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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
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S)
240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
Harrah's Entertainment, Inc.
- - -----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant): Hotel Employees & Restaurant Employees
International Union
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) 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:
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(4) Date Filed
Hotel Employees and Restaurant
Employees International Union ("HERE")
Research Department
1219 28th Street, N.W.
Washington, D.C. 20007
tel. (202) 393-4373
fax (202) 333-6049
Date first mailed: March 21st, 1997
SHAREHOLDER SOLICITATION FOR PROPOSAL
AGAINST MANAGEMENT'S POISON PILL
at
Harrah's Entertainment Inc.
Annual Stockholders Meeting
April 25, 1997 11:00 a.m.
Winegardner Auditorium Dixon Gallery and Gardens
4339 Park Avenue
Memphis, Tennessee
Dear Fellow Harrah's Shareholder:
This is to alert you to an upcoming vote on our shareholder
proposal to rescind the Company's poison pill which the board of
directors adopted in July 1996.
We will make the following proposal ("The Anti-Poison Pill
By-law") at the shareholders meeting:
RESOLVED: The Shareholders of Harrah's Entertainment, Inc.
("Company") hereby exercise their right to amend the by-laws of
the Company under Section 109 of the Corporation Law of Delaware
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 Section shall be effective immediately and automatically as
of the date it is approved by the shareholders. Notwithstanding
any provision of these by-laws, this Section 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. 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, 2006 , unless earlier
redeemed by the Board at one cent per right.
The Company's Shareholder Rights Plan is a powerful
anti-takeover device which effectively prevents a change in
control of the Company without the approval of the board of
directors.
Triggering the poison pill affects the bidder by "causing
substantial dilution to a Person or group that attempts to
acquire the Company on terms not approved by the Company's Board
of Directors."FN1
Harrah's Entertainment, Inc., SEC Form 8-A, September 16,
1996.
We feel the poison pill forces potential investors to
negotiate acquisitions with management, instead of making their
offer directly to shareholders.
In 1996, according to the Investor Responsibility Research
Center, shareholder support for proposals opposing pills
increased to 53.4%, the highest support of any issue that proxy
season. Such proposals received eight majority votes in 1996:
Weyerhauser, Rite Aid, Fleming, Supervalu, Rowan, Baker Hughes,
Wellman, and Consolidated Natural Gas.
In our view, the market for Harrah's stock should not be
artificially restricted by management. We believe that
shareholders should be able to decide for themselves whether to
accept an offer for their stock without interference in the form
of a poison pill.
We urge you to VOTE FOR this proposal.
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. Our card (enclosed) grants us no discretionary
authority to vote on matters not listed. Where no voting
instructions are given on our card, the shares represented by the
proxy will be voted for Proposals 1,2, AND 3.
This proposal calls for an amendment to the Company's
By-laws which according to the Company's Certificate of
Incorporation requires "an affirmative vote of at least 75% of
the votes entitled to vote generally in the election of
directors, voting together as a single class."
Only holders of record of shares of Common Stock as of the
close of business on March 4th, 1997 (the "Annual Meeting Record
Date") will be entitled to notice of and to vote at the Annual
Meeting or any adjournment or postponement thereof. Such holders
of shares of Common Stock are entitled to one vote per share on
any matter which may properly come before the Annual Meeting.
The presence, either in person or by properly executed proxy, of
a majority of the shares of Common Stock outstanding on the
Annual Meeting Record Date will constitute a quorum and such
quorum is necessary to permit action to be taken by the
stockholders at such meeting.
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 staff employed directly by HERE
and involved in our solicitation. No affiliated HERE local
unions nor their staff will have access to cards received. 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 that date there were 102,756,865 shares of Common
Stock outstanding. There are no other classes of stock.
SOLICITATION
The participants in this solicitation are the Hotel
Employees & Restaurant Employees International Union and its
staff (not owners themselves). The Union owns 110 shares of
company common stock, acquired on December 2, 1996. We expect to
spend about $10,000 on the solicitation. We will not employ an
outside solicitation firm. Solicitation will be done by phone,
fax, letter, and personal interview 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 with the
Company. The collective bargaining agreement in Las Vegas
expires in May of 1997. Negotiations for this agreement will
commence shortly. The Atlantic City labor agreement expires in
September of 1999. Other Harrah's Entertainment properties are
non-Union but none is the subject of a current organizing
campaign by HERE.
LEGAL DISCUSSION
While HERE believes that the Anti-Poison Pill By-law is
valid, we recognize that the Delaware courts have not considered
the validity of it or any similar by-law and, therefore, have not
resolved the extent to which stockholder-adopted by-laws may
limit the authority of a board of directors to oppose, or to
adopt or employ defensive measures against, takeover bids.
Accordingly, it is uncertain whether the Anti-Poison Pill By-law
would survive a Delaware court challenge. However, there is some
support for the validity of the Anti-Poison Pill By-law in a
recent Oklahoma Federal Court decision involving an Oklahoma
corporation. The court required a corporation to include in its
proxy statement for its 1997 annual shareholders meeting a
proposal to adopt a by-law requiring the board of directors to
redeem the existing poison pill and to submit any successor
poison pill to a shareholder vote. IBTGF v. Fleming Companies,
Inc., No.Civ-96-1650 - A (1997). This decision is not binding on
Delaware courts.
HERE believes that Section 109 of the Delaware General
Corporation Law authorizes the enactment of the Anti-Poison Pill
By-law. Section 109(a) gives stockholders the power to "adopt,
amend or repeal By-laws." Section 109(b) states: "The by-laws
may contain any provision, not inconsistent with law or with the
certificate of incorporation, relating to the business of the
corporation, the conduct of its affairs, and its rights or powers
OR THE RIGHTS OR POWERS OF ITS STOCKHOLDERS, DIRECTORS, officers
or employees" (emphasis added). In a review of the Delaware
General Corporation Law, the Certificate of Incorporation and
By-laws, HERE has not discovered any provisions that bar
stockholders from adopting the Anti-Poison Pill By-law. We
believe that Section 141(a) of the Delaware General Corporation
Law does not bar the adoption of the Anti-Poison Pill By-law.
That section states: "The business and affairs of every
corporation organized under this chapter shall be managed by or
under the direction of a board of directors, EXCEPT AS MAY BE
OTHERWISE PROVIDED IN THIS CHAPTER or in its certificate of
incorporation" (emphasis added). HERE believes that the adoption
of the Anti-Poison Pill By-law is not inconsistent with Section
141(a) for two reasons. First, if Section 141(a) is read as
granting the board of directors exclusive authority over the
business and affairs of the corporation, that grant is qualified
by the phrase "except as may be otherwise provided in this
chapter or in its certificate of incorporation." The savings
clause leaves room for the grant of authority in Section 109 for
stockholders to adopt by-laws, such as the Anti-Poison Pill
By-law, which relate to the rights and powers of stockholders and
directors. Second, HERE believes that any reading of Section
141(a) that invalidated the Anti-Poison Pill By-law would make
meaningless Section 109's broad grant of authority for
stockholders to adopt by-laws relating to the rights or powers of
stockholders and directors.
HERE also believes that the Anti-Poison Pill By-law does not
conflict with Delaware case law dealing with the fiduciary duties
of boards of directors. In certain cases, courts interpreting
Delaware law have, on the basis of particular facts presented,
upheld reasonable defensive measures adopted by directors who, in
good faith and upon reasonable investigation, believed that a
hostile offer posed a danger to corporate policy and
effectiveness, even though a majority of the stockholders may
have tendered their shares. HERE believes that these cases do
not support invalidating the Anti-Poison Pill By-law because in
none of those cases was the board's discretion limited by a
by-law previously adopted by stockholders pursuant to their
powers under Section 109, nor did the court consider the
stockholders' authority to adopt such a by-law. HERE believes it
is inherent in the Delaware scheme of corporate law that while
the board is entitled to exercise its judgment in responding to a
tender offer or other takeover bid, its judgment must be
exercised within the framework of statutes, charter provisions
and by-laws which in certain instances limit the actions that
directors may take even when the directors believe that their
chosen course of action is in the best interests of stockholders.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS/EXECUTIVE COMPENSATION/ELECTION OF DIRECTORS
We incorporate herein by reference the information
contained on these subjects in management's 1997 proxy statement.
Copies are available upon request by contacting us at the number
and address above.
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 is November 14, 1997.
PLEASE VOTE FOR THE PROPOSAL TO RESCIND THE POISON PILL.
H.E.R.E. PROXY CARD FOR THE
HARRAH'S ENTERTAINMENT, INC.
1997 ANNUAL MEETING OF STOCKHOLDERS
PLEASE SIGN THIS PROXY CARD ON THE REVERSE SIDE
The undersigned shareholder in Harrah's Entertainment Inc.
hereby appoints Matthew S. Walker (HERE Research Director) with
full power of substitution, for and in the name of the
undersigned to represent and to vote, as designated below, all
shares of Common Stock of Harrah's Entertainment Inc. that the
undersigned is entitled to vote at the 1997 Annual Meeting of
Stockholders of Harrah's Entertainment to be held on April 25th
1997 at 11 AM (local time) and at any adjournment, postponement,
or rescheduling thereof. The undersigned hereby revokes any
previous proxies with respect to the matters covered by this
proxy. The undersigned grants no discretionary authority to vote
on matters not listed here.
H.E.R.E. RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ANTI-POISON
PILL BY-LAW (PROPOSAL #1)
1. Proposal to amend the by-laws to redeem the Company's "POISON
PILL" and require prior approval by a majority stockholder vote
for adoption of any such "POISON PILL" in the future.
FOR / / AGAINST / / ABSTAIN / /
2. Election of Class I directors for three-year terms expiring
at the 2000 Annual Meeting.
FOR all nominees listed below / /
WITHHOLD AUTHORITY to vote for all nominees listed below / /
*EXCEPTIONS / /
NOMINEES: Joe M. Henson, R. Brad Martin and Eddie N. Williams
*Exceptions:
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the "Exceptions" box and write that nominee's name
in the space provided. IF AUTHORITY TO VOTE FOR ANY NOMINEE IS
NOT WITHHELD, THIS SIGNED PROXY WILL BE DEEMED TO GRANT AUTHORITY
TO VOTE FOR THE NOMINEE.) (SEE REVERSE SIDE)
3. Ratification of the appointment of Arthur Andersen LLP as
independent public accountants for Harrah's Entertainment, Inc.
for the year 1997.
FOR / / AGAINST / / ABSTAIN / /
WHERE NO VOTING INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR PROPOSALS 1,2 AND 3.
Joint owners should each sign. Attorneys, trustees, executors,
administrators, guardians and others signing in a representative
capacity should designate their full titles. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership
name by authorized person.
Dated _______________________________________, 1997
Signature _______________________________________ Signature
_______________________________________
Name/Title (Print) _______________________________________
Address
_________________________________________________________________
________________________________
Phone No. _______________________________________ Fax No.
_______________________________________
# Of Shares _______________________________________
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK.
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
1 1 Harrah's Entertainment, Inc., SEC Form 8-A, September 16,
1996.