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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ShowBiz Pizza Time, Inc.
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(Name of Registrant as Specified in its Charter)
not applicable
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
not applicable
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(2) Aggregate number of securities to which transaction applies:
not applicable
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(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):
not applicable
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
not applicable
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/ / 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:
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(4) Date Filed:
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<PAGE> 2
SHOWBIZ
PIZZA TIME, INC.
(LETTERHEAD AND LOGO)
May 30, 1995
Dear Fellow Stockholder:
You may be receiving a communication from the self-styled "ShowBiz Pizza
Independent Stockholders Committee," which seeks to elect its own representative
to replace a current ShowBiz Pizza director at our upcoming annual meeting. YOUR
BOARD OF DIRECTORS BELIEVES, BASED ON THE REASONS SET FORTH IN THIS LETTER, THAT
THE COMPANY IS MAKING SIGNIFICANT PROGRESS IN MAXIMIZING STOCKHOLDER VALUE. TO
PROTECT YOUR INVESTMENT, WE STRONGLY URGE YOU TO RE-ELECT THE THREE DIRECTORS
NOMINATED BY YOUR BOARD BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE
PROXY CARD. WE URGE YOU NOT TO RESPOND TO THE ATTEMPTS OF THE SO-CALLED "SHOWBIZ
PIZZA INDEPENDENT STOCKHOLDERS COMMITTEE" AND NOT TO RETURN ANY BLUE PROXY CARD.
SHOWBIZ PIZZA: WORKING TO
MAXIMIZE STOCKHOLDER VALUE AND IMPROVE EARNINGS
Your Board of Directors believes it is critical that the Company now
maintain its focus on the significant progress we have been making on our
previously announced strategy to maximize stockholder value and improve
earnings. Aggressive new marketing efforts, tight cost controls and the
repositioning of our Chuck E. Cheese restaurants have marked a path toward a
stronger future, and we have confidence that continued execution of this
strategy will maximize the value of your investment.
As you may know, our repositioning program includes an improved exterior
identity, facility upgrades, expanded free ball-crawl with tubes and tunnels
suspended from or reaching the ceiling, and the enhancement of the variety and
number of games and rides. Compared with year-earlier figures, we have produced
an average sales growth of over 20 percent at the 22 restaurants we repositioned
last year, after giving effect to average sales trends experienced during the
three-month periods prior to their repositionings.
We have completed another 13 renovations this year in the Baltimore and
Washington, D.C. markets. Although the performance of these restaurants is for a
shorter period, we are pleased to inform you that their early results are
reflective of these restaurants repositioned in 1994. We are also in the process
of completing 13 additional renovations in other markets. By the end of 1996, we
will have repositioned approximately 75 percent of our restaurants. The progress
we have made so far leaves us highly optimistic about the future.
In order to accomplish and potentially accelerate the repositioning, we are
in the process of refinancing our debt. In fact, we are working with one of the
top investment banking firms in the country to assist in this process. With
their help, we are optimistic that we will be able in the near future to obtain
the necessary funds to continue our repositioning efforts on schedule, and
perhaps on an accelerated basis.
WHERE A KID CAN BE A KID!(R)
4441 W. Airport Freeway -- Irving, Texas 75062 -- Phone (214) 258-8507 --
Fax (214) 258-8545
Mailing Address P.O. Box 150277, Irving, Texas 75015
<PAGE> 3
WHOSE INTERESTS ARE SERVED BY THE SO-CALLED
"SHOWBIZ PIZZA INDEPENDENT STOCKHOLDERS COMMITTEE"?
On May 4, 1995, the Company received a letter from one of its new
stockholders, New Valley Corporation -- a company controlled by Bennett S.
LeBow -- endorsing ShowBiz Pizza's strategy and indicating that New Valley might
be interested in providing and/or participating in the long-term financing of
the Company. On May 5, 1995, we responded to New Valley's letter, telling them
that, to the extent they had a specific financing proposal they wanted us to
consider, to submit it in writing so that it could be evaluated along with other
alternatives being considered by the Company and its financial advisors.
To date we have not received any such proposal from New Valley. Instead, we
recently learned that New Valley and its associates have begun a proxy fight
under the name of "ShowBiz Pizza Independent Stockholders Committee" in order to
elect their own representative, Joshua S. Friedman, to replace a current ShowBiz
Pizza director at the upcoming annual meeting. Mr. Friedman is a principal of
Canyon Partners, Incorporated, the exclusive financial advisor to, and a member
of a group with, New Valley.
LEBOW'S TRACK RECORD
In light of these recent events, we believe it is important that you know
some facts about LeBow and his affiliates so that you can make an informed
decision regarding his group's bid to elect their representative to your Board
of Directors.
Following are only a few examples of LeBow's track record:
- Last year in a survey of senior executives, outside directors and
financial analysts conducted and reported by Fortune magazine, Brooke
Group Ltd., a publicly traded company controlled by LeBow and the vehicle
through which he controls New Valley, was named the least admired company
of 404 companies included in the survey that had appeared in certain 1993
Fortune 500 directories. As reported, Brooke Group also scored as one of
the three least admired companies in all eight attributes of reputation
in the survey: use of corporate assets; value as a long-term investment;
financial soundness; quality of management; ability to attract, develop
and keep talented people; community and environmental responsibility; and
quality of products or services.*
- In 1990, LeBow merged another company under his control, Brooke Partners
L.P., into Brooke Group, owner of the profitable Liggett Group, Inc.
tobacco company. The merger saddled Brooke Group with $300 million of
junk bond debt, incurred in part in connection with Brooke Partners'
acquisition activities. The result: Brooke Group's net worth of $105
million immediately preceding the merger plunged to a negative net worth
of $104 million. Brooke Group's stock fell from $12 per share on November
19, 1990, the day the restructuring was announced, to $6 7/8 per share by
the end of the month. On May 26, 1995, the stock was trading at $4 per
share.
- While incurring significant net losses in 1991 and 1992, Brooke Group
provided LeBow and his affiliates with approximately $16 million in loans
as well as $12 million for the purchase of LeBow's company, Brooke
Management, Inc., whose only business, as far as we can tell, was to
provide Brooke Group with the management services of LeBow and his
associates. During this period, Brooke Group companies also spent $7.3
million on the purchase of a LeBow company airplane and another $1
million to rent additional aircraft from private companies owned by
LeBow. Then in 1993, Brooke Group paid LeBow a one-time cash dividend of
$16 million.
- Three of the companies over which LeBow has presided -- Western Union
Corporation, MAI Systems Corporation and Brooke Yachts International
Ltd. -- went bankrupt or into receivership while under his control.
_______________
* "Best and Worst Corporate Reputations," Tricia Welsh, Fortune (February 7,
1994). The Company has not sought the consent of either the author or the
publication to use this article.
2
<PAGE> 4
Given LeBow's track record, we are skeptical that he and his associates
will decide to propose financing for the Company on favorable terms. In
addition, Mr. Friedman will have potential conflicts of interest because of his
ties to LeBow and, through an exclusive financial advisory arrangement between
Canyon Partners and New Valley, could receive significant fees in transactions
which do not necessarily benefit all stockholders equally.
SHOWBIZ PIZZA IS COMMITTED TO PROTECTING AND
GROWING THE VALUE OF YOUR INVESTMENT
ShowBiz's directors have served the company and its stockholders faithfully
for many years and are integral to its operating strategy -- the very same
strategy that New Valley has endorsed. We are excited about the results from the
restaurants we have repositioned to date and believe that the continued
execution of our previously communicated strategy is in the best interest of our
stockholders. We do not believe ShowBiz Pizza's Board of Directors should have
even one director affiliated with New Valley, who, in our opinion, would
fractionalize the board and, at a minimum, pose a distraction to management just
as your company enters an important stage of its repositioning.
TO ALLOW THE CURRENT BOARD OF DIRECTORS OF SHOWBIZ PIZZA TO CONTINUE TO
IMPLEMENT ITS BUSINESS PLAN TO MAXIMIZE STOCKHOLDER VALUE FOR ALL SHOWBIZ PIZZA
STOCKHOLDERS, WE URGE YOU TO PLEASE SUPPORT THE THREE DIRECTORS NOMINATED BY
SHOWBIZ PIZZA'S MANAGEMENT AND NOT TO RESPOND TO THE ATTEMPTS OF NEW VALLEY OR
ITS ASSOCIATES TO SOLICIT VOTES FOR MR. FRIEDMAN.
TO GIVE YOUR SUPPORT TO CURRENT MANAGEMENT, PLEASE SIGN, DATE AND RETURN
THE ENCLOSED WHITE PROXY CARD. DO NOT RETURN ANY BLUE PROXY CARDS. REMEMBER,
ONLY YOUR LATEST DATED PROXY COUNTS.
This is an exciting period for ShowBiz Pizza, a period during which we are
following a clearly defined path toward a stronger future. Your continued
support throughout this era of change is deeply appreciated.
Sincerely,
/s/
Richard M. Frank
Chairman and Chief Executive Officer
3
<PAGE> 5
IMPORTANT
1. Whether or not you have already returned a proxy, please sign, date and
return the enclosed WHITE proxy card to your Board of Directors today. Be
sure to vote only on the WHITE proxy. We urge you not to sign any blue
proxy you receive from the "ShowBiz Pizza Independent Stockholders
Committee," New Valley Corporation, Canyon Partners Incorporated, Messrs.
LeBow or Friedman, or their associates, even as a protest vote against
them.
2. If your shares are held in "Street Name," only your broker or banker can
vote your shares and only upon receipt of your specific instructions.
Please contact the person responsible for your account and instruct that
individual to vote a WHITE proxy on your behalf today in accordance with
your Board's recommendations.
3. If you have any questions or need assistance in voting your shares, please
contact Georgeson & Company Inc., which is assisting us, at their toll free
number: 1-800-223-2064.
4
<PAGE> 6
SHOWBIZ PIZZA TIME, INC.
4441 West Airport Freeway
Irving, Texas 75062
_______________________________________________________________________
SUPPLEMENTAL INFORMATION
ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON JUNE 8, 1995
_______________________________________________________________________
The following information supplements and amends the Proxy Statement, dated
May 4, 1995 (the "Proxy Statement"), of ShowBiz Pizza Time, Inc. (the
"Company"). This Supplemental Information should be read in conjunction with the
Proxy Statement.
ADDITIONAL INFORMATION REGARDING PARTICIPANTS
Set forth below is additional information to that contained in the Proxy
Statement regarding the directors of the Company and Larry G. Page, Executive
Vice President, Chief Financial Officer and Treasurer of the Company,
participants in the solicitation of proxies on behalf of the Board of Directors
of the Company.
Except for the information disclosed herein and in the Proxy Statement, to
the knowledge of the Company, none of the foregoing persons (i) own of record
any securities of the Company which are not also beneficially owned by them nor
do they beneficially own, directly or indirectly, any securities of any parent
or subsidiary of the Company; (ii) is or was within the past year, a party to
any contract, arrangement or understanding with any person with respect to any
securities of the Company, including, but not limited to, joint ventures, loan
or option arrangements, puts or calls, guarantees against loss or guarantees of
profit, division of losses or profits, or the giving or withholding of proxies;
or (iii) has any substantial interest, direct or indirect, by security holdings
or otherwise in any matter to be acted upon at the Annual Meeting. Except for
information disclosed herein and in the Proxy Statement, to the knowledge of the
Company, none of the foregoing persons nor any associate of any such person has
any understanding or arrangement with any person with respect to any future
employment by the Company or its affiliates or any future transactions to which
the Company or any of its affiliates will or may be a party. In addition,
certain information with respect to the foregoing persons regarding transactions
in the Company's securities is set forth in Annex A hereto.
The business address of the present principal occupation or employment for
the participants is ShowBiz Pizza Time, Inc., 4441 West Airport Freeway, Irving,
Texas 75062, except as follows: Charles A. Crocco, Jr., Looney & Crocco, 641
Lexington Avenue, New York, New York 10022; Anthony J. Gumbiner and Brian M.
Troup, The Hallwood Group, Incorporated, 3710 Rawlins Street, Suite 1500,
Dallas, Texas 75219; Robert L. Lynch, Perpetual Storage, Inc., 6279 E. Little
Cottonwood Canyon Road, Sandy, Utah 84092; Louis P. Neeb, Neeb Enterprises,
Inc., 6914 Hillpark Drive, Dallas, Texas 75230; Cynthia I. Pharr, C. Pharr &
Company, 3030 LBJ Freeway, Suite 1500, Dallas, Texas 75230; and J. Thomas
Talbot, The Talbot Company, 500 Newport Center Drive, Suite 900, Newport Beach,
California 92660.
EXPENSES
Although no precise estimate can be made at this time, the Company
anticipates that the aggregate amount to be spent for, in furtherance of or in
connection with the solicitation of proxies by the Company (excluding the
salaries and wages of officers, employees and directors and excluding the normal
expenses of an uncontested election) will be approximately $175,000 of which
approximately $85,000 has been incurred to date. The foregoing amount includes
expenditures for printing, postage, legal, accounting, public relations,
soliciting, advertising and related expenses. The Company has retained Georgeson
& Co. Inc. ("Georgeson") for proxy solicitation and advisory services in
connection with the solicitation, for which Georgeson is to receive a fee of
approximately $60,000 together with reimbursement for its reasonable
out-of-pocket expenses. The Company has agreed to indemnify Georgeson against
certain liabilities or expenses arising out of Georgeson's agreement with the
Company. Georgeson will solicit proxies for the Annual Meeting from individuals,
brokers, banks, bank nominees and other institutional holders. It is anticipated
that Georgeson will employ approximately 30 persons to solicit votes from
stockholders for the Annual Meeting by mail, advertisement, telephone or
telecopier. The Company may also request its directors and one of its officers
to solicit proxies by mail, advertisement, telephone, telecopier or in person
without compensation therefor.
Irving, Texas
May 30, 1995
<PAGE> 7
ANNEX A
TRANSACTIONS IN SECURITIES
The following participants purchased or sold securities of the Company
within the past two years as set forth below.
<TABLE>
<CAPTION>
NUMBER OF
DATE OF COMMON SHARES
NAME TRANSACTION PURCHASED (SOLD)
__________________________________________________ ___________ ________________
<S> <C> <C>
Richard M. Frank.................................. 06/93 414,508
12/93 (38,000)
(32,000)
08/94 7,000
09/94 13,000
20,000
11/94 40,000
03/95 (60,000)
04/95 15,725(1)
Michael H. Magusiak............................... 01/94 1,125(2)
958(3)
06/94 16,875(2)(4)
11/94 2,000(4)
J. Thomas Talbot.................................. 06/93 2,000
05/94 2,500
</TABLE>
_______________
(1) Received pursuant to stock grant plan.
(2) Shares purchased through the exercise of options.
(3) Shares purchased through the exercise of warrants.
(4) Purchased on margin. The amount of indebtedness at the time of purchase for
the 16,875 shares purchased was approximately $76,000, while the amount of
indebtedness at the time of purchase for the 2,000 shares purchased was
approximately $15,000.
IMPORTANT
1. Whether or not you have already returned a proxy, please sign, date and
return the enclosed WHITE proxy card to your Board of Directors today. Be
sure to vote only on the WHITE proxy. We urge you not to sign any blue
proxy you receive from the "ShowBiz Pizza Independent Stockholders
Committee," New Valley Corporation, Canyon Partners Incorporated, Messrs.
LeBow or Friedman, or their associates, even as a protest vote against
them.
2. If your shares are held in "Street-Name," only your broker or banker can
vote your shares and only upon receipt of your specific instructions.
Please contact the person responsible for your account and instruct that
individual to vote a WHITE proxy on your behalf today in accordance with
your Board's recommendations.
3. If you have any questions or need assistance in voting your shares, please
contact Georgeson & Company Inc. which is assisting us, at their toll free
number: 1-800-223-2064.
2
<PAGE> 8
PROXY
SHOWBIZ PIZZA TIME, INC.
4441 WEST AIRPORT FREEWAY
IRVING, TEXAS 75062
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Larry G. Page and Richard T. Huston,
and each of them as proxies, with full power of substitution and revocation,
and appoints them to represent and vote, as designated on the reverse side, all
of the shares of Common Stock or Preferred Stock of ShowBiz Pizza Time, Inc.
which the undersigned is entitled to vote at the annual meeting of stockholders
of ShowBiz Pizza Time, Inc. to be held on June 8, 1995, or at any adjournment
thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
[X] PLEASE MARK
VOTE AS IN
THIS EXAMPLE
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 PROPOSALS 1, 2 AND 3.
---
1. ELECTION OF DIRECTORS
Nominees: Richard M. Frank, Anthony J. Gumbiner, and Michael H. Magusiak
[ ] FOR ALL [ ] WITHHELD
NOMINEES FROM ALL
NOMINEES
MARK HERE [ ]
FOR ADDRESS
CHANGE AND
NOTE BELOW
_____________________________________________
For all nominees except as noted above
2. Proposal to authorize an increase in the number of shares available for
issuance pursuant to the Company's current 1988 Non-Statutory Stock
Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to adopt a Non-Employee Directors Stock Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name
by president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. (Please make any address corrections above.)
Signature: ________________________________________________ Date: ___________
Signature: ________________________________________________ Date: ___________
