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: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) / / Definitive Proxy Statement /x/ Definitive Additional Materials / / Soliciting Material Under Rule 14a-12 UNITED INDUSTRIAL CORPORATION - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) STEEL PARTNERS II, L.P. WARREN G. LICHTENSTEIN GLEN M. KASSAN JAMES R. HENDERSON - -------------------------------------------------------------------------------- (Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): /x/ No fee required. / / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: - -------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: - --------------------------------------------------------------------------------(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): - -------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - -------------------------------------------------------------------------------- (5) Total fee paid: - -------------------------------------------------------------------------------- / / Fee paid previously with preliminary materials: - -------------------------------------------------------------------------------- / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: - -------------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: - -------------------------------------------------------------------------------- (3) Filing Party: - -------------------------------------------------------------------------------- (4) Date Filed: - -------------------------------------------------------------------------------- -2- STEEL PARTNERS II, L.P. 150 EAST 52ND STREET 21ST FLOOR NEW YORK, NEW YORK 10022 ------------ TEL (212) 813-1500 FAX (212) 813-2198 September 10, 2002 DEAR FELLOW SHAREHOLDER: We are the owners of 1,310,250 shares of United Industrial Corporation ("UIC") common stock, representing approximately 10% of the outstanding shares. Currently, we have one seat on UIC's six member Board held by Warren Lichtenstein, Chief Executive Officer of Steel Partners, who was elected to the Board in 2001. As a director, Mr. Lichtenstein has been an advocate for good corporate governance and an ongoing supporter of a sale of UIC. For the reasons set forth herein, WE BELIEVE THAT THE FULL VALUE OF OUR INVESTMENT WILL NEVER BE REALIZED UNDER THE EXISTING BOARD. We are committed to creating a more independent Board with a clear and focused mission to maximize shareholder value. We are asking UIC shareholders to elect our director-nominee, Glen Kassan, under cumulative voting to one of the two seats up for election at UIC's annual meeting of shareholders scheduled for October 4, 2002. We are asking you to elect our nominee in order to: o Send a strong message to the Board to actively pursue the prompt sale of UIC; o Elect a representative with strong ownership interests and orientation, who is committed to maximizing value for all shareholders; o Urge the Board to take steps necessary to eliminate the classified Board and having all directors stand for election each year; o Urge the Board to take the steps necessary to pursue all avenues to enhance shareholder value and reduce unnecessary expenses. There can be no assurance that the foregoing actions will be implemented if our nominee is elected or that the election of our nominee will maximize or otherwise enhance shareholder value. WE BELIEVE THAT A PROMPT SALE OF THE COMPANY IS IN ALL SHAREHOLDERS' BEST INTERESTS We believe, as stated many times to UIC's Board and management team, THAT A SALE OF ALL OR A SUBSTANTIAL PORTION OF UIC WOULD LEAD TO THE MAXIMIZATION OF VALUE FOR ALL UIC'S SHAREHOLDERS. We believe that UIC is an attractive acquisition candidate for potential purchasers and, with the assistance of an investment banking firm, can be matched with various aerospace and defense corporations that would be willing to acquire UIC in whole or in parts. Toward that end, we also actively recommended the recent divestiture of UIC's transportation overhaul business. We feel strongly that the sale of the non-core transportation and overhaul business will facilitate the sale of UIC by making it a more attractive acquisition candidate for potential purchasers. IN OUR OPINION, MANAGEMENT HAS WASTED VALUABLE TIME IN IMPLEMENTING A FORMAL SALES PROCESS. Since prior to Mr. Lichtenstein's appointment to the UIC Board in May 2001, he has continuously urged UIC to divest all or substantially all of its business and assets in order to maximize shareholder value. On April 8, 2002, UIC announced that they had been working with Wachovia Securities for over a year to evaluate alternatives to enhance shareholder value, including a sale of UIC. To our knowledge, the Board has still not conducted a formal auction process to solicit buyers. WHAT ADVANCEMENTS HAS THE BOARD MADE IN OVER A YEAR TOWARDS THE SALES PROCESS? In our opinion, UIC hired a financial advisor because Mr. Lichtenstein urged them to do so. In our opinion, UIC sold its non-core transportation overhaul business because Mr. Lichtenstein urged them to do so. ASK YOURSELF, WHERE WOULD THE COMPANY BE IF MR. LICHTENSTEIN HAD NOT ADVISED AND URGED THE COMPANY TO TAKE THESE IMPORTANT FIRST STEPS? Additionally, on August 26, 2002, less than a week after we filed our preliminary proxy statement with respect to the annual meeting, UIC announced that it has accelerated the process under which it is seeking a potential buyer. Based on the timing of UIC's press releases with respect to the sales process and the extended process under which the UIC Board has purported to explore a possible sale, we are concerned that the UIC Board may be delaying the sales process and is not moving quickly enough to enhance shareholder value. WE BELIEVE THAT THE BOARD SHOULD ACT RESPONSIBLY TO SHAREHOLDERS WE FURTHER BELIEVE THAT UIC'S BOARD SHOULD ACT RESPONSIBLY and respond to the sweeping legislation being enacted by Congress and rules being adopted by the New York Stock Exchange, which are prompting greater accountability to shareholders. Specifically, we urge UIC to take action to cause its Board to be composed of a majority of clearly independent directors - we believe that Harold Gelb, Richard Erkeneff and Susan Fein Zawel are not independent directors. The election of our nominee will cause a majority of the UIC Board to be independent only if he is elected to replace Richard Erkeneff, an interested director, increasing the total number of independent directors from three to four. If our nominee is elected to replace Paul Hoeper, who is already an independent director, the number of independent directors will remain at three and the UIC Board will not be composed of a majority of independent directors. WE STRONGLY BELIEVE THAT THERE IS NO NEED FOR MORE THAN ONE MANAGEMENT DIRECTOR ON A SIX MEMBER BOARD. In addition, we recommend that as soon as practicable UIC seek shareholder approval to REMOVE THE CLASSIFIED BOARD, which will allow shareholders to vote on all directors at every annual meeting of shareholders. WE BELIEVE THAT THE BOARD SHOULD REDUCE UNNECESSARY EXPENSES WE ALSO BELIEVE THAT THE BOARD SHOULD PURSUE ALL AVENUES TO ENHANCE SHAREHOLDER VALUE AND REDUCE UNNECESSARY EXPENSES (AND MAXIMIZE UIC'S CASH POSITION), by, among other things, closing the New York office, which we believe is a waste of the company's money. Currently, only Harold Gelb, Susan Zawel, a tax accountant and a skeletal support staff work at the New York office. We believe that most of UIC's business operations are conducted at the AAI facility in Huntsville, Maryland where all of UIC's key employees report for work, and accordingly the New York office is an unnecessary drain on cash and should be closed and consolidated with the AAI facility. IT'S TIME FOR A CHANGE AT UIC As the second largest shareholder of UIC, we believe that our interests are clearly aligned with yours. We wish to see a prompt sale of the company. If our nominee is elected, both he and Mr. Lichtenstein will work to make that happen in the most timely, effective and efficient manner possible. However, there can be no assurance that the election of our nominee will result in a sale of the company or otherwise enhance shareholder value. We are asking you to elect our nominee in opposition to two incumbent nominees whose terms expire at the annual meeting. Your GOLD proxy card may only be voted for our nominee and does not confer voting power with respect to the remaining directorship. We urge you to support our efforts by signing, dating and returning your GOLD proxy card today. If you have already voted for the incumbent management slate, you have every right to change your vote by signing and returning a later dated GOLD proxy. If you have any questions or require assistance with your vote, please contact our proxy solicitor MacKenzie Partners, Inc. at (800) 322-2885 (toll free) or (212) 929-5500 (call collect). Thank you for your support, /s/ Warren Lichtenstein WARREN LICHTENSTEIN On behalf of Steel Partners II, L.P. MACKENZIE PARTNERS, INC. 105 Madison Avenue New York, New York 10016 (212) 929-5500 (call collect) E-mail: proxy@mackenziepartners.com or CALL TOLL FREE (800) 322-2885
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DFAN14A Filing
Steel Partners Ii Inactive DFAN14AAdditional proxy materials by non-management
Filed: 11 Sep 02, 12:00am