SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
Harrah's Entertainment, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant): Hotel Employees & Restaurant Employees
International Union
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SHAREHOLDER PROXY CONTEST INFORMATION
Date first mailed: February __, 1996
HERE International Union
Research Dept.
1219 28th Street, N.W.
Washington, D.C. 20007
tel. (202) 393-4373
fax (202) 333-6049
PLEASE VOTE FOR THE SHAREHOLDER PROPOSAL AGAINST MANAGEMENT'S
POISON PILL
at Harrah's Entertainment Inc.
Annual Stockholders Meeting
Harrah's Casino, 771 Harrah's Blvd., Atlantic City, N.J.
April 25, 1997 11:00 a.m.
Dear Fellow Harrah's Shareholder:
This is to alert you to an upcoming vote on our shareholder
proposal against the Company's poison pill (which the board of
directors adopted without shareholder approval).
We will make the following proposal at the shareholders
meeting:
RESOLVED: The Shareholders of Harrah's Entertainment, Inc.
("Company") hereby exercise their right to amend the bylaws
of the Company to add the following Section 7 to Article V:
Section 7 Poison Pills. The Company shall not adopt or
maintain a "poison pill", shareholder rights plan, rights
agreement or any other form of "poison pill" which is
designed to or has the effect of making acquisition of large
holdings of the Company's shares of stock more difficult or
expensive (such as the July 19th, 1996 "Rights Agreement"),
unless such plan is first approved by A MAJORITY shareholder
vote. The Company shall redeem any such rights now in
effect. The affirmative vote of a majority of shares voted
shall suffice to approve such a plan. This Article shall be
effective immediately and automatically as of the date it is
approved by affirmative vote of the holders of a majority of
the shares, present in person or by proxy at a regular or
special meeting of shareholders. Notwithstanding any
provision of these bylaws, this Article may not be amended,
altered, deleted or modified in any way by the Board of
Directors without prior shareholder approval.
In July, 1996, the Company's Board of Directors adopted a so-
called "shareholder rights plan" which replaced an existing
rights plan that expired on October 5, 1996.<FN1> These rights
are a type of corporate anti-takeover device commonly known as a
"poison pill."
Under its terms, one right was declared for each common share
outstanding. Each right entitles shareholders to purchase, under
certain conditions, one two-hundredth of a share of the Company's
Series A Special Stock of the Company at a purchase price of
$130. The rights will be exercisable only if a person or group
acquires beneficial ownership of 15% or more of the Company's
outstanding common stock or has announced or has commenced a
tender offer upon consummation of which such person or group
would own 15% or more of the Company's outstanding common stock.
Rights held by the 15% holder will become void. The Rights will
expire on October 5, 20006, unless earlier redeemed by the Board
at one cent per Right.
We strongly believe the Company's financial performance is
closely linked to its corporate governance policies and
procedures, and the level of management accountability they
impose. The Company's Shareholder Rights Plan (commonly know as
a "poison pill") is a powerful anti-takeover device which
effectively prevents a change in control of the Company without
the approval of the board of directors.
<FN1>Harrah's Entertainment, Inc., SEC Form 8-K, August 9, 1996.
In our opinion, Harrah's Entertainments poison pill inhibits a
potential acquirer of Company stock when they acquire 15% or more
of the Common Stock of the Company or announce a tender or
exchange offer that would result in the beneficial ownership by a
person or group of 15% or more of the Common Stock. Triggering
the poison pill affects the bidder by allowing Harrah's
Entertainment shareholders under certain conditions to acquire
shares of an acquiring company at a discount. Such a situation,
we believe, complicates tender offers and precludes shareholders
of Harrah's Entertainment from exercising their ownership rights
in assessing offers from potential bidders.
We feel the poison pill forces potential investors to negotiate
acquisitions with management, instead of making their offer
directly to shareholders. We strongly believe that it is the
shareholders (who are the owners of the Company), not the
directors and managers who should have the right to decide what
is or is not a fair price for their shareholdings.
The argument that our directors need a poison pill in order to
negotiate a better offer from potential bidders or prevent so-
called "abusive takeover practices" is unpersuasive. In the past
five years, proposals to redeem or allow shareholder votes on
poison pills have received majority support at 24 U.S. publicly-
traded companies including Advanced Micro Devices, Intel, Ryder,
and Wellman.<FN2> Moreover, since 1990 Philip Morris<FN3>, Time
Warner<FN4>, United Technologies<FN5>, and Lockheed<FN6> have
voluntarily redeemed their poison pills. None of these companies
has experienced any adverse impact attributable to redemption of
their poison pills.
Poison pills can pose such an obstacle to a takeover that
management becomes entrenched. We believe that the entrenchment
of management, and the lack of accountability that results, can
adversely affect shareholder value.
We urge you to VOTE FOR this proposal.
<FN2>IRRC Corporate Governance Bulletins 1992-1996.
<FN3>The Rueters Business Report, April 18, 1995.
<FN4>PR Newswire, November 21, 1991.
<FN5>Wall Street Journal, February 12, 1992.
<FN6>Mergers and Acquisitions, November, 1991.
VOTING PROCEDURE AND VOTING RIGHTS
We have asked management to include this proposal in its
upcoming proxy statement and proxy card, but do not know whether
it will do so. We intend to circulate our own proxy card in
support of the proposal once management releases the names of
nominees for election and other matters to be included on our
card.
You may revoke a proxy vote any time before the tally by
(1) executing a later proxy card; (2) appearing at the meeting to
vote, or (3) delivering the proxyholder or the Company's
secretary written notice of revocation prior to the date of the
meeting. The Company's headquarters is at 1023 Cherry Road,
Memphis, TN 38117.
We will keep the content of all cards we receive
confidential from everyone except our staff, except that at the
meeting our cards must be presented to the company's tabulator in
order to be counted. The record date is March 4, 1997. As of
9/30/96 there were 103,324,000 shares outstanding. Each share of
common stock carries one vote, and there are no other classes of
stock.
SOLICITATION
This solicitation is being conducted by Hotel Employees &
Restaurant Employees International Union, which owns 110 shares
of company common stock. We expect to spend about $5000 on the
solicitation. Solicitation will be done by phone, fax, and letter
by our staff, who will not receive additional compensation
therefor. Our local unions have collective bargaining agreements
in place with Harrah's hotels in Las Vegas and Atlantic City, and
no labor dispute.
RECORD DATE/SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS/EXECUTIVE COMPENSATION/ELECTION OF DIRECTORS
Information on these subjects will be contained in
management's upcoming proxy statement.
SHAREHOLDER PROPOSALS FOR 1998 MEETING
Certain shareholders have the right under SEC Rule 14a-8 to
submit proposals for inclusion in management's proxy statement.
The deadline for submitting such proposals to management for the
1998 meeting will appear in management's forthcoming proxy
statement.
PLEASE VOTE FOR THE PROPOSAL TO RESCIND THE POISON PILL