SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (date of earliest event reported): March 17, 2003
ZAPATA CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 1-4219 C-74-1339132
(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
100 MERIDIAN CENTRE, SUITE 350
ROCHESTER, NEW YORK 14618
(Address of principal executive office)
(585) 242-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
The following is a description of the Common Stock, $.01 par value of Zapata
Corporation.
AUTHORIZED CAPITAL STOCK
Our authorized capital stock consists of 16,500,000 shares of Common Stock,
200,000 shares of preferred stock, par value $.01 per share and 1,800,000 shares
of preference stock, par value $.01 per share. As of March 14, 2003, 2,390,849
shares of our common stock were outstanding and no shares of preferred stock or
preference stock were outstanding. The following description of our capital
stock does not purport to be complete and is subject to the provisions set forth
in our articles of incorporation and amended by-laws.
COMMON STOCK
The holders of our common stock are entitled to one vote per share, voting with
the holders of any other class of stock entitled to vote, without regard to
class, on all matters to be voted on by the stockholders, including the election
of directors. Our articles of incorporation do not provide for cumulative voting
in the election of directors. All issued and outstanding shares of common stock
are fully paid and non-assessable. Our common stock currently is listed on the
New York Stock Exchange.
Subject to the prior and superior rights of any series of our preferred stock or
preference stock created by our board of directors from time to time, the
holders of our common stock are entitled to receive dividends when, as and if
declared by our board of directors from funds legally available for such
dividends. Additional restrictions on the payment of dividends upon, or the
making of other distributions to, or the acquisition of, our common stock may be
set forth in the resolution or resolutions adopted by our board of directors
providing for the issuance of any series of our preferred stock or preference
stock.
In the event of any liquidation, dissolution or winding up of our affairs, the
holders of our common stock are entitled to receive, pro rata, any assets and
funds available for distribution to stockholders remaining after payment has
been made in full (i) to the holders of our preferred stock of the liquidation
amounts established for the respective series, plus in each case an amount equal
to any dividends accrued thereon and unpaid to the payment date and (ii) to the
holders of our preference stock of the liquidation amounts established for the
respective series, plus in each case an amount equal to any dividends accrued
thereon and unpaid to the payment date.
No holder of our common stock has any preemptive rights to purchase or subscribe
to any shares of any class by reason of his holding any shares of our common
stock.
AUTHORIZED PREFERRED STOCK AND PREFERENCE STOCK
Our board of directors has the authority to issue up to 200,000 shares of our
preferred stock, and 1,800,000 shares of our preference stock, in one or more
series. Our board of directors also has the authority to fix the number of
shares constituting any such series and the preferences, limitations and
relative rights, including dividend rights, dividend rate, voting rights, terms
of redemption, redemption price or prices, conversion rights and liquidation
preferences of the shares constituting any series, without any further vote or
action by the stockholders. The issuance of our preferred stock or preference
stock by our board could adversely affect the rights of holders of our common
stock. The potential issuance of our preferred stock or preference stock may
have the effect of delaying, deferring or preventing a change in control, may
discourage bids for our common stock at a premium over the market price of our
common stock and may adversely affect the market price of, and the voting and
other rights of the holders of, our common stock.
ANTITAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND
BY-LAWS.
BOARD OF DIRECTORS.
Our articles of incorporation provide that except as otherwise fixed by or
pursuant to the provisions of a certificate of designation setting forth the
rights of the holders of any class or series of our preferred stock or
preference stock, the number of the directors on our board of directors will be
fixed from time to time exclusively pursuant to a resolution adopted by a
majority of the total number of directors at any time constituting our board of
directors (but shall not be less than 3). The directors, other than those who
may be elected by the holders of our preferred stock or preference stock, will
be classified, with respect to the time for which they severally hold office,
into three classes,
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as nearly equal in number as possible. Directors elected to succeed directors
whose terms then expire will be elected for a term of office to expire at the
third succeeding annual meeting of stockholders after their election, with each
director to hold office until such person's successor is elected and qualified.
Our articles of incorporation provide that except as otherwise provided for or
fixed by or pursuant to a certificate of designation setting forth the rights of
the holders of any class or series of Preferred Stock or Preference Stock, newly
created directorships resulting from any increase in the number of directors and
any vacancies on our board of directors that result from the death, resignation,
retirement, disqualification or removal from office of any director, may be
filled by a majority of our board of directors then in office, even though less
than a quorum, including the sole remaining director, and not by the
stockholders. Additionally, our by-laws provide that the affirmative vote of
five directors is required to fill the vacancy on our board of directors or any
committee thereof created by the death, resignation, or removal of Avram A.
Glazer or Bryan G. Glazer, or any action to remove Avram A. Glazer or Bryan G.
Glazer from any committee of our board of directors. Any director elected to
fill a vacancy shall hold office for a term expiring at the annual meeting at
which the term of the class to which they shall have been elected expires when
the number of directors is increased as permitted by our by-laws, and any newly
created directorships are filled by our board of directors, there shall be no
classification of such additional directors until our next annual meeting of
stockholders. No decrease in the number of directors constituting our board of
directors shall shorten the term of any incumbent director.
These provisions would preclude a third party from removing incumbent directors
and simultaneously gaining control of our board of directors by filling the
vacancies created by removal with its own nominees. Under the classified board
provisions described above, it would take at least two elections of directors
for any individual or group to gain control of our board of directors.
Accordingly, these provisions could discourage a third party from initiating a
proxy contest, making a tender offer or otherwise attempting to gain control of
us.
APPROVAL OF CERTAIN TRANSACTIONS
Our articles of incorporation require the affirmative vote of the holders of at
least 80% of all our stock entitled to vote in elections of directors,
considered as one class, to approve any of the following transactions involving
us and any corporation, person or entity that beneficially owns at least five
percent of our voting stock (a "Five Percent Owner"): (a) a merger or
consolidation with or into any other corporation, (b) any sale or lease of all
or any substantial part of our assets to any other corporation, person or entity
or (c) any sale or lease to us or any of our subsidiaries of any assets having
an aggregate fair market value of at least $2 million in exchange for our voting
securities (or securities convertible into voting securities or options, rights
or warrants to purchase voting securities or securities convertible into voting
securities) or any of our subsidiaries by any other corporation, person or
entity. The foregoing requirements do not apply to a merger or similar
transaction if our board of directors has approved a memorandum of understanding
with such other corporation with respect to such transaction before the time
that the Five Percent Owner acquired its 5% interest or to certain transactions
if the other party is a corporation of which a majority of the outstanding
shares of all classes of stock entitled to vote in the election of directors is
owned by us or our subsidiaries.
Our by-laws provide that the affirmative vote of five members of our board of
directors shall be required (in addition to the requirement for action by a
majority of the directors present at a meeting at which a quorum is present) in
order to issue or adopt an agreement or plan for the issuance of any stock,
rights or other securities (including, without limitation, securities
convertible into or exchangeable or exercisable for our stock) to the
stockholders or any class thereof generally, any term of which is contingent
upon or effective upon the acquisition by any person of any of or all of our
stock or upon any other action by any person with respect to such stock.
If a compromise or arrangement is proposed between our creditors or stockholders
and us, our articles of incorporation permits any court of equitable
jurisdiction within the State of Nevada to order a meeting of our creditors or
stockholders, as the case may be, upon application by us or our creditors,
stockholders, trustees, or receivers. If a majority in number representing
three-fourths in value of our creditors or stockholders, as the case may be,
agrees to any compromise or arrangement and to our reorganization, as a
consequence of such compromise or arrangement, and if sanctioned by the court
upon which the application was made, the compromise or arrangement will be
binding on us, as well as all of our creditors or stockholders, as the case may
be.
These provisions may deter any potential unfriendly offers or other efforts to
obtain control of us that are not approved by our board of directors and could
thereby deprive the stockholders of opportunities to realize a premium on their
stock and could make the removal of management more difficult. On the other
hand, these provisions may
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induce any persons seeking control of us or a business combination with us to
negotiate terms acceptable to our board of directors.
AMENDMENTS
Our articles of incorporation provide that the affirmative vote of the holders
of 80% of all our voting stock, voting together as a single class, is required
to amend provisions of our articles of incorporation relating to the number,
election and term of our directors, the classification of directors, provisions
respecting transactions with Five Percent Owners, and the voting requirements
for an amendment to our by-laws.
NEVADA ANTITAKEOVER LAWS AND CERTAIN CHARTER PROVISIONS
Nevada's 'Business Combinations' statute, Nevada Revised Statutes 78.411-78.444,
which applies to Nevada corporations having at least 200 stockholders which have
not opted-out of the statute, prohibits an 'interested stockholder' from
entering into a 'combination' with the corporation, unless certain conditions
are met. A 'combination' includes (a) any merger or consolidation with an
'interested stockholder,' or any other corporation which is or after the merger
or consolidation would be, an affiliate or associate of the interested
stockholder, (b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets, in one transaction or a series of transactions, to or
with an 'interested stockholder,' having (i) an aggregate market value equal to
5% or more of the aggregate market value of the corporation's assets determined
on a consolidated basis, (ii) an aggregate market value equal to 5% or more of
the aggregate market value of all outstanding shares of the corporation or (iii)
representing 10% or more of the earning power or net income of the corporation
determined on a consolidated basis, (c) any issuance or transfer of shares of
the corporation or its subsidiaries, to any interested stockholder, having an
aggregate market value equal to 5% or more of the aggregate market value of all
the outstanding shares of the corporation, except under the exercise of warrants
or rights to purchase shares offered, or a dividend or distribution paid or made
pro rata to all stockholders of the corporation, (d) the adoption of any plan or
proposal for the liquidation or dissolution of the corporation proposed by or
under any agreement, arrangement or understanding, whether or not in writing,
with the 'interested stockholder,' (e) certain transactions which would have the
effect of increasing the proportionate share of outstanding shares of the
corporation owned by the 'interested stockholder,' or (f) the receipt of
benefits, except proportionately as a stockholder, of any loans, advances or
other financial benefits by an 'interested stockholder.' An 'interested
stockholder' is a person who (i) directly or indirectly beneficially owns 10% or
more of the voting power of the outstanding voting shares of the corporation or
(ii) an affiliate or associate of the corporation which at any time within three
years before the date in question was the beneficial owner, directly or
indirectly, of 10% or more of the voting power of the then outstanding shares of
the corporation.
A corporation to which the statute applies may not engage in a 'combination'
within three years after the interested stockholder acquired its shares, unless
the combination or the interested stockholder's acquisition of shares was
approved by the board of directors before the interested stockholder acquired
the shares. If this approval was not obtained, then after the three-year period
expires, the combination may be consummated if all the requirements in the
corporation's articles of incorporation are met and either (a)(i) the board of
directors of the corporation approves, prior to the 'interested stockholder's'
date of acquiring shares, or as to which the purchase of shares by the
'interested stockholder' has been approved by the corporation's board of
directors before that date or (ii) the combination is approved by the
affirmative vote of holders of a majority of voting power not beneficially owned
by the 'interested stockholder' at a meeting called no earlier than three years
after the date the 'interested stockholder' became such or (b) the aggregate
amount of cash and the market value of consideration other than cash to be
received by holders of common shares and holders of any other class or series of
shares meets the minimum requirements set forth in Sections 78.411 through
78.443, inclusive, and prior to the consummation of the combination, except in
limited circumstances, the 'interested stockholder' will not have become the
beneficial owner of additional voting shares of the corporation.
Nevada law permits a Nevada corporation to 'opt out' of the application of the
'Business Combinations' statute by inserting a provision doing so in its
original articles of incorporation. Our articles of incorporation has such a
provision. The Articles can be amended at any time to subject us to the effect
of the 'Business Combinations' statutes. Under Nevada law, our articles of
incorporation may be amended pursuant to a resolution adopted by our board of
directors and ratified by a vote of a majority of the voting power of our
outstanding voting stock.
Nevada's 'Control Share Acquisition' statute, Nevada Revised Statute
78.378-78.3793, prohibits an acquiror, under certain circumstances, from voting
shares of a target corporation's stock after crossing certain threshold
ownership percentages, unless the acquiror obtains the approval of the target
corporation's stockholders. The statute specifies
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three thresholds: at least one-fifth but less than one-third, at least one-third
but less than a majority, and a majority or more, of all the outstanding voting
power. Once an acquiror crosses one of the above thresholds, shares which it
acquired in the transaction taking it over the threshold or within ninety days
become 'Control Shares' which are deprived of the right to vote until a majority
of the disinterested stockholders restore that right. A special stockholders'
meeting may be called at the request of the acquiror to consider the voting
rights of the acquiror's shares no more than 50 days (unless the acquiror agrees
to a later date) after the delivery by the acquiror to the corporation of an
information statement which sets forth the range of voting power that the
acquiror has acquired or proposes to acquire and certain other information
concerning the acquiror and the proposed control share acquisition. If no such
request for a stockholders' meeting is made, consideration of the voting rights
of the acquiror's shares must be taken at the next special or annual
stockholders' meeting. If the stockholders fail to restore voting rights to the
acquiror or if the acquiror fails to timely deliver an information statement to
the corporation, then the corporation may, if so provided in its articles of
incorporation or bylaws, call certain of the acquiror's shares for redemption.
Neither our articles of incorporation nor by-laws provide for such a redemption.
The Control Share Acquisition statute also provides that the stockholders who do
not vote in favor of restoring voting rights to the Control Shares may demand
payment for the 'fair value' of their shares (which is generally equal to the
highest price paid in the transaction subjecting the stockholder to the
statute).
The Control Share Acquisition statute only applies to Nevada corporations with
at least 200 stockholders, including at least 100 stockholders who have
addresses in Nevada appearing on the stock ledger of the corporation, and which
do business directly or indirectly in Nevada. We do not have at least 100
stockholders who have addresses in Nevada appearing on our stock ledger.
Therefore, the Control Share Acquisition statute does not currently apply to us.
If the `Business Combination' statute and/or the `Control Share' Acquisition
statute become applicable to the Company in the future, the cumulative effect of
these terms may be to make it more difficult to acquire and exercise control
over us and to make changes in management more difficult.
LIABILITY OF DIRECTORS AND OFFICERS; INDEMNIFICATION
Our articles of incorporation limit the liability of our directors and officers
to the fullest extent permitted by Nevada law. This is intended to allow our
directors and officers the benefit of Nevada law which provides that directors
and officers of Nevada corporations may be relieved of liabilities for damages
for breach of their fiduciary duties as directors and officers, except under
certain circumstances, including (i) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law, or (ii) the willful or grossly
negligent payment of unlawful distributions.
Our articles of incorporation and by-laws generally require us to indemnify our
directors and officers to the fullest extent permitted by Nevada law. Our
articles of incorporation and our by-laws also permit us to advance expenses to
our directors and officers to the fullest extent permitted by Nevada law upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount if it should be ultimately determined that they are not entitled to
indemnification by us. We have entered into indemnification agreements with each
of our directors and executive officers which provide for indemnification to the
fullest extent permitted by Nevada law and which require us to advance expenses
to them upon the receipt of the proper undertaking.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, (other
than the payment by us of expenses incurred or paid by one or more of our
directors, officers or controlling persons and the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the questions whether such
indemnification by us is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue. We have obtained officer
and director liability insurance for our officers and directors with respect to
liabilities arising out of certain matters.
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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 hereunto duly authorized.
ZAPATA CORPORATION
By: /s/ Leonard DiSalvo
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Name: Leonard DiSalvo
Title: Vice-President Finance and Chief
Financial Officer
Date: March 17, 2003
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