-----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, CzqTKmYZXceEjAl3nuh4wwHwu87cHQVwriePhUVcz3C8/Hp8WGw4UdEtipzffWZp LRdefBOSKe5J7jAAvLW88w== 0000950172-97-000409.txt : 19970502 0000950172-97-000409.hdr.sgml : 19970502 ACCESSION NUMBER: 0000950172-97-000409 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970501 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENVIRODYNE INDUSTRIES INC CENTRAL INDEX KEY: 0000033073 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 952677354 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-05485 FILM NUMBER: 97593640 BUSINESS ADDRESS: STREET 1: 701 HARGER ROAD STE 190 CITY: OAK BROOK STATE: IL ZIP: 60521 BUSINESS PHONE: 7085718800 FORMER COMPANY: FORMER CONFORMED NAME: MGN INC DATE OF NAME CHANGE: 19790425 DEFA14A 1 SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 1) Filed by the Registrant {X} Filed by a Party other than the Registrant {_} Check the appropriate box: {_} Preliminary Proxy Statement (Revocation of Consent Statement) {_} Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) {_} Definitive Proxy Statement (Revocation of Consent Statement) {X} Definitive Additional Materials {_} Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 ENVIRODYNE INDUSTRIES, INC. ----------------------------------------- (Name of Registrant as Specified in Its Charter) ----------------------------------------- (Name of Person(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 transactions: ______________ (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: ____________________________________________________ FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION: Nasdaq SmallCap: EDYN MEDIA: INVESTORS: Roy Wiley Stephen M. Schuster or (312) 255-3035 Gordon S. Donovan (630) 575-2400 ENVIRODYNE URGES SHAREHOLDERS TO REJECT ZAPATA DIRECTOR SLATE; OUTLINES MALCOLM GLAZER HISTORY OF USING CONTROL FOR PERSONAL GAIN OAK BROOK, ILL. - May 1 - Envirodyne Industries, Inc. (Nasdaq SmallCap: EDYN) Thursday released the following text of a letter to stockholders by F. Edward Gustafson, chairman of the board, president and chief executive officer: Dear Fellow Stockholder: I wanted to remind you that the Company's Annual Meeting is set to take place on May 16, 1997 and to encourage you to sign and return the enclosed WHITE proxy card even if you have already done so. Additionally, I wanted to acquaint you with Malcolm Glazer's history of taking control of companies and then engaging in self-serving transactions at the expense of other stockholders. Zapata Corporation may soon be sending you proxy materials along with a blue proxy card. Zapata is looking to take control of Envirodyne. We urge you not to sign or return any blue proxy card. Zapata is led by Malcolm Glazer, its Chairman and largest stockholder, who wants control of Envirodyne without paying a fair control premium to all our stockholders. The more you know about Mr. Glazer, the clearer it becomes that Mr. Glazer wants what is best for Mr. Glazer and that he has often used company-related transactions for his personal gain. Zapata has also indicated that it intends to introduce a proposal to eliminate the Company's Stockholder Rights Plan at the Annual Meeting. This is simply another tactic by Zapata to make it easier to acquire control of the Company without paying a fair price to all stockholders. We urge you to vote AGAINST Zapata's proposal. Enclosed is a supplement to our Proxy Statement describing in more detail the Zapata proposal and the reasons we oppose it. Malcolm Glazer's Approach We believe that Mr. Glazer's activities follow a pattern of acquiring control of companies without actually buying the company and then using that control for his personal gain. At Zapata, Mr. Glazer and his son, Avram gained two seats on the board in July 1993. By the following July 1994 Malcolm Glazer had been named Chairman of Zapata's board, and in August of 1994, he was elected president and CEO. His son, Avram succeeded him as president and CEO in March 1995. Transactions Involving Glazer-Controlled Companies Since early 1995 a series of questionable transactions between Zapata and companies in which Glazer has an interest has prompted lawsuits by stockholders and a former Zapata director. Glazer-Controlled Zapata Pays $18.8 Million For Glazer's Envirodyne Shares According to an October 7, 1996 Business Week article entitled "Is Zapata the Glazers' Toy?", Mr. Glazer made a deal to sell his holdings in Envirodyne to an investment banking firm, but the deal collapsed in February 1995. Soon after, according to the article, Mr. Glazer found another buyer for his shares -- Zapata. In August 1995, Zapata paid the $18.8 million to a Glazer-controlled trust for such shares. The payment was in the form of a promissory note bearing interest at the prime rate and maturing in August 1997; Zapata has since prepaid the promissory note. This transaction has enabled Mr. Glazer to get cash for his Envirodyne shares and still retain control over them through his control of Zapata. Glazer-Controlled Houlihan's Pays $10 Million to Advertise In Tampa Stadium In October 1995, Houlihan's Restaurant Group, Inc. (a Glazer-controlled restaurant operator) agreed to pay $10 million for the right to advertise its name in Tampa Stadium, where the Glazer-owned Tampa Bay Buccaneers play. However, Houlihan's has only two restaurants in Florida -- neither of which is in Tampa! According to a December 1995 article in the St. Petersburg Times, the money will be paid to a partnership run by Glazer and his sons. A Zapata Director Sues the Glazers and Zapata In November 1995, Peter Holt resigned from the Zapata board in a disagreement over Zapata's strategy to depart from energy services and enter into the food service business. In his resignation letter, Mr. Holt said: "The entry into food services...was predicated not upon the identification of a more attractive industry segment than energy services, but upon the make-up of Mr. Glazer's investment portfolio, apparently the only source of candidates which are regarded, by those responsible for the new strategy, as suitable acquisitions by Zapata." Mr. Holt subsequently sued Zapata, Malcolm Glazer and Avram Glazer. Zapata Attempts to Purchase Glazer-Controlled Houlihan's for $80 Million In June 1996, Zapata and Houlihan's entered into a merger agreement that called for Zapata to purchase Houlihan's for $80 million - - a 30% premium over the pre-deal share price. Mr. Glazer, a 73% owner of Houlihan's, stood to make $58.6 million on this transaction. Stockholders of Zapata sued to block the purchase. The Court enjoined the merger and as a result, Zapata abandoned the acquisition in October 1996. Zapata Attempts A Share Buy-Back Then last December, Zapata announced plans to buy back up to 50% of its outstanding stock at $4.50 per share. Mr. Glazer announced that he planned to tender approximately one-third of his position, which would have resulted in his receiving up to $13.5 million. In addition, the buyback would have increased Mr. Glazer's proportional holdings in Zapata. A lawsuit was filed by a stockholder in January 1997 to block the buy-back. In February 1997, Michael Heisley offered to buy the Zapata shares at a higher price that would benefit all stockholders. The Glazer-controlled Zapata board rejected the offer and withdrew its buy-back offer. We can only surmise that Mr. Glazer wanted both his money and the ability to continue to control Zapata through his tightly-controlled Zapata board. These transactions illustrate the way Mr. Glazer operates - solely for his benefit. Your Board of Directors and I would like to point out to Mr. Glazer that we have a fiduciary responsibility to represent the interests of all stockholders, not just Mr. Glazer and his interests. The Real Reasons Mr. Glazer Wants Envirodyne Mr. Glazer knows a good thing when he sees it. Envirodyne's cash flow continues to grow, debt is being paid down as scheduled and Viskase Corporation, a wholly owned subsidiary of the Company, was recently awarded $102 million in damages in a patent infringement suit! Your board is surprised by Mr. Glazer's recent actions because he has clearly stated that he is in full agreement with the direction management is taking the Company. He has never proposed a different strategic goal or direction. Don't Let Envirodyne Fall Under the Control of Zapata and Mr. Glazer Your vote is necessary to ensure that Envirodyne remains an independent company and does not fall under the control of Zapata and Mr. Glazer. If Mr. Glazer wants control of Envirodyne, he should make a bona fide offer that is fair to all stockholders. We urge you to sign, date and return the enclosed WHITE Envirodyne proxy card. Your Board of Directors recommends that you vote FOR the five Envirodyne nominees and AGAINST Zapata's proposal to eliminate the Stockholder Rights Plan. We urge you not to sign any blue proxy cards. If you already have signed a blue proxy card, you may revoke that proxy card by signing, dating and returning the enclosed WHITE proxy card. Very truly yours, F. Edward Gustafson Chairman of the Board, President and Chief Executive Officer Envirodyne has major interests in food packaging and the food supplies industry, operating through three subsidiaries -- Viskase Corporation, Clear Shield National, Inc. and Sandusky Plastics, Inc. The company recently reported operating income of $39.7 million for the year ended December 26, 1996 on net sales of $651.4 million. The company's annual meeting of stockholders is scheduled for May 16 in Chicago. -----END PRIVACY-ENHANCED MESSAGE-----