sec document

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OqbwrGofJsm+oiw0fDKFhKPEJnWgsBBlTar77mYQAWeHMnaKfXPVfKLCYOthZnVJ I4bIkExAQZRLERDETpM6ZQ== 0000921895-02-000502.txt : 20020903 0000921895-02-000502.hdr.sgml : 20020903 20020903152243 ACCESSION NUMBER: 0000921895-02-000502 CONFORMED SUBMISSION TYPE: PRRN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020903 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STEEL PARTNERS II L P CENTRAL INDEX KEY: 0000915653 FILING VALUES: FORM TYPE: PRRN14A BUSINESS ADDRESS: STREET 1: 150 EAST 52ND STREET STREET 2: 21ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-813-1500 MAIL ADDRESS: STREET 1: 150 EAST 52ND STREET, 21ST FLOOR CITY: NY STATE: NY ZIP: 10022 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: UNITED INDUSTRIAL CORP /DE/ CENTRAL INDEX KEY: 0000101271 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 952081809 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRRN14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04252 FILM NUMBER: 02755302 BUSINESS ADDRESS: STREET 1: 570 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2127528787 MAIL ADDRESS: STREET 1: 570 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: HAYES MANUFACTURING CORP DATE OF NAME CHANGE: 19660911 FORMER COMPANY: FORMER CONFORMED NAME: TOPP INDUSTRIES CORP DATE OF NAME CHANGE: 19710510 PRRN14A 1 formprrn14a01874_09032002.htm SCHEDULE 14A sec document

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. 1)

Filed by the Registrant / /

Filed by a Party other than the Registrant /x/

Check the appropriate box:

/x/ Preliminary Proxy Statement

/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

/ / Definitive Proxy Statement

/ / 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:

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-2-

STEEL PARTNERS II, L.P.

September __, 2002

Dear Fellow Stockholder:

Steel Partners II, L.P. ("Steel") is the beneficial owner of
1,310,250 shares of Common Stock of United Industrial Corporation, representing
approximately 10.0% of the outstanding Common Stock. We do not believe that the
current Board of Directors is acting in your best interests, and we are
therefore seeking your support for the election of our nominee to the Board of
Directors of United Industrial at the annual meeting of stockholders scheduled
to be held at the Park Lane Hotel (Ballroom Suite, 2nd floor) located at 36
Central Park South, New York, New York on October 4, 2002, at 10:00 A.M.

We urge you to carefully consider the information contained in the
attached Proxy Statement and then support the efforts of Steel to maximize value
for all stockholders by signing, dating and returning the enclosed GOLD proxy
today. The attached Proxy Statement and the enclosed GOLD proxy card are first
being furnished to the stockholders on or about September __, 2002.

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
proxy.

If you have any questions or require any assistance with your vote
please contact MacKenzie Partners, Inc., which is assisting us, at their address
and toll-free numbers below.

Thank you for your support,

Warren G. Lichtenstein
On behalf of Steel Partners II, L.P.

[MACKENZIE LOGO]

PRELIMINARY COPY SUBJECT TO COMPLETION

DATED SEPTEMBER 3, 2002

ANNUAL MEETING OF STOCKHOLDERS
OF
UNITED INDUSTRIAL CORPORATION

-------------------------

PROXY STATEMENT
OF
STEEL PARTNERS II, L.P.

-------------------------

PLEASE MAIL THE ENCLOSED GOLD PROXY CARD

Steel Partners II, L.P. ("Steel") is the second largest stockholder
of United Industrial Corporation, a Delaware corporation ("UIC" or the
"Company"). Steel is writing to you in connection with the election of two
directors to UIC's Board of Directors at the annual meeting of stockholders
scheduled to be held at the Park Lane Hotel (Ballroom Suite, 2nd floor) located
at 36 Central Park South, New York, New York on October 4, 2002, at 10:00 A.M.,
including any adjournments or postponements thereof and any meeting which may be
called in lieu thereof (the "Annual Meeting"). Steel has nominated a director in
opposition to UIC's incumbent director nominees, Richard Erkeneff and Paul J.
Hoeper, whose terms expire at the Annual Meeting. Steel believes that recent
actions of the Board of Directors of UIC (the "UIC Board") have not been in the
best interests of UIC's stockholders. As further described herein, Steel
believes that a more thorough investigation of strategic alternatives, a greater
dedication to maximizing stockholder value and improving corporate governance
policies, will be best achieved through the election of Steel's nominee. There
can be no assurance that the election of our nominee will maximize or otherwise
enhance stockholder value or improve corporate governance.

This proxy statement (the "Proxy Statement") and the enclosed GOLD
proxy card are being furnished to stockholders of UIC by Steel in connection
with the solicitation of proxies from UIC's stockholders to be used at the
Annual Meeting to elect Steel's nominee, Glen M. Kassan (the "Nominee"), to the
UIC Board. As Nominee for director, Mr. Kassan is deemed to be a participant in
this proxy solicitation. As members of the soliciting group, Steel and Warren
Lichtenstein, the managing member of the general partner of Steel, and James
Henderson, an affiliate of Steel, are also deemed to be participants in this
proxy solicitation. Mr. Lichtenstein has been a director of UIC since May 2001.
This Proxy Statement and the GOLD proxy card are first being furnished to UIC's
stockholders on or about September __, 2002.

UIC has set the record date for determining stockholders entitled to
notice of and to vote at the Annual Meeting as of August 26, 2002 (the "Record
Date"). The principal executive offices of UIC are located at 570 Lexington
Avenue, New York, New York 10022. Stockholders of record at the close of
business on the Record Date will be entitled to vote at the Annual Meeting.
According to UIC, as of the Record Date, there were 13,064,818 shares of common
stock, $1.00 par value per share (the "Shares"), outstanding and entitled to
vote at the

Annual Meeting. Steel, along with all of the participants in this solicitation,
are the beneficial owners of an aggregate of 1,320,250 Shares which represents
approximately 10.1% of the Shares outstanding (based on information publicly
disclosed by UIC). The participants in this solicitation intend to vote such
Shares for the election of the Nominee.

THIS SOLICITATION IS BEING MADE BY STEEL AND NOT ON BEHALF OF THE BOARD OF
DIRECTORS OR MANAGEMENT OF UIC. STEEL IS NOT AWARE OF ANY OTHER MATTERS TO BE
BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN THE RATIFICATION OF THE APPOINTMENT
OF THE COMPANY'S AUDITORS. SHOULD OTHER MATTERS, WHICH STEEL IS NOT AWARE OF A
REASONABLE TIME BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE ANNUAL MEETING,
THE PERSONS NAMED AS PROXIES IN THE ENCLOSED GOLD PROXY CARD WILL VOTE ON SUCH
MATTERS IN THEIR DISCRETION.

WE URGE YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE
ELECTION OF OUR NOMINEE DESCRIBED IN THIS PROXY STATEMENT.

IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY UIC MANAGEMENT TO THE UIC
BOARD, YOU MAY REVOKE THAT PROXY AND VOTE AGAINST THE ELECTION OF UIC'S NOMINEES
BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD. THE LATEST DATED
PROXY IS THE ONLY ONE THAT COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED
PROXY FOR THE ANNUAL MEETING TO STEEL, C/O MACKENZIE PARTNERS, INC. WHO IS
ASSISTING IN THIS SOLICITATION, OR TO THE SECRETARY OF UIC, OR BY VOTING IN
PERSON AT THE ANNUAL MEETING.

-2-

IMPORTANT

YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU
OWN. STEEL URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED GOLD PROXY CARD
TODAY TO VOTE FOR THE ELECTION OF THE NOMINEE.

The Nominee is committed, subject to his fiduciary duty to UIC's
stockholders, to giving all UIC's stockholders the opportunity to receive the
maximum value for their Shares. A vote FOR the Nominee will enable you - as the
owners of UIC - to send a message to the UIC Board that you are committed to
maximizing the value of your Shares.

o If your Shares are registered in your own name, please sign and date
the enclosed GOLD proxy card and return it to Steel, c/o MacKenzie
Partners, Inc., in the enclosed envelope today.

o If any of your Shares are held in the name of a brokerage firm,
bank, bank nominee or other institution on the Record Date, only it
can vote such Shares and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for
your account and instruct that person to execute on your behalf the
GOLD proxy card. Steel urges you to confirm your instructions in
writing to the person responsible for your account and to provide a
copy of such instructions to Steel, c/o MacKenzie Partners, Inc.,
who is assisting in this solicitation, at the address and telephone
numbers set forth below, and on the back cover of this proxy
statement, so that we may be aware of all instructions and can
attempt to ensure that such instructions are followed.

IF YOU HAVE ANY QUESTIONS REGARDING YOUR PROXY,
OR NEED ASSISTANCE IN VOTING YOUR SHARES, PLEASE CALL:

[MACKENZIE LOGO]

-3-

PROPOSAL I - ELECTION OF DIRECTOR

REASONS FOR THE SOLICITATION

We are asking you to elect our Nominee in order to:

o remove one of two incumbent directors up for election;

o elect a nominee that supports actions that we believe would give
stockholders the greatest opportunity to maximize the value of
their Shares; and

o elect a clearly independent director.

As further described below, Steel believes that the election of the
Nominee represents the best means for UIC's stockholders to maximize the value
of their Shares. Steel, as the second largest stockholder of UIC, has a vested
interest in the maximization of the value of the Shares. Additionally, Steel
believes that the Nominee has extensive experience in private and public
investment, corporate governance and business management. If elected to the
Board, the Nominee will use his experience to explore alternatives to maximize
stockholder value including, but not limited to, the sale of all or
substantially all of UIC on a tax efficient basis. There can be no assurance
that the election of our Nominee will maximize or otherwise enhance stockholder
value.

WE BELIEVE THAT ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF UIC MUST BE SOLD ON A
TAX EFFICIENT BASIS AS SOON AS POSSIBLE

In Steel's opinion, maximum stockholder value will only be achieved
through a prompt sale of all or substantially all of UIC. The Nominee is
committed to working with the other members of the UIC Board to encourage the
sale of all or substantially all of UIC. UIC has previously announced its
intention to explore a sale of the company and, more recently, announced its
intention to accelerate the sale process. On April 8, 2002, UIC announced that
it had been working with Wachovia Securities for a year to explore alternatives
to enhance stockholder value, including a possible sale of UIC. Additionally, on
August 26, 2002, less than a week after Steel filed its 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 these press releases and the extended process under which the UIC
Board has purported to explore a possible sale, Steel is concerned that the UIC
Board may be delaying the sale process and is not moving quickly enough to
enhance stockholder value. While UIC has taken steps to divest certain of its
businesses and assets during the past two years, Steel believes that all or
substantially all of UIC should be sold as soon as possible.

Despite the UIC Board's recent announcement, we do not believe that
the UIC Board is moving quickly enough to maximize stockholder value. While
stockholders have waited patiently for the UIC Board to further enhance
stockholder value, we believe UIC's financial performance this year has taken a
turn for the worse, as evidenced by net losses reported in UIC's Form 10-Q for
the six months ended June 30, 2002 (the "June 30 10-Q"). We believe,

-4-

UIC's financial performance will languish as long as UIC continues to operate as
it has historically.

o According to the June 30 10-Q, UIC realized net losses of
approximately $10.7 million for the three month period ended June 30,
2002 compared to net income of approximately $1.9 million for the
comparable period in 2001.

o According to the June 30 10-Q, UIC realized net losses of
approximately $22.0 million for the six month period ended June 30,
2002 compared to net income of approximately $4.5 million for the
comparable period in 2001.

o This represents, in our opinion, a stunning decrease in net income of
approximately 463% and 389% during the three and six month periods,
respectively.

WE BELIEVE THAT UIC SHOULD ADOPT CRITICAL CORPORATE GOVERNANCE POLICIES
INCLUDING CAUSING A MAJORITY OF THE BOARD TO BE COMPOSED OF INDEPENDENT
DIRECTORS AND DECLASSIFYING THE UIC BOARD

We believe that UIC should respond to the sweeping legislation
enacted by Congress and rules being adopted by the New York Stock Exchange
("NYSE") which are promoting greater accountability to stockholders.
Specifically, we believe that UIC must cause its Board of Directors to be
composed of a majority of clearly independent directors which we believe will
shortly be a listing requirement for all NYSE companies. Under proposed Section
303A of the NYSE listing standards, listed companies will be required to have a
majority of independent directors. According to UIC's preliminary proxy
statement for the Annual Meeting (the "Management Proxy Statement"), the UIC
Board is currently composed of six directors, two of whom are also executive
officers of UIC, as follows:

NAME POSITION
---- --------

Harold Gelb Chairman of the Board

Richard Erkeneff President and Director

Susan Fein Zawel Vice President Corporate Communications,
Associate General Counsel and Secretary

Joseph Schneider Director

Paul J. Hoeper Director

Warren Lichtenstein Director

We do not believe that a majority of the UIC Board is independent
under either the existing or proposed NYSE standards.

-5-

o According to the Management Proxy Statement, Richard Erkeneff and
Susan Zawel are UIC employees and collected salaries, bonuses and
other compensation in the aggregate of $608,171 and $229,436,
respectively, during 2001.

o According to the Management Proxy Statement, Mr. Gelb has a special
compensation arrangement with UIC under which he received compensation
of $137,500 during 2001 and will receive $150,000 during 2002 for his
services as Chairman of the Board. The other UIC directors receive
only $20,000 per year and other fees for attending Board and committee
meetings.

o As three of the current six UIC Board members are employees of UIC
and/or collect six-figure salaries and other compensation for their
services and receive other benefits, we question the collective
Board's ability to exercise independent judgment in carrying out its
responsibilities.

We believe that a majority of independent directors will increase
the quality of oversight over the UIC Board, lessen the possibility of conflicts
of interest and allow the UIC Board to most effectively exercise its fiduciary
duties to the stockholders.

If elected, the Nominee would also attempt to work with the UIC
Board to take other measures to improve UIC's corporate governance, including
declassifying the Board and removing the "staggered board" provision. A
classified board of directors limits the ability of stockholders to elect all
directors on an annual basis. We believe that the annual election of directors
is the primary means for stockholders to influence corporate governance policies
and to hold management accountable for its implementation of those policies.
Steel and the Nominee view classified boards as having the effect of insulating
directors from being accountable to the corporation's stockholders.

WE BELIEVE THAT THE UIC BOARD MUST PROMPTLY EXPLORE OTHER ALTERNATIVES TO
MAXIMIZE STOCKHOLDER VALUE INCLUDING A SALE OF THE ENTIRE COMPANY

We believe that the election of the Nominee represents an
opportunity for stockholders to maximize the present value of their Shares. Glen
Kassan has extensive experience providing management and advisory services to
public and private companies and currently serves as an executive officer and
director of various public companies. See "The Nominee." If elected, the Nominee
will, subject to his fiduciary duties of the highest standards, explore all
available alternatives to maximize stockholder value including, but not limited
to:

o working with the UIC Board to sell the entire company by means of a
merger, tender offer or otherwise, or to divest assets of the Company
on a tax efficient basis;

o working with the UIC Board to respond to new corporate governance
legislation and NYSE listing standards, and take other measures to
improve corporate governance, including declassifying the organization
of the UIC Board;

-6-

o working with the UIC Board to reduce unnecessary expenses by, among
other things, closing UIC's New York office and consolidating all
activities in the AAI Corporation facility in Huntsville, Maryland;
and

o maximizing UIC's cash position.

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 stockholder value.

Subject to his fiduciary duties, the Nominee's priority would be to
maximize stockholder value by pursuing a sale of UIC. Although the Nominee would
seek to sell UIC to the highest bidder, the Nominee's priority would be to
negotiate and consummate a transaction on the most favorable terms available to
the UIC stockholders. The Nominee would work to solicit bids from potential
acquirors, including competitors of UIC. In accordance with the Nominee's
fiduciary duties to enter into a sale transaction that would have the greatest
benefit to UIC stockholders, bids would be carefully evaluated based on, among
other things, the value of the consideration offered, the ability of the bidder
to finance the bid, the quality of any non-cash consideration offered (including
the financial condition of any bidder offering non-cash consideration), and the
timing and likelihood of consummation of the proposed transaction in light of
any required financing or regulatory approvals. This process could result in the
Nominee's decision to accept a proposal to acquire UIC for a purchase price that
is not necessarily the highest price offered.

We wish to provide the stockholders, the true owners of UIC, with
the opportunity to elect directors that are unaffiliated with the existing
Board. Your vote to elect the Nominee does not constitute a vote in favor of our
value enhancing plans including pursuing a sale of UIC. Your vote to elect the
Nominee will have the legal effect of replacing one incumbent director with our
Nominee. If the Nominee is elected to the Board and a transaction involving the
sale of UIC is proposed by the Board, stockholders will have an opportunity to
vote on such transaction to the extent required by law.

Neither we (nor to our knowledge, any other person on our behalf)
has made or undertaken any analysis or reports as to whether stockholder value
will be maximized as a result of this solicitation or obtained reports from
consultants or other outside parties as to whether the proposals presented
herein would have an effect on stockholder value. There can be no assurance that
stockholder value will be maximized as a result of this solicitation or the
election of the Nominee.

THE NOMINEE

The following information sets forth the name, business address,
present principal occupation, and employment and material occupations,
positions, offices, or employments for the past five years of the Nominee. This
information has been furnished to Steel by the Nominee. Where no date is given
for the commencement of the indicated office or position, such office or
position was assumed prior to September 1, 1997. The Nominee is a citizen of the
United States.

-7-

GLEN M. KASSAN (59) has been an Executive Vice President of Steel
Partners, Ltd., a management and advisory company, since March 2002. Steel
Partners, Ltd. has provided management services to Steel and other affiliates of
Steel since March 2002. Mr. Kassan served as Executive Vice President of Steel
Partners Services, Ltd., a management and advisory company, from June 2001
through March 2002 and Vice President from October 1999 through May 2001. Steel
Partners Services, Ltd. provided management services to Steel and other
affiliates of Steel until March 2002, when Steel Partners, Ltd. acquired the
rights to provide certain management services from Steel Partners Services, Ltd.
He has also served as Vice President, Chief Financial Officer and Secretary of
WebFinancial Corporation, a commercial and consumer lender, since June 2000. Mr.
Kassan has served as Vice Chairman of the Board of Directors of Caribbean
Fertilizer Group Ltd., a private company engaged in the production of
agricultural products in Puerto Rico and Jamaica, since June 2000. Mr. Kassan is
a director and has served as President of SL Industries, Inc., a manufacturer
and marketer of Power and Data Quality systems and equipment for industrial,
medical, aerospace and consumer applications, since January 2002 and February
2002, respectively. From June 2000 to April 2002, Mr. Kassan served as Vice
President, Chief Financial Officer and Secretary of Gateway Industries, Inc., a
provider of database development and Web site design and development services.
From 1997 to 1998, Mr. Kassan served as Chairman and Chief Executive Officer of
Long Term Care Services, Inc., a privately owned healthcare services company
which Mr. Kassan co-founded in 1994 and initially served as Vice Chairman and
Chief Financial Officer. Mr. Kassan is currently a director of Tandycrafts,
Inc., a manufacturer of picture frames and framed art, Puroflow Incorporated, a
designer and manufacturer of precision filtration devices, and the Chairman of
the Board of US Diagnostic Inc., an operator of outpatient diagnostic imaging.
As of the date hereof, Mr. Kassan did not beneficially own any Shares. Mr.
Kassan has not purchased or sold any Shares during the past two years. The
business address of Mr. Kassan is c/o Steel Partners, Ltd., 150 East 52nd
Street, 21st Floor, New York, New York 10022.

The Nominee will not receive any compensation from Steel for his
services as a director of UIC. On March 20, 2002, Glen Kassan and Steel entered
into a Reimbursement Agreement (the "Kassan Reimbursement Agreement") in which
Steel agreed to bear all expenses incurred by Mr. Kassan in connection with his
nomination to the UIC Board, including approved expenses incurred by Mr. Kassan
in the solicitation of proxies or written consents from UIC stockholders. The
Kassan Reimbursement Agreement is attached to Amendment No. 6 to the Schedule
13D filed by Steel, Warren Lichtenstein and the Nominee with respect to UIC and
is incorporated herein by reference.

Other than as stated above, there are no arrangements or
understandings between Steel and the Nominee or any other person or persons
pursuant to which the nomination described herein is to be made, other than the
consent by the Nominee to be named in this Proxy Statement and to serve as a
director of UIC if elected as such at the Annual Meeting. The Nominee has not
been convicted in any criminal proceedings (excluding traffic violations or
similar misdemeanors) over the past ten years. The Nominee is not a party
adverse to UIC or any of its subsidiaries or has a material interest adverse to
UIC or any of its subsidiaries in any material pending legal proceedings.

-8-

Steel does not expect that the Nominee will be unable to stand for
election, but, in the event that the Nominee is unable to serve or for good
cause will not serve, the Shares represented by the enclosed GOLD proxy card
will be voted for a substitute nominee. In addition, Steel reserves the right to
nominate a substitute person if UIC makes or announces any changes to its Bylaws
or takes or announces any other action that has, or if consummated would have,
the effect of disqualifying the Nominee. In any such case, Shares represented by
the enclosed GOLD proxy card will be voted for such substitute nominee.
Notwithstanding Steel's ability to vote proxies for a substitute nominee, the
enclosed GOLD proxy card can only be voted for up to one of the two directors
being elected at the Annual Meeting.

The UIC Board is divided into three classes serving staggered
three-year terms. Two directors are to be elected at the Annual Meeting to hold
office until 2005 and until their successors are duly elected and qualify. Steel
has no reason to believe that the Nominee will be disqualified or unable or
unwilling to serve if elected.

YOU ARE URGED TO VOTE FOR THE ELECTION OF THE NOMINEE ON THE ENCLOSED GOLD PROXY
CARD.

PROPOSAL 2 - APPOINTMENT OF INDEPENDENT AUDITORS

Steel has no objection to the ratification of the appointment of
Ernst & Young LLP as independent accountants for UIC for the fiscal year ending
December 31, 2002. Please see the Management Proxy Statement for a description
of this proposal.

VOTING AND PROXY PROCEDURES

Only stockholders of record on the Record Date will be entitled to
notice of and to vote at the Annual Meeting. Each Share is entitled to one vote.
Stockholders who sell Shares before the Record Date (or acquire them without
voting rights after the Record Date) may not vote such Shares. Stockholders of
record on the Record Date will retain their voting rights in connection with the
Annual Meeting even if they sell such Shares after the Record Date. Based on
publicly available information, Steel believes that the only outstanding class
of securities of UIC entitled to vote at the Annual Meeting are the Shares.

Shares represented by properly executed GOLD proxy cards will be
voted at the Annual Meeting as marked and, in the absence of specific
instructions, will be voted FOR the election of the Nominee to the Board, FOR
the proposal to ratify the appointment of Ernst & Young LLP as independent
accountants of UIC for the fiscal year ending December 31, 2002, and in the
discretion of the persons named as proxies on all other matters as may properly
come before the Annual Meeting.

QUORUM

In order to conduct any business at the Annual Meeting, a quorum
must be present in person or represented by valid proxies. A quorum consists of
a majority of the Shares issued and outstanding on the Record Date. All Shares
that are voted "FOR", "AGAINST" or "ABSTAIN"

-9-

on any matter will count for purposes of establishing a quorum and will be
treated as Shares entitled to vote at the Annual Meeting (the "Votes Present").

ABSTENTIONS

Abstentions will count as Votes Present and shall have the same
effect as a vote against a matter (other than in the election for the Board of
Directors). While there is no definitive statutory or case law authority in
Delaware, the Company's state of incorporation, as to the proper treatment of
abstentions, Steel believes that abstentions should be counted for purposes of
determining both: (i) the total number of Votes Present, for the purpose of
determining whether a quorum is present; and (ii) the total number of Votes
Present that are cast ("Votes Cast") with respect to a matter (other than in the
election of the Board of Directors).

BROKER NON-VOTES

Shares held in street name that are present by proxy will be
considered as Votes Present for purposes of determining whether a quorum is
present. With regard to certain proposals, the holder of record of Shares held
in street name is permitted to vote as it determines, in its discretion, in the
absence of direction from the beneficial holder of the Shares.

The term "broker non-vote" refers to shares held in street name that
are not voted with respect to a particular matter, generally because the
beneficial owner did not give any instructions to the broker as to how to vote
such shares and the broker is not permitted under applicable rules to vote such
shares in its discretion because of the subject matter of the proposal, but
whose shares are present on at least one matter. Such shares shall be counted as
Votes Present for the purpose of determining whether a quorum is present. Broker
non-votes will not be counted as Votes Cast with respect to matters as to which
the record holder has expressly not voted. Accordingly, Steel believes that
broker non-votes will have no effect upon the outcome of voting on any of the
business matters set forth in this Proxy Statement.

VOTES REQUIRED FOR APPROVAL

Election of Directors. A plurality of the total Votes Cast by
holders of the Shares is required for the election of directors. A vote to
"WITHHOLD" for any nominee for director will be counted for purposes of
determining the Votes Present, but will have no other effect on the outcome of
the vote on the election of directors. Stockholders have cumulative voting
rights with respect to the election of directors. Under cumulative voting, each
stockholder is entitled to the same number of votes per share as the number of
directors to be elected (or, for purposes of this election, two votes per
Share). A stockholder may cast all of such votes for the Nominee or distribute a
portion of such votes to the Nominee, as he or she wishes, either by so marking
the ballot at the meeting or by specific voting instructions sent with a signed
proxy to either Steel in care of MacKenzie Partners, Inc. at the address set
forth on the back cover of this Proxy Statement or to UIC at 570 Lexington
Avenue, New York, New York 10022 or any other address provided by UIC. Steel is
not aware of any conditions precedent to the exercise of cumulative voting
rights by UIC stockholders. Steel intends to cumulate all votes for the sole
Nominee.

-10-

Other Proposals. Other than the election of directors, the vote
required for all other business matters set forth in this Proxy Statement is the
affirmative vote of a majority of the Votes Cast.

We are asking you to elect our Nominee in opposition to two
incumbent nominees whose terms expire at the Annual Meeting. The enclosed GOLD
proxy card may only be voted for our Nominee and does not confer voting power
with respect to the remaining directorship.

REVOCATION OF PROXIES

Stockholders of UIC may revoke their proxies at any time prior to
exercise by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered either to Steel
in care of MacKenzie Partners, Inc. at the address set forth on the back cover
of this Proxy Statement or to UIC at 570 Lexington Avenue, New York, New York
10022 or any other address provided by UIC. Although a revocation is effective
if delivered to UIC, Steel requests that either the original or photostatic
copies of all revocations be mailed to Steel in care of MacKenzie Partners, Inc.
at the address set forth on the back cover of this Proxy Statement so that Steel
will be aware of all revocations and can more accurately determine if and when
proxies have been received from the holders of record on the Record Date of a
majority of the outstanding Shares. Additionally, MacKenzie Partners, Inc. may
use this information to contact stockholders who have revoked their proxies in
order to solicit later dated proxies for the election of the Nominee.

IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEE TO THE UIC BOARD, PLEASE
SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED.

SOLICITATION OF PROXIES

The solicitation of proxies pursuant to this Proxy Statement is
being made by Steel. Proxies may be solicited by mail, facsimile, telephone,
telegraph, in person and by advertisements. Steel will not solicit proxies via
the Internet.

Steel has entered into an agreement with MacKenzie Partners, Inc.
for solicitation and advisory services in connection with this solicitation, for
which MacKenzie Partners, Inc. will receive a fee not to exceed $75,000,
together with reimbursement for its reasonable out-of-pocket expenses, and will
be indemnified against certain liabilities and expenses, including certain
liabilities under the federal securities laws. MacKenzie Partners, Inc. will
solicit proxies from individuals, brokers, banks, bank nominees and other
institutional holders. Steel has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all solicitation materials to
the beneficial owners of the Shares they hold of record. Steel will reimburse
these record holders for their reasonable out-of-pocket expenses in so doing. It
is anticipated that MacKenzie Partners, Inc. will employ approximately 45
persons to solicit UIC's stockholders for the Annual Meeting.

-11-

The entire expense of soliciting proxies is being borne by Steel. If
the Nominee is elected to the UIC Board, Steel intends to seek reimbursement of
the costs of this solicitation from UIC. Unless otherwise required by law, Steel
does not currently intend to submit the question of reimbursement of the costs
of this solicitation to a stockholder vote. Costs of this solicitation of
proxies are currently estimated to be approximately $175,000. Steel estimates
that through the date hereof, its expenses in connection with this solicitation
are approximately [$35,000].

PARTICIPANT INFORMATION

Along with the Nominee, Warren Lichtenstein and Steel are
participants in this solicitation. Warren Lichtenstein is Chairman of the Board,
Secretary and the Managing Member of Steel Partners, L.L.C. ("Steel LLC"), a
Delaware limited liability company. Steel LLC is the general partner of Steel.
The principal business of Mr. Lichtenstein, Steel LLC and Steel is investing in
the securities of small-cap companies. The principal business address of Mr.
Lichtenstein, Steel LLC and Steel is 150 East 52nd Street, 21st Floor, New York,
New York 10022. Mr. Lichtenstein has been a director of UIC since May 2001. Glen
Kassan is a Vice President of Steel Partners, Ltd., an affiliate of Steel. As of
the date hereof, Steel is the beneficial owner of 1,310,250 Shares. Steel LLC
does not beneficially own any Shares on the date hereof, except by virtue of its
role in Steel. Mr. Lichtenstein beneficially owns 10,000 Shares underlying
options exercisable within 60 days of the date of this Proxy Statement and may
be deemed to beneficially own the 1,310,250 Shares of UIC owned by Steel by
virtue of his positions with Steel. For information regarding purchases and
sales of Shares during the past two years by Steel, see Schedule I.

On March 7, 2001, Warren Lichtenstein, Steel and James Henderson, an
affiliate of Steel, entered into an Agreement (the "Agreement") with UIC
pursuant to which, among other things, Mr. Henderson has been allowed to attend
all meetings of the UIC Board in a non-voting observer capacity. The Agreement
is attached to Amendment No. 5 to the Schedule 13D filed by Steel and Warren
Lichtenstein with respect to UIC and is incorporated herein by reference.

On March 20, 2002, James Henderson and Steel entered into a
Reimbursement Agreement (the "Henderson Reimbursement Agreement") in which Steel
agreed to bear all expenses incurred by Mr. Henderson in connection with his
nomination to the UIC Board, including approved expenses incurred by Mr.
Henderson in the solicitation of proxies or written consents from UIC
stockholders. Although Mr. Henderson was previously nominated by Steel for
election at the Annual Meeting, Steel has decided not to solicit proxies for his
election. The Henderson Reimbursement Agreement is attached to Amendment No. 6
to the Schedule 13D filed by Steel, Warren Lichtenstein and Mr. Henderson with
respect to UIC and is incorporated herein by reference.

As a member of the soliciting group, Mr. Henderson is deemed to be a
participant in this proxy solicitation. The principal occupation of Mr.
Henderson is serving as an Executive Vice President of Steel Partners, Ltd., a
management and advisory company. Steel Partners, Ltd. provides management
services to Steel and other affiliates of Steel. As of the date hereof, Mr.
Henderson did not beneficially own any Shares. Mr. Henderson has not purchased
or sold

-12-

any Shares during the past two years. The business address of Mr. Henderson is
c/o Steel Partners, Ltd., 150 East 52nd Street, 21st Floor, New York, New York
10022.

CERTAIN TRANSACTIONS BETWEEN STEEL AND UIC

Except as set forth in this Proxy Statement (including the Schedules
hereto), neither Steel nor any of the other participants in this solicitation,
or any of their respective associates: (i) directly or indirectly beneficially
owns any Shares or any securities of UIC; (ii) has had any relationship with UIC
in any capacity other than as a stockholder, or is or has been a party to any
transactions, or series of similar transactions, or was indebted to UIC during
the past year with respect to any Shares of UIC; or (iii) knows of any
transactions during the past year, currently proposed transactions, or series of
similar transactions, to which UIC or any of its subsidiaries was or is to be a
party, in which the amount involved exceeds $60,000 and in which any of them or
their respective affiliates had, or will have, a direct or indirect material
interest. In addition, other than as set forth herein, there are no contracts,
arrangements or understandings entered into by Steel or any other participant in
this solicitation or any of their respective associates within the past year
with any person with respect to any of UIC's securities, including, but not
limited to, joint ventures, loan or option arrangements, puts or calls,
guarantees against loss or guarantees of profit, division of losses or profits,
or the giving or withholding of proxies.

Except as set forth in this Proxy Statement (including the Schedules
hereto), neither Steel nor any of the other participants in this solicitation,
or any of their respective associates, has entered into any agreement or
understanding with any person with respect to (i) any future employment by UIC
or its affiliates or (ii) any future transactions to which UIC or any of its
affiliates will or may be a party. However, Steel has reviewed, and will
continue to review, on the basis of publicly available information, various
possible business strategies that it might consider in the event that the
Nominee is elected to the Board.

OTHER MATTERS AND ADDITIONAL INFORMATION

Steel is unaware of any other matters to be considered at the Annual
Meeting other than the ratification of the appointment of the Company's
auditors. However, should other matters, which Steel is not aware of a
reasonable time before this solicitation, be brought before the Annual Meeting,
the persons named as proxies on the enclosed GOLD proxy card will vote on such
matters in their discretion.

Steel has omitted from this Proxy Statement certain disclosure
required by applicable law that is already included in the Management Proxy
Statement. This disclosure includes, among other things, biographical
information on UIC's directors and executive officers, information concerning
executive compensation, an analysis of cumulative total returns on an investment
in UIC Shares during the past five years, information on audit services and fees
of Ernst & Young LLP and procedures for nominating directors for election to
the UIC Board and submitting proposals for inclusion in UIC's proxy statement at
the next annual meeting. Stockholders should refer to the Management Proxy
Statement in order to review this disclosure.

See Schedule II for information regarding persons who beneficially
own more than 5% of the Shares and the ownership of the Shares by the management
of UIC.

-13-

The information concerning UIC contained in this Proxy Statement and
the Schedules attached hereto has been taken from, or is based upon, publicly
available information.

STEEL PARTNERS II, L.P.

_______, 2002

-14-

SCHEDULE I

TRANSACTIONS IN THE SHARES DURING THE PAST TWO YEARS

Shares of Common Price Per Date of
Stock Purchased Share ($) Purchase
--------------- --------- --------

STEEL PARTNERS II, L.P.

20,000 9.84410 8/28/00
5,000 9.95500 8/29/00
20,300 10.02380 8/30/00
7,000 10.82000 9/06/00
500 11.29000 9/13/00
6,000 11.27960 9/19/00
600 11.05000 9/20/00
3,400 11.10250 9/21/00
5,000 10.91500 9/22/00
10,200 10.21820 10/18/00
9,000 10.17500 10/19/00
4,200 10.41610 10/20/00
11,000 10.56140 10/23/00
5,000 10.48750 10/24/00
6,000 10.50830 10/25/00
1,700 10.67500 10/27/00
5,000 10.67000 10/30/00
1,000 10.81000 10/31/00
3,000 10.42500 11/02/00
900 10.42500 11/03/00
2,500 10.67500 11/06/00
3,600 10.67500 11/22/00
10,800 10.79650 11/27/00
8,720 10.80000 11/28/00
11,000 10.67500 11/29/00

-15-

Shares of Common Price Per Date of
Stock Purchased Share ($) Purchase
--------------- --------- --------

STEEL PARTNERS II, L.P.

300 10.72500 12/04/00
500 10.67500 12/06/00
5,500 11.05000 12/27/00
14,400 11.09340 12/28/00
9,000 11.10500 12/29/00
2,000 11.17500 1/03/01
6,600 11.12570 1/04/01
17,600 13.50920 3/12/01
4,700 13.47000 3/13/01
5,000 13.30000 3/14/01
3,400 13.53000 3/15/01
10,000 13.30000 3/16/01
11,300 13.20260 3/19/01

-16-

WARREN G. LICHTENSTEIN
----------------------

NONE(1)

JAMES R. HENDERSON
------------------

NONE

GLEN M. KASSAN
--------------

NONE

- ----------------------

(1) By virtue of his position with Steel Partners II, L.P., Mr. Lichtenstein
has the power to vote and dispose of UIC Shares owned by Steel Partners II,
L.P. Accordingly, Mr. Lichtenstein may be deemed the beneficial owner of
the UIC Shares owned by Steel Partners II, L.P.

-17-

SCHEDULE II

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

THE FOLLOWING IS BASED SOLELY ON INFORMATION PROVIDED IN THE
MANAGEMENT PROXY STATEMENT:

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

At the record date, more than 5% of the Company's outstanding voting
securities was beneficially owned by each of the persons named in the following
table, except that the information as to Kennedy Capital Management, Inc.,
Dimensional Fund Advisors Inc., Elaine Fein and J.P. Morgan Chase & Co. is as of
December 31, 2001 and is based upon information furnished to the Company by such
entities in Schedules 13G, and the information as to Steel Partners II, L.P. is
based upon information furnished by such entity in a Schedule 13D and a Form 4.

Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
-------------- ---------------- --------------------- ---------
Common Stock Kennedy Capital Management, Inc. 1,509,450(1) 11.55%
10829 Olive Boulevard
St. Louis, Missouri 63141

Common Stock Steel Partners II, L.P. 1,310,250 10.03%
150 East 52 Street
New York, New York 10022

Common Stock Dimensional Fund Advisors Inc. 1,059,440(2) 8.11%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401

Common Stock Elaine Fein 983,747(3) 7.53%
P.O. Box 99
Scarsdale, New York 10583

Common Stock J.P. Morgan Chase & Co. 914,551(4) 7.00%
270 Park Avenue
New York, New York 10017

(1) Kennedy Capital Management, Inc., a registered investment advisor, has sole
voting power as to 1,496,400 shares of Common Stock and sole dispositive
power as to 1,509,450 shares.

(2) Dimensional Fund Advisors Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940, is
deemed to have beneficial ownership of 1,059,440 shares of Common Stock.
Dimensional furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves as
investment manager to certain other commingled group trusts and separate
accounts (collectively, the "Funds"). In its role as investment advisor or
manager, Dimensional possesses voting and/or investment power over the
securities of the Company that are owned by the Funds. Dimensional
disclaims beneficial ownership of such securities.

(3) Includes 912,551 shares of Common Stock owned by The Estate of Bernard
Fein, of which Ms. Fein is an executor, and 71,196 shares owned by The Fein
Foundation, of which Ms. Fein is a trustee.

-18-

(4) Includes 912,551 shares of Common Stock owned by The Estate of Bernard
Fein, of which J.P. Morgan Chase & Co. is an executor.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of August 26, 2002, the number of
shares of Common Stock of the Company beneficially owned by each director of the
Company, each nominee for director, each executive officer named in the Summary
Compensation Table above, and by all directors and executive officers of the
Company as a group. Except as otherwise indicated all shares are owned directly.

Amount and
Nature of Beneficial Percent
Name or Group Ownership(1)(2) of Class
- ------------- -------------------- --------
Richard R. Erkeneff 646,000 4.76%
Harold S. Gelb 35,000 (3)
Paul J. Hoeper 5,000 (3)
Warren G. Lichtenstein 1,320,250(4) 10.10%
James H. Perry 82,843 (3)
Joseph S. Schneider 30,000 (3)
Robert W. Worthing 80,419(5) (3)
Susan Fein Zawel 386,954(6) 2.95%
All directors and executive
officers as a group,
consisting of 8 persons 2,586,466 18.68%

(1) The information as to securities owned by directors, nominees and executive
officers was furnished to the Company by such directors, nominees and
executive officers. Includes units in the Company's 401(k) plan, which
consist of shares of Common Stock and cash.

(2) Includes shares which the following persons have the right to acquire
within 60 days through the exercise of stock options: Mr. Erkeneff, 510,000
shares; Mr. Gelb, 30,000 shares; Mr. Hoeper, 5,000 shares; Mr.
Lichtenstein, 10,000 shares; Mr. Perry, 77,000 shares; Mr. Schneider,
25,000 shares; Mr. Worthing, 71,000 shares; Ms. Fein Zawel, 55,000 shares;
and all directors and executive officers as a group, 783,000 shares.

(3) Less than 1%.

(4) All of such shares are owned by Steel Partners II, L.P. ("Steel") (other
than Mr. Lichtenstein's stock options). Mr. Lichtenstein is the Chairman of
the Board, Secretary and Managing Member of the general partner of Steel.
Mr. Lichtenstein disclaims beneficial ownership of the shares owned by
Steel, except to the extent of his pecuniary interest therein.

(5) Does not include 500 shares of Common Stock owned by Mr. Worthing's spouse,
as to which he disclaims beneficial ownership.

(6) Includes 11,440 shares of Common Stock owned by Ms. Fein Zawel's spouse,
4,772 shares of Common Stock owned by Ms. Fein Zawel jointly with her
spouse, and 32,634 shares of Common Stock held in trust for her minor
children.

-19-

IMPORTANT

Tell your Board what you think! Your vote is important. No matter
how many Shares you own, please give Steel your proxy FOR the election of the
Nominee by taking three steps:

o SIGNING the enclosed GOLD proxy card,

o DATING the enclosed GOLD proxy card, and

o MAILING the enclosed GOLD proxy card TODAY in the envelope provided (no
postage is required if mailed in the United States).

If any of your Shares are held in the name of a brokerage firm,
bank, bank nominee or other institution, only it can vote such Shares and only
upon receipt of your specific instructions. Accordingly, please contact the
person responsible for your account and instruct that person to execute the GOLD
proxy card representing your Shares. Steel urges you to confirm in writing your
instructions to Steel in care of MacKenzie Partners, Inc. at the address
provided below so that Steel will be aware of all instructions given and can
attempt to ensure that such instructions are followed.

If you have any questions or require any additional information
concerning this Proxy Statement, please contact MacKenzie Partners, Inc. at the
address set forth below.

[MacKenzie Logo]

-20-

PRELIMINARY COPY SUBJECT TO COMPLETION

DATED SEPTEMBER 3, 2002

UNITED INDUSTRIAL CORPORATION ANNUAL MEETING OF STOCKHOLDERS
------------------------------------------------------------

THIS PROXY IS SOLICITED ON BEHALF OF STEEL PARTNERS II, L.P.

THE BOARD OF DIRECTORS OF UNITED INDUSTRIAL CORPORATION IS NOT SOLICITING THIS
PROXY.

The undersigned appoints Warren G. Lichtenstein and Glen M. Kassan, and each of
them, attorneys and agents with full power of substitution to vote all shares of
common stock of United Industrial Corporation (the "Company") which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company, and including at any adjournments or
postponements thereof and at any meeting called in lieu thereof, as follows:

1. ELECTION OF DIRECTOR:

A total of two Directors will be elected at the Annual Meeting of
Stockholders of the Company. This Proxy can only be voted for one of
the two Directors being elected at the Annual Meeting. Accordingly,
this Proxy does not confer voting power with respect to the
remaining directorship.

FOR WITHHOLD

Nominee: Glen M. Kassan [ ] [ ]

2. RATIFICATION OF APPOINTMENT FOR AGAINST ABSTAIN
OF INDEPENDENT AUDITORS: [ ] [ ] [ ]

3. IN THEIR DISCRETION WITH RESPECT TO ANY OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING.

The undersigned hereby revokes any other proxy or proxies heretofore
given to vote or act with respect to the shares of Common Stock of the Company
held by the undersigned, and hereby ratifies and confirms all action the herein
named attorneys and proxies, their substitutes, or any of them may lawfully take
by virtue hereof. IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED
ABOVE. IF NO DIRECTION IS INDICATED WITH RESPECT TO THE ABOVE PROPOSALS, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEE, OR ANY SUBSTITUTIONS
THERETO, AND FOR THE RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS.

This proxy will be valid until the sooner of one year from the date
indicated below and the completion of the Annual Meeting.

DATED: ____________________________

PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.

- ------------------------------------
(Signature)

- ------------------------------------
(Signature, if held jointly)

- ------------------------------------
(Title)

WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.

IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!

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