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: November 17, 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
NPC International, Inc. announced yesterday that on November 7, 1995,
a petition was filed in the District Court of Wyandotte County, Kansas by
Charles Miller and Kenneth Steiner, individually and on behalf of all
others similarly situated, against O. Gene 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 (collectively, the ``Management Group``) and NPC
International, Inc. The suit seeks class action status, injunctive relief,
unspecified monetary damages and attorney fees arising from the Management
Group`s initial proposal to purchase the publicly held common stock of the
Company for $9.00 per share.
The Company believes the lawsuit is without merit and will vigorously
defend the litigation.
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.
The following Exhibits follow:
Exhibit 1 - Class Action Petition, Case No. 95C 05077
Exhibit 2 - Press Release dated November 16, 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: November 17, 1995 By: Troy Cook
Vice President and
Chief Financial Officer
IN THE DISTRICT COURT OF WYANDOTTE COUNTY, KANSAS
CIVIL DEPARTMENT
CHARLES MILLER and KENNETH STEINER, )
individually and on behalf of all )
others similarly situated, )
)
Plaintiffs, ) CLASS ACTION
) PETITION
vs. ) (Pursuant to Chapter
) 60, K.S.A.)
NPC INTERNATIONAL INC., O. GENE )
BICKNELL, JAMES K. SCHWARTZ and )
TROY D. COOK, )
)
Serve at: 720 W. 20th St. )
Pittsburg, KS )
)
Defendants. )
INTRODUCTION
This action arises out of an unlawful scheme and plan by a
management group (the ``management group``) led by defendant O. Gene
Bicknell (``Bicknell``), the majority shareholder of NPC International Inc.
(``NPC`` or the ``Company``), to acquire the remaining 38% ownership of the
Company not already owned by Bicknell in a going-private transaction for
grossly inadequate consideration and without full and complete disclosure
of all material information, in breach of defendants` fiduciary duties.
Plaintiffs allege that they and other public stockholders of NPC are
entitled to enjoin the transaction, or alternatively, recover damages in
the event the transaction is consummated.
THE PARTIES
1. Plaintiffs, residents of New York, are and have been at all
relevant times the owners of NPC common stock.
2. Defendant NPC is a corporation organized and existing under
the laws of the State of Kansas with its principal executive offices
located at 720 West 20th Street, Pittsburg, Kansas. NPC is a franchisee of
Pizza Hut restaurants and delivery kitchens and of ``Tony Roma`s`` and ``A
Place for Ribs`` restaurants. As of August 9, 1995, NPC had issued and
outstanding 24.51 million shares of stock, of which Bicknell owned 62% of
the outstanding stock.
3. (a) Defendant Bicknell is and has been at all relevant times
NPC`s Chairman and Chief Executive Officer, as well as its majority
shareholder.
(b) Defendant James R. Schwartz (``Schwartz``) is and has
been at all relevant times NPC`s President and Chief Operating Officer.
Defendant Schwartz is the beneficial owner of 65,000 shares of NPC common
stock. On or about January 27, 1995, NPC and defendant Schwartz entered
into a lucrative, five-year employment contract.
(c) Defendant Troy D. Cook (``Cook``) is and has been at all
relevant times NPC`s Vice President-Finance and Chief Financial Officer.
4. As noted above, each of the individual defendants named in
paragraph 3 above (the ``Individual Defendants``), is an officer and/or
director of NPC, and thus owes a fiduciary duty to the shareholders of NPC.
Similarly, Bicknell is the controlling shareholder of the Company and
therefore owes fiduciary duties to NPC shareholders. However, Bicknell and
the other members of the management group, in seeking to acquire the
Company for inadequate consideration, have interests which are in direct
conflict with those of class members. Thus, defendants stand on both sides
of the transaction, and are incapable of acting impartially as their
allegiance is to maximize their own pecuniary interests.
CLASS ACTION ALLEGATIONS
5. Plaintiffs bring this action pursuant to K.S.A. Chapter
60-223 individually and on behalf of all other stockholders of the Company
(except the defendants herein, the directors of NPC and any persons, firm,
trust, corporation, or other entity related to or affiliated with them and
their successors in interest), who are or will be threatened with injury
arising from defendants` actions, as more fully described herein (the
``Class``).
6. This action is properly maintainable as a class action for
the following reasons:
(a) The Class is so numerous that joinder of all members is
impracticable. As of March, 1995 there were approximately 6,100 holders of
record of NPC common stock who are members of the Class and which stock
trades on the NASDAQ over-the-counter market.
(b) Members of the Class are scattered throughout the United
States and are so numerous that: it is impracticable to bring them all
before this Court.
(c) There are questions of law and fact which are common to
the Class and which predominate over questions affecting any individual
class member. The common questions include, inter alia, the following:
(i) Whether defendants have engaged and are continuing
to engage in a plan and scheme to benefit themselves at the expense of the
members of the Class;
(ii) Whether the Individual Defendants, as officers,
directors and/or majority stockholders of NPC, have fulfilled, and are
capable of fulfilling, their fiduciary duties to plaintiffs and the other
members of the Class, including their duties of entire fairness, loyalty,
due care, and candor;
(iii) Whether the defendants have disclosed all material
facts in connection with the challenged transaction; and
(iv) Whether plaintiffs and the other members of the
Class would be irreparably damaged were defendants not enjoined from the
conduct described herein;
(d) The claims of plaintiffs are typical of the claims of
the other members of the Class in that all members of the Class will be
damaged by defendants` actions.
(e) Plaintiffs are committed to prosecuting this action and
have retained competent counsel experienced in litigation of this nature.
Plaintiffs are adequate representatives of the Class.
(f) A class action is superior to any other method available
for the fair and efficient adjudication of this controversy since it would
be impractical and undesirable for each of the members of the Class, who
have suffered or will suffer damages, to bring separate actions.
7. Moreover, defendants have acted and will continue to act on
grounds generally applicable to the Class, thereby making appropriate final
injunctive or corresponding declaratory relief with respect to the Class as
a whole.
BACKGROUND AND SUBSTANTIVE ALLEGATIONS
8. On or about July 19, 1995, NPC announced that it would put
forth for consideration at the August 8, 1995 annual shareholder meeting a
recapitalization plan pursuant to which the then outstanding Class A and
Class B common stock would be converted into a new, single class of voting
common stock. The only difference between the two classes was that holders
of Class B stock only had a right to vote an extraordinary corporate
matters. The Company never indicated the reason for the plan. However, as
part of the plan, holders of Class A stock as of the record date were
entitled to a cash dividend of $.421875 per share payable following
approval of the recapitalization plan by NPC stockholders.
9. In connection with the shareholder vote on the
recapitalization plan, defendant Bicknell, the majority owner of both Class
A and Class B outstanding stock, stated he would vote in favor of the
recapitalization plan.
10. The plan was part of defendants` plan to obtain the valuable
assets of the Company, to the detriment of NPC`s public stockholders. In
contemplation of a going-private transaction, defendants sought to create
one, as opposed to the then current two classes of common stock, in order
to, inter alia, facilitate the transaction by requiring only one vote,
rather than two separate votes, of minority stockholders to approve the
transaction.
11. On or about November 6, 1995, NPC announced that it had
received an offer from a management group, consisting of defendants
Bicknell, Schwartz and Cook, to acquire the Company`s publicly-held shares
at a price of $9 per share (the ``offer``).
12. NPC announced that a Special Committee of the Board of
Directors had been formed and had retained CS First Boston and legal
counsel to help the Company evaluate the offer.
13. The offer follows on the heels of NPC`s recent record
revenues; on or about July 19, 1995, the Company reported record net income
of $4,125,000 or $.17 per share for the quarter ended June 27, 1995,
compared with net income of $3,775,000 or $.15 per share in the same period
in the prior year. Thereafter, on October 23, 1995, NPC again announced
its quarterly earnings for the quarter ended September 26, 1995 with net
income of $3,637,000 or $.15 per share compared with $2,995,000 or $.12 per
share in the prior year.
14. Defendants have breached their fiduciary duties of good
faith, loyalty, fair dealing and candor. The price offered by defendants
in the offer is grossly inadequate; the offer contains virtually no premium
over the Company`s trading price immediately prior to the announcement of
the transaction, and fails to fully value NPC`s present and future
anticipated results.
15. Because of the control exercised by Bicknell over NPC, no
third party, as a practical matter, would emerge to bid for the Company`s
common stock.
16. The price to be paid in the offer is not the result of
arms`-length negotiations but was determined arbitrarily by defendants and
is designed to take advantage of NPC`s current stock price which fails to
fully reflect its anticipated future results.
17. In violation of their fiduciary obligations, and in an effort
to minimize the price paid for the publicly-held shares, the defendants
have proposed the offer described above designed to circumvent many of the
protections customarily afforded minority shareholders in going-private
transactions. For example, the offer, a proposal is not conditioned upon
approval by a majority of the public shareholders (i.e., a ``majority of
the minority`` provision). Similarly, the Special Committee has not been
charged with the responsibility of insuring that the transaction is
structured in a procedurally fair manner.
CAUSE OF ACTION
18. Plaintiffs hereby repeat and reallege the allegations as set
forth in paragraphs 1 through 17 above.
19. The offer is in furtherance of a fraudulent plan to take NPC
private, which, if not enjoined, will result in the elimination of the
public stockholders of NPC in a transaction that is inherently unfair to
them and that is the product of the defendants` conflict of interest, as
described herein. More particularly, the offer is in violation of
defendants` fiduciary duties and has been timed and structured unfairly in
that:
(a) The offer is designed and intended to eliminate members
of the Class as stockholders of the Company from continued equity
participation in the Company at a price per share which defendants know or
should know is grossly unfair and inadequate;
(b) Defendants, by virtue of, among other things, Bicknell`s
voting and ownership power, control and dominate the Company;
(c) Defendants have unique knowledge of the Company and have
access to information denied or unavailable to the class. Without all
material information, class members are unable to determine whether the
price offered in the offer is fair, or whether they should tender their
shares.
20. By reason of the foregoing acts, practices, and courses of
conduct by defendants, plaintiffs and the other members of the Class have
been and will be damaged because they will not receive their fair
proportion of the value of NPC`s assets and business, which far exceeds the
offer price in the unfair and unlawful transaction at issue, and have been
and will be prevented from obtaining fair consideration for their shares of
NPC common stock.
21. Moreover, the Special Committee is a procedural sham; not
only do the members of the Special Committee represent Bicknell`s
handpicked colleagues, but the Special Committee has been granted a very
narrow scope of review over the offer.
22. In addition, the management group has proposed an offer which
is not structured in a manner procedurally fair to class members.
23. Unless enjoined by this Court, defendants will continue to
breach their fiduciary duties owed to plaintiffs and the Class and will
consummate the transaction to the irreparable harm of plaintiffs and the
Class.
24. Plaintiffs and the other members of the Class have no
adequate remedy at law.
WHEREFORE, plaintiffs demand judgment as follows:
(a) Declaring this to be a proper class action and naming
plaintiffs as Class representatives;
(b) Ordering defendants to carry out their fiduciary duties
to plaintiffs and the other members of the Class, including the duties of
care, loyalty, and candor, and to effect a transaction providing class
members with a fair price and that is structured in a procedurally fair
manner;
(c) Granting preliminary and permanent injunctive relief
against the consummation of the transaction as described herein;
(d) In the event the offer is consummated, rescinding the
offer effected by defendants and awarding rescissionary damages;
(e) Ordering defendants, jointly and severally, to pay to
plaintiffs and to other members of the Class all damages suffered and to be
suffered by them as the result of the acts and transactions alleged herein;
(f) Awarding plaintiffs the costs and disbursements of the
action including allowances for plaintiffs` reasonable attorneys and
experts` fees; and
(g) Granting such other and further relief as may be just
and proper in the premises.
Dated: November 7, 1995
NORRIS, KEPLINGER & LOGAN, LLC
By:___________________________
Bruce Keplinger, #09562
7300 W. 110th Street
Suite 540
Overland Park, Kansas 66210
(913) 663-2000
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
100 Park Avenue
New York, New York 10017-5563
(212) 907-0700
WOLF HALDENSTEIN ADLER
FREEMAN & HERZ, LLP
270 Madison Avenue
New York, New York 10017
(212) 545-4600
Attorneys for Plaintiffs
JURY TRIAL DEMAND
Plaintiffs demand trial by jury on all issues so triable.
Bruce Keplinger
Contact: David G. Short
Vice President Legal
and Secretary
(214) 343-7886
FOR IMMEDIATE RELEASE
NPC INTERNATIONAL, INC. ANNOUNCES FILING OF CLASS ACTION PETITION
PITTSBURG, Kansas, (November 16, 1995) - NPC International, Inc.
announced today that on November 7, 1995, a petition was filed in the
District Court of Wyandotte County, Kansas by Charles Miller and Kenneth
Steiner, individually and on behalf of all others similarly situated,
against O. Gene 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 (collectively,
the ``Management Group``) and NPC International, Inc. The suit seeks class
action status, injunctive relief, unspecified monetary damages and attorney
fees arising from the Management Group`s initial proposal to purchase the
publicly held common stock of the Company for $9.00 per share.
The Company believes the lawsuit is without merit and will vigorously
defend the litigation.
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.
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``.
