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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2 TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
Handy & Harman
(Name of Subject Company)
Handy & Harman
(Name of Person(s) Filing Statement)
Common Stock, par value $1.00 per share
(Title of Class of Securities)
410306104
(CUSIP Number of Class of Securities)
Paul E. Dixon, Esq.
Senior Vice President, General
Counsel and Secretary
Handy & Harman
250 Park Avenue
New York, New York 10177
(212) 661-2400
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
With a Copy to:
Milton G. Strom, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
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This Amendment supplements and amends as Amendment No. 2 the
Solicita tion/Recommendation Statement on Schedule 14D-9, originally
filed on December 24, 1997 (the "Schedule 14D-9"), by Handy & Harman, a
New York corporation ("Handy & Harman"), relating to the tender offer
(the "WHX Offer") by HN Acquisition Corp., a New York corporation (the
"Purchaser") and a wholly owned subsidiary of WHX Corporation, a Delaware
corporation ("Parent"), disclosed in a Tender Offer Statement on Schedule
14D-1, dated December 16, 1997, to purchase any and all outstanding
shares of common stock, par value $1.00 per share (the "Shares"), of
Handy & Harman, including the associated Common Stock Purchase Rights
issued pursuant to the Rights Agreement, dated as of January 26, 1989, as
amended on April 25, 1996 and October 22, 1996 (as so amended, the
"Rights Agreement"), of Handy & Harman at a price of $30.00 per Share,
net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated December 16, 1997, and the
related Letter of Transmittal. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
On December 26, 1997, William Steiner, individually and on behalf of
all other shareholders of Handy & Harman similarly situated (the
"Plaintiff"), filed a purported class action complaint (the "Complaint") in
the Supreme Court the of the State of New York for the County of New York
(the "Court") against Handy & Harman and each of Handy & Harman's directors
(the "Defendants"). The Complaint alleges, among other things, that the
Defendants have breached their fiduciary duties to Handy & Harman and its
shareholders by (i) not appointing an independent committee to evaluate the
WHX Offer and to explore business opportunities with WHX, (ii) refusing to
negotiate with WHX, (iii) not pursuing alternative transactions, and (iv)
amending Handy & Harman's By-laws to provide that the annual meeting of
shareholders shall be held on such date and at such time as Handy &
Harman's Board of Directors so determine. The Plaintiff seeks as relief,
among other things, (i) an order from the Court requiring that the
individual Defendants (A) undertake an independent evaluation of strategic
alternatives to maximize value for Handy & Harman's shareholders,(B) take
actions to ensure that no conflicts of interest exist between Defendants'
own interests and their fiduciary obligations to Handy & Harman's
shareholders and (C) utilize Handy & Harman's shareholder rights plan in a
manner that will maximize shareholder value; (ii) a declaration that the
December 23, 1997 amendment to Handy & Harman's By-laws is null and void;
and (iii) unspecified monetary damages and attorneys' fees and expenses.
The Defendants believe that the lawsuit is without merit and intend to
defend themselves vigorously. The foregoing description of the Complaint is
qualified in its entirety by reference to the full text of the Complaint
which is filed herewith as Exhibit 29 and is incorporated herein by
reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit
No. Description
29 Complaint filed in the Supreme Court of the State
of New York, New York County, in an action titled
William Steiner, individually and on behalf of all
others similarly situated v. Handy & Harman et al.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: January 5, 1998 HANDY & HARMAN
By: /s/ Paul E. Dixon
Paul E. Dixon
Senior Vice President, General
Counsel and Secretary
>
EXHIBIT INDEX
Exhibit
No. Description
29 Complaint filed in the Supreme Court of the State
of New York, New York County, in an action titled
William Steiner, individually and on behalf of all
others similarly situated v. Handy & Harman et al.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - x
WILLIAM STEINER, individually and on
behalf of all others similarly situated, Index No. 97124099
Plaintiff, FILING DATE:
v. Plaintiff designates
CLARENCE A. ABRAMSON, ROBERT E. NEW YORK COUNTY
CORNELIA, RICHARD N. DANIEL, GERALD G. as the Place of Trial
GARBACZ, FRANK E. GRZELECKI,
GOUVERNEUR M. NICHOLS, HERCULES P. The basis of the venue is the
SOTOS, ELLIOT J. SUSSMAN, ROGER E. defendants' place business
TETRAULT and HANDY & HARMAN
SUMMONS
Defendants,
- - - - - - - - - - - - - - - - - - - - - - x Plaintiffs reside in New York
TO THE ABOVE NAMED DEFENDANTS:
YOU ARE HEREBY SUMMONED to answer the complaint in this action and
to serve a copy of your answer, or, if the complaint is not served with
this summons, to serve a notice of appearance, on the Plaintiff's
Attorneys within 20 days after the service of this summons, exclusive of
the day of service (or within 30 days after the service is complete if
this summons is not personally delivered to you within the State of New
York); and in case of your failure to appear or answer, judgment will be
taken against you by default for the relief demanded in the complaint.
Dated: New York, New York
December 26, 1997
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
100 Park Avenue, 12th floor
New York, New York 10017
Telephone: (212) 907-0700
DEFENDANT'S ADDRESS:
CLARENCE A. ABRAMSON
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
ROBERT E. CORNELIA
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
RICHARD N. DANIEL
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
GERALD G. GARBACZ
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
FRANK E. GRZELECKI
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
GOUVERNEUR M. NICHOLS
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
HERCULES P. SOTOS
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
ELLIOT J. SUSSMAN
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
ROGER E. TETRAULT
c/o Handy & Harman
250 Park Avenue
New York, New York 10177
HANDY & HARMAN
250 Park Avenue
New York, New York 10177
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - x
WILLIAM STEINER, individually and on
behalf of all others similarly situated, Index No. 97124099
Plaintiff,
v.
CLARENCE A. ABRAMSON, ROBERT E.
CORNELIA, RICHARD N. DANIEL,
GERALD G. GARBACZ, FRANK E.
GRZELECKI, GOUVERNEUR M.
NICHOLS, HERCULES P. SOTOS, ELLIOT
J. SUSSMAN, ROGER E. TETRAULT and
HANDY & HARMAN,
Defendants,
- - - - - - - - - - - - - - - - - - - - x
CLASS ACTION COMPLAINT
Plaintiff alleges on information and belief, except as to
paragraph 2 which is alleged on knowledge, as follows:
1. Plaintiff brings this action as a class action on behalf
of himself and all other stockholders of Handy & Harman ("Handy" or the
"Company") who are similarly situated, against the Company and the
individual defendants, who are directors of the Company, in connection
with the offer by WHX Corporation ("WHX"), a share holder of the Company,
to acquire the remaining outstanding shares of Handy stock it does not
already own.
THE PARTIES
2. Plaintiff is the owner of shares of Handy common stock and
has owned such stock at all times material hereto.
3. (1) Defendant Handy is a corporation organized and existing
under the laws of the State of New York with principal executive offices
at 250 Park Avenue, New York, New York. The Company is a diversified
manufacturer providing engineered products, system components and
precious metal fabrication for industries worldwide. Handy has
approximately 12 million shares of common stock outstanding, of which
approximately 4.9% are held by WHX.
(2) Defendant Richard N. Daniel ("Daniel") is the
Chairman of the Board and Chief Executive Officer of Handy. In 1996,
Mason's compensation from Handy was at least $640,000, comprised of a
salary of $470,000 and a bonus of $170,000.
(3) Defendant Frank E. Grzelecki is Vice Chairman of
the Company, President and Chief Operating Officer. In 1996, Grzelecki's
compensation from Handy was at least $560,000 comprised of a salary of
$410,000 and a bonus of $150,000.
(4) Defendants Clarence A. Abramson, Robert E. Cornelia,
Gerald G. Garbacz, Gouverneur M. Nichols, Hercules P. Sotos, Elliot J.
Sussman and Roger E. Tetrault are directors of the Company.
4. The foregoing individual defendants referred to as P. P.
3(b)-(d) (collectively referred to herein as the "Individual
Defendants"), as directors of the Company, are in a fiduciary
relationship with plaintiff and the public stockholders of Handy and owe
plaintiff and the other Handy public stockholders the highest obligations
of good faith, fair dealing, due care, loyalty and full and candid
disclosure.
CLASS ACTION ALLEGATIONS
5. Plaintiff brings this action for declaratory, injunctive
and other relief on his own behalf and as a class action, pursuant to
Article 9 of the Civil Practice Laws and Rules and on behalf of all
common stockholders of Handy (except defendants herein and any person,
firm, trust, corporation or other entity related to or affiliated with
any of the defendants) or their successors in interests, who are being
deprived of the opportunity to maximize the value of their Handy shares
by the wrongful acts of the defendants as described herein (the "Class").
6. This action is properly maintainable as a class action for
the following reasons:
(1) The class of stockholders for whose benefit this action
is brought is so numerous that joinder of all Class members is
impracticable. There are approximately 2,816 Handy stockholders of record
and approximately 12 million shares of Handy common stock. Members of the
Class are scattered throughout the United States.
(2) There are questions of law and fact which are
common to members of the Class and which predominate over all questions
affecting only individual members, including whether the defendants have
breached the fiduciary duties owed by them to plaintiff and members of
the Class by reason of the acts described herein.
(3) The claims of plaintiff are typical of the claims
of the other members of the Class and plaintiff has no interests that are
adverse or antagonistic to the interests of the Class.
(4) Plaintiff is committed to the vigorous prosecution
of this action and has retained competent counsel experienced in
litigation of this nature. Accordingly, plaintiff is an adequate
representative of the Class and will fairly and adequately protect the
interests of the Class.
(5) The prosecution of separate actions by individual
members of the Class would create a risk of inconsistent or varying
adjudications with respect to individual members of the Class and
establish incompatible standards of conduct for the party opposing the
Class.
(6) Defendants have acted and are about to act on
grounds generally applicable to the Class, thereby making appropriate
final injunctive relief with respect to the Class as a whole.
FACTUAL BACKGROUND
7. WHX is a Delaware corporation with its principal executive
offices at 110 East 59th Street, New York, New York. WHX, through its
subsidiaries, is a vertically integrated manufacturer of predominantly
value-added flat rolled steel prod ucts. Its Wheeling-Pittsburgh Steel
unit is the fourth-largest United States steelmaker. WHX holds
approximately 4.9% of Handy's issued and outstanding common stock.
8. On or about December 15, 1997, Ronald LaBow, Chairman of
WHX sent a proposal letter to defendant Daniel advising him of WHX's
interest in buying Handy for $30.00 per share in cash (the "December 15
Letter"). His letter noted that the offering price represented a
significant premium to the then-current and historic market price. LaBow
further advised that the Offer is conditioned on upon, among other
things, approval by Handy's Board of Directors under the Shareholder
Rights Plan (the "Poison Pill") and the Business Combination Statute
(Section 912) of the New York law. He also informed Daniel that the Offer
will not be subject to financing. LaBow expressed to Daniel his hope that
WHX could have "an amicable and productive dialogue on the
merits of [the Offer] and the benefits which a combination of our
companies would bring to your senior management team, employees at large
and the company's shareholders."
9. On that same day, WHX issued a press release announcing an
all cash tender offer for Handy at $30.00 per share for a total of
approximately $360 million in cash and $182 million in assumed debt, for
a total value of $533 million (the "Offer"). The announced price
represented a 34.8% premium over the closing price on the preced ing
trading day.
10. On or about December 16, 1997, WHX filed with the United
States Securities Exchange Commission ("SEC") a Schedule 14D-1 setting
forth the details of its tender offer, which is set to expire on January
16, 1998. The WHX tender offer is conditioned on, among other things:
a. the rights under Handy's Rights Agreement (the "Poison Pill")
having been redeemed by Handy's Board of Directors or the rights
being invalid or otherwise inapplicable to the Offer;
b. Handy not having entered into any agreement or transaction with
any person or entity having the effect of impairing WHX's ability
to acquire Handy or otherwise diminishing the expected economic
value to WHX of the purchase of Handy; and
c. the provisions of Section 912 of the New York Business
Corporation Law have been complied with or are invalid or otherwise
inapplicable to the Offer.
11. On December 18, 1997, at a meeting among the Board of
Directors of Handy (participated in by all Individual Defendants), Handy
management, Goldman Sachs (Handy's financial advisor) and legal the Offer
was discussed.
12. On December 23, 1997, the Individual Defendants met again
with management and Handy's legal counsel and reviewed the Offer.
13. On December 23, 1997, Handy filed a Form 8-K with the SEC
announcing that, on December 23, 1997, Handy's Board approved an
amendment to Handy's By-laws. Article I, Section 1 of Handy's By-laws was
amended such that the first paragraph provides in its entirety as
follows:
The annual meeting of the shareholders of the corporation shall be
held annually, at such place and hour and on such date as the board
of directors may fix, for the election of directors and for the
transaction of such other business as may properly come before the
meeting.
Prior to that amendment, the first sentence of Article I, Section 1 of
Handy's By-laws provided:
The annual meeting of shareholders of the corporation shall be held
annually in the City of New York, at such place and at such hour as
the board of directors may fix, on the second Tuesday in May if not
a legal holiday and, if a legal holiday, then on the next secular
day following, for the election of director and for the transaction
of such other business as may properly come before the meeting.
The foregoing amendment was clearly made by Handy as an "eleventh hour"
and highly improper defensive measure in response to the Offer, and it
has a material and deleterious affect on class members' voting rights.
The amendment's intended effect is to further concentrate the Individual
Defendants' control over the timing and course of events affecting Handy
and to preserve their lucrative positions as directors, particularly at
this critical juncture when the Offer, which clearly will significantly
enhance shareholder value, remains outstanding. The amendment gives
Handy's Board greater opportunity to forestall Handy's shareholders'
exercise of their voting power with respect to material matters that the
Individual Defendants perceive as a threat to their position and standing
vis a vis the Company, including the Offer. By enacting the amendment to
the By-laws in response to the Offer, the Individual Defendants are
seeking to entrench themselves in control and are otherwise advancing
their own interests to the detriment of plaintiff and the Class. The
decision to make the By-law amendment exemplifies the Individual
Defendants' agenda, to wit, to stave off a change of control of Handy
that will result in their loss of continued enjoyment of the significant
benefits that inure to them by virtue of their director and/or executive
positions with Handy.
14. On December 24, 1997, Handy issued a press release and
filed with the SEC a Form 14D-9 setting forth its response to the Offer,
and stating Defendants determination that the $30 per share all cash
offer for all shares reflected in the Offer is inadequate and not in the
best interests of Handy's and its shareholders. Despite the fact that the
Individual Defendants Daniel and Grzelecki have a substantial financial
interest in successfully resisting the Offer, they apparently
participated in all discussions relating to the Offer; no special
committee of independent directors was established to separately review
the WHX Offer.
15. The actions taken by the defendants are in gross disregard
of the duties each of them owes to plaintiff and the other members of the
Class.
16. Defendants' fiduciary obligations require them to:
(1) undertake an appropriate evaluation of any bona fide
offers, and take appropriate steps to solicit all potential bids for the
Company or its assets or consider strategic alternatives;
(2) undertake an appropriate and independent evaluation
of the proposed Handy-WHX merger, including appointing a disinterested
committee so that the interests of Handy's public stockholders would be
protected; and
(3) adequately ensure that no conflicts of interest
exist between defendants' own interests and their fiduciary obligations
to the public stockholders of Handy.
17. In response to the Offer, Defendants failed to appoint an
independ ent committee to fairly and objectively evaluate the Offer and
to explore business opportunities with WHX.
18. Indeed, Defendants have apparently refused to either
negotiate with WHX, or even to explore with it the parameters of the
Offer to seek to maximize shareholder value, or attempt to pursue
alternative transactions. In fact, Defendants have deliberately acted to
thwart WHX from acquiring the Company.
19. Particularly, in an unreasonable response to the WHX
Offer, Defendants amended Handy's By-laws in a transparent attempt to
disenfranchise Handy shareholders with respect to their exercise of
voting power, and to entrench the Individual Defendants in control.
20. Plaintiff and other Class members are immediately
threatened by the acts and transactions complained of herein which have
caused and will cause irrepara ble injury to them.
21. The proposal reflected in WHX's Offer represents an
opportunity to effect a change of control of Handy, its business and
affairs. In a change of control transaction, the Individual Defendants
necessarily and inherently suffer from a conflict of interest between
their own personal desires to retain their offices in Handy, with the
emoluments and prestige which accompany those offices, and their
fiduciary obligation to maximize shareholder value in a change of control
transaction. Because of such conflict of interest, it is unlikely that
defendants will be able to represent the interests of Handy's public
stockholders with the impartiality that their fiduciary duties require,
nor will they be able to ensure that their conflicts of interest will be
resolved in the best interests of Handy's public stockholders.
22. By virtue of the acts and conduct alleged herein, the
Individual Defendants, who direct the actions of the Company, are
carrying out a preconceived plan and scheme to entrench themselves in
office and to protect and advance their own personal parochial interests
at the expense of Handy's public shareholders.
23. As a result of the foregoing, the Individual Defendants
have breached their fiduciary duties owed to Handy and its stockholders.
24. Unless enjoined by this Court, defendants will continue to
breach their fiduciary duties owed to plaintiff and the other members of
the Class to the irrepara ble harm of the Class, as aforesaid.
25. Plaintiff and the other members of the Class have no
adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(1) declaring this to be a proper class action;
(2) ordering the Individual Defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by
announcing their intention to:
(a) undertake an appropriate and independent evalua
tion of alternatives designed to maximize value for Handy's public
stockholders; and
(b) adequately ensure that no conflicts of interests
exist between defendants' own interests and their fiduciary obligations to
Handy's public stockholders or, if such conflicts exist, ensure that all
the conflicts would be resolved in the best interests of Handy's public
stockholders;
(3) ordering Defendants to utilize the Poison Pill in a
manner designed to maximize shareholder value;
(4) declaring the December 23, 1997 amendment to the
Bylaws to be null and void;
(5) ordering defendants, jointly and severally, to
account to plaintiff and the other members of the Class for all damages
suffered and to be suffered by them as a result of the wrongs complained
of herein;
(6) awarding plaintiff the costs and disbursements of
this action, including a reasonable allowance for plaintiff's attorney's
fees and experts' fees; and
(7) granting such other and further relief as this
Court may deem to be just and proper.
Dated: December 26, 1997
GOODKIND LABATON RUDOFF &
SUCHAROW, LLP
100 Park Avenue
New York, New York 10017-5563
(212) 907-0700
Attorneys for Plaintiff