<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. 3)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-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:
_________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_________________________________________________________________
(3) Per unit price or underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
_________________________________________________________________
(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>
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 November 13, 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 seven 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
October 23, 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, as of the Record Date there
were 46,541,357 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 December 15, 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" in recognition of his "outstanding contribution to the
regional railroad renaissance in the United States." 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, the Company's share price has declined by
43%. During the nine-month period ended September 30, 2000, the Company's
reported net income, excluding special items, decreased to $.87 per diluted
share from the $.93 per diluted share reported for the same period last year.
The Company experienced this decrease in net income per share despite its
repurchase this year of almost 10% of its outstanding shares.
Under Mr. Burkhardt's leadership as Chief Executive Officer, Wisconsin
Central experienced strong growth in revenues, 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:
<TABLE>
<CAPTION>
Cumulative
Year ended December 31, Increase
_____________________________________________________________________________________ __________
(in millions, except per share data)
1990(1) 1991 1992 1993 1994 1995 1996 1997 1998
--------- --------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $113,289 113,657 124,364 151,691 211,139 264,427 275,438 333.5 344.1 203.1%
Net Income $ 7,546 8,251 10,881 15,371 36,695 42,509 48,432 77,462 76,294 917.3%
Earnings Per $ .32 .25 .28 .31 .74 .85 .96 1.52 1.49 465.6%
Share(2)
Share Price(3) -- $ 3.33 6.00 9.96 13.75 21.92 39.63 23.38 17.19 525.1%
______________________
</TABLE>
(1) As reported in the Company's Annual Report on Form 10-K for the year
ended December 31, 1991. All other information is derived from the
Company's Annual Report on Form 10-K for the applicable year.
(2) As adjusted for stock splits.
<PAGE>
(3) The share prices contained in the table are the reported closing
prices for the Company's Common Stock on the last trading day of the applicable
year, as adjusted for stock splits.
During this period, the Company's revenues 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.
Since Mr. Burkhardt's departure, performance measures have been flat or
have deteriorated, as indicated in the following table:
<TABLE>
<CAPTION>
Quarter ended Quarter ended Increase
June 30, 1999(1) September 30, 2000(2) (Decrease)
---------------- --------------------- ----------
<S> <C> <C> <C>
Revenues (millions) $ 90.8 $ 96.3 6.0%
Net Income (millions) $ 18.9 $ 14.5 (23.3)%
Earnings per share $ 0.37 $ 0.30 (18.9)%
Share Price $18.88 $10.56 (44.1)%
-----------------
</TABLE>
(1) As reported in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999.
(2) As reported by the Company in a press release dated October 25, 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
$10.81 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 what the
Committee believes 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 revenues and net income. For example, the Company's revenues
increase during each of years during the period from 1990 through 1998 and
compounded at an average annual rate of 25.5% during this period. In addition,
the Company's profits during this period increased at an average compound rate
of 114.7%. In contrast, the Company's revenues have increased by only 3.78%
during the 12 months ended June 30, 2000, while the Company's net income
declined by 26.8% during the same
<PAGE>
period. The Committee believes the market is willing to pay for growth, but
conversely will heavily discount the share price of a company that cannot
produce growth. In the Committee's view, this is what we have seen at Wisconsin
Central in the last year.
The second factor, in the Committee's opinion, 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 recent poor
operational and financial performance of the Company's overseas investments. For
example, during the Company's third quarter ended September 30, 2000, the
Company's equity in the net income of its international affiliates, excluding
special items, was $1.5 million, compared with $5.6 million for the third
quarter in 1999. In addition, despite the problems affecting the Company's
existing international businesses, the Committee is concerned that the Company
continues to expend significant funds in pursuing its international acquisition
strategy. The costs incurred by the Company in connection with bidding on an
international privatization project can be substantial, with no guaranty that
the Company's bid will be successful. In fact, the Committee believes the
Company has been unsuccessful in its last three attempts to bid on international
projects.
The third factor is what the Committee views as 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
Surface Transportation Board's moratorium on merger transactions involving Class
I railroads is scheduled to expire in June 2001 pending adoption of new merger
rules by the Board. Based on the provisions contained in the Board's current
proposed rules and the announced timetable for adopting final rules, the
Committee believes that a merger or similar transaction involving the Company
will not be significantly impacted by regulatory restrictions.
In the Committee's opinion, the Company's current Board of Directors and
management have demonstrated that they are unwilling to consider a merger or
similar transaction designed to maximize shareholder value. In fact, the
Committee is aware that the Company's current Chief Executive Officer was
approached by one of the major U.S. railroads late last year regarding a
possible acquisition transaction, but that the Company refused to participate in
discussions with this potential purchaser.
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 been established to develop and implement a program
designed to maximize shareholder value by returning the Company to a growth
management philosophy, improving operational performance and disposing of the
Company's under performing 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. Each nominee proposed by the
Committee for election to the Company's Board of Directors is pledged to support
the implementation of this program.
<PAGE>
The Committee's program includes the following measures:
. Improve the Company's domestic operations by increasing revenues and
expanding market share, improving competitiveness and customer service, and
restoring employee morale and productivity to historic levels. The
Committee intends to implement a growth management philosophy strongly
focused on meeting customer service and price requirements with the goal of
increasing revenues and expanding market share. Specifically, the Committee
believes that the Company should take steps to eliminate delays in rate
quotations and improve other customer services and to become more proactive
in the development of customer alliances. In the Committee's view, the
Company is currently focused on "yield management" by attempting to
increase profits margins. While this approach is generally commendable,
the Committee believes it often clashes with the objective of gaining
market share and frequently results instead in a loss of business.
. Discontinue efforts to invest in international privatizations, including
the pending acquisition of rail operations in Jordan. The Committee
believes these privatization contests are risky and provide low returns.
The Committee also believes the performance of these investments 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. During the
Company's third quarter ended September 30, 2000, the Company's equity in
the net income of its international affiliates, excluding special items,
was $1.5 million, compared with $5.6 million for the third quarter in 1999.
All of the Company's international investments are minority positions in
under performing companies. As currently structured, with management
controlled by venture capital funds, the Committee believes 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.
In the Committee's opinion, regional railroads such as the Company are
likely to face additional competition in the future as the mega-rail
systems rationalize their post-merger operations and begin to benefit from
increased economies of scale. At the same time, the Committee believes that
the well-managed regional railroads should become attractive merger
candidates when the larger railways again begin to expand their businesses
through acquisitions. The Committee believes that substantial operational
and revenue synergies should result from an acquisition of the Company by
one of these railways. The Committees director nominees, if elected, are
committed to providing the Company's shareholders with an opportunity to
vote on any merger transaction of this type.
<PAGE>
. 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.
Each of the Committee's proposals has been developed with the goal of
maximizing value for Wisconsin Central's shareholders. There can of course be
no assurance that the Committee's nominees, if elected, will be successful in
maximizing shareholder value.
THE COMMITTEE'S DIRECTOR NOMINEES
The Committee has proposed seven 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 each of the Nominees has been
furnished by the respective Nominees.
<TABLE>
<CAPTION>
Present Principal Occupation,
Five-Year Employment History
Name, Age and Business Address And Directorships
------------------------------------------- --------------------------------------------
<S> <C>
John W. Barriger (73) Vice President, The Derson Group Ltd., a
155 Melrose Avenue personnel consulting firm, since 1990.
Kenilworth, Illinois 60043 Assistant to Trustee, Chicago, 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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
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. 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 Administration, Yale
University (1960).
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,
Massachusetts Institute of Technology
(1968).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Michael W. Howell (53) Chairman, FPT Group Limited, a distributor
Smeaton House of power transmission equipment, since
Dalkeith, Scotland 1998. Director, Arlington Capital
EH22 2NJ Management (CI) Limited, since 1991.
Director, Fenner plc, 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
Pittsburgh, Pennsylvania 15220 Ferrovias 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, a
8412 Evergreen Lane private investment fund, since 1999.
Darien, Illinois 60561 President and Chief Executive Officer,
Clipper Group, a third-party multi-modal
transportation and logistics provider, 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).
</TABLE>
<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 3,000 *
Edward A. Burkhardt 3,510,004(4) 7.54%
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 3,539,254 7.60%
----------------
* 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 46,541,357 shares of Common Stock outstanding as of
the Record Date, as reported by the Company.
(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 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,
<PAGE>
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."
The Committee believes that the elimination of the Company's classified
Board of Directors, which would result in the annual election of all directors,
is desirable and in the best interests of the Company and its shareholders. In
reaching this conclusion, the Committee considered the possibility that the
elimination of the Company's classified Board could have certain potential
adverse effects. The requirement that all directors stand for election annually
could result in the simultaneous removal from office of all of the Company's
directors, which could lead to a loss of continuity in the governance and
corporate policies of the Company. The existence of the Company's classified
Board of Directors may also have the effect of delaying or preventing the
acquisition of the Company without the approval of the Company's Board of
Directors. This effect could deter or discourage parties considering an
unsolicited offer or proposal to acquire the Company.
After considering these potential adverse consequences, the Committee
determined that the benefits it expects will be derived from the elimination of
the Company's classified Board are likely to outweigh the potential risks. The
Committee believes that the requirement that each director stand for election
annually will serve to increase the accountability of directors to the Company's
shareholders. The Committee also believes that the fact that the nominees for
director proposed by the Committee include the former Chairman and Chief
Executive Officer of the Company and other individuals with substantial
experience in the railroad and transportation industries reduces the risk of a
loss in continuity resulting from the replacement of the Company's current
directors. The Committee further determined that the risks to the Company
arising from the possibility of an unsolicited acquisition did not justify the
continuation of a classified Board and that the Board would have other effective
means available to it to deter any unfair or coercive acquisition proposal.
<PAGE>
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.
The Committee believes that the elimination of Section 3.13 of the Amended
Bylaws is desirable and in the best interests of the Company and its
shareholders. In reaching this conclusion, the Committee considered the
possibility that the elimination of Section 3.13 could have certain potential
adverse effects. The ability of the Company's shareholders to remove directors
without cause could result in the simultaneous removal from office of all of the
Company's directors, which could lead to a loss of continuity in the governance
and corporate policies of the Company. The existence of Section 3.13, together
with Section 3.2 of the Amended Bylaws establishing the Company's classified
Board of Directors, may also have the effect of delaying or preventing the
acquisition of the Company without the approval of the Company's Board of
Directors. This effect could deter or discourage parties considering an
unsolicited offer or proposal to acquire the Company.
After considering these potential adverse consequences, the Committee
determined that the benefits it expects will be derived from the elimination of
Section 3.13 of the Amended Bylaws are likely to outweigh the potential risks.
The benefits considered by the Committee with respect to the elimination of
Section 3.13 are substantially the same as the benefits previously described in
"The Committee's Proposals - Proposal No.1 - Elimination of Provision
Establishing Classified Board."
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 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).
<PAGE>
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.
The Company's Amended Bylaws permit the Board of Directors, by resolution
adopted by at least two-thirds of the entire Board, to decrease the number of
directors constituting the Board of Directors to not less than four directors.
If elected, the Nominees intend to adopt a resolution decreasing the number of
directors constituting the Board to seven in order to reflect the number of
directors then in office.
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 adopted since the adoption of the Amended Bylaws on May 20, 1999.
Proposal No. 6 is therefore primarily intended to repeal any amendments to the
Amended Bylaws adopted by the Company's current Board of Directors without
shareholder approval after the date of this Consent Statement and at or prior to
the time the Committee's proposals become effective. Proposal No.6 would have
the effect of repealing all such amendments, including any amendments that
would have the effect preventing or impeding the effectiveness of the
Committee's proposals. The Committee has no knowledge of any plan or intention
of the Company's current Board of Directors to adopt any amendment to the
Amended Bylaws.
<PAGE>
_______________
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.
The Company has announced that its Board of Directors has established
October 23, 2000 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 "WITHHOLDS CONSENT"
with respect to a Proposal, will have the same effect as voting against the
Proposal.
<PAGE>
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 or withhold consent to
each Proposal by marking the "CONSENTS" or "WITHHOLDS CONSENT" 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 one or more Proposals, the shareholder will thereby consent to all
unmarked Proposals in their 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 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
<PAGE>
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 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, 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 MBL an additional fee equal
<PAGE>
to 0.5% of the amount of any replacement financing arranged by MBL. If MBL is
requested to underwrite a portion of any required replacement financing, the
Committee has agreed to negotiate a separate fee payable to MBL based on market
rates in effect at the time of the transaction. 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.
MBL has previously assisted Rail World, Inc., a private company owned by
Mr. Burkhardt, in the provision of debt and equity financing for proposed
acquisition transactions.
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 or to arrange for or underwrite such financing. 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, as of the Record Date there
were 46,541,357 shares of Common Stock outstanding. 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 Percentage
Shareholder Owned(1) Ownership
----------- -------- ---------
Southeastern Asset Management, Inc. (2) 7,088,500 15.2%
State of Wisconsin Investment Board (3) 4,045,000 8.7
Cascade Investment LLC (4) 3,600,300 7.7
Edward A. Burkhardt (5) 3,510,004 7.5
Tweedy, Browne & Company LLC (6) 3,099,211 6.7
Capital Research and Management Company (7) 2,525,000 5.4
__________
(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
<PAGE>
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 13D/A filed as of October 30, 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 451,500
of these shares, sole dispositive power with respect to 692,500 of these
shares, shared voting and shared dispositive power with respect to
6,396,000 of these shares, and no voting power with respect to 241,000 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 845,200 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 Form 13F filed as of July 20, 2000 with the Securities and
Exchange Commission by the State of Wisconsin Investment Board (the
"Investment Board"). The address of Investment Board is P.O. Box 7842,
Madison, Wisconsin 53707.
(4) 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.
(5) 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
(6) 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 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.
(7) According to a Form 13F filed as of August 15, 2000 and a Schedule 13G
filed as of February 2, 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.
<PAGE>
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, 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 3,539,254 shares of the Company's Common Stock,
representing approximately 7.6% 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 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.
<PAGE>
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:
<TABLE>
<CAPTION>
Member Date Transaction Type Number of Shares Price Per Share
------ ---- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
John W. 10/9/00 Purchase 1,000 $10.18
Barriger 10/20/00 Purchase 2,000 10.69
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
</TABLE>
_____________
(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.
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
<PAGE>
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.
The director nominees proposed by the Committee have agreed to elect Mr.
Burkhardt as the Company's Chief Executive Officer if they are elected as
directors of the Company pursuant to this Consent Solicitation. In his capacity
as Chief Executive Officer, Mr. Burkhardt is expected to receive compensation
from the Company in the form of salary, bonuses, employee health and welfare
benefits, and stock options or similar rights. The specific amount and
composition of Mr. Burkhardt's compensation has not been agreed by the members
of the Committee. Mr. Burkhardt's compensation is expected, however, to be
substantially comparable to the compensation provided by the Company to its
current Chief Executive Officer.
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
<PAGE>
railway operations. The aggregate amount of the payments made by Clipper Express
Co. to the Company during 1999 did not exceed $500,000.
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, telegram,
newspaper and magazine 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
<PAGE>
with respect to this Consent Solicitation. Mr. Burkhardt and the Committee
intend to seek reimbursement of their expenses related to this Consent
Solicitation from 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
November 13, 2000
<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
October 23, 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 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.
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 [_]
Proposal No. 2. -- Modification of the Provision for Filling Vacancies
Consents [_] Withholds Consent [_]
Proposal No. 3. -- Elimination of Provision Regarding the Removal of
Directors
Consents [_] Withholds Consent [_]
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 [_]
(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:
________________________________________________________).
<PAGE>
Proposal No. 5. -- Election of Nominees: John W. Barriger, Edward A.
Burkhardt, Robert E. Dowdy, Aaron J. Gellman, Michael W. Howell, Henry Posner
III and Andy Sze.
Consents [_] Withholds Consent [_]
(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 [_]
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.
<PAGE>
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.
<PAGE>
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
<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 December 15, 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).
________________________________________________________________________________
