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.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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.
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{_} 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:
__________________________________________________________
April 30, 1997
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.
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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
Important
1. Regardless of how many shares you own, your vote is very
important. Please sign, date and mail the enclosed WHITE proxy
card. Please vote each WHITE proxy card you receive since each
account in which you own shares must be voted separately. Only
your latest dated proxy card counts.
2. We urge you not to return any blue proxy card sent to you by Zapata.
3. If your shares are held in the name of a bank, broker or other
nominee, please direct the party responsible for your account to
vote the WHITE proxy card as recommended by the Board of
Directors. If you have any questions on how to vote your shares,
please contact Envirodyne at (630) 575-2400 or call our proxy
solicitor MORROW & CO. at (800) 662-5200.
ENVIRODYNE INDUSTRIES, INC.
SUITE 190
701 HARGER ROAD
OAK BROOK, ILLINOIS 60521
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PROXY STATEMENT SUPPLEMENT
DATED APRIL 30, 1997
____________
ANNUAL MEETING OF STOCKHOLDERS: MAY 16, 1997
This Proxy Statement Supplement (the "Supple-
ment") is furnished by the Board of Directors of
Envirodyne Industries, Inc. ("Envirodyne" or the "Compa-
ny"), in connection with the Company's solicitation of
proxies for use at the Company's Annual Meeting of Stock-
holders and any adjournments or postponements thereof
(the "Annual Meeting"). The Annual Meeting will be held
on Friday, May 16, 1997. This Supplement amends and
supplements, and should be read in conjunction with, the
Proxy Statement of the Company, dated April 18, 1997 (the
"Envirodyne Proxy Statement"). Capitalized terms used
herein but not otherwise defined herein will have the
respective meanings assigned to them in the Envirodyne
Proxy Statement.
NOMINATIONS AND PROPOSAL
SUBMITTED BY ZAPATA CORPORATION
As set forth in the Envirodyne Proxy Statement
under the caption "OTHER MATTERS," Zapata Corporation
("Zapata") has informed the Company that Zapata will
appear at the Annual Meeting to nominate three individu-
als for election as directors and to present a proposal
(the "Zapata Proposal") for a vote of the Company's
stockholders. A description of Zapata's nominees is
included as Appendix A. Zapata has commenced the solici-
tation of proxies from Envirodyne stockholders to obtain
votes for the three director nominees and the Zapata
Proposal. The Zapata Proposal, which is identified below
as Proposal No. 3, also appears on the enclosed revised
WHITE proxy card.
As described more fully below, the Board of
Directors believes that both Zapata's nomination of
director candidates and the Zapata Proposal are designed
to provide Zapata with the ability to gain complete
control of the Company, to expose stockholders to poten-
tially coercive and abusive takeover tactics, and to
prevent the Board from negotiating on behalf of all
stockholders with Zapata or others over any offer to
acquire the Company.
THE BOARD OF DIRECTORS BELIEVES IT IS IN THE BEST INTER-
ESTS OF THE COMPANY AND ITS STOCKHOLDERS TO REJECT BOTH
THE ZAPATA NOMINEES AND THE ZAPATA PROPOSAL. THE BOARD
RECOMMENDS A VOTE AGAINST BOTH THE ZAPATA NOMINEES AND
PROPOSAL NO. 3 ON THE ENCLOSED REVISED WHITE PROXY CARD,
AND A VOTE FOR THE COMPANY'S NOMINEES.
IF YOU RETURNED OR RETURN THE WHITE PROXY CARD OR ANY
VOTING INSTRUCTION CARD PREVIOUSLY FURNISHED WITH THE
ENVIRODYNE PROXY STATEMENT WHICH DID NOT INCLUDE THE
ZAPATA PROPOSAL (PROPOSAL NO. 3), THE PROXY HOLDERS WILL
EXERCISE THEIR DISCRETIONARY AUTHORITY TO VOTE AGAINST
THE ZAPATA PROPOSAL. IF YOU WISH TO SPECIFY THE MANNER
IN WHICH YOUR SHARES ARE TO BE VOTED ON THE ZAPATA PRO-
POSAL, YOU SHOULD MARK, SIGN, DATE AND RETURN THE REVISED
WHITE PROXY CARD OR VOTING INSTRUCTION CARD ACCOMPANYING
THIS SUPPLEMENT. RETURN OF A LATER DATED PROXY CARD OR
VOTING INSTRUCTION CARD WILL REVOKE ANY PREVIOUS PROXY
CARD OR VOTING INSTRUCTION CARD YOU MAY HAVE RETURNED.
Zapata, whose address is 1717 St. James Place,
Houston, Texas 77056, has indicated that it owns
5,877,304 shares of the Company's Common Stock.
PROPOSAL NO. 3
Zapata has submitted the following proposal:
RESOLVED, that the Board of Directors of the
Company should (i) take appropriate action to
redeem as soon as practicable the Rights issued
under the Rights Agreement, dated June 26,
1996, between the Company and Harris Trust &
Savings Bank (the "Rights Agreement") or other-
wise terminate the Rights Agreement, and (ii)
not implement any other stockholder rights plan
without a binding vote by the Company's stock-
holders.
BOARD OF DIRECTORS' RESPONSE
YOUR BOARD OF DIRECTORS STRONGLY URGES STOCKHOLDERS TO
VOTE AGAINST THE ZAPATA PROPOSAL ON THE ENCLOSED, REVISED
WHITE PROXY CARD. PLEASE MARK, SIGN, DATE AND MAIL THE
ENCLOSED REVISED WHITE PROXY CARD TODAY.
As stated above, the Board of Directors be-
lieves that the Zapata Proposal is ill-advised and
against the best interests of Envirodyne stockholders.
The Company adopted the Rights Agreement in response to
its concern that Zapata or another person or group could
acquire control, in the open market or otherwise, of the
Company without paying an appropriate premium for control
and without offering a fair and adequate price to all
stockholders. The Rights Agreement also prevents a
person or group from accumulating shares in the Company
in the market or in negotiated transactions with a view
to profiting by putting the Company "in play" at a time
when such action is not in the best interests of stock-
holders and could seriously disrupt and be detrimental to
the Company and its business.
The Rights Agreement encourages third parties,
including Zapata, interested in acquiring the Company to
negotiate with the Board. The Rights Agreement is not
intended to deter an offer to acquire the Company at a
price and on terms that would be in the best interests of
all stockholders.
Currently, Zapata owns approximately 40% of the
outstanding Common Stock of the Company. Rights issued
under the Rights Agreement (other than those held by
Zapata) would become exercisable at a discount if Zapata
and its affiliates increase their holdings to 41% or more
of the outstanding Common Stock. The Board believes that
Zapata wants to eliminate the Rights Agreement because it
prevents Zapata from acquiring majority control of
Envirodyne without paying a fair price to all stockhold-
ers. The management of Envirodyne has told Zapata that
it would willingly consider an offer to buy the Company,
so long as all stockholders received an appropriate
premium for their shares. Zapata has not indicated any
interest in even discussing such a transaction.
Accordingly, the Board of Directors believes
that eliminating the Company's Rights Agreement would
potentially deny stockholders a fair premium for the
transfer of control of the Company, expose stockholders
to coercive and abusive takeover tactics and limit the
ability of the Board to negotiate on behalf of all stock-
holders with Zapata or others with respect to any possi-
ble acquisition proposal that may arise.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote
AGAINST the Zapata Proposal set forth above as Proposal
No. 3.
The Envirodyne Proxy Statement is modified as
set forth herein.
By order of the Board of Directors,
Stephen M. Schuster
Vice President, General Counsel and Secretary
April 30, 1997
IF YOU HAVE ANY QUESTIONS OR REQUIRE ASSISTANCE
IN VOTING YOUR SHARES OF ENVIRODYNE COMMON STOCK, PLEASE
CONTACT:
MORROW & CO.
909 THIRD AVENUE
20TH FLOOR
NEW YORK, NEW YORK
TOLL FREE: (800) 662-5200
APPENDIX A
ZAPATA NOMINEES FOR DIRECTOR
Below is a description of Zapata's three nomi-
nees for election as directors of the Company. This
information has been provided to the Company by Zapata.
Malcolm I. Glazer, age 68, is a self-employed
private investor, whose diversified portfolio consists of
investments in television broadcasting, restaurants,
restaurant equipment, food services equipment, health
care, banking, real estate, stocks, government securities
and corporate bonds. He is also the owner of the Tampa
Bay Buccaneers, a National Football League franchise.
Mr. Glazer has been President and Chief Executive Officer
of First Allied Corporation ("First Allied"), an invest-
ment company, since 1984. He has served as a director of
Zapata since July 1993, has been the Chairman of the
Board of Directors of Zapata since July 1994 and served
as President and Chief Executive Officer of Zapata from
August 1994 until March 1995. He currently serves as the
Chairman of the Board of Houlihan's Restaurant Group,
Inc., a restaurant holding company ("Houlihan's"), and a
director of Specialty Equipment Companies, Inc., a food
services equipment manufacturer ("Specialty"). Mr.
Glazer has served as a director of the Company since May
1995 and has not been renominated by the Board. Malcolm
I. Glazer is the father of Avram A. Glazer. His business
address is 1482 South Ocean Boulevard, Palm Beach, Flori-
da 33480.
Avram A. Glazer, age 36, is Malcolm I. Glazer's
son. Mr. Glazer has served as the President and Chief
Executive Officer of Zapata since March 1995. Prior to
that time, Mr. Glazer was employed by, and worked on
behalf of, Malcolm I. Glazer and a number of entities
owned and controlled by Malcolm I. Glazer, including
Florida Management Office, TV Management Office,
Farmington Mobile Home Park, Inc., Century Development
Corporation d/b/a KGNS Laredo and Canandaigua Mobile
Park. Mr. Glazer has served as Vice President of First
Allied since 1985. He has served as a director of Zapata
since July 1993, and also is a director of Houlihan's and
Specialty. Mr. Glazer has served as a director of the
Company since May 1995, and a member of the Audit Commit-
tee of the Board of Directors of the Company since Janu-
ary 1997 and has not been renominated by the Board. His
business address is 18 Stoney Clover Lane, Pittsford, New
York 14534.
Robert V. Leffler, Jr., age 51, has served as
owner of the Leffler Agency, an advertising and market-
ing/public relations firm based in Baltimore, Maryland
that specializes in sports, rental real estate and medi-
cal areas, for more than the past five years. The
Leffler Agency's clients include the Tampa Bay Bucca-
neers, which Malcolm Glazer owns. Mr. Leffler has served
as a director of Zapata since May 1995. His business
address is 2607 North Charles St., Baltimore, Maryland
21218.
<TABLE>
<S> <C>
Envirodyne
Industries, Inc. Proxy Solicited by the Board of Directors
for the Annual Meeting of Stockholders
May 16, 1997
</TABLE>
F. Edward Gustafson and Stephen M. Schuster, or either of them individually,
and each of them with power of substitution, are hereby appointed Proxies of
the undersigned to vote all shares of Common Stock of Envirodyne Industries,
Inc. owned on the record date by the undersigned at the Annual Meeting of
Stockholders to be held on May 16, 1997, or any adjournments or postponements
thereof, upon such business as may properly come before the meeting, including
the items on the reverse side of this form as set forth in the Notice of Annual
Meeting of Stockholders and Proxy Statement, dated April 18, 1997 (the "Proxy
Statement"). THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE. IF NO
DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2 AND
"AGAINST" PROPOSAL 3.
Proposal 1--Election of Directors Nominees: Robert N. Dangremond, F. Edward
Gustafson, Michael E. Heisley,
Gregory R. Page, Mark D. Senkpiel.
Proposal 2--Ratification of the appointment of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the 1997 fiscal year.
Proposal 3--Zapata proposal: recommendation that the Board of Directors of the
Company take appropriate action to redeem as soon as practicable the rights
issued under the Stockholder Rights Plan adopted by the Board as of June 26,
1996 or otherwise terminate the Rights Plan and not implement any other
Stockholder Rights Plan without a binding vote of the Company's stockholders.
IF YOU HAVE ALREADY RETURNED, OR WISH TO RETURN, THE WHITE PROXY CARD PREVIOUSLY
FURNISHED TO YOU BY THE BOARD OF DIRECTORS WHICH DOES NOT INCLUDE PROPOSAL 3,
THE PROXIES NAMED THEREIN WILL EXERCISE THEIR DISCRETIONARY AUTHORITY TO VOTE
AGAINST PROPOSAL 3. HOWEVER, IF YOU WISH TO DIRECT THE MANNER IN WHICH YOUR
SHARES ARE TO BE VOTED ON PROPOSAL 3, YOU SHOULD MARK, SIGN, DATE AND RETURN
THIS REVISED PROXY CARD.
(Shares cannot be voted unless this Proxy Card is signed and returned, or other
specific arrangements are made to have the shares represented at the meeting.)
PLEASE MARK YOUR
VOTES AS IN THIS ENVIRODYNE INDUSTRIES, INC.
/X/ EXAMPLE 701 HARGER ROAD, SUITE 190
OAK BROOK, ILLINOIS 60521
PROXY CARD This proxy, when properly executed, will be voted in the
manner directed herein by the
undersigned stockholder. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR ALL NOMINEES
LISTED AND FOR PROPOSAL 2 AND "AGAINST" PROPOSAL 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2
<TABLE>
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FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election of Directors 2. Ratification of Accountants
(See Reverse) / / / / (See Reverse) / / / / / /
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For, except vote WITHHELD from the following nominee(s): THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 3
FOR AGAINST ABSTAIN
- ------------------------------------------------ 3. Zapata Proposal
PLEASE SIGN, DATE AND RETURN IN ENCLOSED ENVELOPE. (See Reverse) / / / / / /
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</TABLE>
Signature ______________________________________________
Title __________________________________________________
DATE ___________________________________________________
Signature ______________________________________________
Title __________________________________________________
DATE ___________________________________________________
Please sign exactly as your name appears. If acting as attorney, executor,
trustee or in representative capacity, sign name and indicate title. Joint
owners should each sign personally.
