SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 4, 1995
NPC INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Kansas
(State of incorporation)
0-13007 48-0817298
(Commission (IRS Employer
File Number) Identification No.)
720 W. 20th Street, Pittsburg, Kansas 66762
(Address of principal executive office) (Zip Code)
Registrant`s telephone number: (316-231-3390)
Item 5. Other events
On December 1, 1995, NPC International, Inc. announced that it was
served on November 28, 1995, with a second action which was filed in the
District Court of Crawford County, Kansas by Harbor Finance Partners, a
Colorado partnership, against NPC International, Inc., and certain
directors of the Company. The suit seeks class action status, injunctive
relief, unspecified monetary damages and attorney fees arising from the
proposal of Mr. Bicknell, Chairman of the Board and Chief Executive
Officer, James K. Schwartz, President and Chief Operating Officer, and Troy
D. Cook, Vice President Finance and Chief Financial Officer (the
``Management Group``) to purchase the publicly held common stock of the
Company for $9.00 per share. On November 15, 1995, the Company announced
the filing of a lawsuit in the District Court of Wyandotte County, Kansas
which makes similar allegations and seeks comparable relief. The Company
believes that both of these lawsuits are without merit and will defend
against them vigorously.
NPC has delegated the authority to review and evaluate the proposed
transaction with the Management Group to a Special Committee of the Board
of Directors consisting of the independent directors. The Special
Committee has retained CS First Boston as its independent financial advisor
and has retained its own legal counsel to assist the Special Committee.
The following Exhibits follow:
Exhibit 1 - Class Action Petition, Case No. 95C219P
Exhibit 2 - Press Release dated December 1, 1995
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized.
NPC INTERNATIONAL, INC.
Date: December 4, 1995 By: Troy Cook
Vice President and
Chief Financial Officer
IN THE DISTRICT COURT OF CRAWFORD COUNTY, KANSAS
CIVIL COURT DEPARTMENT
- -------------------------------x
HARBOR FINANCE PARTNERS, a :
Colorado Partnership, : C.A. No. 95C219P
:
Plaintiff, :
:
- against - :
:
NPC INTERNATIONAL INC., :
O.G. BICKNELL, MARY M. PULFER, : CLASS ACTION PETITION
J.W CARLIN, R.E. CRESSLER, : (Pursuant to K.S.A. Chapter 60)
and F.D. JABARA :
:
Defendants. :
- -------------------------------x
Plaintiff, by its attorneys, alleges upon personal knowledge as to
itself and its own acts, and upon information and belief based upon the
investigation conducted by counsel, as follows:
SUMMARY OF THE ACTION
Plaintiff brings this action individually and as a class
action on behalf of all persons, other than defendants, who own the
securities of NPC International Inc. (``NPC`` or the ``Company``), and who
are similarly situated and who have been deprived of the opportunity to
maximize the value of their shares by defendants` breach of fiduciary duty
(the ``Class``) in relation to the proposed management-led ``squeeze out``
acquisition of NPC (as described below).
PARTIES
1. Plaintiff Harbor Finance Partners is the owner of shares of NPC common
stock.
2. DefendAnt NPC is a corporation duly organized and existing under the
laws of the State of Kansas. NPC is the world`s largest Pizza Hut
franchisee and currently operates 370 Pizza Hut restaurants and delivery
kitchens in 11 states. Additionally, the Company operates and franchises
116 Skipper`s quick service seafood restaurants in seven western states and
British Columbia. NPC also operates and franchises 170 Tony Roma`s
restaurants, the casual theme restaurant ``Famous for Ribs`` worldwide.
The Company maintains its principal executive offices at 720 West 20th
Street, Pittsburg, Kansas 66762. NPC stock trades on the National
Association of Securities Dealers Automated Quotation system (NASDAQ).
3. Defendant O.G. Bicknell is the Chairman of the Board of Directors of
the Company and the Chief Executive Officer. He beneficially owns 62% of
the Company`s outstanding stock.
4. Defendants Mary M. Pulfer, J.W. Carlin, R.E. Cressler, and F.D. Jabara
are directors of NPC.
5. Because of their positions as directors of the Company, the director
defendants owe a fiduciary duty of loyalty and due care to plaintiff and
the other members of the Class.
6. Each defendant herein is sued individually and as a conspirator and
aider and abettor, as well as, where applicable, in his/her capacity as a
director of the Company. The liability of each arises from the fact that
each has engaged in all or part of the unlawful acts, plans, schemes, or
transactions complained of herein.
CLASS ACTION ALLEGATIONS
7. Plaintiff brings this action on its own behalf and as a class action,
pursuant to K.S.A. Section 60-223, on behalf of all stockholders of the
Company, except defendants herein and any person, firm, trust, corporation,
or other entity related to or affiliated with any of the defendants, who
will be threatened with injury arising from defendants` actions described
more fully below.
8. This action is properly maintainable as a class action.
9. According to the Company`s latest Form 10-Q, there are 24,507,324
shares of the Company outstanding. Of those shares, 16,748,649 are owned
by officers and/or directors of the Company.
10. The Class is so numerous that joinder of all members is impracticable.
The Company has over six thousand stockholders. The record holders of the
Company`s securities can be easily determined from the stock transfer
records maintained by NPC or its transfer agent.
11. There are questions of law and fact common to the Class that
predominate over questions affecting any individual class member. The
common questions include, inter alia, whether:
(a) defendants have engaged in conduct constituting unfair dealing and
have engaged in a plan and scheme which harms the Company`s public
stockholders;
(b) defendants have prevented and are continuing to prevent plaintiff and
the Class from receiving the maximum value per share that could be
received;
(c) defendants have breached or aided and abetted the breach of the
fiduciary and other common law duties owed by them to plaintiff and the
members of the Class;
(d) the director defendants, as directors of NPC, have fulfilled, and are
capable of fulfilling, their fiduciary duties to plaintiff and the Class,
including their duties of entire fairness, loyalty, due care, and candor;
12. Plaintiff is an adequate representative of the Class. Plaintiff is
committed to prosecuting the action and has retained competent counsel
experienced in litigation of this nature. Plaintiff`s claims are typical
of the claims of the other members of the Class and plaintiff has the same
interests as the other members of the Class.
THE SQUEEZE OUT
13. On November 6, 1995, the Company announced a merger proposal,
under which a company controlled by an NPC management group would acquire
all of NPC`s stock not owned by the group for $9 per share (the ``Squeeze
Out Mergers``). Thus, it will cost the management group approximately $70
million to buy out the public shareholders of the Company.
14. As reported in the Dow Jones Newswire on November 6, 1995, the Company
has created a special committee of the outside members of NPC`s board which
will analyze the proposed Squeeze Out Merger. As further reported in the
Dow Jones Newswire, the special committee has retained CS First Boston as a
financial advisor to assist the committee in evaluating the proposal. The
fact that Bicknell beneficially owns 62% of the Company`s outstanding
stock, however, makes this special committee a mere pretense because of the
committee`s loyalty toward Bicknell.
15. As reported in The Wall Street Journal and The New York Times on
November 7, 1995, the management group behind the Squeeze Out Merger
consists of three persons: Mr. Bicknell, Mr. James K. Schwartz, president
and chief operating officer of the Company, and Troy D. Cook, vice
president, finance and the Company`s chief financial officer.
16. On July 19, 1995, the Business Wire reported that NPC had announced
record earnings for the first quarter ended June 27, 1995. In the
announcement, Mr. Bicknell said ``[w]e are very pleased with this quarter`s
results and anticipate continued earnings growth throughout this fiscal
year. We remain committed to the aggressive growth of our company and to
increasing stockholder value.`` In the announcement, Mr. Schwartz said
``[t]he successful rollout of Stuffed Crust pizza and continued earnings
growth at Tony Roma`s contributed to strong earnings for the quarter.``
CAUSE OF ACTION FOR BREACH OF FIDUCIARY
DUTY AGAINST ALL DEFENDANTS
1. Plaintiff reavers and incorporates by reference all previous
allegations.
2. The Squeeze Out Merger price is not the result of arm`s-length
negotiations but was fixed arbitrarily by defendant Bicknell and those he
controls, as part of an unlawful plan and scheme.
3. Because the proposed transaction is a transaction commonly known as a
``squeeze out merger,`` by which a management group takes a company
private, there is no incentive for the management group to pay a suitable
price for the Company`s publicly-held shares.
4. Defendants, in violation of their fiduciary obligations to maximize
stockholder value, have not considered other potential purchasers of NPC or
its stock in a manner designed to obtain the highest possible price for
NPC`s public stockholders.
5. The proposed Squeeze Out Merger is wrongful, unfair, and harmful to
the Company`s public stockholders, and represents an attempt by defendants
to aggrandize their personal and financial positions and interests and to
enrich themselves, at the expense of and to the detriment of the public
stockholders of the Company. The proposed Squeeze Out Merger will deny
class members their right to share proportionately in the true value of
NPC`s valuable assets, profitable business, and future growth in profits
and earnings, while usurping the same for the benefit of the defendants at
an unfair and inadequate price.
6. Defendants herein have willfully participated in unfair dealing toward
plaintiff and the other members of the Class and have engaged in and
substantially assisted and aided and abetted each other in breach of the
fiduciary duties owed by them to the Class.
7. By the acts, transactions and courses of conduct alleged herein,
defendants, individually and as part of a common plan and scheme in breach
of their fiduciary duties to plaintiff and the Class, are attempting
unfairly to deprive plaintiff and the Class of consideration in a
transaction which could provide them with the opportunity to maximize their
investment in NPC.
8. In seeking to close the Squeeze Out Merger, without seeking possible
third party buyers, defendants have violated the fiduciary duties owed to
the public shareholders of the Company and have placed their personal
interests ahead of the interests of the Company`s public shareholders.
Defendants are using their positions as directors for the purpose of
pursuing their own agenda, all to the detriment of plaintiff and the Class.
9. The defendants have not, in accordance with their fiduciary duties:
(a) acted independently so that the interests of the Company`s public
shareholders would be protected;
(b) adequately ensured that no conflicts of interest exist or if such
conflicts exist to ensure that all conflicts would be resolved in the best
interests of the Company`s public shareholders; and
(c) taken all appropriate steps to enhance the Company`s value and
attractiveness as a merger, acquisition, restructuring or recapitalization
candidate.
10. Because the director defendants, and especially Bicknell, dominate the
business affairs of the Company, and are in possession of private
information concerning the Company`s assets, business and future prospects,
there exists an imbalance of knowledge and economic power between them and
the public stockholders of the Company which makes it inherently unfair for
them to seek to close the Agreement at the expense of their duty to
maximize stockholder value for the Company`s public shareholders.
11. As a result of the actions of defendants, plaintiff and the Class have
been and will be damaged in that they have not and will not receive their
fair proportion of the value of the Company`s assets and business. As a
practical matter, no third party will bid for the Company when the Squeeze
Out Merger has been met with such affinity.
12. Plaintiff and the Class have no adequate remedy at law.
THEREFORE, plaintiff prays for judgment and relief as
follows:
(a) declaring that this action is properly maintainable as a class action
and certifying plaintiff as representative of the Class;
(b) ordering the director defendants to discharge their fiduciary duties
to plaintiff and the other members of the Class by announcing their
intentions to;
(a) act independently on a fully informed basis in the best interests of
the Company`s public shareholders;
(b) undertake an appropriate evaluation of NPC as a merger or acquisition
candidate;
(c) take all appropriate steps to enhance the Company`s value and
attractiveness as a merger or acquisition candidate;
(d) cooperate with ail persons having a bona fide interest in proposing
any transaction which would maximize shareholder value;
(e) take all steps to create an active auction for the Company in order to
maximize shareholder value;
(f) adequately ensure that no conflicts of interest exist between
defendants` own interests and their fiduciary obligation to maximize
shareholder value or, if such conflicts exist, to ensure that all such
conflicts a e resolved in favor of the Company`s public shareholders.
(c) declaring that the defendants and each of them have committed or aided
and abetted a gross abuse of trust and have breached their fiduciary duties
to plaintiff and the other members of the class;
(d) ordering defendants to permit a stockholders` committee consisting of
Class members and their representatives to participate in any process
undertaken in connection with the sale of the Company in order to ensure a
fair procedure, adequate procedural safe-guards, and independent input by
plaintiff and the Class in connection with any transaction for the public
shares of NPC;
(e) awarding compensatory damages against defendants, jointly and
severally, in an amount to be determined at trial, together with
prejudgment interest at the maximum rate allowable by law;
(f) awarding plaintiff and the Class their costs and disbursements and
reasonable allowances for plaintiff`s counsel and experts` fees and
expenses; and
(g) granting such other and further relief as may be just and proper.
Dated: November 8, 1995
ZACKERY E. REYNOLDS
102 South National
P.O. Box 32
Fort Scott, Kansas
By:
Zackery E. Reynolds
Attorneys for Plaintiff
Of Counsel:
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
Joel C. Feffer
Jorn A. Holl, Esq.
805 Third Avenue
New York, New York 10022
(212) 935-7400
11147597
Contact: David G. Short
Vice President Legal and Secretary
(214) 343-7886
FOR IMMEDIATE RELEASE
NPC INTERNATIONAL, INC.
ANNOUNCES FILING OF ADDITIONAL PETITION
PITTSBURG, Kansas (December 1, 1995) - NPC International, Inc.
announced today that it was served on November 28, 1995, with an action
which was filed in the District Court of Crawford County, Kansas by Harbor
Finance Partners, a Colorado partnership, against NPC International, Inc.,
and certain directors of the Company. The suit seeks class action status,
injunctive relief, unspecified monetary damages and attorney fees arising
from the proposal of Mr. Bicknell, Chairman of the Board and Chief
Executive Officer, James K. Schwartz, President and Chief Operating
Officer, and Troy D. Cook, Vice President Finance and Chief Financial
Officer (the ``Management Group``) to purchase the publicly held common
stock of the Company for $9.00 per share. On November 15, 1995, the
Company announced the filing of a lawsuit in the District Court of
Wyandotte County, Kansas which makes similar allegations and seeks
comparable relief. The Company believes that both of these lawsuits are
without merit and will defend against them vigorously.
NPC has delegated the authority to review and evaluate the proposed
transaction with the Management Group to a Special Committee of the Board
of Directors consisting of the independent directors. The Special
Committee has retained CS First Boston as its independent financial advisor
and has retained its own legal counsel to assist the Special Committee.
NPC International, Inc. is the world`s largest Pizza Hut franchisee
and currently operates 372 Pizza Hut restaurants and delivery kitchens in
11 states. Additionally, the Company operates and franchises 116 Skipper`s
quick service seafood restaurants in seven western states and British
Columbia. NPC also operates and franchises 171 Tony Roma`s restaurants,
the casual theme restaurant Famous for Ribs, worldwide.
The Company`s stock is traded on the NASDAQ National Market under the
symbols ``NPCI``
*******************
95-13
