UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 10)
VIDEO LOTTERY TECHNOLOGIES, INC.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
92656M10
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(CUSIP Number)
William Spier
444 Madison Avenue
38th Floor
New York, New York 10022
(212) 759-3287
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(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
- with a copy to -
Peter S. Golden, Esq.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
(212) 820-8000
December 17 and 18, 1996
(Dates of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the
statement / /.
This Amendment No. 10 amends and supplements the
statement on Schedule 13D filed by William Spier on October 30,
1992 and, as a result of an amendment thereto, by Video
Investment Partners, L.P., Asgard Ltd., Parkway M&A Capital
Corporation, Alpine Associates, Ltd., Gabriel Capital, L.P.,
LBN Investment Associates, L.P., and Homer Noble (the "Schedule
13D") with respect to Common Stock, par value $.01 per share
(the "Shares"), of Video Lottery Technologies, Inc., a Delaware
corporation (the "Company").
Unless otherwise defined, all capitalized terms used
herein shall have the meaning given such terms in the
Schedule 13D.
Item 4 of the Schedule 13D is hereby amended to add
the following information.
ITEM 4. PURPOSE OF TRANSACTION
(a) LETTER REAFFIRMING PREVIOUS PROPOSAL TO ACQUIRE
THE COMPANY. William Spier has delivered a letter to the Board
of Directors of the Company stating that he is prepared to
immediately enter into a merger agreement with the Company
providing for the payment of $6.00 in cash for each Share based
upon his proposal dated November 14, 1996. The letter stated
Mr. Spier's belief that he had already satisfied all reasonable
concerns of the Company regarding his ability to complete the
transaction. He also proposed, as evidence of his confidence
in being able to consummate the transaction, that he purchase
up to an additional 20% of the outstanding Shares in open
market or privately negotiated transactions at prices up to
$6.00 per Share immediately after entering into a merger
agreement with the Company. A copy of the letter is attached
as an exhibit hereto and is hereby incorporated by reference.
There can be no assurance that any transaction will result from
this proposal.
(b) ENCOURAGING STOCKHOLDERS TO COMMUNICATE THEIR
SUPPORT FOR PROPOSAL TO BOARD. In light of the apparent
unwillingness of the Board of Directors of the Company to
pursue Mr. Spier's acquisition proposal, Mr. Spier encourages
all stockholders who wish to receive $6 per Share in cash for
their Shares to communicate to the Board their support for
Mr. Spier's proposal in any way they consider appropriate.
(c) INABILITY TO JOIN IN BOARD'S RECOMMENDATION TO
REELECT JAMES DAVEY AS A DIRECTOR OF THE COMPANY. Mr. Spier has
advised the Board of Directors of the Company that he dissents
from the Board's nomination of James Davey to be elected at the
next annual meeting of the Company's stockholders and does not
join in the Board's recommendation that stockholders vote in favor
of Mr. Davey's reelection as a director of the Company.
Mr. Spier is not supporting Mr. Davey's reelection
because he disagrees with Mr. Davey's views as to the appropriate
management and strategic direction of the Company.
Item 7 of the Schedule 13D is hereby amended to add
the following information.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Letter to Board of Directors of the Company dated
December 17, 1996.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth
in this statement is true, complete and correct.
ALPINE ASSOCIATES, LTD.
/S/WILLIAM SPIER By: /S/WILLIAM SPIER
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William Spier William Spier
Pursuant to Power of Attorney
VIDEO INVESTMENT PARTNERS, L.P. GABRIEL CAPITAL, L.P.
/S/WILLIAM SPIER By: /S/WILLIAM SPIER
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William Spier William Spier
Managing General Partner Pursuant to Power of Attorney
ASGARD LTD. LBN INVESTMENT ASSOCIATES, L.P.
/S/WILLIAM SPIER By: /S/WILLIAM SPIER
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William Spier William Spier
Pursuant to Power of Attorney Pursuant to Power of Attorney
PARKWAY M&A CAPITAL HOMER NOBLE
CORPORATION
/S/WILLIAM SPIER By: /S/WILLIAM SPIER
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William Spier William Spier
Pursuant to Power of Attorney Pursuant to Power of Attorney
Date: December 18, 1996
EXHIBIT
WILLIAM SPIER
444 MADISON AVENUE, 38TH FLOOR
NEW YORK, NEW YORK 10022
PHONE: 212 751-2300
FAX: 212 644-0499
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December 17, 1996
Mr. Richard Burt
Chairman, Special Committee
Video Lottery Technologies, Inc.
115 Perimeter Center Place
Atlanta, GA 30346
Dear Rick:
In response to your December 9, 1996 letter, I am
prepared to immediately enter into a merger agreement with Video
Lottery Technologies, Inc. providing for the payment of $6.00 in
cash for each common share of VLT. I believe I have already
satisfied all REASONABLE concerns of the Board of Directors of
VLT and the Special Committee. In that regard, I have proposed a
number of means to assure you that the financing for the
transaction will be available and that all regulatory and other
necessary approvals will be obtained.
However, I am concerned by the schizophrenic nature of
your December 9 letter and VLT's December 12 press release.
Although you state that you are willing to enter into good faith
negotiations regarding the sale of VLT, you then impose
preconditions not only to an agreement but also to negotiations.
You then go on to state that even if I satisfied every one of
VLT's preconditions (including those having no rational
relationship to my proposal), VLT is still not prepared to commit
to take any action to enhance shareholder value. Consequently,
it is quite difficult for me to believe that the Special
Committee is dedicated to sincerely pursuing all credible
proposals to provide immediate and substantial benefits to VLT
and its stockholders despite the Company's repeated public
declarations to that effect. Indeed, the assertion in your
December 9 letter that the Committee "has not, at this point,
decided that VLT is for sale at all", apparently contradicts the
Company's often stated position.
I also am disappointed by the suggestion in your letter
that the VLT Special Committee intends to delay a decision on my
acquisition proposal until it has reviewed yet again its possible
courses of action. After more than four years of reviewing
strategic alternatives and corporate restructuring, the
apparently unsuccessful recent effort to sell AWI, and the more
than one month since my proposal had been publicly announced and
other parties have had a chance to express their interest in
acquiring VLT, any reasonable person would be compelled to
conclude that you are at the end of a process of self-examination
and not at the beginning. Indeed, my proposal resulted from my
perception and that of many VLT stockholders that no other
attractive alternative existed for VLT, its customers, suppliers
and shareholders, and that it was necessary to put an end to
VLT's apparently endless exploration of alternatives and
management's constant distraction and lack of focus. The time
for VLT to act is now.
In addition, although I do not expect to be treated
more favorably than any third party expressing interest in VLT, I
am entitled to be treated fairly and not be subjected to demands
which are either impossible to meet or inappropriate. For
example, you have requested that I agree to terms to which no
third party would ever agree, such as not subjecting a merger to
necessary regulatory approvals. As you know state lottery
authorities and gaming commissions must approve changes of
control of VLT. We all have a fiduciary obligation to ensure
that VLT's businesses, customers and employees not be adversely
affected by any transaction and must not ignore the clear
requirements of those licensing or doing business with VLT. I am
confident all approvals will be obtained because these
authorities have already approved my qualifications.
Nevertheless, it is entirely unreasonable and unfair not to
afford these regulators the opportunity to review the proposed
transaction. No other transaction in either the lottery or
gaming industries has even been effected without a condition
relating to the receipt of regulatory and similar approvals.
Your position on the matter seems punitive and inconsistent with
your stated desire to deal with me in good faith and reflects a
motivation that appears inimical to stockholder interests.
Indeed, no reasonable person, including any Fortune 500 company,
would ever agree to such a demand.
With respect to your pre-conditions for negotiation,
the only relevant concerns have already been addressed.
o FEASIBILITY. Your investment banker, Salomon
Brothers, has already indicated to us that it
believes our proposed transaction is based on a
sound business plan, is financeable, and is likely
to close.
o FINANCING. I have previously outlined a structure
which will permit the necessary financing to be
obtained without much difficulty. I also have
already proposed that at the time we execute a
merger agreement, both my financial advisor and
VLT's would deliver letters stating that the
financing for the transaction should be available.
In addition, I have suggested that VLT can
terminate the merger agreement if I do not have
commitments for financing within a reasonable
period after the signing of the agreement, say 45
days, and would be willing to reimburse VLT for
its reasonable out-of-pocket expenses if financing
were unavailable.
o REGULATORY APPROVALS. You already have been
advised that the participants in my group will
either be current members of my investor group or
similar passive investors and any third parties
will be persons already licensed or approved by
the relevant regulatory authorities. Because you
are well aware that I have been repeatedly found
acceptable by every regulatory and similar
authority scrutinizing VLT, you have a better
basis for concluding my transaction will be
approved by all of these authorities than almost
any other third party proposal. Once again, if my
transaction cannot be completed because of failure
to obtain necessary approvals, I am prepared to
pay VLT's reasonable out-of-pocket expenses.
o REPRESENTATIONS AND WARRANTIES. A merger
agreement between us will contain only customary
provisions in transactions of this type. I am
confident our lawyers can quickly work out an
acceptable agreement.
o ARRANGEMENTS WITH THIRD PARTIES. Of course we
agree that VLT's stockholders be fully informed as
to any arrangements we have with third parties.
Therefore, we would complete all such arrangements
within the time we have proposed to finalize
financing arrangements. Accordingly, there will
be no difficulty in fully describing arrangements,
if any, in the VLT proxy materials to be mailed to
stockholders in connection with the merger.
o COMMITMENT. I was surprised by your suggestion
that I was not fully committed to this
transaction. I proposed to provide interim
financial support to VLT as a demonstration of my
commitment. However, if you require further
demonstration of my commitment to my proposal and
my desire to provide VLT shareholders with a
highly beneficial transaction, I AM WILLING TO
PURCHASE UP TO AN ADDITIONAL 20% OF VLT'S COMMON
SHARES IN OPEN MARKET OR PRIVATELY NEGOTIATED
TRANSACTIONS AT PRICES UP TO $6 PER SHARE AS
PROMPTLY PRACTICABLE AFTER OUR EXECUTING A MERGER
AGREEMENT. This will permit those stockholders
desiring immediate liquidity to sell their shares
at attractive prices and will require me to make a
substantial additional investment in VLT. What
better way can I demonstrate my confidence in my
ability to complete the proposed acquisition than
for me to make a sizable down payment which
provides immediate benefits to VLT's public
shareholders?
o VLT RIGHT TO TERMINATE. My proposal already
contemplates that VLT could terminate its
agreement with me if it can provide VLT
shareholders with at least $6 in cash per share.
Obviously, I would agree that VLT could provide
this cash value through one or more transactions.
As a stockholder I would support transactions
providing greater immediate cash value than my
proposal. However, I do not consider it
reasonable or in VLT's shareholders' interests to
permit the Special Committee to deprive
stockholders of the ability to accept my proposal
if the Special Committee changes its mind but
cannot deliver at least $6 in cash per share to
shareholders. The real owners of VLT should be
given the right to decide the destiny of their
investment. Finally, if I have expended
substantial funds to provide value to VLT
shareholders and VLT terminates my agreement in
order to pursue a superior cash alternative, VLT
should reimburse my out-of-pocket expenses. After
all, it will have been my transaction which both
provided a floor on the auction and impelled a
third party to pay a higher price. I am not
asking to make a profit; I only ask that I not be
subjected to considerable expense to subsidize a
benefit for all shareholders. No reasonable
acquirer would agree to your proposal.
o TIMING. I agree that we should all work together
to consummate my transaction as promptly as
practicable. Certain considerations limit how
quickly we can close. The transaction will
require VLT shareholder approval. Therefore,
proxy materials must be prepared, filed with the
SEC, cleared by the SEC, and sent to shareholders.
Depending upon factors beyond my or VLT's control,
the process of obtaining shareholder approval
takes between 60 and 180 days from the execution
of a merger agreement. Similarly, obtaining
regulatory approvals subjects the transaction to
timing considerations out of our control. Once
again, if hearings are required after necessary
filings and investigations are made, 180 days may
pass before closing. We will all work diligently
to consummate the merger as soon as possible. We
cannot, however, ignore timing constraints
applicable to every transaction in the gaming and
lottery industries. Do not treat me unfairly by
asking me to agree to something to which no third
party seeking to acquire VLT would ever agree.
o INDEMNIFICATION. I do not understand your focus
on indemnification of directors and officers of
VLT. Presumably, you will be comfortable that you
have acted properly. Nevertheless, I am willing
to do whatever is usual in transactions of this
type.
o DISCUSSIONS WITH THIRD PARTIES, INCLUDING EDS.
With respect to EDS, I note that VLT has been
engaged in efforts to resolve its dispute for
close to one year. I encourage a quick resolution
of the disagreement. However, if an agreement
cannot be reached in the near future, VLT must
acknowledge that its efforts have been
unsuccessful and that my acquisition proposal
provides the most likely means of resolving the
situation. In any event, in the immediate future,
I have no intention of engaging in substantive
discussions with EDS regarding its dispute with
VLT and possible resolutions of that dispute in
the context of my acquisition proposal.
o VLT'S EXPLORATION OF OTHER ALTERNATIVES. Although
I share the view of many of VLT's stockholders
that there are no superior alternatives to my
proposal, I will actively support VLT efforts to
achieve a greater than $6 per share cash value
after a merger agreement is signed. It is
detrimental to the interests of VLT, its
shareholders and other constituents to delay a
transaction which everyone agrees is highly
attractive because of the speculative possibility
that VLT somehow has missed out on an opportunity
during its comprehensive and extraordinarily
lengthy review of strategic options over the past
four years.
o MY PARTICIPATION AS A DIRECTOR. I am extremely
disturbed by your desire to exclude me from
participation as a director of VLT in respect of
matters unrelated to my acquisition proposal. It
is indisputable that as a director of VLT I
continue to have a fiduciary duty to exercise a
supervisory role over VLT's business affairs. At
a time when VLT is confronting so many business,
management, compensation, and operating problems,
it is particularly important that each director be
extensively involved on a fully informed basis in
VLT's affairs. Other than matters relating to my
acquisition proposal or other possible
extraordinary and competing transactions, I am not
only entitled to fully participate as a director,
but required to do so. (I further note that your
reference to Mr. Lyons as my affiliate in your
December 12 press release is erroneous and
insulting to Mr. Lyons. He is not in any way
controlled by me. During his four years of
service as a VLT director he has disagreed with me
many times.) Asking me to effectively abdicate my
responsibilities as a director of VLT is a
disservice to VLT and its shareholders. Moreover,
you have created the impression that your only
motivation for excluding me from the continuing
management of VLT is to silence dissenting voices
on the Board, particularly when such dissent
relates to matters including your compensation and
that of other members senior management.
Therefore, I respectfully demand that I be
afforded all rights of a director of VLT and not
be excluded from any Board deliberations other
than those relating to those involving a sale of
VLT or a substantial portion of its assets.
Lastly, you have asked me to consent to the appointment
of counsel to the Special Committee. I do not wish to intrude on
the independence of the Special Committee and only request that
appropriate safeguards be adopted to ensure that the interests of
VLT and management not be confused. I defer to the Committee's
judgment in this regard.
In light of the urgency of VLT's situation and the
desirability of proceeding rapidly to complete an extremely
attractive transaction, I urge you to accept my proposal. I
request that we avoid over-lawyering this situation by arguing
about the "shape of the negotiating table" and move forward as
sensible businessmen to implement this transaction. I believe I
have provided the Special Committee with a "no cost", "no lose"
proposal which includes terms which are far more advantageous in
every respect than any third party would be expected to offer.
It is now the Special Committee's obligation to exercise sound
business judgment in discharging its fiduciary responsibilities
and join with me to reward VLT's shareholders for their patience.
Sincerely,
William Spier
