SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(A)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(A)
(AMENDMENT NO. 6)(1)
RAWLINGS SPORTING GOODS COMPANY, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(Title of Class of Securities)
754459105
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(CUSIP Number)
ROBERT S. PRATHER, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BULL RUN CORPORATION
4370 PEACHTREE ROAD
ATLANTA, GEORGIA 30319
(404) 266-8333
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
with a copy to:
STEPHEN A. OPLER
ALSTON & BIRD LLP
1201 WEST PEACHTREE STREET, N.W.
ATLANTA, GEORGIA 30309-3424
(404) 881-7693
DECEMBER 21, 2001
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(continued on following pages)
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(1) The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
CUSIP NO. 754459105 PAGE 2 OF 18 PAGES
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1 NAME OF REPORTING PERSON
BULL RUN CORPORATION
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) 91-1117599
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
BK
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Georgia
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7 SOLE VOTING POWER
NUMBER 812,791
OF ----------------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 812,791
PERSON ----------------------------------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
812,791
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X] (SEE ITEM 5)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.1%
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14 TYPE OF REPORTING PERSON
CO
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Page 2 of 18
This Amendment No. 6 to the Statement on Schedule 13D amends and
supplements the Statement on Schedule 13D, as amended by Amendment Nos. 1, 2, 3,
4 and 5 thereto (collectively, the "Schedule 13D"), filed by Bull Run
Corporation ("Bull Run") relating to the common stock (the "Common Stock") of
Rawlings Sporting Goods Company, Inc. (the "Company" or "Rawlings"). The address
of the Company is 1859 Intertech Drive, Fenton, MO 63026. Capitalized terms used
herein and not defined shall have the meanings assigned thereto in the Schedule
13D.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 is hereby amended as follows:
(a), (b) and (c) Since the filing of the Schedule 13D the information
concerning the directors of Bull Run has changed by the addition of Messrs. Host
and Johnson as directors of Bull Run and by changes in the principal occupations
of certain of the directors. The updated information concerning the directors
and executive officers of Bull Run is contained on the revised Schedule A
hereto.
(c) The principal business of Bull Run is that of a sports,
affinity marketing and management company through its wholly-owned subsidiary
and primary operating business, Host Communications, Inc. Bull Run also has
significant investments in other sports and media companies, including Gray
Communications Systems, Inc. ("Gray"), the owner and operator of 13 television
stations, four newspapers and other media and communications businesses; and
iHigh, Inc. ("iHigh"), an Internet and marketing company focused on high school
students. The Company provides consulting services to Gray, in connection with
Gray's acquisitions and dispositions.
(d) Neither Bull Run nor, to the best of its knowledge, any of its
directors or executive officers, has, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Neither Bull Run not, to the best of its knowledge, any of its
directors or executive officers, has, during the past 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 was or is 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.
(f) Each of Bull Run's directors and executive officers is a
United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Item 3 is hereby amended as follows:
Page 3 of 18
The source of funds for the purchase of the Common Stock by Mr. Prather
reported in Item 5 below came from his personal funds.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is hereby amended as follows:
In its press release of May 28, 1999, the Company announced that it
would be exploring strategic financial alternatives as part of its three-year
plan process and had engaged BancBoston Robertson Stephens Inc. ("Robertson
Stephens") as its exclusive investment banker and financial advisor to provide
assistance and advice in such matters. As reported in Amendment No. 3 to the
Schedule 13D, Amendment Number One to Standstill Agreement dated as of April 23,
1999 between Bull Run and the Company ("Amendment Number One") affords Bull Run
the right to participate on the same basis as any other person in any Board of
Directors initiated process to explore strategic alternatives that could
reasonably be expected to lead to a change in control of the Company or if the
Board should determine to enter into any agreement with any other person
regarding a change in control of the Company. As reported on Amendment No. 3 to
the Schedule 13D, Bull Run's intention following the Company's announcement was
to participate in any Board initiated process to the extent allowed by Amendment
Number One.
In connection with Bull Run's anticipated participation in the Rawlings
Board of Directors' initiated process to explore strategic alternatives, on
August 6, 1999 Bull Run entered into a Confidentiality Agreement letter with
Rawlings (the "Confidentiality Agreement") providing, among other things, that
Bull Run would maintain the confidential nature of information disclosed to Bull
Run in the due diligence process. In addition, the Confidentiality Agreement
restricted Bull Run for one year from the date of the Confidentiality Agreement
from (i) acquiring any voting securities or assets of Rawlings or any of its
subsidiaries, (ii) soliciting proxies to vote any securities of Rawlings; (iii)
making any public announcement with respect to, or submitting a proposal for, or
offer of any extraordinary transaction involving Rawlings or its securities or
assets, (iv) forming or joining in any group (as defined in the Securities
Exchange Act of 1934, as amended) in connection with any of the foregoing, or
(v) requesting any amendment or waiver of any of these provisions. A copy of the
Confidentiality Agreement was filed as Exhibit 1 to Amendment No. 5 to the
Schedule 13D.
Following Bull Run's execution of the Confidentiality Agreement,
Rawlings provided Bull Run with the Confidential Descriptive Memorandum dated
August 1999, containing information regarding Rawlings' business operations and
historical and forecast results of operations.
On August 10, 1999, Robertson Stephens sent Bull Run a letter
requesting that Bull Run submit a written, non-binding indication of interest to
Robertson Stephens regarding the potential sale or recapitalization transaction
with the Company (the "Initial Request Letter"). A copy of the Initial Request
Letter was filed as Exhibit 2 to Amendment No. 5 to the Schedule 13D. The
Initial Request Letter stated, among other things, that "Rawlings is exploring a
possible sale or recapitalization transaction. Rawlings seeks to maximize the
value realized for the Company, and looks forward to completing the transaction
in a timely manner."
Page 4 of 18
In response to the Initial Request Letter and based on Bull Run's
review of the Confidential Descriptive Memorandum, on August 24, 1999 Bull Run
sent to Rawlings in care of Robertson Stephens a preliminary indication of
interest in acquiring Rawlings (the "Preliminary Indication of Interest"). A
copy of the Preliminary Indication of Interest was filed as Exhibit 3 to
Amendment No. 5 to the Schedule 13D. The Preliminary Indication of Interest
proposed a purchase by Bull Run of the issued and outstanding capital stock of
Rawlings for a price in the range of $12.00 per share to $16.00 per share,
subject to certain conditions, including without limitation, due diligence.
After submitting the Preliminary Indication of Interest, Robertson
Stephens invited Bull Run and its advisors and prospective debt and equity
financing sources to conduct a due diligence investigation of Rawlings. On
September 7 and 8, 1999, Bull Run, its advisors, Prudential Securities
Incorporated ("Prudential") and Alston & Bird LLP ("A&B"), and certain potential
financing sources initiated the due diligence investigation with a review of
selected confidential information provided by Rawlings and meetings with
Rawlings' senior management. Thereafter, Bull Run continued its due diligence
investigation with a review of additional requested information supplied by
Rawlings and its advisors.
On September 17, 1999, Robertson Stephens sent to Prudential, Bull
Run's financial advisor, a letter outlining the procedures and timeline
anticipated with respect to the submission of final, binding offers to acquire
Rawlings (the "Definitive Offer Procedures Letter"). A copy of the Definitive
Offer Procedures Letter was filed as Exhibit 4 to Amendment No. 5 to the
Schedule 13D. The Definitive Offer Procedures Letter also included the form of
transaction agreement that Rawlings and Robertson Stephens were "asking all
prospective bidders to mark-up to show any proposed modifications or additional
terms and conditions they suggest or require as part of their definitive
proposal." The Definitive Offer Procedures Letter required the complete final,
binding offer to be sent to Robertson Stephens no later than 5 p.m. San
Francisco time, on Monday, October 4, 1999.
In response to the Definitive Offer Procedures Letter and based on its
initial due diligence investigation, on October 4, 1999, Bull Run submitted an
offer (the "October 4 Offer") to the Company's Board of Directors to offer each
of the Company's stockholders (and each holder of stock options and other Common
Stock equivalents) the option of accepting either of the following two
alternatives: (i) $12.25 per share payable in cash for 100% of each of the
Company's stockholder's Common Stock or (ii) $13.00 per share payable in cash
for up to 92% of each of the Company's stockholder's Common Stock, with each
stockholder retaining 8% or more of his, her or its Common Stock. A copy of the
October 4 Offer was filed as Exhibit 5 to Amendment No. 5 to the Schedule 13D.
Bull Run's rationale for structuring the October 4 Offer with two options was,
in part, based upon Bull Run's intention to preserve Rawlings as a public
company.
The October 4 Offer described the equity and debt financing proposals
that Bull Run had obtained to finance the acquisition, to refinance all of the
existing indebtedness of Rawlings and to fund Rawlings' future capital
requirements. Bull Run's October 4 Offer was expressly conditioned on, among
other matters, the completion of Bull Run's due diligence review to
Page 5 of 18
confirm (i) the accuracy of the representations and warranties of Rawlings made
in the revised purchase agreement, (ii) the contents of the Disclosure Schedules
under the revised purchase agreement and (iii) other key business items. The
October 4 Offer also was expressly conditioned on the receipt of third party
financing, which Bull Run expected would include certain Rawlings stockholders
not tendering their shares of Rawlings. Bull Run had expected that certain major
institutional stockholders owning, managing or otherwise speaking for
approximately 1.6 million shares of Rawlings Common Stock would agree to retain
their stock and not to tender in the transaction.
On October 7, 1999, Bull Run's financial advisor, Prudential, sent a
letter to Robertson Stephens in response to certain questions raised by
Robertson Stephens with respect to the October 4 Offer (the "October 7 Letter").
A copy of the October 7 Letter was filed as Exhibit 6 to Amendment No. 5 to the
Schedule 13D.
On October 13, 1999, based on telephone conversations between Bull
Run's legal counsel, A&B, and Rawlings' Finance Committee's legal counsel,
Skadden, Arps, Slate, Meagher & Flom, LLP ("Skadden"), A&B sent to Skadden a
revised version of the form of definitive merger agreement, marked to show the
acceptance of most of Skadden's responses to A&B's original comments included
with the October 4 Offer.
On October 14, 1999, after a meeting of the Finance Committee,
representatives of Robertson Stephens and Skadden contacted Bull Run and its
advisors to discuss the October 4 Offer. During this discussion, as requested by
Robertson Stephens and Skadden on behalf of the Finance Committee, Bull Run
orally agreed to increase the purchase price by $0.25 per share, agreeing to pay
(i) $12.50 per share payable in cash for 100% of each of the Company's
stockholder's Common Stock or (ii) $13.25 per share payable in cash for up to
92% of each of the Company's stockholder's Common Stock with each stockholder
retaining 8% or more of his, her or its Common Stock; subject to the execution
of an agreement providing a period of exclusivity for Bull Run to complete its
due diligence investigation.
On October 25, 1999, Bull Run and Rawlings entered into a letter
agreement (the "Exclusivity Letter") providing a period of exclusivity in which
Bull Run and its financing sources would be allowed to complete their due
diligence review. A copy of the Exclusivity Letter was filed as Exhibit 7 to
Amendment No. 5 to the Schedule 13D. The Exclusivity Letter provided that the
period of exclusivity (the "Exclusivity Period") would end on the fifteenth day
after the date on which Bull Run and its potential financing sources had
received all or substantially all the due diligence materials pertaining to
Rawlings that they had requested in connection with their due diligence
investigation of Rawlings. Bull Run was obligated to acknowledge in writing when
the Exclusivity Period began and ended in accordance with the foregoing.
Pursuant to an October 29, 1999 letter from A&B to Skadden, based on a
significant portion of the requested due diligence materials having been
provided to Bull Run, the Exclusivity Period began on Saturday, October 30, 1999
at 5:00 p.m. (EST) and ended on Sunday, November 14, 1999 at 5:00 p.m. (EST). A
copy of such October 29, 1999 letter was filed as Exhibit 8 to Amendment No. 5
to the Schedule 13D. On November 17, 1999, pursuant
Page 6 of 18
to a letter from Rawlings to Bull Run, the Exclusivity Period was extended until
5:00 p.m., CST, on Friday, December 3, 1999. A copy of such November 17, 1999
letter was filed as Exhibit 9 to Amendment No. 5 to the Schedule 13D.
During the Exclusivity Period, Rawlings and its financial and legal
advisors expressed concerns regarding Bull Run's proposed tender offer
containing two tender alternatives. As a result of these concerns and numerous
discussions and negotiations that took place among Rawlings, Bull Run and their
respective financial and legal advisors, Bull Run amended the October 4 Offer.
The amended transaction structure provided for a tender for a maximum of
5,000,000 shares of Common Stock at a price of $13.25 per share, payable in
cash.
As a result of Bull Run's continuing due diligence investigation of
Rawlings and based on discussions with Robertson Stephens and Skadden, on
December 3, 1999 Bull Run again amended the October 4 Offer by offering to
purchase all of the outstanding shares of Common Stock not owned by Bull Run
(approximately 7.1 million shares) at $10.00 per share, payable in cash (the
"December 3 Offer"). A copy of the December 3 Offer was filed as Exhibit 10 to
Amendment No. 5 to the Schedule 13D. The December 3 Offer identified financing
commitments that Bull Run had received for an aggregate of up to $45 Million and
that Bull Run anticipated receiving a debt financing commitment to finance the
tender offer, refinance existing debt and fund estimated future capital
requirements.
On December 7, 1999, at the request of the Finance Committee, Bull Run,
Prudential and A&B participated in a telephonic Finance Committee meeting in
which Prudential, on behalf of Bull Run, presented to the Finance Committee the
results of Bull Run's due diligence investigation and the basis and rationale
for Bull Run's December 3 Offer. Bull Run, Prudential and A&B were available for
questions from the Finance Committee.
On December 8, 1999, Mr. Richard Easton of Skadden spoke with A&B on
the telephone, in which conversation Mr. Easton informed A&B that Bull Run's
December 3 Offer was not a proposal that the Finance Committee could accept or
reject. Later on December 8, 1999, Robertson Stephens, Prudential, Skadden, A&B
and Bull Run held a telephone conference call, during which Mr. Easton of
Skadden stated that the Finance Committee had determined that Rawlings must
proceed with the refinancing of its existing bank financing. Further, Mr. Easton
stated that the two alternatives were Rawlings' management's three-year plan and
Bull Run's December 3 Offer. Mr. Easton stated further that the parties were
pretty close to a final agreement with respect to the definitive Merger
Agreement and that the only issue of a substantive nature is how to deal with
Rawlings' existing stock options since at $10 per share a large number of
options are "under water."
On December 14, 1999, Mr. Easton of Skadden spoke with A&B by telephone
and informed them that the Finance Committee had tentatively scheduled a
telephonic committee meeting for the afternoon of December 15, 1999.
On December 14, 1999, Robert S. Prather, Jr., President and Chief
Executive Officer of Bull Run, sent a letter to Robertson Stephens, as financial
advisor to Rawlings (the "December 14 Letter"). A copy of the December 14 Letter
was filed as Exhibit 11 to Amendment No. 5 to
Page 7 of 18
the Schedule 13D. In the December 14 Letter, Bull Run indicated that it was in
the process of confirming the terms of the final amount of capital required to
consummate the transaction and that Bull Run expected to provide the final
required financing commitment by Tuesday, December 21, 1999. The December 14
Letter included a proposed debt financing commitment of up to $100 million to
finance the consummation of the proposed acquisition of Rawlings' Common Stock,
to refinance all of Rawlings' existing debt and to fund the continuing
operations of Rawlings.
On December 15, 1999, Bull Run's legal counsel, A&B, was contacted by
Mr. Easton of Skadden, who communicated certain concerns regarding Bull Run's
December 3 Offer, including concerns relating to the debt financing commitment
attached as an Exhibit to the December 14 Letter. Later on December 15, 1999,
prior to Mr. Easton joining the telephonic Finance Committee meeting, he spoke
with Mr. Stephen Opler of A&B who informed Mr. Easton that Bull Run had obtained
a letter from an existing Rawlings stockholder stating that it spoke for 550,000
shares and expressing its current intention to not tender these shares based on
certain assumptions. Mr. Opler also informed Mr. Easton that a similar letter
was being prepared and sent to Bull Run from another Rawlings stockholder owning
or controlling over 890,000 shares. Mr. Opler suggested that he send to Mr.
Easton by facsimile a copy of the first letter, but Mr. Easton stated that Mr.
Opler and Bull Run should reconsider whether it was in the best interests of
that stockholder for Mr. Opler to send the letter to Mr. Easton. The letter was
not sent to Mr. Easton at that time.
On the afternoon of December 15, 1999, Rawlings' advisors, Robertson
Stephens and Mr. Easton of Skadden, telephoned Bull Run's advisors, Prudential
and A&B, respectively, to inform Bull Run through its advisors that the Finance
Committee had decided, by unanimous vote, to discontinue its discussions with
Bull Run and to recommend to Rawlings' Board of Directors that Rawlings'
management's three-year plan be adopted.
In response to the concerns articulated by Robertson Stephens and Mr.
Easton of Skadden regarding the December 3 Offer and the December 14 Letter, on
December 15, 1999 Bull Run submitted a supplementary letter (the "December 15
Letter") enclosing letters from two existing Rawlings stockholders, owning,
controlling or otherwise speaking for an aggregate of approximately 1.4 million
shares, expressing their current intention not to tender such shares in Bull
Run's proposed transaction. A copy of the December 15 Letter was filed as
Exhibit 12 to Amendment No. 5 to the Schedule 13D. One of those Rawlings
stockholders stated that it spoke for a total of 550,000 shares and that its
letter was based on a tender offer being made within the next thirty days at a
price between $9.00 and $12.00. Further, this stockholder's letter stated that
"[h]owever, should an outside event occur that would present an adverse material
effect on the market, total control of my position might not be possible."
Public filings indicated that the second Rawlings stockholder held beneficial
ownership of approximately 890,000 shares. The second Rawlings stockholder's
letter stated that "[a]s a significant shareholder in other companies that have
received tender offers, we have chosen not to tender when we believed that
retention of our position was in the best interests of our clients. At this
time, if a $10.00 offer were made for Rawlings Sporting Goods Company, Inc., it
is our present opinion that it would not be in the best interests of our clients
to accept such tender offer."
Page 8 of 18
On December 16, 1999, Rawlings issued a press release that stated that
"the Finance Committee of [Rawlings'] Board of Directors, consisting of five
independent directors, has completed its five and one-half month review of
strategic alternatives and has unanimously determined to recommend that the
Board adopt management's three-year plan." On December 17, 1999, based on input
Bull Run and its advisors received from Robertson Stephens and Skadden, Bull Run
submitted to each member of the Finance Committee, Robertson Stephens and
Skadden revised and supplemental documentation with respect to Bull Run's
previously submitted December 3 Offer to acquire all of the outstanding capital
stock of the Company, excluding shares held by Bull Run and two other existing
stockholders. The documentation provided to the Finance Committee was intended
to be responsive to the comments made by Rawlings' advisors, both before and
after the December 16 press release by Rawlings, and included evidence of
commitments to provide financing in sufficient amount to consummate the
contemplated transaction. A copy of Bull Run's December 17, 1999 letter was
filed as Exhibit 13 to Amendment No. 5 to the Schedule 13D.
On December 20, 1999, Bull Run sent a letter to the Finance Committee
of Rawlings' Board of Directors to confirm that each member of the Finance
Committee received a copy of the December 17, 1999 letter and the attached
materials as well as to request that the Finance Committee meet with Bull Run,
"in person or by telephone, to determine if [the Finance Committee] and [Bull
Run] (and [their] respective advisors) can work together, cooperatively to
consummate this transaction." A copy of Bull Run's December 20, 1999 letter was
filed as Exhibit 14 to Amendment No. 5 to the Schedule 13D.
On December 22, 1999, , Bull Run's President and Chief Executive
Officer, Mr. Robert S. Prather, Jr., traveled to St. Louis to meet with Mr.
Andrew N. Baur, the Chairman of the Finance Committee of the Board of Directors
of Rawlings, to discuss Bull Run's proposal to purchase all of the outstanding
capital stock of Rawlings not held by those Rawlings stockholders who had
expressed an interest not to sell their Rawlings stock. On December 23, 1999,
Mr. Prather sent Mr. Baur a letter (the "December 23 Letter") confirming Mr.
Prather's understanding that Mr. Baur planned to call a meeting of the Finance
Committee for Monday, December 27, 1999 in order for the Finance Committee to
discuss Bull Run's offer. A copy of the December 23 Letter was filed as Exhibit
15 to Amendment No. 5 to the Schedule 13D.
In response to Mr. Prather's letter on December 23, 1999, Mr. Baur sent
a letter to Mr. Prather clarifying that Mr. Baur intended to attempt to convene
the Finance Committee on Monday, December 27, 1999, but he did not know the
availability of the members of the Finance Committee. Mr. Baur's letter also
stated that he was not going to ask the Finance Committee to reconsider Bull
Run's $10.00 per share cash offer, but that he would update the Finance
Committee on the conversation between Mr. Baur and Mr. Prather on December 22,
1999, and that Mr. Baur would inquire about what the members of the Finance
Committee wished to do. Finally, Mr. Baur stated that it was not his
recommendation to waive the Standstill Agreements, but that "[i]t was simply a
general discussion as to what would happen if a tender from a third party were
to take place." A copy of Mr. Baur's December 23, 1999 letter was filed as
Exhibit 16 to Amendment No. 5 to the Schedule 13D.
Page 9 of 18
Between December 23, 1999 and December 31, 1999, Mr. Prather and Mr.
Baur had several telephone conversations in which Mr. Prather requested a
meeting between Bull Run and the Finance Committee to discuss Bull Run's $10.00
per share cash offer. In addition, A&B and Prudential had similar discussions
with Skadden and Robertson Stephens, respectively. On December 28, 1999, Mr.
Easton of Skadden spoke by telephone with Mr. Opler of A&B and informed him that
the Finance Committee had not received, and therefore had not considered, any
report or detailed analysis from Robertson Stephens regarding Rawlings'
management's three-year plan or its anticipated impact on stockholder value. Mr.
Easton also informed Mr. Opler that Robertson Stephens had delivered a
memorandum to the Finance Committee stating Robertson Stephen's opinion that the
Finance Committee would be breaching its fiduciary duties to not perform due
diligence with respect to management's three-year plan. Mr. Easton also stated
that perhaps if Bull Run's preliminary indication of interest had indicated a
value in the range of $10 to $13 the Finance Committee's expectations might have
been different.
On January 4, 2000, Mr. Easton of Skadden called A&B to inform A&B on
behalf of Bull Run that the Finance Committee believed that some resolution to
the current situation is necessary and that the Finance Committee had authorized
and instructed Mr. Easton to make a proposal to Bull Run. The proposal was
communicated in that telephone call as well as in writing (the "January 4
Proposal"). A copy of the January 4 Proposal was filed as Exhibit 17 to
Amendment No. 5 to the Schedule 13D. The January 4 Proposal stated that the
Finance Committee would be prepared to waive the restrictions in the Standstill
Agreement and amend Rawlings' Rights Plan in order to allow Bull Run to make a
cash tender offer for all outstanding shares of Rawlings' capital stock at a
price of $10.00 per share, subject to certain conditions. Bull Run would be
given 45 calendar days to complete the tender offer. The holders of at least a
majority of the outstanding shares (excluding those held by Bull Run) would have
to tender. Bull Run had to agree to do a back-end cash merger as promptly as
practicable following a successful tender offer, pursuant to which all remaining
stockholders (except any agreeing to stay in) would receive the same $10.00 per
share price. Bull Run further had to agree that if the tender offer failed, Bull
Run would lose its current right to designate two members of Rawlings' Board of
Directors (the two current designees were to resign) and Bull Run would
surrender its Warrant to purchase 925,804 shares of Rawlings Common Stock in
exchange for the forgiveness of the unpaid half of the Warrant purchase price.
Bull Run paid approximately $1.4 million at the time of the issuance of the
Warrant as the first one-half of the Warrant purchase price. The January 4
Proposal also stated that Rawlings' Board of Directors "will not recommend in
favor of the [tender] offer and may either remain neutral or recommend against"
the tender offer.
In response to the January 4 Proposal, A&B submitted a letter to Mr.
Easton on January 5, 2000 (the "January 5 Letter") expressing Bull Run's
willingness to accept the January 4 Proposal, subject to certain clarifications
and modifications. A copy of the January 5 Letter was filed as Exhibit 18 to
Amendment No. 5 to the Schedule 13D. The January 5 Letter clarified that the 45
day time period would begin upon the execution of a definitive agreement between
Bull Run and Rawlings. The letter requested that Rawlings' Board of Directors
use all reasonable efforts to cooperate with Bull Run with respect to the tender
offer, including providing updated financial and operational information,
assisting with required filings and taking whatever action may be necessary, if
any, to allow the tender offer to proceed unrestricted by the provisions of
Page 10 of 18
Section 203 of the Delaware General Corporation Law. The January 5 Letter also
requested that the Board of Directors agree not to recommend against the tender
offer.
On January 6, 2000, Mr. Easton of Skadden and Mr. Opler of A&B spoke by
telephone, during which conversation Mr. Easton stated that the Finance
Committee was not prepared to assist Bull Run in connection with the tender
offer or to use reasonable efforts to cooperate with Bull Run. In the January 6,
2000 telephone call with A&B, Mr. Easton also agreed that the January 4 Proposal
would be modified to include mutual releases of Rawlings, the Rawlings directors
and Bull Run.
The Rawlings Board of Directors met on January 7, 1999 by telephone.
After the Board meeting, Mr. Easton of Skadden telephoned Mr. Opler of A&B to
clarify the Finance Committee's January 4 Proposal and to inform A&B that a
deadline of January 12, 2000 at 5:00 p.m. had been established for Bull Run to
accept or reject the January 4 Proposal. Mr. Easton informed A&B that at the
Board meeting, Mr. O'Hara's severance benefits were increased to include: an
extra two years of employee benefits, an extra year (for a total of three) of
base salary, a $50,000 moving allowance if Mr. O'Hara moves within 18 months and
if the costs are not assumed by another employer, and Mr. O'Hara will forgo the
right to join a country club and, in exchange, the Company will pay a $28,000
key man life insurance premium and forgive a $56,000 loan to Mr. O'Hara.
On January 11, 2000, Mr. Easton of Skadden and Mr. Opler of A&B spoke
by telephone, during which conversation Mr. Easton stated that at a price of $10
per share Rawlings was not prepared to assist Bull Run in connection with its
tender offer. Mr. Easton of Skadden, Mr. Opler of A&B and Bull Run's securities
counsel, Proskauer Rose LLP, had several other telephone conversations between
January 6, 2000 and January 12, 2000.
On January 12, 2000, Mr. Robert S. Prather, Jr., President and Chief
Executive Officer of Bull Run, sent a letter to the Finance Committee expressing
Bull Run's eagerness to reach an agreement with Rawlings by that afternoon. A
copy of Mr. Prather's letter to the Finance Committee dated January 12, 2000 was
filed as Exhibit 19 to Amendment No. 5 to the Schedule 13D. Mr. Prather's letter
reiterated the concessions that Bull Run had already made in the spirit of
compromise and outlined the few remaining issues left to be resolved. The three
major issues remaining were (i) whether Rawlings would allow Bull Run to extend
the time period by 13 business days in the event that Bull Run received comments
from the Securities and Exchange Commission on the tender offer documents, (ii)
whether Rawlings would allow Bull Run and its financing sources an opportunity
to conduct bring-down confirmatory due diligence and (iii) whether any
consequences of Bull Run's tender offer failing should be conditioned on
Rawlings and the Finance Committee's acting in a reasonable manner throughout
the process as well as whether Bull Run should forfeit 1/2 or all of its Warrant
and whether Bull Run should lose one or both of its designees to the Rawlings
Board of Directors.
The Finance Committee of Rawlings met on the evening of January 12,
2000 to discuss the proposed Bull Run tender offer. Following the Finance
Committee meeting and at the request of the Finance Committee, Mr. Easton of
Skadden spoke with A&B by telephone and informed A&B of the Finance Committee's
revised proposal, which was represented by the
Page 11 of 18
"Summary of Agreed Upon Terms" later sent to A&B by facsimile. A copy of the
"Summary of Agreed Upon Terms" was filed as Exhibit 20 to Amendment No. 5 to the
Schedule 13D. The revised proposal again stated that the Finance Committee would
be willing to waive the Standstill Agreement and amend Rawlings' rights plan in
order to allow Bull Run to make a cash tender offer for all of the outstanding
shares of Rawlings' capital stock at a price of $10.00 per share, subject to
certain conditions. The terms and conditions of this revised proposal were
identical to the January 4 Proposal, except (i) that Rawlings agreed to amend
the time frame for completion of the tender offer to 45 calendar days from the
date of the public announcement of the agreement or, if longer, by 13 business
days after the first SEC comments on the offer documents, if any, are received
by Bull Run; and (ii) that the only information or assistance Rawlings agreed to
provide Bull Run was the same package of information that it had recently
provided to its new lender, GE Capital Corp. The Summary of Agreed Upon Terms
failed to reflect the statements that Mr. Easton made regarding mutual releases
of Rawlings, the Rawlings directors and Bull Run. The revised proposal was
received by telephone by A&B at approximately 8:00 p.m. on January 12, 2000 with
a deadline for Bull Run to respond by 9:00 a.m. the following morning.
On the evening of January 12, 2000, A&B and Proskauer Rose spoke by
telephone with Mr. Easton of Skadden who informed them that the Finance
Committee needed a "yes" or "no" answer by 9:00 a.m. A&B and Proskauer Rose
explained that it was Bull Run's view that it was not in the best interests of
Rawlings or its stockholders for a tender offer to be commenced but not
consummated and that Bull Run and its financing sources would require an update
of their respective due diligence investigations so that both Rawlings and Bull
Run would have a high degree of confidence that the tender offer would be
consummated. Mr. Easton stated that the Finance Committee would not give Bull
Run's lender even four days to perform due diligence prior to Bull Run making
its tender offer.
Shortly before 9:00 a.m. on the Morning of January 13, 2000, Mr.
Prather, on behalf of Bull Run, sent a letter to the Finance Committee in
response to the "Summary of Agreed Upon Terms." A copy of Mr. Prather's letter
to the Finance Committee dated January 13, 2000 was filed as Exhibit 21 to
Amendment No. 5 to the Schedule 13D. Mr. Prather stated in the letter that Bull
Run was "anxious to move forward with [the Finance Committee] as promptly as
possible," but that Bull Run would not be able to respond by 9:00 a.m. because
the information Rawlings offered to provide would not be sufficient to allow
Bull Run's lender to complete their customary confirmatory due diligence. Mr.
Prather also requested the access and information necessary to conclude this
customary, confirmatory due diligence based on and in response to Mr. Easton's
repeated prior statements that Bull Run would be given no assistance or
cooperation whatsoever. Mr. Prather stated that "[w]e believe this confirmatory
due diligence can be completed in a very short period of time," and that if
Rawlings will agree to allow it, "we are confident that we can resolve promptly
all of the remaining issues in the proposal." Mr. Prather further reiterated in
the letter that Bull Run is "anxious to proceed with [the] tender offer and
[Bull Run] will continue to use [its] best good faith efforts to resolve any
concerns that the Finance Committee might have."
In response to questions directed to A&B by Mr. Easton regarding Mr.
Prather's January 13, 2000 letter, Mr. Prather sent a second letter to the
Finance Committee on the morning of January 13, 2000. A copy of Mr. Prather's
second letter to the Finance Committee dated January
Page 12 of 18
13, 2000 was filed as Exhibit 22 to Amendment No. 5 to the Schedule 13D. Mr.
Prather clarified that the "remaining issues" he mentioned in the earlier letter
were in fact "likely minor and easily resolved." First, Bull Run would expect
that the 45 day time period would not commence until completion of the
confirmatory due diligence, estimated to take approximately one business week.
The only other issue remaining was whether Rawlings' Board of Directors would
have the flexibility to recommend against the tender offer, as opposed to
remaining neutral. Mr. Prather explained in the letter that Bull Run had no
objection to the Board of Directors recommending against the tender offer, but
that one of Bull Run's equity sources was not allowed to invest in any "hostile"
transactions and Bull Run had not been able to obtain the equity source's
concurrence that a recommendation against the tender offer would not cause the
transaction to be deemed "hostile."
Rawlings issued a press release on the morning of January 13, 2000
announcing that "as part of its recently concluded exploration of strategic
alternatives, it had extensive discussions with Bull Run . . . concerning the
possible acquisition of Rawlings by an investor group led by Bull Run."
Rawlings' press release further stated that "Bull Run declined to accept the
Finance Committee's proposal before an agreed upon deadline" notwithstanding the
fact that Bull Run responded to the Finance Committee's revised proposal dated
January 12, 2000 with two letters in which it assured Rawlings that the parties
were very close to an agreement on all remaining issues. The press release
further stated that "pursuant to a resolution unanimously approved late last
week by Rawlings' Board of Directors, including Bull Run's two representatives
on the Board, the acquisition talks between the two companies would cease and
Rawlings would continue to focus on implementing its business plan and improving
operating results." However, Bull Run only agreed to a "drop-dead date" of 5:00
p.m. on January 12, 2000 by which to submit a proposal to the Finance Committee,
and as stated, Bull Run did in fact submit a proposal to Rawlings by the 5:00
p.m. deadline and continued negotiating with Rawlings well into the night of
January 12, 2000. Neither Bull Run nor its two representatives on the Board of
Directors of Rawlings agreed to implement Rawlings' three-year business plan. A
copy of the press release issued by Rawlings dated January 13, 2000 was filed as
Exhibit 23 to Amendment No. 5 to the Schedule 13D.
As more particularly described below, this Amendment No. 6 to the
Schedule 13D is being filed to disclose that (i) Bull Run and its wholly-owned
subsidiary Host Communications, Inc ("HCI"), on the one hand, and Rawlings, on
the other hand, have asserted certain claims against one another in connection
with the terms of the Investment Purchase Agreement, dated as of November 21,
1997, by and between Rawlings and Bull Run (the "Investment Agreement"), the
Common Stock Purchase Warrant dated November 21, 1997 issued pursuant to the
Investment Agreement (the "Warrant") and the Strategic Marketing Agreement,
dated as of November 21, 1997, by and between Rawlings and Host Communications,
Inc, ("HCI") (the "Marketing Agreement"), (ii) that Bull Run, HCI, Rawlings,
Robert S. Prather, Jr. ("Prather") and W. James Host ("Host") have determined
that it is in their respective best interests to compromise and settle in full
any claims that any of them may have with respect to (A) any of the Investment
Agreement, the Warrant, the Marketing Agreement, the Standstill Agreement, dated
as of November 21, 1997 (as amended by Amendment Number One to Standstill
Agreement, dated as of April 23, 1999) (the "Standstill Agreement"), that
certain Agreement dated as of November 21, 1997 by and among Rawlings, Bull Run
and Prather (the "Prather
Page 13 of 18
Agreement") and that certain Agreement dated as of April 28, 2000 by and among
Rawlings, Bull Run and Host or (B) any claims they may have with respect to Bull
Run or Prather as shareholders of Rawlings or with respect to Prather or Host as
directors of Rawlings, and (iii) that, to this end, the parties have executed
the Settlement Agreement, dated as of December 21, 2001, a copy of which is
filed as Exhibit 1 to this Amendment No. 6 to the Schedule 13D (the "Settlement
Agreement").
The Settlement Agreement provides for (i) the absolute release by each
of the parties thereto of all claims against one another as described above,
(ii) the continuation in force of the Standstill Agreement, (iii) the payment by
Bull Run to Rawlings over a period ending on August 30, 2002 of certain amounts
pursuant to the Investment Agreement, (iv) certain restrictions on transfer by
Bull Run of its Common Stock in Rawlings, and (v) the termination of the
Marketing Agreement.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended as follows:
(a) As of the date hereof, Bull Run is the beneficial owner of
812,791 shares of the Common Stock (which includes the right to acquire 625
shares of the Common Stock underlying options granted to W. James Host pursuant
to Rawlings' Non-Employee Directors' Stock Plan (the "Directors' Plan") assigned
by Mr. Host to Bull Run that Bull Run has a right to acquire, and 5,666 shares
of Common Stock deliverable by Rawlings in lieu of director's fees assigned to
Bull Run by Mr. Host, as described in paragraph (c) below). As of the date
hereof, Robert S. Prather, Jr. is the beneficial owner of 16,605 shares of the
Common Stock, which excludes any of the shares of the Common Stock beneficially
owned by Bull Run but which includes 2,625 shares of the Common Stock underlying
options granted to Mr. Prather under the Directors' Plan that he has a right to
acquire, and 10,780 shares of common Stock deliverable by Rawlings in lieu of
director's fees pursuant to the Directors' Plan.
(b) Bull Run has sole power to vote and dispose of its shares of
the Common Stock and Mr. Prather has sole power to vote and dispose of his
shares of the Common Stock.
(c) Robert S. Prather, Jr. purchased 3,200 shares of the Common
Stock in the open market as follows:
------------------------------------------------------------------------------------------------------
DATE NUMBER PER SHARE AMT. TOTAL PAID
---- ------ -------------- ----------
------------------------------------------------------------------------------------------------------
December 8, 1998 1,000 shares $11.375 $11,375
------------------------------------------------------------------------------------------------------
March 12, 1999 2,000 shares $ 9.93 $19,860
------------------------------------------------------------------------------------------------------
April 1, 1999 200 shares $ 9.50 $ 1,900
------------------------------------------------------------------------------------------------------
TOTAL 3,200 SHARES $33,135
============ =======
------------------------------------------------------------------------------------------------------
Page 14 of 18
Bull Run's two former designees to the Rawlings Board of Directors,
Messrs. Robert S. Prather, Jr. and W. James Host, have been granted options to
acquire 2,625 and 625 shares, respectively, of the Common Stock and are to be
issued an additional 10,780 and 5,666 shares, respectively, of the Common Stock,
all pursuant to the Directors' Plan. Mr. Host has directed that the options
granted and shares issued or to be issued to him as a participant in the
Directors' Plan be assigned and issued to Bull Run. In addition, Mr. Prather has
purchased personally 3,200 shares of the Common Stock.
Prior to November 21, 2001, and in addition to the aggregate
amount of 812,791 shares of Common Stock noted above as beneficially owned by
Bull Run, Bull Run owned the Warrant to purchase 925,804 shares of Common Stock,
subject to adjustment. The Warrant expired unexercised on November 21, 2001
because the Warrant was not exercisable until the price of the last reported
trade of Common Stock on the NASDAQ Stock Market was at least $16.50 for twenty
(20) consecutive trading days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Item 6 is hereby amended as follows:
As described in Item 4 of this Amendment No. 6 to the Schedule 13D and
the Exhibit hereto, Bull Run has entered into the Settlement Agreement with
Rawlings, pursuant to which the parties settled certain claims. Further,
pursuant to the terms of the Standstill Agreement, the Prather Agreement and the
Host Agreement, Prather and Host have resigned from the Rawlings Board of
Directors and Bull Run no longer has the right to designate nominees to the
Rawlings Board of Directors.
Page 15 of 18
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT NUMBER DESCRIPTION
-------------- ---------------------------------------------------------------
1 Settlement Agreement, dated as of December 21, 2001, by and
among Bull Run, Rawlings, Host Communications, Inc., Robert S.
Prather, Jr. and W. James Host.
Page 16 of 18
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.
Dated: December 28, 2001
BULL RUN CORPORATION
/s/ Robert S. Prather, Jr.
-------------------------------------------
Name: Robert S. Prather, Jr.
Title: President and Chief Executive Officer
Page 17 of 18
SCHEDULE A
Set forth below is the name and principal occupation of each of the
directors of Bull Run Corporation ("Bull Run") as of December 27, 2001. Unless
otherwise noted below, the business address of each of such persons is c/o Bull
Run Corporation, 4370 Peachtree Road, N.E., Atlanta, Georgia 30319, and each of
such persons is a citizen of the United States of America.
DIRECTORS OF BULL RUN
NAME PRINCIPAL OCCUPATION
J. Mack Robinson Chairman of the Board of Bull Run; Chairman of the
Board and President of Delta Life Insurance Company
(an insurance company); Chairman of Atlantic American
Corporation (an insurance holding company); and
President and Chief Executive Officer of Gray
Communications Systems, Inc. (a media corporation).
Gerald N. Agranoff Managing general partner of SES Family Investment &
Trading Partnership, L.P. (an investment
partnership); member of Asher B. Edelman &
Associates, LLC (a manager for a value oriented
investment fund); and a general partner of, and
general counsel to, Edelman Securities Company, L.P.
(a registered broker-dealer); and Vice Chairman and
Acting President of Dynacore Holdings Corporation.
Mr. Agranoff's address is 717 Fifth Avenue, New York,
New York 10022.
James W. Busby President of Del Mar of Wilmington Corporation (a
real estate development company). Mr. Busby's address
is 1936 London Lane, Wilmington, North Carolina
28405.
W. James Host Chief Executive Officer of Host Communications, Inc.,
a subsidiary of Bull Run. Mr. Host's address is 546
East Main Street, Lexington, Kentucky 40508.
Hilton H. Howell, Jr. Vice President and Secretary of Bull Run; President
and Chief Executive Officer of Atlantic American
Corporation (an insurance holding company); Executive
Vice President and General Counsel of Delta Life
Insurance Company and Delta Fire & Casualty Insurance
Co.; and Executive Vice President of Gray
Communications Systems, Inc.
Monte C. Johnson Self-employed as a business consultant; and President
of KAJO, Inc. (an oil and gas operating company). Mr.
Johnson's address is P.O. Box 3829, Lawrence, Kansas
66046.
Robert S. Prather, Jr. President and Chief Executive Officer of Bull Run;
and Executive Vice President of Gray Communications
Systems, Inc.
EXECUTIVE OFFICERS OF BULL RUN
NAME OFFICE
Robert S. Prather, Jr. President and Chief Executive Officer of Bull Run.
Hilton H. Howell, Jr. Vice President and Secretary of Bull Run.
Frederick J. Erickson Vice President - Finance, Chief Financial Officer,
Treasurer and Assistant Secretary of Bull Run.
Page 18 of 18