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: - -------------------------------------------------------------------------------- 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 18, 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. By now, we hope you have received the proxy materials that we mailed seeking your support for the election of our director-nominee Glen Kassan at the UIC annual meeting scheduled for October 4, 2002. We are convinced that the full value of our investment will never be realized under the leadership of the current Board of Directors. We are offering shareholders the opportunity to add one more independent director to the Board. If Mr. Kassan is elected, he will join Warren Lichtenstein, CEO of Steel Partners who was elected to UIC's Board in 2001. BOTH MESSRS. KASSAN AND LICHTENSTEIN ARE FULLY COMMITTED TO PURSUING A COURSE OF ACTION THAT WILL MAXIMIZE SHAREHOLDER VALUE. We have launched our proxy contest only as a last resort because of what we believe to be the Board's ongoing lack of commitment to selling UIC. Despite the Board's public stance that they have asked their financial advisor to "intensify and accelerate" a sales process, no formalized mechanism for seeking potential acquirers has been implemented and the Board has not accepted Mr. Lichtenstein's repeated offers to initiate a formalized sales process. MOREOVER, THE BOARD HAS POINTEDLY EXCLUDED MR. LICHTENSTEIN FROM DISCUSSIONS AND MEETINGS REGARDING THE SALE OF UIC. Mr. Lichtenstein has urged the Board to adopt and publicly announce a formal timetable and responsibility schedule to organize a prudent businesslike sales process. Unfortunately, the Board has elected not to heed Mr. Lichtenstein's advice. Help us to convince the Board to publicly commit to the type of sales process outlined below: Weeks 1-2 Distribute new confidentiality agreements and distribute revised Confidential Information Memoranda to interested parties Week 3 Receive written indications of interest. Board meeting to discuss indications of interest. Invite the highest indications to conduct due diligence Weeks 4-5 Potential purchasers conduct due diligence Weeks 6-7 Receive final bids, Board meets to analyze and discuss final bids and reach determinations. Notify three highest bidders and schedule additional due diligence Weeks 8-12 Draft and review acquisition and tender offer documentation and make necessary filings, and commence tender offer Week 13 Closing of transaction In the event the Board determines not to proceed with the sale of the entire company, then specific divisions could be sold, the New York office should be closed and the contemplated transaction should be closed within the above scheduled timeline. In our opinion, the Board needs to develop a formalized sales process, similar to the one detailed above, and have it published. ONLY BY HAVING A PUBLIC SALES PROCESS CAN WE BE ASSURED THAT UIC IS NOT DEALING WITH SELECTIVE PURCHASERS AND THAT THEY WILL PERFORM A PUBLIC AUCTION. Ask yourself, by not pursuing a full auction, has the Board discouraged potential purchasers? By not announcing a full auction, is the Board doing everything it can to maximize shareholder value? LET'S SET THE RECORD STRAIGHT In addition to providing our fellow shareholders with the reasons for our proxy fight and allowing our fellow shareholders to see how we would initiate a formalized sales process, we are also writing to you to clarify some points that UIC made about Steel Partners, Warren Lichtenstein and Glen Kassan in a recent letter. Steel Partners is an investment firm that focuses on undervalued companies that it believes are out of favor with Wall Street or followed by few analysts, but offer long-term growth potential. We are not seeking control of UIC, and if Glen Kassan is elected, he and Mr. Lichtenstein will constitute only a minority on the UIC Board. We strongly believe that there is no need for more than one management director on a six member Board. Currently the Board is comprised of six members, three of whom are insiders. WE DON'T BELIEVE THAT HAVING 50% OF THE BOARD'S SEATS HELD BY COMPANY INSIDERS IS GOOD CORPORATE GOVERNANCE. Messrs. Kassan and Lichtenstein intend to be constructive, independent participants in the deliberations of the Board. As seasoned business people, Messrs. Kassan and Lichtenstein will assist the Board by, among other things, designing and implementing a formal sales process and reducing unnecessary expenses. However, there can be no assurance that the election of Mr. Kassan will maximize or otherwise enhance shareholder value. Steel Partners II, L.P. has made numerous investments in addition to the few described by UIC. Unfortunately, UIC's management failed to mention many of the successful transactions Steel Partners has completed including the following public company investments: o Medical Imaging Centers of America (OTC Bulletin Board:MIGA) -- Steel Partners believed MIGA was undervalued in the market and acquired approximately 20% of its shares and commenced a proxy fight. Pursuant to an agreement obtained by Steel Partners, MIGA agreed to effect a prompt sale of the company and did so for $11.75 per share in cash, AN INCREASE OF 169% from the date that Steel Partners first publicly disclosed its position in its Schedule 13D filing. o Aydin Corporation (NYSE:AYD) -- Steel Partners believed AYD was undervalued in the market and acquired approximately 10% of its shares. Steel Partners lost confidence in the company's management after several years and successfully completed a consent solicitation to gain majority representation on the board of directors. The new board of directors restructured AYD and was responsible for selling AYD at $13.50 per share in cash (a 39% premium to market), AN INCREASE OF 74% from the date that Steel Partners first publicly disclosed its position in its Schedule 13D filing. o Tech-Sym Corporation (NYSE:TSY) -- Steel Partners believed TSY was undervalued in the market and acquired approximately 10% of its shares. Two of Steel Partners' nominees were elected to the board of directors. The new board restructured TSY and successfully sold the company for $30 per share in cash, AN INCREASE OF 36% from the date that Steel Partners first publicly disclosed its position in its Schedule 13D filing. o PLM International, Inc. (AMEX: PLM) -- Steel Partners believed PLM was undervalued in the market and acquired approximately 18% of its shares. Two of Steel Partners' nominees were elected to the board of directors and were instrumental in prompting the September 2000 sale of a subsidiary, which resulted in a $5.00 per share cash dividend. Steel Partners' nominees were also instrumental in closing the merger of PLM in February 2001 that yielded shareholders an additional $3.46 per share in cash. From the date that Steel Partners first publicly disclosed its interest in PLM in its Schedule 13D filing to the consummation of the merger, PLM SHAREHOLDERS REALIZED A 54% INCREASE in their investment. You may have recently received a letter from UIC seeking to discredit Steel Partners, Warren Lichtenstein and Glen Kassan and sway your vote by presenting what we believe to be a misleadingly selective account of our past investment activities. We question why UIC's management is attacking Steel Partners, Warren Lichtenstein and Glen Kassan in this manner. WHY ARE THEY NOT FOCUSING ON THE IMPORTANT ISSUE -- UIC'S SALES PROCESS AND MAXIMIZING SHAREHOLDER VALUE? A sizeable part of our business involves investments in undervalued companies. Over the long term, we believe that we have achieved superior returns overall on our investments. While UIC's management has focused on a few instances where, on the surface, Steel Partners' returns on its investment may not have been fully realized, our track record is much better than they would have you believe. WE BELIEVE THAT OUR INVESTMENTS DESCRIBED ABOVE SUPPORT OUR CONVICTION THAT WE CAN ACHIEVE MAXIMUM VALUE FOR ALL UIC SHAREHOLDERS BY UNDERTAKING THE SALES PROCESS. We have invested in UIC in order to make a profit and we presume you did as well. We believe that with the election of Glen Kassan, who along with Warren Lichtenstein is publicly committed to a prompt sale of UIC, we can achieve our goal of maximizing shareholder value. We urge you to support our efforts by signing, dating and returning your GOLD proxy card today. You need only ask yourself: Would it not be of substantial value to UIC to have two shareholder representatives on the Board, directors who are experienced business people, who have an interest in the company worth more than $25 million, who have a proven track record of creating shareholder value and whose only interest is to MAXIMIZE the value of their investment for themselves and other UIC shareholders? VOTE YOUR GOLD PROXY CARD TODAY VOTE THE GOLD PROXY TODAY. Do not return any white proxy sent to you by UIC management. If you have already returned management's white proxy card, you may revoke that proxy by signing, dating and returning the enclosed GOLD proxy card. The latest dated proxy card is the only one that counts. If you have any questions or need assistance in voting your shares, please call 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. Logo] 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: 18 Sep 02, 12:00am