<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
- --------------------------------------------------------------------------------
MALIBU ENTERTAINMENT WORLDWIDE, INC.
- --------------------------------------------------------------------------------
(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:
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(2) Aggregate number of securities to which transaction applies:
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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):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
MALIBU ENTERTAINMENT WORLDWIDE, INC.
717 NORTH HARWOOD, SUITE 1650
DALLAS, TEXAS 75201
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
QUESTIONS AND ANSWERS
WHEN AND WHERE IS THE MEETING?
The annual meeting of shareholders of Malibu Entertainment Worldwide, Inc.
will be held at the SpeedZone, 11130 Malibu Drive, Dallas, Texas, on Tuesday,
June 6, 2000, at 11:00 a.m. local time.
WHO CAN VOTE?
Record holders of shares of Malibu common stock (the "Malibu Common
Shares") as of the close of business on May 2, 2000 are entitled to vote at the
meeting. On that date, 57,142,547 Malibu Common Shares were outstanding and each
Share is entitled to one vote.
WHAT IS BEING VOTED ON?
- Election of seven directors for terms ending at the 2001 annual meeting
of shareholders.
- Any other business properly brought before the meeting.
MEI Holdings, L.P., the holder of 67% of the Malibu Common Shares ("MEI
Holdings"), has informed the Company that it intends to vote its shares in favor
of each of the nominees and any other matter that properly comes before the
meeting. Accordingly, each of the director nominees will be elected and any
other matter properly brought before the meeting will be approved as a result of
MEI Holdings' vote, regardless of how many other Malibu shareholders vote. As of
the date of this proxy statement, the directors do not know of any other matters
that are to be presented at the meeting. If any other matter requiring a vote
properly comes before the meeting, the holders of the proxies will vote your
Malibu Common Shares on any such matter in their sole discretion.
HOW DO I VOTE?
Mark, sign and date your proxy card and return it in the postage-paid
envelope provided. If you do not indicate your voting preferences on your proxy
card, your Malibu Common Shares will be voted in favor of the proposal.
MAY I CHANGE MY VOTE?
You may revoke your proxy at any time before your proxy is voted at the
annual meeting in any one of the following three ways:
(1) by sending a written notice to the Secretary of the Company,
stating that you want to revoke your proxy;
(2) by completing a properly signed proxy with a later date; or
(3) by voting in person at the annual meeting.
WHEN IS THIS PROXY STATEMENT BEING MAILED TO SHAREHOLDERS?
This Proxy Statement is being mailed to Shareholders on or about May 5,
2000.
<PAGE> 3
WHO IS SOLICITING PROXIES?
The Company has retained McKenzie Partners, Inc. to aid in the solicitation
of proxies in the enclosed form and related duties and will pay such firm a
customary fee plus reasonable expenses for so acting (estimated at $3,500 in the
aggregate). The cost of solicitation of proxies will be borne by the Company. It
is expected that solicitation of proxies will be primarily by mail. Proxies may,
however, be solicited by the Company's directors, officers and employees
(without additional compensation), in person, by telephone or otherwise.
Arrangements may be made with brokerage firms and other custodians, nominees and
fiduciaries to forward the solicitation material to the beneficial owners of
Malibu Common Shares held of record by such persons. The Company may, upon
request, reimburse such brokers, custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred by them in connection therewith.
WHAT IS THE EFFECT OF ABSTENTIONS AND BROKER NON-VOTES?
Abstentions and broker non-votes will be treated as shares not voted for
purposes of determining whether the requisite vote has been obtained as to the
proposals and therefore will have no effect on the outcome of the vote on any
matter being considered at the Annual Meeting that requires the affirmative vote
of a majority of votes cast at the Annual Meeting of Malibu Common Shares
entitled to vote.
ARE DISSENTER'S RIGHTS OR APPRAISAL RIGHTS AVAILABLE TO SHAREHOLDERS?
The shareholders of Malibu have no dissenter's or appraisal rights under
Article 13 of the Georgia Business Corporation Code or under Malibu's Articles
of Incorporation with respect to the items set forth in this Proxy Statement.
WHOM SHOULD I CALL WITH QUESTIONS?
If you have questions regarding the matters referred to in this document,
you should contact Richard N. Beckert, Malibu's Chief Executive Officer, at
(214) 210-8701.
ELECTION OF DIRECTORS
INFORMATION ABOUT BOARD NOMINEES
The Malibu Board will consist of seven directors, each of whom has been
nominated, and agreed to stand, for re-election. We have provided information
regarding each nominee below. If any of the nominees is unable to stand for
election, we may provide for a lesser number of nominees or designate a
substitute for such nominee. In the latter event, Malibu Common Shares
represented by proxies may be voted for the substitute. If elected, each
director nominee will serve for a term expiring at Malibu's 2001 annual meeting
of shareholders or until the earlier of the election of his or her successor or
his or her resignation or removal from office.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE
- ---- --- --------
<S> <C> <C>
Richard N. Beckert.......................................... 43 1998
Daniel A. Decker............................................ 47 1996
James T. Hands.............................................. 39 1996
Richard M. Fitzpatrick...................................... 46 1996
William M. Kearns, Jr. ..................................... 64 1995
Steven D. Scheetz........................................... 32 1998
Bert W. Wasserman........................................... 66 1995
</TABLE>
Richard N. Beckert has been a member of the Board since November 1998 and
Chief Executive Officer of Malibu since August 1998. Prior to joining Malibu,
Mr. Beckert was the Senior Vice President of Administration, for Bristol Hotels
and Resorts ("Bristol") and served in various capacities for Bristol from
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<PAGE> 4
1983 through 1998. Mr. Beckert was the Mayor of the Town of Addison, Texas from
May 1993 until May 1999. He was a member of the Board of Directors of the
Metrocrest Chamber of Commerce from 1992 until 1999. He was also a member of the
Addison Business Association from 1985 to 1999. Mr. Beckert has been a board
member of Houlihan's Restaurant Group, Inc. since 1999.
Daniel A. Decker has been a member of the Board since August 1996 and an
Executive Vice President of The Hampstead Group, LLC ("Hampstead") since 1990.
Hampstead is an investment firm which sponsored formation of MEI Holdings,
Malibu's majority shareholder. Mr. Decker served as a director of Wyndham Hotel
Corporation from 1996 until the sale of Wyndham to Patriot American Hospitality,
Inc. in 1998. Prior to 1990, Mr. Decker was a partner in the Dallas law firm of
Decker, Hardt, Kopf, Harr, Munsch & Dinan, P.C. Mr. Decker was a director of
Forum Group, Inc. from June 1993 until March 1996.
James T. Hands has been a member of the Board since 1996 and has been a
Vice President of Hampstead since 1993. Prior to 1993, Mr. Hands was a
consultant employed by Kenneth Leventhal & Co.
Richard M. Fitzpatrick has been a member of the Board since August 1996 and
has been the Chief Financial Officer/Vice President of Hampstead since 1989. He
served as the interim chief financial officer of Malibu from November 1996
through December 1998.
William M. Kearns, Jr. has been a member of the Board since January 1995.
Since 1994, Mr. Kearns has served as President of W.M. Kearns & Co., Inc., a
private investment company. Since 1998, he has served as vice chairman of Keefe
Managers, Inc. which manages a series of financial services portfolios. Mr.
Kearns serves as a senior consultant to Proudfoot Consulting, Plc. He is a
trustee of EQ Advisors Trust, a registered investment company, and is a director
of Greenfield Capital Partners, Marine Transport Corporation, Selective
Insurance Group, Inc., and Transistor Devices, Inc. Mr. Kearns is a member of
the Executive Advisory Board of the William E. Simon School of Business of the
University of Rochester.
Steven D. Scheetz has been a member of the Board since 1998. He currently
serves as Vice President of Hampstead and is the managing member of Odyssey
Advisors LLC. Since 1992, Mr. Scheetz has been a member of the mergers and
acquisitions team at Hampstead and is responsible for the financial underwriting
and valuation efforts of Hampstead and its investments. Prior to joining
Hampstead, Mr. Scheetz was an officer of Belcore & Associates, Inc., a regional
real estate investment and management firm. Previously, Mr. Scheetz worked in
the corporate finance department of Daseke Management Company of America, a real
estate investment and management company.
Bert W. Wasserman has been a member of the Board since January 1995. Mr.
Wasserman served as Executive Vice President and Chief Financial Officer from
1990 to 1994 and as a director from 1990 to 1993 of Time Warner Inc. From 1981
to 1991, Mr. Wasserman served as a member of the Office of the President and
Board of Directors of Warner Communications, Inc. Mr. Wasserman served as a
member of the National Advisory Board of Chemical Bank until March 1996. Mr.
Wasserman currently serves as a member of the Board of the Baruch College Trust
Fund, a director of various registered investment companies for which The
Dreyfus Corporation acts as investment advisor, and a director of Winstar
Communications, Inc. and Lillian Vernon Corporation.
The seven candidates for director receiving the highest number of
affirmative votes cast at the Annual Meeting will be elected as directors of
Malibu. Shareholders do not have a right to cumulate their votes for directors.
MEI Holdings has informed the Company that it intends to vote its shares (which
represents 67% of the Malibu Common Shares outstanding on the Record Date) for
each of the director nominees. Accordingly, each of the director nominees will
be elected as a result of MEI Holdings' vote, regardless of how other Malibu
shareholders vote.
Robert A. Whitman, who currently serves as Chairman of the Board, will not
be a nominee for election to the Board at the 2000 Annual Meeting. After the
election, a new Chairman of the Board will be selected from the Board by a vote
of the newly elected Board of Directors.
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<PAGE> 5
MALIBU BOARD MEETINGS
Your directors met six times during 1999. Each director attended at least
three-fourths or more of the total number of meetings of directors and meetings
of committees on which he or she served.
MALIBU BOARD COMMITTEES
The Malibu Board has two committees: an Audit Committee and a Compensation
Committee. The Malibu Board does not have a nominating committee.
The Audit Committee is responsible for reviewing (i) the selection of our
independent auditors, (ii) the audits conducted by our independent and internal
auditors, (iii) our internal controls and practices, and (iv) our financial
statements as certified by our independent auditors. Messrs. Wasserman
(Chairman), Fitzpatrick and Kearns are members of our Audit Committee. The Audit
Committee met four times in 1999.
The Compensation Committee is responsible for (i) determining the
compensation of our executive officers and (ii) overseeing the base pay or
salary, annual performance bonus and long-term compensation of our executive
officers. Messrs. Decker (Chairman), Kearns and Wasserman are members of our
Compensation Committee. The Compensation Committee met one time in 1999.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Principles. The Compensation Committee of the Board seeks to provide a
competitive compensation package that enables us (i) to attract and retain key
executives, (ii) to integrate pay programs with our business objectives, (iii)
to reward executive officers for achievement of short-term operating goals and
for long-term stockholder value, and (iv) to link individual executive
compensation with our overall performance.
Factors Considered in Determining Compensation. The Committee targets
salaries for its key executives that are competitive with related industry
companies of similar size, taking into account the experience of individual
officers. Generally, the Committee attempts to fix base salaries at lower levels
to emphasize result-oriented factors reflected in a bonus potential and the
value of stock options. The Committee periodically reviews salaries and pay
ranges for its executives, and salaries are increased based on the Committee's
evaluation of an individual's performance and their contribution to our goals.
COMPENSATION COMMITTEE
Daniel A. Decker, Chairman
William M. Kearns, Jr.
Bert W. Wasserman
DIRECTOR COMPENSATION
General
Our directors, other than Mr. Beckert, are paid the following for their
services as directors: (i) an annual fee of $25,000, payable in quarterly
installments, (ii) fees of $1,000 for each special meeting attended in person,
(iii) fees of $750 for each telephonic special meeting attended, (iv) an annual
fee of $5,000 for serving on a Board committee, (v) fees of $750 for each
special committee meeting attended in person, and (vi) fees of $500 for each
telephonic special committee meeting attended.
Each of Messrs. Decker, Fitzpatrick, Hand, Scheetz and Whitman waived his
rights to such fees for 1996, 1997, 1998 and 1999.
Potential Compensation through Stock Option Plan Grants
Nonemployee Director Stock Option Plan. In September 1993, Malibu adopted
the 1993 Nonemployee Director Stock Option Plan (the "Director Plan") which was
amended during 1995 and for which 250,000 Malibu Common Shares are reserved for
issuance. The Director Plan provides for the grant of nonqualified
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<PAGE> 6
stock options to purchase Malibu Common Shares to directors who are not our
employees. All options are issued at fair market value at the date of grant and
vest immediately and expire 10 years from the date of grant. Each of Messrs.
Decker, Fitzpatrick, Hands, Scheetz and Whitman waived his rights to such
options for the years 1996 through 1999. Each of Messrs. Kearns and Wasserman
were granted 5,000 stock options in 1999 pursuant to this plan.
Mountasia 1993 Incentive Stock Option Plan. In September 1993, Malibu
adopted the Mountasia 1993 Incentive Stock Option Plan (the "Plan"), which was
amended in 1995. The Plan provides for the issuance of options covering up to
1,250,000 Malibu Common Shares. Options may be granted under the Plan to our
employees, officers, directors, consultants and advisors. All options are issued
at fair market value at the date of grant. The options expire four to five years
from the date of grant and they vest immediately. As of December 31, 1999, there
were no options outstanding under this plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and the rules
promulgated under it require that certain of our officers, directors and
stockholders report transactions effected in Malibu Common Shares with the SEC.
During 1999, each Malibu director filed on a timely basis the forms required
under Section 16(a) relating to transactions in Malibu Common Shares.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Richard N. Beckert..................................... 43 Chief Executive Officer
R. Scott Wheeler....................................... 43 Chief Financial Officer
</TABLE>
See the biography of Richard N. Beckert under "Information about Board
Nominees."
R. Scott Wheeler has been Chief Financial Officer of Malibu since December
1998. Prior to joining Malibu, Mr. Wheeler was a vice president and assistant
vice president of The Beltway Companies from 1985 to 1998. Mr. Wheeler is
currently the Mayor of the Town of Addison, Texas, Chairman of the Communities
Foundation of Texas Metrocrest Area Fund Advisory Council and is a member of the
Board of Directors of Compass Bank Dallas.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE -- 1999 AND 1998
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ---------------------------------------
-------------------- RESTRICTED NUMBER OF SECURITIES
NAME & PRINCIPAL POSITION YEAR SALARY BONUS STOCK AWARDS UNDERLYING OPTION SALES
------------------------- ---- -------- -------- ------------ -----------------------
<S> <C> <C> <C> <C> <C>
Richard N. Beckert, CEO..... 1999 $275,000 $150,000 -- --
1998 $100,481 $164,725(3) $687,500(1) 1,000,000
R. Scott Wheeler, CFO....... 1999 $124,789 $ 43,767 -- --
1998(2) $ 1,000 $ 7,000 -- 200,000
</TABLE>
- ---------------
(1) This amount represents 500,000 restricted Malibu Common Shares with a value
of $80,000 as of December 31, 1999. Dividends are payable on such restricted
shares.
(2) Mr. Wheeler's employment was effective December 28, 1998.
(3) The amount listed includes an $11,600 signing bonus and a year-end bonus for
1998 of $153,125.
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<PAGE> 7
STOCK OPTIONS
FISCAL YEAR END OPTION VALUES IN 1999
<TABLE>
<CAPTION>
# OF SECURITIES # OF SECURITIES
UNDERLYING UNDERLYING
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR END YEAR END
NAME --EXERCISABLE --UNEXERCISABLE
- ---- ----------------- -----------------
<S> <C> <C>
Richard N. Beckert, CEO............................... 333,333 666,667
R. Scott Wheeler, CFO................................. 50,000 150,000
</TABLE>
All of the options listed in the above chart were denominated in prices greater
than the December 31, 1999 stock price and therefore had no economic value (they
were not in-the-money).
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Mr. Beckert
In August of 1998, Malibu entered into a four-year employment agreement
with Mr. Beckert which provides that he will serve as the Chief Executive
Officer and as a member of the Board of Directors. Mr. Beckert was to receive an
initial annual base salary of $275,000, and he is entitled to annual bonus
payments in an amount up to 100% of his annual base salary. If Mr. Beckert
terminates his employment for good reason or the company terminates his
employment within 6 months of a change in control, at a time when cause does not
exist, Mr. Beckert will continue to receive his annual base salary through the
date his employment is terminated and generally will receive the equivalent of
two years annual base salary. When no other severance is due, if Mr. Beckert's
employment is terminated for reasons other than for cause, Mr. Beckert will
continue to receive his annual base salary through the date his employment is
terminated and, generally, will receive the equivalent of two years base salary
and bonus.
In connection with entering into his employment agreement, Mr. Beckert was
granted non-qualified stock options to purchase 1,000,000 Malibu Common Shares
and 500,000 Restricted Malibu Common Shares with 100% cliff vesting were issued
to him. The options vest at a rate of 1/48 per month for four years and the
restricted stock vests in August of 2002. The option vesting is accelerated
generally in circumstances which entitle Mr. Beckert to a severance payment
under his employment agreement.
Mr. Wheeler
In December of 1998, Malibu entered into a three-year employment agreement
with Mr. Wheeler which provides that he will serve as the Chief Financial
Officer. The agreement called for Mr. Wheeler to receive an initial base salary
of $120,000, and he is entitled to annual bonus payments of up to 50% of his
annual base salary. When no other severance is due, if Mr. Wheeler's employment
is terminated for reasons other than for cause or by Mr. Wheeler for good
reason, Mr. Wheeler will continue to receive his annual base salary through the
date his employment is terminated and, generally, will receive the equivalent of
one year of his annual base salary.
In connection with entering into his employment agreement, Mr. Wheeler was
simultaneously granted non-qualified stock options to purchase 200,000 Malibu
Common Shares. The options vest at a rate of 1/48 per month for four years. The
option vesting is accelerated generally in circumstances which entitle Mr.
Wheeler to a severance payment under his employment agreement.
Long-Term Incentive Plan
In April 1997, Malibu adopted its 1997 Long-Term Incentive Plan ("1997
Plan") which was implemented to attract and retain qualified officers and other
key employees and to provide such employees with appropriate incentives. The
plan provides for the issuance of up to 4,000,000 Malibu Common Shares and
restricted stock. During 1999 and 1998, Malibu granted options to purchase
209,000 and 918,100, respectively, Malibu Common Shares at prices ranging from
$0.38 to $3.00, the market price at the time of grant. The
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<PAGE> 8
options vest over four years and expire ten years from the date of grant. Under
the 1997 Plan, the Company issued Mr. Beckert's 500,000 shares of restricted
stock and Mr. Wheeler's 200,000 options described above.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Recapitalization
On July 20, 1999 the Company completed its previously announced
recapitalization and the land sale and leaseback transaction (together, the
"Recapitalization") relating to its Willowbrook, Texas and Puente Hills,
California entertainment parks (the "Sale and Leaseback").
The principal components of the Recapitalization were as follows:
- Repayment of $11.4 million to one of the Company's principal lenders.
$9.1 million of the $11.4 million came from the proceeds of the Sale and
Leaseback with the balance being provided by an entity related to the
Company's largest shareholder, MEI Holdings.
- This lender, which held $21.4 million of secured debt of a subsidiary of
the Company and $21.0 million of other indebtedness advanced through the
Company's largest shareholder as an accommodation to the Company, also
exchanged the remaining $33.0 million of debt (including $2.0 million of
accrued interest) for non-convertible preferred stock of the Company. An
entity related to this lender also received 6,000,000 of the Company's
common shares. If the Company has not redeemed the non-convertible
preferred stock by December 31, 2000, the lender will be entitled to an
addition 2,000,000 of the Company's common shares plus 4,000,000 of
common shares from the Company's largest shareholder.
- The elimination of $500,000 per month principal amortization payment
under the Company's debt to its next largest lender that would have been
payable had the Recapitalization not been completed.
- Conversion of $50.0 million of debt (including $8.0 million of accrued
interest) to the Company's largest shareholder into preferred stock of
the Company that is convertible into Company common stock at any time at
$2.50 per common share. In addition, $12.0 million of debt (including
$400,000 of accrued interest) to an entity related to the Company's
largest shareholder was converted into preferred stock of the Company
which is convertible into Company common stock at any time after
September 30, 2000 at a per common share price of the lower of $2.50 or
120% of market at the time of conversion. This convertible preferred
stock has the right to vote with the Company common stock on a "as
converted" basis.
In addition, an entity related to the Company's largest shareholder
purchased, $2.8 million of additional shares of preferred stock of the Company.
That entity and the Company's largest shareholder have the right, but not the
obligation, to purchase up to $4.5 million and $2.5 million, respectively, worth
of additional shares of preferred stock of the Company.
In the Recapitalization, the Company issued convertible preferred stock to
the Company's largest shareholder and a related entity in exchange for an
aggregate of $62.0 million of debt held by those entities. These securities were
exempt from registration with the Securities and Exchange Commission pursuant to
Section 4(2) of the Securities Act of 1933 as amended.
Superstar Dragsters, Inc. Transaction
In December 1999, the Company agreed to issue 4,633,922 shares of common
stock worth $1,500,000 and made a payment of $1,100,000 in connection with a
settlement with the manufacturer of its Top Eliminator(R) attraction relating to
past and future orders of the attraction. These shares were issued in February
2000 and were exempt from registration with the Securities and Exchange
Commission pursuant to Section 4(2) of the Securities Act of 1933 as amended.
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<PAGE> 9
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Resignation of Mr. L. Scott Demerau and Ms. Julia E. Demerau
Directors L. Scott Demerau and Julie E. Demerau tendered their resignations
from the Board of Directors on February 21, 2000. In connection with the
resignation of Mr. Demerau from the Board of Directors of the Company, Mr.
Demerau received discounted and accelerated payment of certain severance
obligations owed to him pursuant to an existing agreement with the Company. The
replacement agreement calls for Mr. Demerau's remaining obligations to be paid
in full by the end of May 2000.
Ms. Demerau was not entitled to any such payments.
STOCK PERFORMANCE GRAPH
The following graph compares the five-year cumulative total return on
Malibu Common Shares with that of the S&P 500 Index and an industry group. This
graph assumes $100 was invested on September 30, 1994 in each of Malibu Common
Shares, the S&P 500 companies and a group of companies represented by the
Entertainment-500 Industry Segment. Cumulative total return assumes the
reinvestment of dividends.
TOTAL SHAREHOLDER RETURNS
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Measurement Period September September December December December December
(Fiscal Year Covered) 1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Malibu Entertainment Worldwide
Inc. 100.00 76.74 31.39 26.65 11.05 1.45
S&P 500 Index 100.00 129.74 169.13 225.56 290.02 351.04
Entertainment-500 100.00 132.18 133.12 194.24 263.16 307.92
</TABLE>
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<PAGE> 10
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Malibu
Measurement Period Entertainment S&P 500
(Fiscal Year Covered) Worldwide Inc. Index Entertainment
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sep94................................... 100.00 100.00 100.00
Sep95................................... 76.74 129.74 132.18
Dec96................................... 31.39 169.13 133.12
Dec97................................... 26.65 225.56 194.24
Dec98................................... 11.05 290.02 263.16
Dec99................................... 1.45 351.04 307.92
</TABLE>
SECURITY OWNERSHIP INFORMATION
The following table sets forth certain information regarding the beneficial
ownership of Malibu Common Shares as of April 24, 2000 by (i) each person who we
know beneficially owns more than 5% of Malibu Common Shares, (ii) each director
and executive officer of Malibu, and (iii) all directors and executive officers
of Malibu as a group. Unless otherwise stated below, the address of each person
is the principal offices of Malibu located at 717 North Harwood, Suite 1650,
Dallas, Texas 75201. For purposes of the table, a person or group of persons is
deemed to have "beneficial ownership" of any shares as of a given date if that
person has the right to acquire the shares within 60 calendar days after such
date.
BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
NUMBER OF
MALIBU % OF MALIBU
NAME COMMON SHARES COMMON SHARES
- ---- ------------- -------------
<S> <C> <C>
MEI Holdings, L.P........................................... 38,323,513 67.07%
4200 Texas Commerce Tower
Dallas, Texas 75201
Richard N. Beckert(1)....................................... 481,688 *
Daniel A. Decker(2)......................................... 38,323,513 67.07%
Richard M. Fitzpatrick...................................... -- --
James T. Hands.............................................. -- --
William M. Kearns, Jr.(3)................................... 135,000 *
Steven D. Scheetz........................................... -- --
Bert W. Wasserman(4)........................................ 95,000 *
R. Scott Wheeler(5)......................................... 74,999 *
Superstar Dragsters, Inc.(6)................................ 4,633,922 8.11%
Partnership Acquisition Trust(7)............................ 6,000,000 10.5%
All directors and executive officers as a group (8
persons)(2)............................................... 39,110,180 68.44%
</TABLE>
- ---------------
* Less than one percent
(1) Includes 437,521 vested options and 41,667 options that Mr. Beckert has the
right to acquire within 60 days.
(2) Mr. Decker disclaims beneficial ownership of the 38,323,513 Malibu Common
Shares held by MEI Holdings.
(3) Includes 35,000 vested options.
(4) Includes 35,000 vested options.
(5) Includes 66,667 vested options and 8,332 options that Mr. Wheeler has the
right to acquire within 60 days.
(6) In December 1999, the Company agreed to issue 4,633,922 shares of common
stock in connection with a settlement with the manufacturer of its Top
Eliminator(R) attraction; these shares were issued in February 2000. Further
described under "Certain Relationships and Transactions -- Superstar
Dragsters, Inc. Transaction".
(7) On July 20, 1999, in connection with the Recapitalization, the Company
issued 6,000,000 shares of common stock to one of its principal lenders,
further described under "Certain Relationships and
Transactions -- Recapitalization".
9
<PAGE> 11
ADDITIONAL INFORMATION
AVAILABLE INFORMATION
Copies of the Company's Annual Report on Form 10-K for the year ended
December 31, 1999, as filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
being distributed to the shareholders together with this Proxy Statement.
FUTURE STOCKHOLDER PROPOSALS
Any Malibu shareholder who wishes to submit a proposal for inclusion in the
proxy materials for the 2001 Annual Meeting of Shareholders must submit such
proposal to the Secretary of Malibu by March 1, 2001. The Securities and
Exchange Commission recently amended Rule 14a-4 under the Exchange Act to
provide that a proxy may confer discretionary authority to vote on a proposal
for an annual meeting of stockholders if the proponent fails to notify the
Company at least 45 days prior to the month and day of mailing the prior year's
proxy statement. For purposes of the Company's 2001 annual meeting of
stockholders, management may use its discretionary voting authority to vote on
any proposal with respect to which the Company receives notice after March 31,
2001, even if such proposal is not discussed in the proxy statement for the 2001
annual meeting of stockholders.
ACCOUNTANTS
The Company has selected Arthur Andersen LLP to serve as the Company's
independent accountants for 2000. Representatives of Arthur Andersen LLP are
expected to be present at the Annual Meeting, where they will have the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
May 5, 2000
10
<PAGE> 12
PROXY
MALIBU ENTERTAINMENT WORLDWIDE, INC.
717 NORTH HARWOOD, SUITE 1650
DALLAS, TEXAS 75201
ANNUAL MEETING OF SHAREHOLDERS
JUNE 6, 2000
This Proxy is solicited on behalf of the Board of Directors. The
undersigned, having received the Notice of Annual Meeting of Shareholders and
the Proxy Statement hereby appoints each of Richard N. Beckert and R. Scott
Wheeler, with full power of substitution and resubstitution, as proxies of the
undersigned, to represent and to vote as designated below and in accordance with
their judgment all of the shares of Common Stock of Malibu Entertainment
Worldwide, Inc. ("Malibu") held of record by the undersigned on May 2, 2000, at
the Annual Meeting of Shareholders to be held on June 6, 2000 and at any
adjournment or postponement thereof.
The Malibu Board of Directors recommends a vote FOR the election of the
seven nominees for director named below.
1. ELECTION OF DIRECTORS
[ ] FOR ALL nominees listed below [ ] WITHHOLD AUTHORITY
except as marked to the to vote for all
contrary below nominees listed below
Richard N. Beckert, Daniel A. Decker, Richard M. FitzPatrick, James T.
Hands, William M. Kearns, Jr., Steven D. Scheetz and Bert W. Wasserman.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE ON ANY INDIVIDUAL NOMINEE, DRAW
A LINE THROUGH THAT NOMINEE'S NAME ABOVE.
If not otherwise marked, this Proxy will be voted for the election of all
nominees.
2. In his discretion, the Proxy is authorized to vote upon such other business
as may properly come before the meeting, or any adjournment thereof.
<PAGE> 13
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. Please sign exactly as name
appears below. When shares are held by joint tenants, both should sign. 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.
Dated , 2000
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Signature
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Signature If Held Jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
