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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 15)
Zapata Corporation
------------------
(Name of Issuer)
Common Stock $0.01 Par Value
--------------------------------
(Title of Class of Securities)
989070R17
---------------
(CUSIP Number)
Gordon E. Forth, Esq.
WOODS, OVIATT, GILMAN, STURMAN & CLARKE
44 Exchange Street
Rochester, New York 14614
(716) 454-5370
--------------
(Name, Address and Telephone Number
of Person Authorized to Receive Notices
and Communications)
May 2, 1996
-------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box
Check the following box if a fee is being paid with the statement
SCHEDULE 13D
CUSIP NO. 98907OR17 Page 2 of 23 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Malcolm I. Glazer Trust
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Florida
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 10,415,384
OWNED BY
8 SHARED VOTING POWER
EACH
REPORTING PERSON
-0-
WITH
9 SOLE DISPOSITIVE POWER
10,415,384
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,415,384
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.3%
14 TYPE OF REPORTING PERSON
00
SCHEDULE 13D
CUSIP NO. 98907OR17 Page 3 of 23 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Malcolm I. Glazer
S.S. No. ###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 10,415,384
OWNED BY
8 SHARED VOTING POWER
EACH
REPORTING PERSON
-0-
WITH
9 SOLE DISPOSITIVE POWER
10,415,384
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,415,384
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.3%
14 TYPE OF REPORTING PERSON
IN
This Amendment No. 15 ("Amendment No. 15") amends and supplements the
Schedule 13D and statement attached thereto, as previously amended ("Schedule
13D"), filed on behalf of Malcolm I. Glazer ("Glazer") and The Malcolm Glazer
Trust ("Trust" and together with Glazer, the "Reporting Persons") relating to
the common stock, par value $.01 per share, of Zapata Corporation "(Zapata"),
and is hereby filed on behalf of the Reporting Persons. All capitalized terms
used in this Amendment No. 15 and not otherwise defined herein have the meanings
previously ascribed to such terms in the Schedule 13D.
Item 4. Purpose of Transaction.
----------------------
Item No. 4 is hereby amended by inserting the following paragraph
immediately prior to the last paragraph thereof:
On May 2, 1996 Zapata announced in a press release that it had entered into
a Letter of Intent with Houlihan's Restaurant Group, Inc. ("Houlihan's")
pursuant to which Zapata has proposed an acquisition of Houlihan's for a
combination of cash and stock totalling $8.00 per share. The Reporting Persons
together with members of the Glazer family hold approximately 73.3% of
Houlihan's outstanding shares of common stock. According to the press release,
the proposed merger would result in each share of Houlihan's stock being
converted into $4.00 in cash, without interest, and $4.00 in average market
value of Zapata common stock based on a specified the number of trading days
prior to the effective date of the merger. Under the proposal, Houlihan's
shareholders not affiliated with the Reporting Persons would be afforded the
opportunity to elect, subject to pro ration, to receive 100% cash in the merger
for their Houlihan's shares. In the event that the unaffiliated stockholders,
as a group, elect to receive cash in the merger in such amount that the
aggregate ownership of Zapata common stock by Reporting Persons and their
affiliates after the merger would exceed 49.9% of Zapata's outstanding common
stock, then the cash elections of the unaffiliated stockholders would be reduced
pro rata to assure that the Reporting Persons and their affiliates do not exceed
the 49.9% ownership interest limitation upon consummation of the merger. Based
on the foregoing and assuming that a merger agreement is entered into,
appropriate approvals and consents thereto are received and the merger is
consummated, the Reporting Persons' Zapata ownership interest could increase to
49.9% of Zapata's outstanding common stock. A copy of Zapata's press release is
attached hereto as Exhibit 15 and incorporated herein by reference.
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Page 4 of 23 Pages
Item 5. Purpose of Transaction.
----------------------
Item No. 5(a) is hereby amended by deleting that Item in its entirety and
replacing it with the following:
(a) The Reporting Persons are the beneficial owners of 10,415,384 shares of
Zapata common stock, which constitutes approximately 35.3% of Zapata's
outstanding shares of common stock, par value $.25 per share. Of those shares,
10,395,384 shares are owned of record by the Trust and 20,000 shares are
purchasable presently or within 60 days after the date hereof by Glazer at an
exercise price of $5.94 per share pursuant to options granted on July 2, 1993 by
Zapata to Glazer under a certain stock option plan.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to the Securities of the Issuer
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- --
Item No. 6 is hereby amended by inserting the following paragraph
immediately after the last paragraph thereof:
On April 30, 1996, Zapata and the Reporting Persons entered into an
Agreement which restricts the Reporting Persons' from acquiring, selling, voting
and otherwise dealing with their current and future Zapata stockholdings during
the term of the Agreement. Under the Agreement, the Reporting Persons have
agreed on behalf of themselves and members of the Glazer family and entities
controlled by them not to increase their ownership of voting securities of
Zapata beyond 49.9% of Zapata's outstanding voting securities, unless, among
other things, such increases are approved by a majority of the directors of the
Zapata Board who are not members of the Glazer family or are made in response to
a tender offer or similar proposal by others to acquire more than 20% of
Zapata's outstanding voting securities. Further, the Reporting Persons may
exceed the 49.9% limitation if a holder of greater than 5% of Zapata's
outstanding voting securities discloses an intent to acquire control of Zapata.
So long as the Agreement remains in effect, the Reporting Persons have a
right of first purchase to maintain their proportionate ownership position in
Zapata. Generally, the Agreement provides that Zapata has a right to acquire
any voting securities sought to be transferred by the Reporting Persons. The
Reporting Persons are permitted under the Agreement to sell their voting
securities free of Zapata's right of first refusal in a number of circumstances,
including sales or transfers to purchasers that agree to be bound by the terms
of the Agreement, pursuant to a public distribution, in response to a tender
offer by an unaffiliated third party for at least 14.9% of Zapata's outstanding
voting securities, in connection with corporate reorganizations or upon
conversion, exchange or exercise of outstanding securities. The Agreement
prohibits Zapata from soliciting proposals for acquisitions of Zapata so long as
the Reporting Persons hold more than 9.9% of Zapata's outstanding voting
securities; however, Zapata has reserved the right to respond to unsolicited
proposals from other parties.
Page 5 of 23 Pages
In the event that any combination between Zapata and any entity in which
the Reporting Persons own 15% or more of the voting equity, such as Houlihan's,
the Zapata Board is required to appoint a special committee which will negotiate
and approve the transaction. In the event of a proposed acquisition of any such
Glazer controlled entity, the Reporting Persons have agreed to grant the special
committee evaluating such acquisition an irrevocable proxy to vote all of the
Reporting Persons' Zapata shares in such manner as a majority of the committee
members may determine.
The Agreement terminates upon, among other events, the first to occur of 18
months of Zapata's acquisition of Houlihan's, Zapata's announcement that it does
not intend to acquire Houlihan's, the acquisition by another party of securities
representing 20% or more of the voting power attributable to Zapata's
outstanding capital stock, a breach of the Agreement by Zapata or the Reporting
Persons' acquisition of more than 50% of Zapata's outstanding voting securities
in accordance with the terms of the Agreement. In the event that Zapata
announces its intention to acquire another Glazer controlled entity by the
Reporting Persons prior to the expiration of the Agreement, the Agreement's
termination date will be automatically extended until the first to occur of 18
months after the acquisition of such entity or Zapata's announcement that it
does not intend to acquire such entity.
A complete copy of the Agreement is attached hereto as Exhibit 16 and is
----------
incorporated herein by reference.
Item 7. Materials to be Filed as Exhibits.
---------------------------------
Item No. 7 is hereby amended by inserting the following exhibits
immediately after the last exhibit appearing thereunder:
Exhibit 15 - May 2, 1995 Press Release Issued by Zapata
Exhibit 16 - Agreement dated as of April 30, 1996 among Zapata and the
Reporting Persons
Page 6 of 23 Pages
SIGNATURE PAGE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 15 is true,
complete and correct.
Dated: May 14, 1996
THE MALCOLM GLAZER TRUST
By: /s/ MALCOLM I. GLAZER, AS TRUSTEE
---------------------------------------
Malcolm I. Glazer, as Trustee
By: Avram Glazer, Power of Attorney
/s/ Malcolm Glazer
--------------------------------------------
Malcolm I. Glazer
By: Avram Glazer, Power of Attorney
Page 7 of 23 Pages
EXHIBIT 15
May 2, 1996 (ZOS-NYSSE) --- Zapata Corporation ("Zapata") and Houlihan's
Restaurant Group, Inc. ("Houlihan's") announced today that they have entered
into a letter of intent relating to Zapata's proposed acquisition of Houlihan's
for a combination of cash and stock amounting to $8.00 per share. In view of
Malcolm I. Glazer's ownership of 35.2% of Zapata's 29.5 million outstanding
shares of common stock and 73.3% of Houlihan's 10.0 million outstanding shares
of common stock, the letter of intent was negotiated by representatives of
special committees of the directors of both Zapata and Houlihan's who are not
members of the Glazer family. The proposed transaction represents another step
in Zapata's transformation into a food service company.
Zapata and Houlihan's have proposed a merger of Houlihan's into a newly
organized subsidiary of Zapata with each share of Houlihan's stock being
converted into $4.00 in cash, without interest, and $4.00 in average market
value of Zapata common stock for a specified number of trading days prior to the
effective date of the merger. It is proposed that shareholders not affiliated
with Malcolm Glazer would be afforded the opportunity to elect, subject to
proration as noted below, to receive 100% cash in the merger for their
Houlihan's shares. In the event that the unaffiliated stockholders as a group
exercise elections to receive such an amount of cash in the merger that the
aggregate ownership of Zapata's then outstanding common stock, the cash
elections of the unaffiliated stockholders will be reduced pro rata to assure
that the foregoing 49.9% ownership threshold is not exceeded.
Any transaction would be subject to the negotiation and execution of a
definitive merger agreement and, among other things, approval of the transaction
by the directors and stockholders of both companies, compliance with the Hart-
Scott-Rodino Antitrust Improvements Act, registration of the Zapata shares
issuable in the merger under the Securities Act of 1933 and receipt of consent
from Houlihan's lending bank or the refinancing of Houlihan's outstanding bank
debt. There can be no assurance that a transaction will be consummated, or, if
consummated, will be on the terms as proposed.
Zapata also announced that Malcolm Glazer has entered into a Standstill
Agreement with Zapata. Under the Standstill Agreement, Mr. Glazer has agreed on
behalf of himself, his family and entities controlled by him not to increase his
or their ownership of voting securities in Zapata above 49.9% on either an
outstanding or fully-diluted share basis, unless, among other things, such
increase is approved by a majority of the directors on the Zapata Board who are
not members of the Glazer family or is in response to a tender offer or other
proposal by others to acquire more than 14.9% of Zapata's voting securities.
Page 8 of 23 Pages
As long as the Standstill Agreement is in effect, Mr. Glazer will have a
right of first purchase to maintain his proportionate ownership position in
Zapata. Generally, Zapata will have the right to acquire any voting securities
sought to be transferred by Mr. Glazer. Mr. Glazer will be permitted to sell
voting securities free of Zapata's purchase option in a number of circumstances,
including sales or transfers to a purchaser that agrees to be bound by the terms
of the Standstill Agreement, pursuant to a public distribution, in response to a
tender offer by an unaffiliated third party for at least 14.9% of Zapata's
outstanding voting securities, in connection with certain corporation
reorganizations or upon conversion, exchange or exercise of outstanding
securities. As long as Mr. Glazer owns more than 9.9% of the voting securities
of Zapata, Zapata has agreed generally not to solicit proposals for the
acquisition Zapata although it has reserved the right to respond to unsolicited
proposals from others.
Under the Standstill Agreement, any combinations between Zapata and other
entities in which Mr. Glazer owns 15% or more of the voting equity, such as
Houlihan's, must be negotiated and approved by a special committee of Zapata's
directors. In the event of a proposed acquisition of a Glazer controlled
entity, Mr. Glazer has agreed to grant the special committee evaluating such
acquisition an irrevocable proxy to vote all of Mr. Glazer's Zapata shares in
such manner as the committee in its sole discretion determines.
The Standstill Agreement terminates upon, among other events, the first to
occur of eighteen months after Zapata's acquisition of Houlihan's, Zapata's
announcement that it does not intend to acquire Houlihan's, the acquisition by
another of securities representing 20% of the voting power attributable to
Zapata's outstanding capital stock, a breach of the terms of the Standstill
Agreement by Zapata or Mr. Glazer's acquisition of more than 50-% of Zapata's
outstanding voting securities in accordance with the terms of the Agreement. In
the event that Zapata announces its intention to acquire another Glazer
controlled entity prior to the expiration of the Standstill Agreement, the
termination date of the Standstill Agreement will be automatically extended
until the first to occur of eighteen months after the acquisition of such entity
or Zapata's announcement that it does not intend to acquire such entity.
Page 9 of 23 Pages
AGREEMENT EXHIBIT 16
---------
AGREEMENT dated and effective as of April 30, 1996, between Zapata
Corporation, a Delaware corporation (the "Company"), and Malcolm I. Glazer,
individually and as trustee of the Malcolm I. Glazer Trust ("Glazer").
WHEREAS, as of the date of this Agreement, Glazer owns beneficially
10,408,717 shares of common stock, par value $0.25 per share ("Common Stock"),
of the Company, representing approximately 35.2% of the Company's outstanding
Common Stock;
WHEREAS, as of the date of this Agreement, Glazer owns beneficially 15% or
more of the outstanding securities of other corporations, persons, partnerships,
trusts and entities that are entitled to vote for the election of directors or
others performing similar functions ("Glazer Controlled Entities");
WHEREAS, the Company has previously publicly announced its intention to
explore the possible acquisition of two Glazer Controlled Entities that are
engaged in the food service industry;
WHEREAS, the Board of Directors of the Company has appointed a special
committee of its members ("HOL Special Committee") to evaluate the Company's
possible acquisition of Houlihan's Restaurant Group, Inc. ("HOL"), one of the
Glazer Controlled Entities; and
WHEREAS, as a condition to the HOL Special Committee recommending a
transaction between the Company and/or a subsidiary of the Company, the HOL
Special Committee has requested and Glazer has agreed to enter into this
Agreement establishing certain terms and conditions concerning Glazer's
acquisition and disposition of the Company's securities and certain other
aspects of their relationship;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties agree as follows:
I. Certain Definitions.
"Adjusted Voting Power" shall mean, with respect to Outstanding Voting
Securities, the highest number of votes that the holders of all such Outstanding
Voting Securities would be entitled to cast for the election of directors or on
any other matter (except to the extent such voting rights are dependent upon
arrearages in the payment of dividends, events of default or bankruptcy),
assuming for purposes of this computation, the conversion into or exchange for
Voting Securities or Convertible Securities and the exercise of Options for the
purchase of Voting Securities or Convertible Securities, in each case to the
extent that any such action would increase the number of such votes.
Page 10 of 23 Pages
"Beneficial Ownership" with respect to any security shall mean, the
ability, whether through contract, arrangement, understanding, relationship or
otherwise, to exercise, directly or indirectly, the voting power (including the
power to vote or to direct the voting) and/or the investment power (including
the power to dispose or to direct the disposition) of such security. Unless the
context clearly otherwise requires, the terms "own" and "hold" and their
variations when used in this Agreement in conjunction with percentages of
securities and the voting power associated with such securities should be read
to incorporate the concept of Beneficial Ownership.
"Convertible Securities" shall mean securities of the Company which
are convertible into or exchangeable for Voting Securities.
"Glazer Directors" shall mean Malcolm I. Glazer, Avram Glazer and any
other member of the Glazer family serving on the Company's Board of Directors
from time to time.
"Glazer Group" means Glazer and any corporation, person, partnership,
trust or other entity controlled, directly or indirectly, by Glazer but does not
and shall not in any circumstance include the Company.
"Glazer Public Company" shall mean any publicly held entity (other
than the Company) in which Glazer holds Beneficial Ownership of less than 50% of
such entity's issued and outstanding securities that are entitled to vote in the
election of directors or on any other matter (except to the extent such voting
rights are dependent upon arrearages in the payment of dividends, events of
default or bankruptcy).
"Options" shall mean options and rights (whether presently exercisable
or not) to purchase Voting Securities or Convertible Securities (except options
issued under employee stock option plans); and "Outstanding Voting Securities"
shall at any time mean the then issued and outstanding Voting Securities,
Convertible Securities (which shall be counted at the highest conversion or
exchange rate at which they can be converted or exchanged) and Options (which
shall be counted at the highest rate at which they can be exercised).
"Termination Date" shall mean the date upon which this Agreement
terminates pursuant to paragraph 7.
"Voting Power" shall mean, with respect to Voting Securities, the
highest number of votes that the holders of all Voting Securities, issued and
outstanding on the date such determination is made, would be entitled to cast
for the election of directors or on any other matter (except to the extent such
voting rights are dependent upon arrearages in the payment of dividends, events
of default or bankruptcy).
Page 11 of 23 Pages
"Voting Securities" shall mean the Common Stock and any other
securities of the Company of any kind or class having power to vote for the
election of directors;
II. Limitation on Ownership of Voting Securities, Convertible Securities
and Options.
A. Except as expressly permitted by the other provisions of this
Agreement, Glazer shall not, and shall not permit any other member of the Glazer
Group to, acquire, without the prior consent of a majority of the Company's
directors that are not Glazer Directors, Beneficial Ownership of any Voting
Securities, Convertible Securities or Options (collectively, sometimes the
"Regulated Securities") from the date hereof through the Termintion Date, if
after such acquisition the Glazer Group would hold in the aggregate either more
than (i) 49.9% of the Voting Power of all Voting Securities or (ii) 49.9% of
the Adjusted Voting Power of all Outstanding Voting Securities.
B. Glazer shall be under no obligation to dispose or cause the
disposition of Regulated Securities owned by the Glazer Group in excess of one
of the percentage limitations set forth in subparagraph 2(a) if such excess is
caused by a reduction in the Voting Power of Voting Securities or the Adjusted
Voting Power of Outstanding Voting Securities, as the case may be, whether as a
result of a recapitalization of the Company, a repurchase of securities by the
Company or otherwise.
C. If any member of the Glazer Group, without the prior consent of
Glazer, acquires Regulated Securities the result of which is to cause the Glazer
Group to exceed one of the percentage limitations set forth in subparagraph
2(a), Glazer shall not be deemed to be in breach of this paragraph 2 if he shall
promptly take all reasonable steps to cause a member of the Glazer Group to
dispose of the Regulated Securities owned by it in excess of such percentage
limitation; provided, however, that in the case of a Glazer Public Company,
Glazer shall only be required to take reasonable good faith efforts to cause
such Glazer Public Company to dispose of the Regulated Securities owned by it in
excess of such percentage limitation.
D. Notwithstanding any other provisions of this paragraph 2, Glazer
or any member of the Glazer Group designated by Glazer shall have the right
(upon receipt by the Company of written notice to such effect) to acquire
additional Regulated Securities or to make a tender offer (whether for cash of
otherwise) for any and all Outstanding Voting Securities of the Company,
provided such acquisition or tender offer is commenced:
Page 12 of 23 Pages
1. within 90 days after the announcement by any person,
entity or group (other than a member of and without any solicitation,
promotion, arrangement or assistance by any member of the Glazer Group)
that such person, entity or group intends to commence a tender offer for
Outstanding Voting Securities if after the completion of such proposed
tender offer such person, entity or group, together with all persons and
entities controlling, controlled by or under common control or in a group
with it, would, if such tender offer were to be successful, own 14.9% or
more of the Adjusted Voting Power of all Outstanding Voting Securities; or
2. at any time any person, entity or group (other than a member
of and without any solicitation, promotion, arrangement or assistance by
any member of the Glazer Group) holds 14.9% or more of the Adjusted Voting
Power of all Outstanding Voting Securities, or within 90 days after the
filing (without any solicitation, promotion, arrangement or assistance by
any member of the Glazer Group), by any person, entity or group (other than
a member of the Glazer Group) owning 5% or more of the Adjusted Voting
Power of all Outstanding Voting Securities, of any document with a
governmental agency (including a statement on Schedule 13D with the
Securities and Exchange Commission or a notification under the Hart-Scott-
Rodino Antitrust Improvements Act) to the effect that such person, entity
or group intends or contemplates acquiring Outstanding Voting Securities,
if after the completion of such proposed acquisition such person, entity or
group, together with all persons and entities controlling, controlled by or
under common control or in a group with it, would own 14.9% or more of the
Adjusted Voting Power of all Outstanding Voting Securities;
and provided further that in the case of a tender offer pursuant to subparagraph
2(d), such tender offer is made either:
(x) at a price determined by an Independent Investment Banker
(as hereinafter defined), selected by the member of the Glazer Group
making the tender offer, to be fair to the holders of Outstanding
Voting Securities (other than the Glazer Group) from a financial point
of view; or
(y) if made pursuant to clause (i) of this subparagraph 2(d),
but only if the announced tender offer is in fact commenced and only
if after the completion of the proposed tender offer by such person,
entity or group, such person, entity or group, together with all
persons and entities controlling, controlled by or under common
control or in a group with it, would (if such tender offer were to be
successful) own 14.9% or more of the Adjusted Voting Power of all
Outstanding Voting Securities, at a price higher than the price
specified in such competing offer at the time of commencement of the
tender offer by a member of the Glazer Group.
Page 13 of 23 Pages
"Independent Investment Banker" for purposes of this paragraph means a
nationally recognized investment banking firm which neither (i) had an existing
client relationship, immediately prior to its retention to render an opinion in
connection with a tender offer made pursuant to paragraph 2(d) with any member
of the Glazer Group, nor (ii) had received fees aggregating more than $200,000
in the five years immediately prior thereto from any one or more members of the
Glazer Group.
III. Transfer of Outstanding Voting Securities.
A. Except pursuant to clause (iv) of paragraph 3(b) and except for
transfers among members of the Glazer Group, notwithstanding anything to the
contrary in this Agreement, Glazer shall not, and shall not permit any member of
the Glazer Group to, assign, sell or otherwise transfer to any transferee (such
transferee to include all persons and entities controlling, controlled by or
under common control or in a group, as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, with such person in respect of
Outstanding Voting Securities) in one transaction or a series of transactions
whenever occurring, unless such transferee agrees to be bound by the provisions
of this Agreement (it being understood that all percentage limitations shall be
reduced in this Agreement and such transferee's agreement and such additional
adjustments shall be made, so that the Company shall be in the same position as
reasonably practicable as if the transferee were a member of the Glazer Group),
more than such quantity of Regulated Securities as would result in the
transferee, immediately after the transfer, holding an aggregate of more than
9.9% of the Adjusted Voting Power of all Outstanding Voting Securities or such
greater percentage of the Adjusted Voting Power of all Outstanding Voting
Securities, as may be approved by a majority of the Company's directors that are
not Glazer Directors.
B. In the event that Glazer or any other member of the Glazer Group
wishes to transfer, assign, sell or otherwise dispose of any Outstanding Voting
Securities owned by it, Glazer shall, or shall cause such other member of the
Glazer Group to, do so in accordance with subparagraphs 3(d) and 3(e) below, as
they are applicable; provided, however, that compliance with such subparagraphs
shall not be required in the following instances: (i) a disposition pursuant to
Rule 144, as in effect from time to time, under the Securities Act of 1933, as
amended (the "Securities Act"), or any successors to such Rule; (ii) a
disposition through a bona fide underwritten public offering; (iii) a bona fide
public distribution by means of any other registration statement relating to
equity securities of the Company (on appropriate forms) filed by the Company
under the Securities Act; (iv) tendering all or any portion of the Common Stock
or other Outstanding Voting Securities then held by it pursuant to a tender
offer (other than by a member or affiliate of, and without any solicitation,
promotion, arrangement or assistance by, the Glazer Group) for at least 14.9% of
the outstanding shares of Common Stock or at least 14.9% of the Adjusted Voting
Power of other Outstanding Voting Securities, as the case may be, provided that
at the time such offer is commenced the entity making such tender offer (x) has
financing or financial commitments from responsible financial
Page 14 of 23 Pages
institutions sufficient to purchase all shares of Common Stock or other
Outstanding Voting Securities, as the case may be, sought to be purchased
pursuant to such offer and (y) commits to use its best efforts to acquire any
shares of Common Stock or other Outstanding Voting Securities, as the case may
be, not purchased in the tender offer at the highest price paid in the offer;
(v) a merger or consolidation in which the Company is acquired or a plan of
liquidation of the Company; (vi) the conversion, exchange or exercise of
Convertible Securities or Options in accordance with their respective terms; or
(vii) a bona fide pledge or grant of a security interest in or any other lien or
encumbrance ("Lien") in such Outstanding Voting Securities, provided that any
foreclosure, subsequent sale or other disposition by the holder of the Lien
shall be expressly subject to the terms of this Agreement.
C. The Company agrees, in connection with a bona fide underwritten
public offering by the Glazer Group and in addition to the current shelf
registration statement that it agrees to maintain during the term of this
Agreement with respect to the shares of Common Stock owned by Glazer from time
to time, to register under the Securities Act, at the expense of the Company,
such Outstanding Voting Securities as Glazer shall designate for sale, but such
obligation to register shall be limited to two registered offerings requested by
Glazer separated by a period of at least one year. In connection with any such
registration statement, Glazer and the Company agree to execute such
underwriting agreements or other documents providing for mutual indemnification
and contribution arrangements, the payment of fees and commissions and the
performance of other obligations reasonably related to such transaction as are
customarily included in underwriting agreements and other documents executed by
sophisticated parties involved in similar transactions. Glazer agrees that he
will not, and will not permit any other members of the Glazer Group to, tender
its shares of Common Stock or other Outstanding Voting Securities pursuant to
clause (iv) of the first sentence of this paragraph unless it has given notice
to the Company and made a public announcement of its intention to tender not
less than ten business days prior to the expiration of such tender offer.
D. In the event that Glazer, or any other member of the Glazer
Group, wishes to transfer, assign, sell or otherwise dispose of any or all
Outstanding Voting Securities owned by it for cash only, Glazer shall, or shall
cause such other member of the Glazer Group to, give to the Company notice of
such member of the Glazer Group's offer to sell such Outstanding Voting
Securities and the cash price and terms it is willing to accept (the "Offering
Terms"). The Company shall have a period of time to accept such offer (the
"Offer Period"). (i) If such offer is not accepted within the Offer Period,
such member of the Glazer Group shall have a period of time (the "Selling
Period") in which it shall be free to sell such Outstanding Voting Securities at
the Offering Terms or at cash prices or terms more favorable to such member of
the Glazer Group than the Offering Terms. (ii) If such member of the Glazer
Group, within the Selling Period, wishes to accept a cash price or terms less
favorable to such member of the Glazer Group than the Offering Terms, it shall
notify the Company of its new cash price and
Page 15 of 23 Pages
terms (the "Revised Offering Terms"), in which event (x) the Company shall have
the Offer Period to accept such new offer, and (y) if such new offer is not
accepted within such Offer Period, such member of the Glazer Group shall have
the Selling Period in which it shall be free to sell such Outstanding Voting
Securities at such Revised Offering Terms or at cash prices or terms more
favorable to such member of the Glazer Group than the Revised Offering Terms.
(iii) Notwithstanding clause (ii) of this subparagraph 3(d), if such member of
the Glazer Group, within any Selling Period, intends to accept a firm offer of a
cash price on terms less favorable to such member of the Glazer Group than the
Offering Terms or Revised Offering Terms, as the case may be, it shall notify
the Company of the cash price and terms of such firm offer, in which event (A)
the Company shall have a different period within which to accept the revised
offer (the "Reoffer Period"), and (B) if such revised offer is not accepted
within such Reoffer Period, such member of the Glazer Group shall have the
Selling Period in which it shall be free to sell such Outstanding Voting
Securities at the cash price and on the terms of such firm offer or at a cash
price or terms more favorable to such member of the Glazer Group than those of
the firm offer. (iv) The closing of the sale and purchase under an offer
accepted by the Company shall take place within 30 days of the date of
acceptance. The Offer Period shall be 60 days from the date of notice of
Offering Terms or Revised Offering Terms, as the case may be, and the Reoffer
Period shall be 30 days from the date of notice of the terms of such a firm
offer, except in the event that any transfer (including a transfer to a voting
trust), assignment, sale or other disposition by a member of the Glazer Group
governed by this subparagraph 3(d) is compelled by order of a court,
administrative agency or other competent governmental authority, in which case
the Offer Period and the Reoffer Period both shall be 15 business days. (v)
The Selling Period shall be 180 days from the date the Offer Period or Reoffer
Period, as the case may be, expires.
E. In the event that Glazer or any other member of the Glazer Group
wishes to transfer, assign, sell or otherwise dispose of any or all of the
Outstanding Voting Securities owned by it solely for consideration other than
cash, Glazer shall, or cause such other member of the Glazer Group to, give the
Company notice at least 60 days before such member of the Glazer Group legally
obligates itself to transfer, assign, sell or dispose of any such Outstanding
Voting Securities, unless such transfer (including a transfer to a voting
trust), assignment, sale or disposition is compelled by order of a order,
administrative agency or other competent governmental authority, in which event
such member of the Glazer Group shall give the Company notice at least 15
business days prior to such transfer, assignment, sale or disposition.
F. The Company may assign its right under subparagraph 3(d) to
purchase Outstanding Voting Securities of the Glazer Group; provided that such
assignee agrees in writing (for the benefit of the selling member of the Glazer
Group) to purchase the selling member of the Glazer Group's Outstanding Voting
Securities in accordance
Page 16 of 23 Pages
with the provisions of subparagraph 3(d), and the Company guarantees to such
member of the Glazer Group all of the assignee's obligations to such member of
the Glazer Group in connection with said purchase.
G. Notwithstanding the provisions of subparagraph 3(d), if at any
time during the Selling Period a member of the Glazer Group wishes to transfer,
sell, assign or otherwise dispose of its Outstanding Voting Securities solely
for consideration other than cash, the provisions of subparagraph 3(d) shall not
(or shall cease to) apply to such transaction and such transfer, sale,
assignment, or other disposition shall be governed by the provisions of
subparagraph 3(e).
H. Notwithstanding anything herein to the contrary, subparagraphs
3(d) and 3(e) shall not apply to any sale, transfer, assignment or other
disposition of a type described in subparagraph 3(b)(i) through 3(b)(viii).
IV. Undertakings by the Company. So long as the Glazer Group shall hold
more than 9.9% of the Voting Power of all Voting Securities, the Company agrees
to take no action to solicit, promote or arrange for, or (except as required by
law) assist in, the acquisition by any person, entity or group (other than a
member of the Glazer Group), together with all persons and entities controlling,
controlled by or under common control or in a group with it, of 14.9% or more of
the Adjusted Voting Power of all Outstanding Voting Securities or of all or
substantially all of the assets of the Company; provided, however, that the
Company shall be free to respond to and authorize negotiations with respect to a
proposed transaction initiated by a third party and not solicited by the Company
subsequent to the date hereof; and provided further, that nothing herein shall
prevent the Company from taking action, in accordance with the procedures set
forth in the remainder of this paragraph, to solicit, promote or arrange for, or
agree to or assist in, the acquisition by any person, entity or group of
Outstanding Voting Securities or assets of the Company in a transaction or
transactions which is to be approved in advance of the consummation of any
material part of such transaction or transactions by the affirmative vote of a
majority of the Outstanding Voting Securities entitled to vote thereon at an
annual or special meeting called for the purpose of acting thereon. Prior to
taking any action to solicit, promote or arrange for, or agree to or assist in,
an acquisition pursuant to the second proviso of the next preceding sentence,
the Company shall (a) give Glazer notice of its desire to do so, stating the
type or types of transactions sought, and (b) if so requested by Glazer or
advised by counsel, make a public announcement of its desire to do so. The
Company thereafter may furnish information to and engage in discussions and
negotiations with the prospective purchaser for such purposes with respect to
the type or types of transactions described in the notice to Glazer. If no
definitive written agreement for such acquisition subject to this paragraph 4 is
executed and approved by the boards of both the Company and such a prospective
purchaser within the 120-day period following the effective date of notice to
Glazer, the Company's notice to Glazer shall expire and the Company may not
thereafter solicit, promote or arrange for, or agree to or assist in, such
acquisition unless and until a new
Page 17 of 23 Pages
notice is given to Glazer. Notwithstanding the foregoing, the Company may
solicit, promote or arrange for, or agree to or assist in, the acquisition by
any person, entity or group of Outstanding Voting Securities or assets upon the
receipt by the Company of a written notice form the Glazer Group (x) pursuant to
paragraph 2(d) that it intends to commence a tender offer pursuant to such
paragraph or (y) pursuant to paragraph 3(b) that it intends to tender its shares
of Common Stock or other Outstanding Voting Securities pursuant to clause (iv)
of such paragraph.
If a member of the Glazer Group shall make a written proposal to the
Company or its Board of Directors to enter into a negotiated transaction with
the Company which would result in the Glazer Group acquiring additional
securities of the Company raising its holding to more than 49.9% of the Voting
Power of all Voting Securities or the acquisition by the Glazer Group of
substantially all the assets of the Company, in either case for a price stated
in such proposal, and counsel to the Company shall advise the Company that
receipt of such proposal requires the Company to make the receipt and terms
thereof public, the restrictions of this paragraph 4 shall become inoperative
upon receipt by Glazer of written notice form the Company to that effect. If
the member of the Glazer Group that made such proposal shall subsequently
withdraw the proposal by written notice to the Company, the provisions of this
paragraph 4 shall thereupon be reinstated; provided that this paragraph shall
not limit the Company in concluding negotiations undertaken and not terminated
prior to such withdrawal.
V. Proposed Acquisition of a Glazer Controlled Entity.
A. Prior to the commencement of any substantive negotiations that
could reasonably be expected to lead to the Company's acquisition of all or a
material portion of a Glazer Controlled Entity through merger, consolidation,
stock purchase, asset acquisition or otherwise (an "Acquisition"), the Board of
Directors of the Company shall appoint a special committee of directors
("Special Committee"). Such Special Committee shall be empowered to retain, at
the sole expense of the Company, investment bankers, lawyers and other
consultants and advisors to evaluate all aspects of the possible Acquisition.
The members of each Special Committee shall be directors who are not Glazer
Directors. Each Special Committee shall have the sole corporate power and
authority to negotiate the terms of any Acquisition if permitted by law
(otherwise the Special Committee shall recommend the Acquisition to the
Company's entire Board of Directors), to call all regular or special meetings of
stockholders, to approve the Acquisition and take all other actions reasonably
related thereto on behalf of the entire Board of Directors, and to authorize
officers and other representatives of the Company to sign all documents and take
such other actions on behalf of the Company as may be necessary, desirable or
appropriate to consummate the Acquisition. The Board of Directors has
established the HOL Special Committee comprised of Ronald C. Lassiter
(Chairman), Robert V. Leffler, Jr. and W. George Loar to evalute the possible
Acquisition of HOL.
Page 18 of 23 Pages
B. If any aspect of an Acquisition that has been approved by a
Special Committee requires approval by the holders of outstanding Voting
Securities, Glazer shall, and shall cause each member of the Glazer Group to,
grant the members of the Special Committee an irrevocable proxy to vote all
outstanding Voting Securities that each member of the Glazer Group is entitled
to vote on such matter, whether at a regular or special meeting of stockholders,
in such manner as a majority of the members of the Special Committee shall
determine in their sole discretion. The irrevocable proxy shall be in
substantially the form of Exhibit A attached hereto. Each proxy granted by
Glazer pursuant to this paragraph 5(b) shall be deemed to be coupled with an
interest.
VI. Glazer's Right of First Purchase.
A. In the event the Company's Board of Directors proposes to offer
and sell any Regulated Securities during the term of this Agreement ("New
Securities"), Glazer shall have the right of first purchase to acquire his Pro
Rata Share of the New Securities for the same price and on the same terms and
conditions as the Company proposes to sell the New Securities to others.
Glazer's Pro Rata Share shall mean the percentage of the aggregate Adjusted
Voting Power of all Outstanding Voting Securities represented by the Outstanding
Voting Securities owned by Glazer on the date the Board of Directors authorizes
the offer and sale of the New Securities.
B. At least 20 days prior to the date on which the Company proposes
to issue and sell the New Securities, the Company shall notify Glazer in writing
of the terms and conditions of the proposed offering of New Securities and its
bona fide intention to offer and sell the New Securities ("Notice"). If for any
reason, the sale of such New Securities is not consummated, Glazer's election to
purchase such New Securities shall lapse and be of no further force and effect.
Glazer may within ten days after the receipt of the Notice, elect to purchase
all but not less than all of his Pro Rata Share of the issue of New Securities
on the terms and conditions set forth in the Notice. The Notice shall set forth
(i) the number and type of New Securities proposed to be issued and sold and the
material terms of such New Securities, (ii) the proposed price or range of
prices at which such New Securities are proposed to be sold and the proposed
terms of payment and (iii) the proposed date of issuance and sale of such New
Securities. If such right of first purchase is not timely exercised by Glazer,
the right of first purchase with respect to the New Securities described in the
Notice shall be extinguished, and the Company shall be permitted to sell the New
Securities on the terms set forth in the Notice at any time within the 120-day
period following the date of the Notice. After the expiration of such 120-day
period, Glazer's right of first purchase shall be reinstated.
C. The right of first purchase created by this paragraph 6 shall not
apply to (i) New Securities issued to officers or employees of the Company and
its subsidiaries pursuant to stock option or other incentive plans and
arrangements that have been approved by the stockholders of the Company or (ii)
New Securities sold otherwise than entirely for cash.
Page 19 of 23 Pages
VII. Termination. This Agreement shall extend until the earliest of the
dates or events described in subparagraphs (a) through (f) below or until
terminated in accordance with any other provision of this Agreement:
A. the earlier of the last day of the eighteenth calendar month
following consummation of the Acquisition of HOL, or if no such Acquisition is
effected by the Company, the date upon which a public announcement is made by
the Company that it has abandoned any intention to acquire HOL (such earlier
termintion date being herein referred to as the "Expiration Date");
notwithstanding the foregoing, if during the term of this Agreement, the Company
announces that it intends to acquire another Glazer Controlled Entity, the term
of this Agreement shall not terminate on the Expiration Date but shall be
automatically extended until the first to occur of (i) the last day of the
eighteenth calendar month following the consummation of the acquisition of such
Glazer Controlled Entity, or (ii) the date upon which a public announcement is
made by the Company that it has abandoned any intention to acquire such Glazer
Controlled Entity;
B. the issuance by the Company of any new class of securities having
the right to vote, separately, as a class, for directors, or to approve,
separately as a class, mergers or any other major transactions involving the
Company (except to the extent such voting rights are dependent on arrearages in
the payment of dividends, events of default or bankruptcy); provided that, this
paragraph 7(b) shall not apply to any new class of securities the issuance and
specific terms of which shall have been approved in advance by the affirmative
vote of a majority of the outstanding stock of the Company entitled to vote
thereon at an annual or special meeting called for the purpose of acting
thereon;
C. notice that Glazer has determined to terminate this Agreement
effective on a date stated in such notice, given within ninety days after the
execution, approval by the Board of Directors of the Company, or announcement of
an agreement, or agreement in principle, whether or not subject to approval by
the Board of Directors of the Company or other corporate action, that provides
for (i) the merger of the Company with and into any other entity (or of any
other entity with or into the Company) and which would result in any person,
entity or group (other than the Glazer Group) holding 14.9% or more of the
Adjusted Voting Power of all Outstanding Voting Securities or in the percentage
of Adjusted Voting Power of Outstanding Voting Securities of the surviving
company (computed in the same manner as Adjusted Voting Power of Outstanding
Voting Securities is computed with respect to the Company) held by the Glazer
Group immediately following such merger being less than 90% of the percentage of
Adjusted Voting Power of Outstanding Voting Securities held by the Glazer Group
immediately prior to the merger, or (ii) any plan of reorganization or
liquidation of the Company, in each case without the prior approval thereof by
the affirmative vote of a majority of the outstanding stock of the Company
entitled to vote thereon at an annual or special meeting called for the purpose
of acting thereon;
Page 20 of 23 Pages
D. notice that Glazer has determined to terminate this Agreement
effective on a date stated in such notice, at any time during which the Glazer
Group holds more than (i) 49.9% of the Adjusted Voting Power of all Outstanding
Voting Securities or (ii) 49.9% of the Voting Power of all Voting Securities, in
each instance as a result of a tender offer made pursuant to paragraph 2(d);
E. the final adjournment of the first annual meeting of shareholders
of the Company after the Glazer Group holds more than (i) 49.9% of the Adjusted
Voting Power of all Outstanding Voting Securities or (ii) 49.9% of the Voting
Power of all outstanding Voting Securities, in each instance as a result of a
tender offer made pursuant to paragraph 2(d); and
F. the first day on which any person, entity or group, as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
announces or otherwise discloses that it has Beneficial Ownership of 20% or more
of the Adjusted Voting Power of all Outstanding Voting Securities or 20% or more
of the Voting Power of all Voting Securities.
Either party may terminate this Agreement prior to any stated
termination date if the other defaults in any material respect in its
obligations hereunder and if such default, providing it is of a nature that may
be cured by the defaulting party, is not cured within ten days.
Either party may waive its right to terminate this Agreement by a
written notice signed by an authorized representative expressly reciting the
event or provision being waived and any conditions or limitations attaching
thereto.
For the purposes of paragraph 7(a), the Company agrees to issue a
public announcement promptly following the determination by a Special Committee
that it has abandoned any intention to acquire HOL or any other Glazer
Controlled Entity.
VIII. Authorization. Glazer agrees not to take, and not to permit any
member of the Glazer Group to take, any action by consent pursuant to Section
228 of the Delaware General Corporation Law which is inconsistent with the terms
of this Agreement; provided, however, that Glazer or any member of the Glazer
Group may take any action by consent which is permitted under Section 228 of the
Delaware General Corporation Law in connection with any tender offer made by a
member of the Glazer Group which is permitted under paragraph 2(d).
IX. Composition of Board. During the term of this Agreement, Glazer
shall, and shall cause the members of the Glazer Group to, take such action as
may be necessary, appropriate or desirable to assure that all times (a) at
least three members of the Company's Board of Directors are not Glazer Directors
and (b) a majority of the members of the Company's Board of Directors are not
Glazer Directors.
Page 21 of 23 Pages
X. Miscellaneous.
A. The parties acknowledge and agree that the breach of the
provisions of this Agreement by Glazer or the Company would irreparably damage
the other party hereto, and accordingly agree that injunctive relief and
specific performance shall be appropriate remedies to enforce the provisions of
this Agreement; provided, however, that nothing herein shall limit the remedies,
legal or equitable, otherwise available.
B. This Agreement shall be governed by and interpreted in accordance
with the law of the State of Delaware applicable to agreements made and to be
performed entirely within such state.
C. This Agreement may be executed in several counterparts and such
counterparts together shall constitute one and the same instrument.
D. Notices given pursuant to this Agreement shall be given as
follows:
If to the Company:
Zapata Corporation
1717 St. James Place, Suite 550
Houston, Texas 77056
Attention: General Counsel
If to Glazer:
Malcolm I. Glazer
1482 South Ocean Boulevard
Palm Beach, Florida 33480
with a copy to:
Avram Glazer
18 Stoney Clover Lane
Pittsford, New York 14534
Notices shall be deemed to have been given (i) if mailed, on the second day
following mailing; and (ii) if hand delivered or given by telex, on the business
day following receipt.
Page 22 of 23 Pages
E. The Agreement may be amended or modified by the parties hereto,
provided that such amendment or modification is approved by a majority of the
directors of the Company that are not Glazer Directors.
ZAPATA CORPORATION
By: /s/ Ronald Lassiter
------------------------------------
Authorized Officer
/s/ Malcolm Glazer
------------------------------------------
Malcolm I. Glazer, individually and as
Trustee of the Malcolm I. Glazer Trust
Page 23 of 23 Pages