meeting and the cash payable in four equal quarterly installments. The
director phantom stock is issued in units equal to the aggregate nominal value
divided by the fair market value of the Common Stock on the date of grant. When
the holder of phantom stock ceases to be a director of the Company, the holder's
phantom stock units are converted to cash at the current market value of the
Common Stock. No additional amounts are paid with respect to attendance at
director or committee meetings. Directors who are full-time employees of the
Company or its subsidiaries do not receive additional compensation for their
services as directors.
New directors are granted 5,500 additional options in connection with
their first election as directors, as provided by the director option plan. The
director options represent the right to purchase Common Stock at an exercise
price equal to fair market value as of the date of the grant. Director options
expire at the earlier of 10 years after the date of grant or one year after the
optionee ceases to be a director. All directors of the Company are also
reimbursed for expenses.
<PAGE>
THE COMMITTEE'S PROPOSALS
The Committee is soliciting consents to take the following actions
(collectively, the "Proposals") by written shareholder consent, without a
shareholder meeting, as permitted by Delaware law and the Amended Bylaws of the
Company. Each member of the Committee has agreed to vote the shares of Common
Stock beneficially owned by him in favor of each of the Proposals.
THE COMMITTEE RECOMMENDS THAT YOU CONSENT TO EACH OF THE PROPOSALS BY
SIGNING, DATING AND RETURNING THE ENCLOSED WHITE CONSENT CARD.
Set forth below is a description of each of the Proposals for which
consents are being solicited:
PROPOSAL NO. 1--Elimination of Provision Establishing Classified Board
The Amended Bylaws of the Company currently provide that the Company's
Board of Directors will be divided into three classes elected to serve for
staggered terms of three years. Proposal No. 1 provides for the amendment of
Section 3.2 of the Amended Bylaws to remove the provision establishing a
classified Board and to require the annual election of all directors. In
particular, the amendment would delete the third and fourth sentences of Section
3.2 of the Amended Bylaws and insert in lieu thereof the sentence "Directors
shall be elected annually to serve for one year terms." With the annual election
of directors, the Company's shareholders will have the ability to hold all
directors accountable on an annual basis.
PROPOSAL NO. 2--Modification of the Provision for Filling Vacancies
Proposal No. 2 provides for the amendment of Section 3.3 of the Amended
Bylaws to recognize the elimination of the classified Board of Directors by
deleting the second and third sentences and inserting in lieu thereof the
sentence "Any director elected in accordance with this paragraph shall hold
office until the next annual meeting of the shareholders or until his or her
earlier death, resignation or removal in a manner permitted by statute or these
by-laws."
PROPOSAL NO. 3--Elimination of Provision Regarding the Removal of Directors
Proposal No. 3 provides for the elimination of Section 3.13 of the
Amended Bylaws in its entirety. This section currently provides that, so long as
the Company's Board of Directors is classified, members of the Board may be
removed from office only for cause by a majority of the votes entitled to be
cast for the election of directors. The elimination of Section 3.13 of the
Amended Bylaws will permit the shareholders of the Company to remove Board
members with or without cause.
PROPOSAL NO. 4--Removal of Current Directors
Proposal No. 4 provides for the removal of the nine current members of
the Company's Board of Directors, Thomas E. Evans, Carl Ferenbach, J. Reilly
McCarren, Roland V. McPherson, Thomas F. Power, Jr., Thomas W. Rissman, John W.
Rowe, A. Francis Small and Robert H. Wheeler, and any other person or persons
who may be
<PAGE>
members of the Company Board at the time the Proposals become effective (other
than the persons elected as a result of the adoption of Proposal No. 5, which is
described below).
PROPOSAL NO. 5--Election of Nominees
Proposal No. 5 provides for the election of the Nominees proposed by
the Committee as directors of Wisconsin Central, to serve until the Company's
next annual meeting of shareholders and until their successors have been duly
elected and qualified. See "The Committee's Director Nominees" for information
concerning the background and experience of the Nominees proposed by the
Committee.
The Committee's primary purpose in seeking to elect the Nominees to the
Company's Board of Directors is for the Nominees to implement the measures
proposed by the Committee described in "The Committee's Program to Maximize
Shareholder Value." If elected, however, the Nominees will be responsible as
directors for the management of the business and affairs of the Company.
Accordingly, the Nominees may determine that their fiduciary duties as directors
require them to delay, modify or determine not to implement certain of the
measures included in the Committee's program.
Each of the Nominees has consented to being named herein as a nominee
for director of the Company and has agreed to stand for election as a director.
Although the Committee has no reason to believe that any of the
Nominees will be unable to serve as a director, if any Nominee is not available
to serve, the Committee expects that the remaining Nominees, upon taking office,
will fill the vacancy with an individual willing to consider and implement the
Committee's program to maximize shareholder value.
PROPOSAL NO. 6--Repeal of Bylaws Adopted Subsequent to May 20, 1999
Proposal No. 6 provides for the repeal of any amendments of the Amended
Bylaws (whether effected by supplement to, deletion from or revision of the
Amended Bylaws) adopted subsequent to May 20, 1999 (the date on which the
Company's Bylaws were most recently amended), and at or prior to the time the
Proposals become effective (other than amendments adopted as a result of the
adoption of Proposal Nos. 1, 2 or 3 set forth above).
The Committee does not believe that any amendments to the Amended
Bylaws have been made since May 20, 1999 through the date this Consent Statement
was first filed with the Securities and Exchange Commission. The Committee
believes that any amendments to the Amended Bylaws made after such date will
have been adopted by current Board of Directors and management with the
objective of preventing their removal from office by the Company's shareholders
pursuant to this Consent Solicitation. The Committee does not believe that any
such amendments to the Amended Bylaws were effected with the interests of the
shareholders in mind and, accordingly, recommends the repeal of any such
amendments.
_______________
<PAGE>
The Committee believes that the Company's current Board of Directors
and management will not take steps consistent with the views of the Committee to
maximize shareholder value, and that the current Board has instead moved to
entrench itself through the institution of the classified board structure and
through a failed attempt to obtain shareholder approval at the Company's 1999
Annual Meeting to eliminate the right of shareholders to act by written consent.
Accordingly, the Committee believes that reform from within the current Board is
a practical impossibility and that only through the seating of a new Board will
the Company's true value be realized. The Committee is convinced that the
adoption of the Proposals will expedite the realization of the Committee's
program to maximize shareholder value.
Adoption of the Proposals, including the removal of the current members
of the Company's Board and election of the Nominees, is an important step toward
prompt implementation of the Committee's plans to improve shareholder value.
Accordingly, the Committee urges you to promptly sign, date and return the
enclosed WHITE consent card.
THE CONSENT PROCEDURE
General; Effectiveness of Consents
Section 228 of the Delaware General Corporation Law (the "Delaware
Law") provides that, unless otherwise provided in the certificate of
incorporation of a corporation, any action required to be or that may be taken
at a meeting of shareholders may be taken without a meeting, without prior
notice and without a vote, if written consents setting forth the action so
taken are signed, dated and delivered to the corporation by the holders of
outstanding shares having not less than the minimum number of votes that would
be necessary to take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Section 228 of the Delaware Law further
provides that no written consent will be effective to take the corporate action
referred to therein unless, within 60 days of the earliest dated consent
delivered to the corporation in the manner required by the Delaware Law, written
consents signed by a sufficient number of holders to take action are delivered
to the corporation in the manner required by the Delaware Act.
The Certificate of Incorporation of the Company, as amended, does not
prohibit shareholder action by written consent. The Company's Amended Bylaws
provide that the Company's Board of Directors may fix a record date to determine
the shareholders entitled to consent to corporate action in writing without a
meeting. The record date is not permitted to precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors and may
not be more than ten days after the date upon which the resolution fixing the
record date is adopted by the Board. If the Board of Directors has not fixed the
record date with respect to a corporate action and no prior action by the Board
is required in connection with such corporate action under the Delaware Law, the
record date will be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is 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 book in which
proceedings of meetings of shareholders are recorded.
<PAGE>
On _________, 2000, the Committee delivered a signed written consent to
the Company at its principal place of business, thereby establishing that date
as the Record Date for purposes of this Consent Solicitation.
A Proposal will become effective when consent cards (or other forms of
consent) indicating consent to the Proposal, signed and dated by the holders of
record on the Record Date of a majority of the shares of the Company's Common
Stock then outstanding, are delivered to the Company in the manner required by
the Delaware Law. Therefore, the failure to sign, date and return a consent with
respect to a Proposal, or the returning of a consent marked "ABSTAINS" or
"WITHHOLDS CONSENT" with respect to a Proposal, will have the same effect as
voting against the Proposal.
Signing and returning a consent card marked to indicate the withholding
of consent to the election of any Nominee will have the same effect as voting
against the election of the Nominee.
Broker non-votes on any Proposal will have the same effect as a vote
against the Proposal.
The effectiveness of each of Proposal Nos. 2, 3, 4 and 5 is conditioned
upon the approval of Proposal No. 1. In addition, the effectiveness of Proposal
No. 4 is conditioned upon at least one of the Nominees listed in Proposal No. 5
being elected as a member of the Board. Except for the foregoing, none of the
Proposals is conditioned upon the approval of any other Proposal.
If the Proposals are adopted pursuant to this Consent Solicitation,
prompt notice will be given pursuant to Section 228(d) of the Delaware Law to
eligible shareholders who have not signed and returned consent cards indicating
consent to each of the Proposals.
Procedural Instructions
If a shareholder is the record holder of shares as of the close of
business on the Record Date, the shareholder may elect to consent to, withhold
consent to or abstain with respect to each Proposal by marking the "CONSENTS,"
"WITHHOLDS CONSENT" or "ABSTAINS" box, as applicable, underneath each such
Proposal on the accompanying WHITE consent card and signing, dating and
returning it promptly in the enclosed envelope. In addition, a shareholder may
withhold consent to the removal of any individual member of the Company's Board
or to the election of any individual Nominee by writing such person's name where
indicated on the consent card.
If a shareholder returns a consent card that is signed and not marked
with respect to any Proposal, the shareholder will thereby consent to that
Proposal in its entirety, except that the shareholder will not thereby consent
to the removal of any member of the Board or the election of any Nominee whose
name is written by the shareholder on the consent card.
Under the Delaware Law, only shareholders of record on the Record Date
are eligible to give their consent to the Proposals. Therefore, the Committee
urges each shareholder, even if the shareholder has subsequently sold its
shares, to grant its consent pursuant to the enclosed WHITE consent card with
respect to all shares held as of the
<PAGE>
Record Date. The failure to consent by a former shareholder who was a
shareholder on the Record Date may adversely affect those who continue to be
shareholders of the Company.
In addition, if your shares are held of record in the name of a
brokerage firm, bank nominee or other institution, only that entity can execute
a consent on your behalf and only upon receipt of your specific instructions.
Accordingly, you should sign, date and return the enclosed WHITE consent card in
the envelope provided by your broker.
Revocation of Consents
Consents with respect to any Proposal may be revoked at any time prior
to the time that the Proposal becomes effective, provided that a written, dated
revocation that clearly identifies the consent being revoked is executed and
delivered either to (i) the Committee at 8600 West Bryn Mawr Avenue, Suite 500N,
Chicago, Illinois 60631-3579, or (ii) the principal executive offices of the
Company at 6250 North River Road, Suite 9000, Rosemont, Illinois 60018.
A revocation may be in any written form validly signed by the record
holder as long as it clearly states that the consent previously given is no
longer effective. The Committee requests that a copy of any revocation sent to
the Company be sent to the Committee at the above address so that the Committee
may more accurately determine if and when consents to the Proposals have been
received from the holders of the requisite number of shares of the Company's
Common Stock. You may revoke any previous consent revocation by SUBSEQUENTLY
signing, dating and returning the WHITE consent card included with this Consent
Statement.
ARRANGEMENTS REGARDING COMPANY FINANCING
The Company has a credit facility provided by a group of bank lenders
under which it has borrowed funds to finance its operations. According to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, as
of that date the Company had outstanding loan obligations under its credit
facility totaling approximately $216.6 million.
Under the terms of the Company's credit facility agreement, the
Company's lenders would be permitted to declare an event of default if a
majority of the current members of the Company's Board of Directors are removed
from office pursuant to this Consent Solicitation. If the Company's lenders were
to declare an event of default under these circumstances, they would have the
right to limit or prohibit future borrowings by the Company, to demand immediate
repayment of the Company's outstanding loans and to take all other actions
permitted by law to enforce the Company's obligations under its credit facility
agreement. The declaration of an event of default or the acceleration of the
Company's obligations under its credit facility agreement may also result in the
occurrence of an event of default under additional loan, lease or other
agreements to which the Company and its subsidiaries are parties.
The Committee believes that the Company is creditworthy and that the
replacement of the current members of the Company's Board of Directors with the
nominees proposed by the Committee should not result in a determination by the
Company's lenders to declare an event of default under the Company's credit
facility
<PAGE>
agreement. The Committee intends to seek an appropriate waiver from the
Company's lenders before removing the current members of the Company's Board of
Directors.
The Committee, however, has taken steps to confirm the availability of
a replacement credit facility in the event that the Company's lenders are
unwilling to grant such a waiver. The Committee has obtained a letter from
Macquarie Bank Limited ("MBL"), an investment bank, confirming that, as of
October 19, 2000 and subject to certain conditions, MBL was highly confident
that it could arrange for financing to replace the Company's existing credit
facility. A copy of MBL's highly confident letter is attached to this Consent
Statement.
The Committee has agreed to pay MBL a fee of $100,000 and to reimburse
MBL for its reasonable expenses incurred in connection with rendering its highly
confident letter. This fee will become payable upon the removal from office of a
majority of the current members of the Company's Board of Directors pursuant to
this Consent Solicitation. The Committee also agreed to pay or to cause the
Company to pay certain additional fees if MBL is required to arrange or
underwrite replacement financing on behalf of the Company. In addition, the
Committee has agreed to indemnify MBL and certain related persons against
liabilities, including certain liabilities under the federal securities laws,
arising out of MBL's engagement.
The highly confident letter does not constitute a commitment or
undertaking by MBL to provide the financing required to replace the Company's
current credit facility. The receipt of the highly confident letter does not
ensure that the Company will be successful in replacing its current credit
facility if required in connection with this Consent Solicitation.
OWNERSHIP OF COMMON STOCK
Each share of Common Stock is entitled to one vote on each of the
Proposals and the Common Stock is the only class of securities of the Company
entitled to vote on the Proposals. According to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2000, as of July 31, 2000, there
were 49,153,957 shares of Common Stock outstanding. The Committee believes that
the number of shares outstanding as of the date of this Consent Statement is
likely to be less than the number indicated in the Company's Form 10-Q, as the
Company has announced a program to repurchase its outstanding shares. According
to the Company's Annual Report on Form 10-K for the year ended December 31,
1999, there were approximately 2,070 holders of record of shares of Common Stock
as of March 20, 2000.
The following table sets forth the share ownership of all persons who,
to the knowledge of the Committee, beneficially owned more than 5% of the
outstanding shares of Common Stock as of the date of this Consent Statement:
Number of Shares
Beneficially Owned(1) Percentage
Shareholder Ownership
Southeastern Asset Management, Inc. (2) 7,909,300 16.08%
Cascade Investment LLC (3) 3,600,300 7.32
<PAGE>
Edward A. Burkhardt (4) 3,510,004 7.14
Tweedy, Browne & Company LLC (5) 3,099,211 6.31
State of Wisconsin Investment Board (6) 2,745,000 5.58
Capital Research and Management Company (7) 2,525,000 5.14
_____________________
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock subject
to stock options and warrants currently exercisable or exercisable within
60 days are deemed outstanding for purposes of computing the percentage
ownership of the person holding the options and the percentage ownership of
any group of which the holder is a member, but are not deemed outstanding
for computing the percentage ownership of any other person. Except as
indicated by footnote, and subject to community property laws where
applicable, to the knowledge of the Committee the persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them.
(2) According to a Schedule 13G filed as of February 9, 2000 with the
Securities and Exchange Commission by Southeastern Asset Management, Inc.
("Southeastern"), Longleaf Partners Small-Cap Fund ("Longleaf") and
Longleaf Partners International Fund ("Longleaf International"), which
indicates that Southeastern has sole voting power with respect to 676,500
of these shares, sole dispositive power with respect to 1,208,500 of these
shares, shared voting and shared dispositive power with respect to
6,700,800 of these shares, and no voting power with respect to 532,000 of
these shares; Longleaf has no sole voting or sole dispositive power with
respect to these shares but has shared voting and shared dispositive power
with respect to 5,550,800 of these shares; and Longleaf International has
no sole voting or sole dispositive power with respect to these shares but
has shared voting and shared dispositive power with respect to 1,150,000 of
these shares. Beneficial ownership of these shares is disclaimed by
Southeastern. The address of Southeastern, Longleaf and Longleaf
International is 6410 Poplar Avenue, Suite 900, Memphis, Tennessee 38119.
(3) According to a Schedule 13G filed as of April 28, 2000 with the Securities
and Exchange Commission by Cascade Investment LLC ("Cascade") and William
H. Gates III, which indicates that Cascade and Mr. Gates each have shared
voting power and shared dispositive power with respect to 3,600,300 shares.
All of the shares owned by Cascade may be deemed to be beneficially owned
by Mr. Gates as the sole member of Cascade. The address of Cascade is 2365
Carillon Point, Kirkland, Washington 98033. The address of Mr. Gates is One
Microsoft Way, Redmond, Washington 98052.
(4) Includes 30,000 shares of Common Stock that Mr. Burkhardt is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Excludes 5,800 shares of Common Stock held by Mr.
Burkhardt's daughter, who has sole voting and dispositive power with
respect to such shares. Mr. Burkhardt disclaims beneficial ownership of the
shares held by his daughter. Mr. Burkhardt's business address is 8600 West
Bryn Mawr Avenue, Suite 500N, Chicago, Illinois 60631-3579
(5) According to a Schedule 13D/A filed as of October 10, 2000 with the
Securities and Exchange Commission by Tweedy, Browne & Company LLC ("Tweedy
Browne"), TBK Partners, L.P. ("TBK") and Vanderbilt Partners, L.P.
("Vanderbilt"), which indicates that Tweedy Browne has sole voting power
with respect to 2,628,599 shares and shared dispositive power with respect
to 2,704,931 shares, TBK has sole voting and sole dispositive power with
respect to 348,000 shares and Vanderbilt has sole voting and sole
dispositive power with respect to 46,280 shares. Each of Tweedy Browne, TBK
and Vanderbilt
<PAGE>
disclaims beneficial ownership of the shares owned by the other. The
address of Tweedy Browne, TBK and Vanderbilt is 350 Park Avenue, New York,
New York 10022.
(6) According to a Schedule 13G filed as of February 2, 2000 with the
Securities and Exchange Commission by State of Wisconsin Investment Board
(the "Investment Board"), which indicates that Investment Board has sole
voting power and sole dispositive power with respect to such shares. The
address of Investment Board is P.O. Box 7842, Madison, Wisconsin 53707.
(7) According to a Schedule 13G filed as of February 14, 2000 with the
Securities and Exchange Commission by Capital Research and Management
Company ("Capital Research"), which indicates that Capital Research has
sole voting power and sole dispositive power with respect to such shares.
The address of Capital Research is 333 South Hope Street, Los Angeles,
California 90071.
Information regarding the ownership of shares of the Company's Common Stock
by the current members of the Company's Board of Directors and management is
contained in the Company's proxy statement dated as of April 10, 2000.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
The Committee, the members of the Committee, the nominees for election
as directors proposed by the Committee and certain other persons named below may
be deemed to be "participants" in this Consent Solicitation as such term is
defined in Schedule 14A promulgated under the Securities Exchange Act of 1934
(the "Exchange Act").
The Committee is an unincorporated association that does not have any
officers or employees and does not beneficially own any equity securities of the
Company. The business address of the Committee is 8600 West Bryn Mawr Avenue,
Suite 500N, Chicago, Illinois 60631-3579.
The members of the Committee are Edward A. Burkhardt (Chairman), John
W. Barriger, Raymond C. Burton, Jr., Robert E. Dowdy, Aaron J. Gellman, Michael
W. Howell, Henry Posner III and Andy Sze. Each of the foregoing individuals is
proposed by the Committee as a nominee for election as a director of the
Company. Information regarding the age, business address, principal occupation,
employment history, directorships and beneficial ownership of Common Stock of
each the foregoing individuals is provided in "The Committee's Director
Nominees."
The Committee has retained Providence Capital, Inc. ("Providence") to
act as its financial advisor and Dealer-Manager in connection with this Consent
Solicitation. Providence engages in investment banking and stock brokerage
business. Providence does not believe that it or any of its respective partners,
directors, officers, employees, affiliates or controlling persons, if any, is a
"participant" in this Consent Solicitation or that Schedule 14A requires the
disclosure of certain information concerning Providence. The business address of
Providence is 730 Fifth Avenue, New York, New York 10019.
As of the date of this Consent Statement, members of the Committee
beneficially owned a total of 3,538,254 shares of the Company's Common Stock,
representing approximately 7.20% of the outstanding shares of Common Stock. The
number of shares of Common Stock beneficially owned by each of the members of
the Committee, and by
<PAGE>
certain persons and entities that may be deemed to be associates of the members
of the Committee, is indicated in "The Committee's Director Nominees." All of
the shares owned of record by any of the members of the Committee or their
associates are beneficially owned by such person or entity. Providence has
informed the Committee that, as of the date of this Consent Statement, it does
not hold any shares of Common Stock for its own account or for the accounts of
its customers.
The number of shares of the Company's Common Stock purchased or sold by
the members of the Committee within the past two years, the dates on which such
shares were purchased or sold and the amount purchased or sold on each such date
is set forth below:
Member Date Transaction Type Number of Shares Price Per Share
------ ---- ---------------- ---------------- ---------------
John W. Barriger 10/9/00 Purchase 1,000 $10.18
Michael W. 9/8/00 Purchase 1,150 12.88
Howell
Henry Posner 4/27/00 Purchase 30,000 14.13
III(1) 4/28/00 Purchase 20,000 14.63
5/2/00 Purchase 65,000 13.41
5/4/00 Purchase 25,000 12.50
5/11/00 Purchase 30,000 12.19
5/23/00 Purchase 30,000 12.25
Andrew Sze(2) 9/6/00 Purchase 6,000 12.90
9/11/00 Purchase 1,000 12.77
9/11/00 Purchase 1,500 12.83
9/11/00 Purchase 6,000 12.89
9/12/00 Purchase 1,500 12.83
9/13/00 Purchase 2,000 12.83
9/13/00 Purchase 2,000 12.90
9/13/00 Purchase 3,000 12.77
-------------
(1) The indicated shares were purchased by Lyndhurst Associates, L.P.
("Lyndhurst Associates"), a Delaware limited partnership in which Mr.
Posner is a limited partner. The Managing General Partner of Lyndhurst
Associates is Henry Posner, Jr., the father of Mr. Posner. The address
of Lyndhurst Associates is 381 Mansfield Avenue, 500 Greentree Commons,
Pittsburgh, Pennsylvania 15220. Mr. Posner disclaims beneficial
ownership of the shares held by Lyndhurst Associates.
(2) Includes 6,000 shares of Common Stock purchased on September 6, 2000
that are held in trusts for the benefit of Mr. Sze's daughter and son.
Mr. Sze has sole voting and dispositive power with respect to such
shares. On September 6, 2000, Mr. Sze's daughter purchased 300 shares
of Common Stock at a price of $12.82 per share. Mr. Sze's daughter has
sole voting and dispositive power with respect to such shares. Mr. Sze
disclaims beneficial ownership of the shares held by his daughter.
<PAGE>
No part of the purchase price or market value of the shares of the
Company's Common Stock beneficially owned by the members of the Committee is
represented by funds borrowed or otherwise obtained for the purpose of acquiring
or holding such shares.
Except as disclosed in this Consent Statement, none of the members of
the Committee is, or was within the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
Company, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies.
Edward A. Burkhardt is the former Chairman, President and Chief
Executive Officer of the Company and is the beneficial owner of more than 5% of
the Company's outstanding Common Stock. During the Company's fiscal year ended
December 31, 1999, the Company paid Mr. Burkhardt $367,500 in salary, bonus and
other compensation in connection with his employment. In addition, during the
Company's fiscal year ended December 31, 1999, the Company granted Mr. Burkhardt
stock options to purchase 70,000 shares of Common Stock, all of which expired on
August 31, 2000.
The Company and Mr. Burkhardt are parties to an Agreement dated as of
July 7, 1999 (the "Separation Agreement") entered into in connection with Mr.
Burkhardt's separation of employment with the Company and its subsidiaries.
Under the terms of the Separation Agreement, Mr. Burkhardt agreed to resign as a
director and officer of the Company and each of its subsidiaries effective as of
August 31, 1999 and the Company agreed to pay Mr. Burkhardt the amount of all of
his previously earned and unpaid salary and to make a cash payment to Mr.
Burkhardt of $1,311,000 as of the effective date of his separation from the
Company. In addition, the Company agreed to make a series of cash payments to
Mr. Burkhardt at a rate of $36,417 per month for the 36-month period ending
August 31, 2002 and to continue to provide Mr. Burkhardt with certain insurance
and other employment benefits. The Separation Agreement also includes agreements
between the parties relating to the exercise of outstanding stock options,
registration rights, non-competition, confidentiality, non-disparagement,
publicity and the mutual release of claims. A copy of the Separation Agreement
is included as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1999.
In connection with his separation of employment with the Company and
its subsidiaries, on August 6, 1999, Wisconsin Central International, Inc.
("WCI"), a subsidiary of the Company, assigned to Rail World, Inc., a company of
which Mr. Burkhardt is the President and Chief Executive Officer and the sole
stockholder, all of WCI's rights and interests in the Teaming Agreement dated as
of April 29, 1999 between WCI, Jarvis International and OU Graniger Invest with
respect to the privatization of the Estonian Railway. On August 6, 1999, WCI
also purchased the shares and options issued by English Welsh & Scottish Railway
Holding Ltd., an affiliate of the Company, held by Mr. Burkhardt for $1,191,687
in cash.
Clipper Express Co., a company of which Andrew Sze was the Chief
Executive Officer and President until 1999, was a customer of the Company's
domestic freight railway operations. The aggregate amount of the payments made
by Clipper Express Co. to the Company during 1999 did not exceed $500,000.
<PAGE>
Except as disclosed in this Consent Statement, none of the Committee,
the members of the Committee, the Committees nominees for director or, to the
Committee's knowledge, any of their respective associates has any arrangement or
understanding with any person (i) with respect to any future employment by the
Company or its affiliates or (ii) with respect to future transactions to which
the Company or any of its affiliates will or may be a party, or any material
interest, direct or indirect, in any transaction that has occurred since
September 30, 1998, or any currently proposed transaction, or series of similar
transactions, which the Company or any of its affiliates was or is to be a party
and in which the amount involved exceeds $60,000.
SOLICITATION OF CONSENTS
The Committee has retained Innisfree M&A Incorporated ("Innisfree") to
assist in the solicitation of consents in connection with this Consent
Solicitation. The Committee has agreed to pay Innisfree a fee for its services
estimated to be not more than $100,000 and to reimburse Innisfree for its
reasonable out-of-pocket expenses. The Committee has also agreed to indemnify
Innisfree against certain liabilities and expenses in connection with this
Consent Solicitation, including liabilities under the federal securities laws.
It is anticipated that approximately 50 persons will be employed by
Innisfree to solicit shareholders in connection with this Consent Solicitation.
Consents may be solicited by mail, e-mail, telephone, telecopier, other forms of
electronic communication, advertisement and in person.
Banks, brokerage houses and other custodians, nominees and fiduciaries
will be requested to forward the solicitation materials to the beneficial owners
of shares of Common Stock for which they hold of record and the Committee will
reimburse them for their reasonable out-of-pocket expenses.
The Committee has retained Providence Capital, Inc. to act as its
advisor in connection with this Consent Solicitation for which Providence will
receive customary fees, as well as reimbursement of reasonable out-of-pocket
expenses. In addition, the Committee has agreed to indemnify Providence and
certain related persons against liabilities, including certain liabilities under
the federal securities laws, arising out of Providence's engagement. In
connection with Providence's role as advisor, the following employees of
Providence may communicate in person, by telephone or otherwise with a limited
number of institutions, brokers or other persons who are shareholders of
Wisconsin Central and may solicit consents from these institutions, brokers or
other persons: Herbert A. Denton and William J. Tapert.
The expenses related directly to this Consent Solicitation are expected
to aggregate $600,000 and will be borne by the Committee. These expenses include
fees and expenses for attorneys, accountants, public relations and financial
advisers, solicitors, advertising, printing, transportation, litigation and
other costs incidental to the solicitation. Of this estimated amount,
approximately $150,000 has been spent to date.
Mr. Burkhardt intends to pay all expenses incurred on behalf of the
Committee and to satisfy the expense reimbursement and indemnification
obligations of the Committee with respect to this Consent Solicitation. Mr.
Burkhardt and the Committee intend to seek reimbursement of their expenses
related to this Consent Solicitation from
<PAGE>
Wisconsin Central whether or not this Consent Solicitation is successful. The
question of reimbursement of the Committee's expenses by Wisconsin Central will
not be submitted to a shareholder vote.
If you have any questions concerning this Consent Solicitation or the
procedures to be followed to sign and return a consent card, please contact
Innisfree M&A Incorporated or the Committee at the telephone numbers indicated
below.
Innisfree 1-888-750-5834
The Committee 1-773-714-8669
Information Regarding the Company
The information concerning the Company contained in this Consent
Statement has been taken from or is based upon documents and records on file
with the Securities and Exchange Commission and other publicly available
information. The Committee has no knowledge that would indicate that statements
relating to the Company contained in this Consent Statement in reliance upon
publicly available information are inaccurate or incomplete. The Committee,
however, has not been given access to the books and records of the Company, was
not involved in the preparation of such information and statements, and is not
in a position to verify, or make any representation with respect to the accuracy
or completeness of, any such information or statements.
Information regarding the deadline for submitting shareholder proposals
for inclusion in the Company's proxy statement for its next annual meeting of
shareholders and the date after which notices of shareholder proposals will be
considered untimely is contained in the Company's proxy statement dated as of
April 10, 2000.
________________
Adoption of the Proposals, including the removal of the current members
of the Company's Board of Directors and election of the Nominees, is an
important step toward implementation of the Committee's plans to maximize
shareholder value at Wisconsin Central. Accordingly, we urge you to promptly
sign, date and return the enclosed WHITE consent card.
WISCONSIN CENTRAL SHAREHOLDERS
COMMITTEE TO MAXIMIZE VALUE
Edward A. Burkhardt, Chairman
__________, 2000
<PAGE>
IMPORTANT
Only shareholders of record on the Record Date are entitled to give their
consent to the Proposals. Thus:
. If your shares are held in your own name, please sign, date and return the
enclosed WHITE consent card in the postage-paid envelope provided.
. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only such entity can execute a consent on your behalf
and only upon receipt of your specific instructions. Accordingly, you
should sign, date and return the enclosed WHITE consent card in the
envelope provided by your broker.
We urge you NOT to sign any consent revocation card.
The Committee requests that completed, signed and dated WHITE consent cards
be returned to it on or before __________, 2000. A FAILURE TO SIGN, DATE AND
RETURN THE WHITE CONSENT CARD IN A TIMELY MANNER WILL HAVE THE SAME EFFECT AS
VOTING AGAINST THE COMMITTEE'S PROPOSALS.
If you have any questions or require any assistance in executing your
consent, please call Innisfree M&A Incorporated at 1-888-750-5834 (toll-free).
<PAGE>
FORM OF CONSENT SOLICITED ON BEHALF OF
WISCONSIN CENTRAL SHAREHOLDERS COMMITTEE TO
MAXIMIZE VALUE
Unless otherwise specified below, the undersigned, a holder of shares
of common stock, par value $0.01 per share (the "Common Stock"), of Wisconsin
Central Transportation Corporation, a Delaware corporation (the "Company"), on
____________, 2000 (the "Record Date"), hereby consents pursuant to Section 228
of the Delaware General Corporation Law, with respect to all of the shares of
Common Stock which the undersigned is entitled to vote, to the taking of the
following actions (collectively, the "Proposals") without a meeting of the
shareholders of the Company:
IF YOU SIGN, DATE AND RETURN THIS CARD WITHOUT INDICATING YOUR VOTE ON
ONE OR MORE OF THE FOLLOWING PROPOSALS, YOU WILL BE DEEMED TO HAVE CONSENTED
WITH RESPECT TO SUCH PROPOSALS. IF YOU CONSENT OR ABSTAIN WITH RESPECT TO ONE OR
MORE OF THE FOLLOWING PROPOSALS, THIS CONSENT CARD WILL REVOKE ANY PREVIOUSLY
EXECUTED REVOCATION OF CONSENT WITH RESPECT TO SUCH PROPOSALS.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
The Wisconsin Central Shareholders Committee to Maximize Value (the
"Committee") recommends that you CONSENT to all of the following actions.
Proposal No. 1. - Elimination of Provision Establishing Classified
Board
Consents [_] Withholds Consent [_] Abstains [_]
Proposal No. 2. - Modification of the Provision for Filling Vacancies
Consents [_] Withholds Consent [_] Abstains [_]
Proposal No. 3. - Elimination of Provision Regarding the Removal of
Directors
Consents [_] Withholds Consent [_] Abstains [_]
Proposal No. 4. - Removal of Current Directors: Thomas E. Evans, Carl
Ferenbach, J. Reilly McCarren, Roland V. McPherson, Thomas F. Power,
Jr., Thomas W. Rissman, John W. Rowe, A. Francis Small and Robert H.
Wheeler.
Consents [_] Withholds Consent [_] Abstains [_]
(Instruction: To consent to the removal of certain of the current
directors of the Company, but not all of them, check the "CONSENTS" box above
and write the name of each person you do not wish removed in the following
space: ________________________________________________________).
Proposal No. 5. -- Election of Nominees: John W. Barriger, Edward A.
Burkhardt, Raymond C. Burton, Jr., Robert E. Dowdy, Aaron J. Gellman, Michael W.
Howell, Henry Posner III and Andy Sze.
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Consents [_] Withholds Consent [_] Abstains [_]
(Instruction: If you wish to consent to the election of certain of the
Nominees, but not all of them, check the "CONSENTS" box above and write the name
of each such person you do not wish elected in the following space:
________________________________________________________. If no box is marked
above with respect to this Proposal, the undersigned will be deemed to consent
to such Proposal, except that the undersigned will not be deemed to consent to
the election of any candidate whose name is written-in in the space provided
above.).
Proposal No. 6. -- Repeal of Bylaws Adopted Subsequent to May 20, 1999
Consents [_] Withholds Consent [_] Abstains [_]
Note: The effectiveness of each of Proposal Nos. 2, 3, 4 and 5 is
conditioned upon the approval of Proposal No. 1. In addition, the effectiveness
of Proposal No. 4 is conditioned upon at least one of the Nominees listed in
Proposal No. 5 being elected as a member of the Board.
Please sign, date and mail your consent today in the enclosed
postage-paid envelope.
Dated:
_______________________________
_______________________________
Signature
_______________________________
Signature if held jointly
_______________________________
Title(s)
Please sign your name above exactly as it appears on your stock
certificate(s)on the Record Date or on the label affixed hereto. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
If you have any questions or need assistance in voting your shares,
please contact Innisfree M&A Incorporated toll-free at 1-888-750-5834.
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October 19, 2000
Mr. Edward Burkhardt
Chairman
Wisconsin Central Shareholders Committee to Maximize Value
8600 West Bryn Mawr Avenue
Suite 500N
Chicago, IL 60631
RE: Wisconsin Central Transportation Corporation
Dear Ed:
We understand that the Wisconsin Central Shareholders Committee to
Maximize Value (the "Committee") together with other shareholders of Wisconsin
Central Transportation Corp. ("WCLX"), are proposing to lodge a proxy statement
with the Securities and Exchange Commission later this week which, if
successful, will result in the existing Board of WCLX being replaced. This will
arguably cause an event of default for WCLX's existing debt facility, which may
require the repayment of the facility.
Macquarie Bank Limited ("Macquarie") is keen to continue its ongoing
relationship with you and your fellow shareholders. In the recent past we have
assisted your company, Rail World, in providing financial advice and finance
arranging services for rail assets in Australasia and Europe. We would be
delighted to assist you to arrange a facility to replace the facility entered
into by WCLX on 14 August 2000, if required.
Macquarie is Australia's leading investment bank with assets in excess
of A$23 billion, earnings of A$210.2 million for the year ending 30 March 2000
and a return on equity of 28.1% for the year ending 30 March 2000. Macquarie is
experienced in arranging $US finance of this type. Macquarie has been named the
1999 No. 1 Australasian Infrastructure Financial Adviser by the international
publication Privatization International. Macquarie has a keen focus on
infrastructure with one of the few infrastructure investment funds worldwide.
Macquarie's infrastructure fund has a market capitalization in excess of A$1
billion.
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Based on our experience of working with Rail World, Macquarie is highly
confident that it can arrange a debt facility for WCLX to replace the existing
approximately US$480 million facility entered into on 14 August 2000.
Sincerely,
MACQUARIE BANK LIMITED
/s/ Murray Bleach
----------------------
Murray Bleach
Executive Director
