CUSIP No. 989070602
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Item 1. Security and Issuer.
Zapata Corporation (the "Issuer"), Common Stock, $.01 par value (the "Shares").
The principal executive offices of the Issuer are located at 100 Meridian
Centre, Suite 350, Rochester, NY, 14618.
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Item 2. Identity and Background.
The Reporting Persons (as defined below) are filing this Schedule 13D because
they have acquired beneficial ownership as a result of receiving certain proxies
to vote the Shares. Until the Closing (as defined in Item 6), the Funds will not
acquire a pecuniary interest in any of the Shares. For a detailed description of
the Share Purchase Agreement (as defined in Item 6) and the transactions
contemplated thereunder, please see Item 6.
(a-c,f) This Schedule 13D is being filed by Harbinger Capital Partners Master
Fund I, Ltd. (the "Master Fund"); Harbinger Capital Partners LLC ("Harbinger
LLC"), the investment manager of the Master Fund; Harbinger Capital Partners
Special Situations Fund, L.P. (the "Special Fund"); Harbinger Capital Partners
Special Situations GP, LLC ("HCPSS"), the general partner of the Special Fund;
Global Opportunities Breakaway Ltd. (the "Breakaway Fund"); Global Opportunities
Breakaway Management, L.P. ("Breakaway Management"), the investment manager of
the Breakaway Fund; Global Opportunities Breakaway Management GP, L.L.C.
("Breakaway Management GP"), the general partner of Breakaway Management;
Harbinger Holdings, LLC ("Harbinger Holdings"), the managing member of Harbinger
LLC and HCPSS; and Philip Falcone, the managing member of Breakaway Management
GP and Harbinger Holdings and the portfolio manager of the Master Fund, the
Special Fund and the Breakaway Fund (each of the Master Fund, Harbinger LLC,
Special Fund, HCPSS, Breakaway Fund, Breakaway Management, Breakaway Management
GP, Harbinger Holdings and Philip Falcone may be referred to herein as a
"Reporting Person" and collectively may be referred to as "Reporting Persons").
The Master Fund is a Cayman Islands corporation with its principal business
address at c/o International Fund Services (Ireland) Limited, Third Floor,
Bishop's Square, Redmond's Hill, Dublin 2, Ireland. The Breakaway Fund is a
Cayman Islands corporation with its principal business address at c/o Maples
Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, Cayman
Islands KY1-1104. Each of Harbinger LLC, HCPSS, Breakaway Management GP and
Harbinger Holdings is a Delaware limited liability company. Each of the Special
Fund and Breakaway Management is a Delaware limited partnership. Philip Falcone
is a United States citizen. The principal business address for each of Harbinger
LLC, the Special Fund, HCPSS, Breakaway Management, Breakaway Management GP,
Harbinger Holdings and Philip Falcone is 555 Madison Avenue, 16th Floor, New
York, New York 10022.
(d) Philip Falcone has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Persons have, during the last five years, been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding were or are subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws.
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Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof the Master Fund may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof Harbinger LLC may be deemed to beneficially own 3,296,228
Shares.
As of the date hereof the Special Fund may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof HCPSS may be deemed to beneficially own 3,296,228 Shares.
As of the date hereof the Breakaway Fund may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof Breakaway Management may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof Breakaway Management GP may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof Harbinger Holdings may be deemed to beneficially own
6,592,456 Shares.
As of the date hereof Philip Falcone may be deemed to beneficially own
9,888,684 Shares.
No borrowed funds were used to purchase the Shares, other than any borrowed
funds used for working capital purposes in the ordinary course of business.
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Item 4. Purpose of Transaction.
On June 17, 2009, the Funds and The Malcolm I. Glazer Family Limited
Partnership, a Nevada limited partnership (the "Family LP"), Malcolm I. Glazer,
Avram A. Glazer and Linda Glazer (each such person and the Family LP, a "Seller"
and together the "Sellers"), entered into a Share Purchase Agreement (the "Share
Purchase Agreement"), pursuant to which, among other things, the Funds agreed to
purchase an aggregate of 9,888,684 Shares from the Sellers. The Funds have
proposed to purchase an additional 49,278 Shares from certain other members of
the Glazer family.
The Reporting Persons intend to acquire the Shares for investment purposes.
Pursuant to the Share Purchase Agreement, each Seller has granted to Harbinger
LLC a proxy to vote the Shares owned by such Seller for the election of three
individuals to the board of directors of the Issuer, one of whom shall be Avram
A. Glazer and two of whom, Philip A. Falcone and Corrine J. Glass (as Class II
directors), have been designated by Harbinger LLC.
After the Reporting Persons acquire the Shares, they intend to evaluate their
investment in the Shares on a continual basis. Other than as expressly set forth
below, the Reporting Persons have no plans or proposals as of the date of this
filing that relate to, or would result in, any of the actions enumerated in Item
4(a)-(j) of Schedule 13D. The Reporting Persons may engage in communications
with one or more stockholders, officers or directors of the Issuer and others,
including but not limited to, discussions regarding the Issuer's operations and
strategic direction and ideas that, if effected, could result in, among other
things, any of the matters identified in Item 4(a)-(j) of Schedule 13D,
including but not limited to debt or equity capital raising transactions,
acquisitions, mergers, combinations and other strategic transactions. The
Reporting Persons reserve their right, based on all relevant factors and subject
to applicable law, at any time and from time to time, to review or reconsider
their position, change their purpose, take other actions, including to cause or
introduce strategic or corporate transactions involving the Issuer or any of its
subsidiaries, or one or more of the types of transactions or have one or more
the results described in Item 4(a)-(j) of Schedule 13D) or formulate and
implement plans or proposals with respect to any of the foregoing.
The Reporting Persons from time to time intend to review their investment in the
Issuer on the basis of various factors, including whether various strategic
transactions have occurred or may occur, the Issuer's business, financial
condition, results of operations and prospects, general economic and industry
conditions, the securities markets in general and those for the Issuer's
securities in general, as well as other developments and other investment
opportunities. Based upon such review, the Reporting Persons intend to take such
actions in the future as they deem appropriate in light of the circumstances
existing from time to time, which may include causing a distribution of
available cash of the Issuer, further acquisitions of Common Stock of the Issuer
or disposal of all or any portion of the Shares acquired pursuant to the Share
Purchase Agreement or other Common Stock of the Issuer otherwise acquired by the
Reporting Persons, either in the open market or privately negotiated
transactions, with or without prior notice.
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Item 5. Interest in Securities of the Issuer.
(a, b) As of the date hereof, the Master Fund may be deemed to be the beneficial
owner of 3,296,228 Shares, constituting 17.1% of the Shares of the Issuer, based
upon 19,276,334 Shares outstanding as of May 1, 2009, according to the Issuer's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on May 6, 2009.
The Master Fund has the sole power to vote or direct the vote of 0 Shares; has
the shared power to vote or direct the vote of 3,296,228 Shares; has sole power
to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Harbinger LLC may be deemed to be the beneficial
owner of 3,296,228 Shares, constituting 17.1% of the Shares of the Issuer, based
upon 19,276,334 Shares outstanding as of May 1, 2009, according to the Issuer's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on May 6, 2009.
Harbinger LLC has the sole power to vote or direct the vote of 0 Shares; has the
shared power to vote or direct the vote of 3,296,228 Shares; has sole power to
dispose or direct the disposition of 0 Shares; and has shared power to dispose
or direct the disposition of 0 Shares.
(a, b) As of the date hereof, the Special Fund may be deemed to be the
beneficial owner of 3,296,228 Shares, constituting 17.1% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
The Special Fund has the sole power to vote or direct the vote of 0 Shares; has
the shared power to vote or direct the vote of 3,296,228 Shares; has sole power
to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, HCPSS may be deemed to be the beneficial owner of
3,296,228 Shares, constituting 17.1% of the Shares of the Issuer, based upon
19,276,334 Shares outstanding as of May 1, 2009, according to the Issuer's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on May 6, 2009.
HCPSS has the sole power to vote or direct the vote of 0 Shares; has the shared
power to vote or direct the vote of 3,296,228 Shares; has sole power to dispose
or direct the disposition of 0 Shares; and has shared power to dispose or direct
the disposition of 0 Shares.
(a, b) As of the date hereof, the Breakaway Fund may be deemed to be the
beneficial owner of 3,296,228 Shares, constituting 17.1% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
The Breakaway Fund has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 3,296,228 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Breakaway Management may be deemed to be the
beneficial owner of 3,296,228 Shares, constituting 17.1% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
Breakaway Management has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 3,296,228 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Breakaway Management GP may be deemed to be the
beneficial owner of 3,296,228 Shares, constituting 17.1% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
Breakaway Management GP has the sole power to vote or direct the vote of 0
Shares; has the shared power to vote or direct the vote of 3,296,228 Shares; has
sole power to dispose or direct the disposition of 0 Shares; and has shared
power to dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Harbinger Holdings may be deemed to be the
beneficial owner of 6,592,456 Shares, constituting 34.2% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
Harbinger Holdings has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 6,592,456 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Philip Falcone may be deemed to be the beneficial
owner of 9,888,684 Shares, constituting 51.3% of the Shares of the Issuer, based
upon 19,276,334 Shares outstanding as of May 1, 2009, according to the Issuer's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on May 6, 2009.
Mr. Falcone has the sole power to vote or direct the vote of 0 Shares; has the
shared power to vote or direct the vote of 9,888,684 Shares; has sole power to
dispose or direct the disposition of 0 Shares; and has shared power to dispose
or direct the disposition of 0 Shares.
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(c) The trading dates, number of Shares purchased and sold and price per share
for all transactions in the Shares that were effected by the Reporting Persons
in the past sixty days are set forth in Exhibit B hereto.
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Share Purchase Agreement
Pursuant to the Share Purchase Agreement, each Seller has agreed to sell and the
Funds have agreed to purchase, an aggregate of 9,888,684 Shares from the Sellers
and each Seller has granted to Harbinger LLC a proxy to vote the Shares owned by
such Seller for the election of three individuals to the board of directors of
the Issuer, one of whom shall be Avram A. Glazer and two of whom, Philip A.
Falcone and Corrine J. Glass (as Class II directors), have been designated by
Harbinger LLC. The Sellers have agreed to cause the Issuer to reconvene its
adjourned meeting of stockholders, and to prepare and mail revised proxy
materials, in each case, in a manner that provides for the election of Avram A.
Glazer, Philip A. Falcone and Corrine J. Glass as directors of the Issuer. The
Sellers have agreed to use their best efforts to cause the Issuer to mail such
proxy materials within four business days of the date of the Share Purchase
Agreement and to hold such meeting of stockholders within ten business days
following such mailing.
The Share Purchase Agreement includes customary covenants including the
following: (a) the Funds and Sellers have agreed to use their reasonable best
efforts to cause their respective closing conditions described below to be
satisfied, (b) each Seller has agreed to (i) certain customary restrictions on
such Seller's ability to transfer or otherwise dispose of any of such Seller's
Shares or shares of common stock ("Zap.com Shares") of Zap.com, the Issuer's
majority-owned subsidiary ("Zap.com"), (ii) not to enter into any voting
arrangement with respect to such Seller's Shares or Zap.com Shares or (iii) not
to take any action that could make any of such Seller's representations or
warranties contained in the Share Purchase Agreement untrue or incorrect or
would have the effect of preventing such Seller from performing any of such
Seller's obligations under the Share Purchase Agreement, and (c) the Sellers
have agreed not to, and have agreed to cause the Issuer not to, operate or take
any action of the Issuer or its subsidiaries outside the ordinary course of
business, including but not limited to, the payment of any dividends or
distributions, change the Issuer's or its subsidiaries' charter or bylaws, grant
any registration rights of the Issuer or its subsidiaries, purchase or otherwise
acquire any shares of any capital stock of the Issuer or its subsidiaries, enter
into or amend the terms of any transactions between the Issuer or any of its
subsidiaries and any immediate family member, affiliate or associate of the
Sellers, sell, lease, or otherwise dispose of any asset or property of the
Issuer or its subsidiaries, enter into any loan or impose any encumbrance on any
asset or property of the Issuer or its subsidiaries or enter into any agreement
to do any of the foregoing.
In addition, each Seller has agreed not to vote on or consent to any matter in
his capacity as a stockholder of the Issuer, and the Issuer has agreed not to
vote on or consent to any matter in its capacity as a stockholder of Zap.com,
except as specifically contemplated by the Share Purchase Agreement with respect
to the granting of the proxies by the Sellers to the Funds or take any action as
a member of the board of directors of the Issuer or Zap.com other than an action
(x) that will not result in a failure of any condition of the Funds to close the
transactions under the Share Purchase Agreement, and (y) such Seller is advised
by counsel he or she must take such action or be in breach of his or her
fiduciary duty as a director. Concurrently with the Closing, the Sellers have
also agreed to use their best efforts to cause each of Avram A. Glazer, Edward
S. Glazer, Darcie S. Glazer and Bryan G. Glazer and each Seller and every person
who is an immediate family member of a Seller or who is an affiliate or
associate of a Seller who is an officer or director of the Issuer or Zap.com to
resign from each position held by such person with the Issuer or Zap.com.
The obligation of the Funds to purchase the Shares at the Closing is subject to
the satisfaction at or before the date of the Closing (the "Closing Date"), of
certain closing conditions, including but not limited to, (i) the election of
Avram A. Glazer, Philip A. Falcone and Corrine J. Glass, as members of the board
of directors of the Issuer, (ii) the Sellers' and the Funds' respective
representations and warranties being true and correct in all material respects,
(iii) the Sellers and the Funds performing and complying with all respective
agreements and covenants, (iv) no action or other proceeding to be pending, no
investigation by any governmental authority to be commenced and no action or
proceeding by any governmental authority to be threatened against any of the
Funds, the Sellers, the Issuer or Zap.com or any of their respective principals,
officers or directors that is seeking to restrain or change the transactions
contemplated under the Share Purchase Agreement or questioning the legality or
validity of, or seeking damages in connection with any, such transactions, (v)
all applicable consents necessary to the execution and delivery of the Share
Purchase Agreement and the consummation of the transactions contemplated thereby
to be obtained, (vi) no material adverse change since the date of the Share
Purchase Agreement in the Issuer or Zap.com to have occurred, (vii) the Sellers
having delivered to the Funds a record list of stockholders which confirms that
the Shares and Zap.com Shares being purchased by the Funds represent the same
percentage of issued and outstanding Shares of the Issuer and Zap.com,
respectively, (viii) there shall have been no change to the Issuer's or its
subsidiaries' authorized capital stock and no capital stock or other rights
exchangeable into, or rights to acquire any, shares of capital stock of the
Issuer or its subsidiaries shall have been issued, and (ix) concurrently with
the Closing, certain family members of the Sellers shall have sold their Shares
to the Funds. The Funds have proposed to purchase an additional 49,278 Shares
from certain other members of the Glazer family.
The foregoing summary of certain terms of the Share Purchase Agreement and the
transactions contemplated thereby, does not purport to be complete and is
subject to, and qualified in its entirety by, the full text of the Share
Purchase Agreement, which is included as Exhibit C to this Schedule 13D, which
is incorporated herein by reference.
Family LP and the Funds are parties to a letter agreement with Jefferies High
Yield Trading, LLC ("Jefferies"), pursuant to which each of Family LP, on the
one hand, and the Funds, on the other hand, will pay Jefferies a finder's fee in
the amount of $500,000. The foregoing summary of the terms of the letter
agreement does not purport to be complete and is subject to, and qualified in
its entirety by, the full text of the letter agreement, which is included as
Exhibit D to this Schedule 13D and is incorporated herein by reference.
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Item 7. Material to be Filed as Exhibits.
THE FOLLOWING MATERIALS ARE FILED AS EXHIBITS TO THIS SCHEDULE 13D:
Exhibit A: Agreement between the Reporting Persons to file jointly
Exhibit B: Schedule of Transactions in the Shares of the Issuer
Exhibit C: Share Purchase Agreement, dated June 17, 2009
Exhibit D: Letter Agreement with Jefferies High Yield Trading, LLC
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