UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate Box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
MULTIMEDIA GAMES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
LIBERATION INVESTMENTS, L.P.
LIBERATION INVESTMENTS, LTD.
LIBERATION INVESTMENT GROUP, LLC
EMANUEL R. PEARLMAN
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
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(1) Title of each class of securities to which the transaction applies:
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previously. Identify the previous filing by registration statement number, or
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MULTIMEDIA GAMES, INC.
SOLICITATION STATEMENT TO CALL A SPECIAL MEETING OF SHAREHOLDERS
BY
LIBERATION INVESTMENTS, L.P.,
LIBERATION INVESTMENTS, LTD.,
LIBERATION INVESTMENT GROUP, LLC AND
EMANUEL R. PEARLMAN
WHY YOU WERE SENT THIS SOLICITATION STATEMENT
Liberation Investments, L.P., a Delaware limited partnership ("LILP"),
Liberation Investments, Ltd., a private offshore investment corporation
("LILtd"), Liberation Investment Group, LLC, a Delaware limited liability
company and general partner of LILP and discretionary investment adviser to
LILtd ("LIGLLC"), and Emanuel R. Pearlman, as Chief Executive Officer and
majority member of LIGLLC (collectively, "Liberation Investments") are hereby
asking you to help Liberation Investments call a special meeting of shareholders
(the "Special Meeting") of Multimedia Games, Inc., a Texas corporation (the
"Company").
This solicitation statement (together with its exhibits, this "Solicitation
Statement") and the accompanying WHITE request card are being furnished to
certain holders of the Company's common stock, par value $0.01 ("Common Stock").
Liberation Investments seeks to call the Special Meeting for the purpose of
considering and voting upon certain proposals described below (see the section
"THE PROPOSALS" on page [ ]) (collectively, the "Proposals"). At this time,
Liberation Investments is only soliciting your request to call the Special
Meeting as described herein. Liberation Investments is not currently seeking
your proxy, consent, authorization or agent designation for approval of any of
the Proposals. In the event the Special Meeting will be called, Liberation
Investments intends to send to all shareholders of record proxy materials
relating to the Proposals to be voted upon at the Special Meeting.
Pursuant to Section 2.24(C) of the Texas Business Corporation Act (the
"TBCA") and Section 2.03 of the Company's Amended and Restated Bylaws, as filed
with the Securities and Exchange Commission (the "SEC") as an exhibit to the
Company's Form 10-K for the fiscal year ended September 30, 2003 (the "Bylaws"),
the Special Meeting may be called by the holders of at least 10% of the shares
entitled to vote at the proposed Special Meeting.
As of [ ], 2006, Liberation Investments was the beneficial owner of, and had
the right to vote, 2,311,327 shares of Common Stock, representing approximately
8.4% of the outstanding Common Stock (based on the number of outstanding shares
of Common Stock set forth by the Company in its Form 10-Q for the quarterly
period ended June 30, 2006, hereinafter the "10-Q").
REQUESTS SHOULD BE DELIVERED AS PROMPTLY AS POSSIBLE, BY FAX OR BY MAIL
(USING THE ENCLOSED ENVELOPE), TO INNISFREE M&A INCORPORATED, AS SET FORTH
BELOW.
THIS SOLICITATION IS BEING MADE BY LIBERATION INVESTMENTS, AND NOT ON BEHALF
OF THE CURRENT BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD").
THE REQUEST TO CALL THE SPECIAL MEETING IS IMPORTANT. LIBERATION INVESTMENTS
URGES YOU TO SIGN, DATE AND RETURN THE ENCLOSED WHITE REQUEST CARD.
IMPORTANT
If your shares of Common Stock are registered in your own name, please sign,
date and mail the enclosed WHITE request card to Innisfree M&A Incorporated in
the postage-paid envelope provided
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herewith. If your shares of Common Stock are held in the name of a brokerage
firm, bank nominee or other institution, only it can sign a WHITE request card
with respect to your shares and only upon receipt of specific instructions from
you. Accordingly, you should contact the person responsible for your account and
give instructions for a WHITE request card to be signed representing your shares
of Common Stock. Liberation Investments urges you to confirm in writing your
instructions to the person responsible for your account and to provide a copy of
such instructions to Liberation Investments in care of Innisfree M&A
Incorporated to the address below, so that Liberation Investments will be aware
of all instructions given and can attempt to ensure that such instructions are
followed. If you have any questions about executing or delivering your WHITE
request card or require assistance, please contact.
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders call toll free: 1-877-825-8631
Banks and Brokers call collect: 1-212-750-5833
WE ARE DISSATISFIED WITH THE COMPANY'S PERFORMANCE AND THE MANAGEMENT OF ITS
AFFAIRS
As described in Schedule 13D filings that we have made with the SEC, we are
dissatisfied with the Company's performance and the management of its affairs,
and have for many months discussed with and advised the Company that it should
pursue strategies to maximize shareholder value. Since the members of Liberation
Investments comprise one of the largest stockholdings in the Company, we have a
strong incentive to maximize shareholder value. Liberation Investments believes
that calling the Special Meeting will provide the Company's shareholders an
opportunity to express their dissatisfaction with the Company's performance and
the management of its affairs. Holding the Special Meeting will also provide the
Company's shareholders an opportunity to influence the future of the Company by
changing the composition of the Board. Liberation Investments expects to
nominate three individuals with significant capital markets expertise and who
are sensitive to shareholder concerns to be elected to the Board at the Special
Meeting. As of the date of this Solicitation Statement, Liberation Investments
has not definitively selected any such individuals that it would nominate to
fill any vacancy in the Board.
Of particular concern to Liberation Investments is the languishing Common
Stock price which is currently trading below its levels of even three years ago.
Also, the Company recently announced poor results for the fiscal 2006 third
quarter, including the results set forth in the table below:
Fiscal 2006 Fiscal 2005
third quarter third quarter
------------- -------------
Total Revenue $32.2 million $37.1 million
Profit/(Loss) $(0.6) million $4.6 million
EBITDA $15.1 million $23.0 million
Selling, General and Administrative
Expenses $17.4 million $14.1 million
THE SPECIAL MEETING
In connection with Liberation Investments soliciting requests to call the
Special Meeting, it is furnishing you with this Solicitation Statement and a
form of request to enable you and other shareholders of the Company to call the
Special Meeting. For the Special Meeting to be held in accordance with the TBCA
and the Bylaws, requests in favor of the call of the Special Meeting must be
executed by the holders of at least 10% of the shares entitled to vote at the
proposed Special Meeting (the "Requisite Holders"). According to the 10-Q, there
were 27,482,486 shares of Common Stock outstanding as of August 4, 2006, with
each share entitled to one vote. Based on such number, requests from holders of
an aggregate of at least 2,748,249 shares of Common Stock would be required to
call the Special Meeting under the TBCA and the Bylaws. In order to minimize
costs, we intend to only solicit requests to call the Special Meeting from large
shareholders who, together with our shares of Common Stock, hold at least 10% of
the shares entitled to vote at the proposed Special Meeting. Pursuant to the
TBCA, the record date for determining the shareholders entitled to call the
Special Meeting is the date the first shareholder signs the notice of the
Special Meeting. In the event the Special Meeting will be called, Liberation
Investments intends to send to
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all shareholders of record proxy materials relating to the Proposals to be voted
upon at the Special Meeting. The record date for determining shareholders
entitled to notice of, or to vote at, the Special Meeting will be the date on
which notice of the Special Meeting is mailed to the shareholders, unless the
Board sets a different record date in accordance with the TBCA.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED WHITE CARD AS PROMPTLY AS
POSSIBLE. Failure to sign and return the WHITE request card will have the same
effect as opposing the call of a Special Meeting.
THE PROPOSALS
If Liberation Investments is successful in soliciting sufficient requests,
Liberation Investments will have the right, but not the obligation, to call and
hold the Special Meeting. In the event the Special Meeting will be called,
Liberation Investments intends to solicit proxies from all shareholders of
record in support of the Proposals by sending all of record shareholders a
notice of the Special Meeting, a proxy statement and a proxy card for use
therewith. Nevertheless, even if Liberation Investments is successful in
soliciting sufficient requests to call the Special Meeting, based on the
Company's conduct, including the articulation and implementation of strategies
to maximize shareholder value, Liberation Investments may, in its discretion,
decide not to call the Special Meeting.
At the Special Meeting, the shareholders will be asked to vote on the
following Proposals:
o the removal without cause of [_], [_] and [_] from the Board and any other
person or persons (other than the persons to be elected pursuant to the
Proposals) elected or appointed to the Board prior to the effective date
of the Proposals to fill any existing or newly created directorship or
vacancy on the Board;
o the amendment of the Bylaws to fix the number of directors constituting
the Board at five (or such other number as is necessary to permit the
Nominees (as defined below) to be elected to the Board and to serve on the
Board together with two current directors of the Company);
o the amendment of the Bylaws to require the unanimous vote of all directors
in order for the Board to (i) amend the section of the Bylaws which fixes
the number, term and qualification of directors constituting the Board or
(ii) take any action referred to in such section;
o the amendment of the Bylaws to provide that vacancies on the Board
resulting from shareholder action may be filled only by a vote of the
shareholders and to expressly provide that the Board may not amend or
repeal this Bylaw;
o the election of three individuals with significant capital markets
expertise and who are sensitive to shareholder concerns (the "Nominees")
to the Board to fill the existing and newly created vacancies on the
Board; and
o the repeal of each provision of the Bylaws or amendments of the Bylaws
that are adopted after December 29, 2003 (the last date the Company
reported changes to the Bylaws) and before the effectiveness of the
Proposals and the seating of the Nominees on the Board.
Liberation Investments expects to request, in any future proxy materials
relating to the Special Meeting, authority to (i) initiate and vote for
proposals to recess or adjourn the Special Meeting for any reason and/or (ii)
oppose and vote against any proposal to recess or adjourn the Special Meeting.
Liberation Investments does not currently anticipate additional proposals on
any substantive matters. Nevertheless, Liberation Investments reserves the right
to either modify the Proposals or cause additional proposals to be identified in
the proxy materials for the Special Meeting. Liberation Investments is not aware
of any other proposals to be brought before the Company's shareholders at the
Special Meeting.
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REQUEST PROCEDURES
Pursuant to this Solicitation Statement, Liberation Investments is soliciting
requests from certain holders of outstanding shares of Common Stock to call the
Special Meeting. By executing a request, a shareholder is designating specified
persons as the shareholder's agents (each, a "Designated Agent"), and is
authorizing the Designated Agents to call the Special Meeting, set the place,
date and time of the Special Meeting, if held to be permissible, to give notice
of the Special Meeting and any adjournment thereof, and to exercise all rights
of the Requisite Holders incidental to calling and convening the Special
Meeting.
If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can sign a request with respect to your shares and
only upon receipt of your specific instructions. Accordingly, please contact the
person responsible for your account and give instructions for a WHITE request
card representing your shares to be signed. Liberation Investments urges you to
confirm in writing your instructions to the person responsible for your account
and to provide a copy of such instructions to Liberation Investments in care of
Innisfree M&A Incorporated at the address or fax number set forth in this
Solicitation Statement so that Liberation Investments will be aware of all
instructions given and can attempt to ensure that such instructions are
followed.
Prior to the taking of any action by the Designated Agents pursuant to the
request to call the Special Meeting, you may revoke your request to call the
Special Meeting by delivering a written revocation to Liberation Investments in
care of Innisfree M&A Incorporated at the address or fax number set forth in
this Solicitation Statement. Such a revocation must clearly state that your
request to call the Special Meeting is no longer effective.
SOLICITATION OF REQUESTS; EXPENSES
The entire expense of preparing this Solicitation Statement and any other
soliciting material and the soliciting of requests (including, without
limitation, costs, if any, related to advertising, printing, fees of attorneys,
financial advisors, solicitors, accountants, public relations, transportation
and litigation) will be borne by Liberation Investments. Requests may be
solicited by Liberation Investments, its officers, agents or representatives by
telephone, telegram, other electronic means, mail, or personal solicitation.
Banks, brokerage houses, and other custodians, nominees, and fiduciaries will be
requested to forward solicitation material to the beneficial owners of Common
Stock that such institutions hold, and Liberation Investments will reimburse
such institutions for their reasonable out-of-pocket expenses.
Liberation Investments has retained Innisfree M&A Incorporated to assist in
the solicitation of requests and the proxy solicitation in connection with the
Special Meeting at a fee estimated not to exceed $[_], and will reimburse such
firm for its reasonable out-of-pocket expenses. That firm will utilize
approximately [_] persons in its solicitation efforts.
Liberation Investments estimates that its total expenditures relating to the
solicitation of requests and the solicitation of proxies for approval of the
Proposals at the Special Meeting will be approximately $[_] (including, without
limitation, costs, if any, related to advertising, printing, fees of attorneys,
financial advisors, solicitors, accountants, public relations, transportation,
and litigation). Total expenditures to date relating to these solicitations have
been approximately $[_].
Liberation Investments intends to seek reimbursement from the Company for
Liberation Investments' actual expenses incurred in connection with this
solicitation and the solicitation of proxies approving the Proposals. Following
the Special Meeting, Liberation Investments will request that the Board approve
the reimbursement of such expenses. If the matter is submitted to a vote of the
Company's shareholders, Liberation Investments will vote its shares in favor of
such reimbursement and will accept the results of such shareholder vote.
CERTAIN INFORMATION REGARDING THE PARTICIPANTS
Each member of Liberation Investments may be deemed to be a "participant" in
the solicitation conducted with this Solicitation Statement. Emanuel R.
Pearlman, is the Chief Executive Officer and
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majority member of LIGLLC, which in turn is a general partner of LILP and
discretionary investment adviser to LILtd. The principal occupation of Mr.
Pearlman is to provide discretionary investment management services through
LIGLLC. The principal business of LIGLLC is to serve as the general partner of
LILP and discretionary investment adviser to LILtd. The principal business of
LILP is that of a private investment partnership engaging in the purchase and
sale of securities for investment for its own account. The principal business of
LILtd is that of a private offshore investment corporation engaging in the
purchase and sale of securities for investment for its own account. The
principal business address for Mr. Pearlman, LIGLLC and LILP is 330 Madison
Avenue, 6th Floor, New York, NY 10017. The principal business address for LILtd
is P.O. Box 31106 SMB Corporate Centre, West Bay Road, Grand Cayman, Cayman
Islands. As of [_], 2006, LILP and LILtd beneficially owned 1,543,418 and
767,909 shares of Common Stock, respectively. As the sole general partner of
LILP and the sole investment advisor to LILtd, LIGLLC may be deemed to
beneficially own the 2,311,327 shares of Common Stock beneficially owned in the
aggregate by LILP and LILtd. As the Chief Executive Officer and majority member
of LIGLLC, Mr. Pearlman may be deemed to beneficially own the 2,311,327 shares
of Common Stock beneficially deemed to be owned by LIGLLC.
Exhibit A lists certain information regarding ownership of Common Stock by
Liberation Investments and transactions in Common Stock made by Liberation
Investments during the last two years. Liberation Investments beneficially owns
2,311,327 shares of Common Stock, or approximately 8.4% of the outstanding
shares of Common Stock. Liberation Investments may, however, change or alter its
investment strategy at any time to increase or decrease its holdings in the
Company. The amount of funds expended by Liberation Investments to acquire the
2,311,327 shares of Common Stock it beneficially owns was $23,911,409.44. The
source of funds for this consideration was working capital of LILP and LILtd.
Except as set forth in this Solicitation Statement, Liberation Investments is
not now, nor has been within the past year, a party to any contract, arrangement
or understanding with any person with respect to any securities of the Company
(including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of
losses or profits, or the giving or withholding of proxies).
There are no material proceedings to which any member of Liberation
Investments or any associate of any member of Liberation Investments is a party
adverse to the Company or any of its subsidiaries or has a material interest
adverse to the Company or any of its subsidiaries. Except as described herein,
neither the members of Liberation Investments nor any associate of any of the
member of Liberation Investments has any interest in the matters to be voted
upon at the Special Meeting, other than an interest, if any, as a shareholder of
the Company.
Except as set forth in this Solicitation Statement, to the best knowledge of
Liberation Investments, none of the members of Liberation Investments nor any
associate of any member of Liberation Investments (i) has engaged in or has a
direct or indirect interest in any transaction or series of transactions since
the beginning of the Company's last fiscal year, or in any currently proposed
transaction, to which the Company or any of its subsidiaries is a party where
the amount involved was in excess of $60,000 and in which such person had, or
will have, a direct or indirect material interest; (ii) has been indebted to the
Company or any of its subsidiaries; (iii) has borrowed any funds for the purpose
of acquiring or holding any securities of the Company, or is presently, or has
been within the past year, a party to any contract, arrangement or understanding
with any person with respect to either any securities of the Company, any future
employment by the Company or its affiliates, or any future transaction to which
the Company or any of its affiliates will or may be a party; (iv) has purchased
or sold any securities of the Company within the past two years; or (v) is the
direct or indirect beneficial or record owner of any securities of the Company
or any parent or subsidiary thereof.
OTHER MATTERS
The principal executive offices of the Company are located at 206 Wild Basin
Road, Building B, Fourth Floor, Austin, Texas 78746. Except as otherwise noted
herein, the information concerning the Company has been taken from or is based
upon documents and records on file with the SEC and other
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publicly available information. Although Liberation Investments does not have
any knowledge that would indicate that any statement contained herein based upon
such documents and records is untrue, it does not take any responsibility for
the accuracy or completeness of the information contained in such documents and
records, or for any failure by the Company to disclose events that may affect
the significance or accuracy of such information.
Exhibit B sets forth information regarding the security ownership of certain
beneficial owners, directors and executive officers of the Company.
SHAREHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
The Company's proxy statement dated March 2, 2006, relating to its 2006
annual meeting, indicates that proposals of shareholders intended to be
presented at its 2007 annual meeting of shareholders must be received by the
Company no later than November 2, 2006 to be considered for inclusion in the
proxy statement and form of proxy relating to that meeting. The Company's proxy
statement also indicates that shareholder proposals not submitted for inclusion
in the proxy statement and form of proxy for the Company's 2007 annual meeting
of shareholders, but instead sought to be presented directly at such meeting,
may be brought before the annual meeting so long as the Company receives notice
of the proposal, no later than January 21, 2007.
YOUR SUPPORT IS IMPORTANT
WE ARE SEEKING YOUR SUPPORT TO CALL THE SPECIAL MEETING. PLEASE SIGN, DATE,
AND MAIL IN THE ENCLOSED POSTAGE-PAID ENVELOPE THE ENCLOSED WHITE REQUEST CARD
AS PROMPTLY AS POSSIBLE.
IF YOUR SHARES OF COMMON STOCK ARE HELD IN THE NAME OF A BROKERAGE FIRM,
BANK, BANK NOMINEE OR OTHER INSTITUTION, ONLY IT CAN SIGN A REQUEST WITH RESPECT
TO YOUR COMMON STOCK. ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR
YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR A REQUEST TO BE SIGNED REPRESENTING YOUR
SHARES OF COMMON STOCK.
WHO TO CALL IF YOU HAVE QUESTIONS
If you have any questions or require any assistance, please contact Innisfree
M&A Incorporated at the following address and toll free telephone number:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders call toll free: 1-877-825-8631
Banks and Brokers call collect: 1-212-750-5833
LIBERATION INVESTMENTS
[_], 2006
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EXHIBIT A
Holdings of Common Stock by Liberation Investments as of [_], 2006:
Shares
Participant
Beneficially
Holds or May
Be Deemed Percent
to Hold of
Participant and Address Beneficially Class(1)
--------------------------------------------------- ------------ --------
Liberation Investments, L.P. 1,543,418 5.6%
330 Madison Avenue, 6th Floor, New York, NY 10017
Liberation Investments, Ltd. 767,909 2.8%
P.O. Box 31106 SMB Corporate Centre, West Bay Road,
Grand Cayman, Cayman Islands
Liberation Investment Group, LLC 2,311,327(2) 8.4%
330 Madison Avenue, 6th Floor, New York, NY 10017
Emanuel R. Pearlman 2,311,327(3) 8.4%
330 Madison Avenue, 6th Floor, New York, NY 10017
Transactions in securities of the Company by Liberation Investments during
the past two years:
Price Per
Quantity of Shares Share
Date of Purchase / (Sale) Class of Security Purchased / (Sold) ($)(4)
---------------------------- ----------------- ------------------ ----------
Liberation Investments, L.P.
February 1, 2005 Common Stock 65,000 8.7931
February 2, 2005 Common Stock 71,500 8.9431
February 3, 2005 Common Stock 26,000 8.9537
February 3, 2005 Common Stock 9,750 8.6464
February 4, 2005 Common Stock 3,250 8.6342
April 25, 2005 Common Stock 65,000 6.9238
April 26, 2005 Common Stock 65,000 6.8709
April 27, 2005 Common Stock 130,000 6.7800
April 27, 2005 Common Stock 32,500 6.8477
June 8, 2005 Common Stock 6,500 10.9500
June 8, 2005 Common Stock 3,250 10.9474
June 15, 2005 Common Stock 3,250 10.9587
(June 16, 2005) Common Stock (26,000) 11.6850
(June 17, 2005) Common Stock (32,565) 12.1000
(July 11, 2005) Common Stock (65,000) 12.0022
(July 22, 2005) Common Stock (39,260) 12.1932
(July 27, 2005) Common Stock (20,475) 12.8016
August 9, 2005 Common Stock 16,250 9.3900
August 9, 2005 Common Stock 6,500 9.3474
August 22, 2005 Common Stock 6,500 9.6629
August 22, 2005 Common Stock 9,750 9.6339
September 12, 2005 Common Stock 21,450 10.0487
September 13, 2005 Common Stock 53,300 10.2922
September 13, 2005 Common Stock 84,500 10.2469
September 14, 2005 Common Stock 32,500 10.0295
September 14, 2005 Common Stock 16,257 9.8203
-------------------------------
(1) Based on the number of shares of Common Stock outstanding as reported in the
10-Q.
(2) Indirect beneficial ownership as a result of LILP and LILtd's beneficial
ownership.
(3) Indirect beneficial ownership as a result of LILP and LILtd's beneficial
ownership.
(4) Excluding commissions.
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Price Per
Quantity of Shares Share
Date of Purchase / (Sale) Class of Security Purchased / (Sold) ($)(4)
---------------------------- ----------------- ------------------ ----------
September 30, 2005 Common Stock 721 9.7000
October 19, 2005 Common Stock 4,420 8.9644
October 21, 2005 Common Stock 28,080 8.9875
(November 23, 2005) Common Stock (5,005) 10.8000
December 27, 2005 Common Stock 1,384 8.9295
December 28, 2005 Common Stock 26,520 8.9915
December 29, 2005 Common Stock 9,750 9.2332
December 30, 2005 Common Stock 16,250 9.2115
February 7, 2006 Common Stock 105,000 9.0141
February 13, 2006 Common Stock 81,400 9.1838
February 14, 2006 Common Stock 38,000 9.1766
March 14, 2006 Common Stock 17,250 10.7000
March 14, 2006 Common Stock 17,250 10.6635
(March 21, 2006) Common Stock (138,000) 13.9705
May 18, 2006 Common Stock 84,000 11.9336
May 18, 2006 Common Stock 42,000 12.0000
May 18, 2006 Common Stock 84,000 12.4273
May 19, 2006 Common Stock 252,000 12.4885
May 24, 2006 Common Stock 85,000 11.9621
May 30, 2006 Common Stock 19,191 11.5430
May 31, 2006 Common Stock 55,250 11.3198
May 31, 2006 Common Stock 29,750 11.3570
May 31, 2006 Common Stock 43,010 11.1454
June 1, 2006 Common Stock 41,990 11.4305
June 16, 2006 Common Stock 34,000 9.6000
June 27, 2006 Common Stock 25,500 9.6149
Liberation Investments, L.P.
February 1, 2005 Common Stock 35,000 8.7931
February 2, 2005 Common Stock 38,500 8.9431
February 3, 2005 Common Stock 14,000 8.9537
February 3, 2005 Common Stock 5,250 8.6464
February 4, 2005 Common Stock 1,750 8.6342
April 25, 2005 Common Stock 35,000 6.9238
April 26, 2005 Common Stock 35,000 6.8709
April 27, 2005 Common Stock 70,000 6.7800
April 27, 2005 Common Stock 17,500 6.8477
June 8, 2005 Common Stock 3,500 10.9500
June 8, 2005 Common Stock 1,750 10.9474
June 15, 2005 Common Stock 1,750 10.9587
(June 16, 2005) Common Stock (14,000) 11.6850
(June 17, 2005) Common Stock (17,535) 12.1000
(July 11, 2005) Common Stock (35,000) 12.0022
(July 22, 2005) Common Stock (21,140) 12.1932
(July 27, 2005) Common Stock (11,025) 12.8016
August 9, 2005 Common Stock 8,750 9.3900
August 9, 2005 Common Stock 3,500 9.3474
August 22, 2005 Common Stock 3,500 9.6629
August 22, 2005 Common Stock 5,250 9.6339
September 12, 2005 Common Stock 11,550 10.0487
September 13, 2005 Common Stock 28,700 10.2922
September 13, 2005 Common Stock 45,500 10.2469
September 14, 2005 Common Stock 17,500 10.0295
September 14, 2005 Common Stock 8,753 9.8203
September 30, 2005 Common Stock 389 9.7000
October 19, 2005 Common Stock 2,380 8.9644
October 21, 2005 Common Stock 15,120 8.9875
(November 23, 2005) Common Stock (2,695) 10.8000
December 27, 2005 Common Stock 745 8.9295
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Price Per
Quantity of Shares Share
Date of Purchase / (Sale) Class of Security Purchased / (Sold) ($)(4)
---------------------------- ----------------- ------------------ ----------
December 28, 2005 Common Stock 14,280 8.9915
December 29, 2005 Common Stock 5,250 9.2332
December 30, 2005 Common Stock 8,750 9.2115
February 7, 2006 Common Stock 45,000 9.0141
March 14, 2006 Common Stock 7,750 10.7000
March 14, 2006 Common Stock 7,750 10.6635
(March 21, 2006) Common Stock (62,000) 13.9705
May 18, 2006 Common Stock 16,000 11.9336
May 18, 2006 Common Stock 8,000 12.0000
May 18, 2006 Common Stock 16,000 12.4273
May 19, 2006 Common Stock 48,000 12.4885
May 24, 2006 Common Stock 15,000 11.9621
May 30, 2006 Common Stock 3,387 11.5430
May 31, 2006 Common Stock 9,750 11.3198
May 31, 2006 Common Stock 5,250 11.3570
May 31, 2006 Common Stock 7,590 11.1454
June 1, 2006 Common Stock 7,410 11.4305
June 16, 2006 Common Stock 6,000 9.6000
June 27, 2006 Common Stock 4,500 9.6149
July 14, 2006 Common Stock 100,000 9.9975
July 17, 2006 Common Stock 50,000 9.9938
July 18, 2006 Common Stock 50,000 9.9326
July 25, 2006 Common Stock 60,000 9.8768
August 2, 2006 Common Stock 25,000 9.1315
11
EXHIBIT B
Except to the extent superceded by information contained in subsequent
Schedule 13D and 13G filings made with the SEC and the updated number of
outstanding shares of Common Stock specified in the 10-Q, the following table
sets forth the beneficial ownership of Common Stock as of February 9, 2006, as
presented in the Company's definitive proxy statement filed with the SEC on
March 2, 2006, by (i) each director of the Company, (ii) each executive officer
of the Company, (iii) all directors and executive officers as a group and (iv)
each person known to the Company to be the beneficial owner of more than 5% of
the outstanding shares of Common Stock. While Liberation Investments does not
have any knowledge that would indicate that any statement contained in this
Exhibit B is untrue, except for the information with respect to Liberation
Investments, Liberation Investments takes no responsibility for the accuracy or
completeness of such information, or for any failure by the Company to disclose
events that may affect the significance or accuracy of such information.
Number of Shares
Beneficial Owner(5) Beneficially Owned Percent of Class(6)
-------------------------------- ------------------ -------------------
Royce & Associates, LLC 2,933,438(7) 10.7%
Barclays Global Investors, N.A. 2,856,392(8) 10.4%
FMR Corp. 2,802,464(9) 10.2%
Prentice Capital Management, LP 2,661,733(10) 9.7%
Private Capital Management, L.P. 2,452,433(11) 8.9%
Liberation Investments 2,311,327(12) 8.4%
------------------------------
(5) Unless otherwise noted, the address for all officers and directors of the
Company is the address of the Company's principal executive offices at 206 Wild
Basin, Building B, Fourth Floor, Austin, Texas 78746.
(6) Percentages of ownership are based on 27,482,486 shares of Common Stock
outstanding as of August 4, 2006 per the 10-Q. Shares of Common Stock subject to
stock options which were exercisable as of February 9, 2006 or were to become
exercisable within 60 days after February 9, 2006, are deemed outstanding for
computing the percentage for the person or group holding such options, but are
not deemed outstanding for computing the percentage for any other person or
group.
(7) Pursuant to a Schedule 13G/A dated January 30, 2006, filed with the SEC,
Royce & Associates, LLC reported that as of December 31, 2005 it had sole voting
power over 2,933,438 shares and sole dispositive power over 2,933,438 shares and
that its address is 1414 Avenue of the Americas, New York, New York 10019.
(8) Pursuant to a Schedule 13G dated February 10, 2006, filed with the SEC,
Barclays Global Investors, N.A. reported that as of January 31, 2006 it and
certain related entities had sole voting power over 2,695,027 shares and sole
dispositive power over 2,856,392 shares and that its address was 45 Fremont
Street, San Francisco, California 94105.
(9) Pursuant to a Schedule 13G dated June 10, 2005, filed with the SEC, FMR
Corp. reported that as of May 31, 2005 it and certain related entities had sole
voting power over 26,100 shares and sole dispositive power over 2,802,464 shares
and that its address is 82 Devonshire Street, Boston, Massachusetts 02109.
(10) Pursuant to a Schedule 13G/A dated February 14, 2006, filed with the SEC,
Prentice Capital Management, LP reported that as of December 31, 2005 it and
certain related persons had shared voting power over 2,661,733 shares and shared
dispositive power over 2,661,733 shares and that its address is 623 Fifth
Avenue, 32nd Floor, New York, New York 10022.
(11) Pursuant to a Schedule 13G dated February 14, 2006, filed with the SEC,
Private Capital Management, L.P. reported that as of February 14, 2006 it and
certain related entities had shared voting power over 2,452,433 shares and
shared dispositive power over 2,452,433 shares and that its address was 8889
Pelican Bay Blvd., Naples, Florida 34108.
(12) Pursuant to a Schedule 13D/A dated August 7, 2006, filed with the SEC,
Liberation Investments reported that as of August 7, 2006 it had shared voting
power over 2,311,327 shares and shared dispositive power over 2,311,327 shares
and that its address is as set forth in the Solicitation Statement.
12
Number of Shares
Beneficial Owner(5) Beneficially Owned Percent of Class(6)
---------------------------- ------------------ -------------------
Sowood Capital Management LP 1,464,900(13) 5.3%
Clifton E. Lind 2,051,686(14) 7.2%
Brendan M. O'Connor 403,000(15) 1.4%
Gary L. Loebig 393,662(16) 1.4%
Craig S. Nouis 286,250(17) 1.0%
Dirk D. Heinen 250,000(18) *(19)
John M. Winkelman 220,000(20) *
Robert D. Repass 172,500(21) *
Thomas W. Sarnoff 150,000(22) *
Michael J. Maples, Sr 47,500(23) *
All executive officers and 4,265,972(24) 13.9%
directors as a group (13
persons)
-------------------------------------
(13) Pursuant to a Schedule 13G dated May 30, 2006, filed with the SEC, Sowood
Capital Management LP reported that it and certain related persons had sole
voting power over 1,464,900 shares and sole dispositive power over 1,464,900
shares and that its address is 500 Boylson Street, 17th Floor, Boston,
Massachusetts 02116.
(14) Consists of (i) 994,852 shares owned by Mr. Lind, (ii) options to purchase
977,334 shares that were exercisable within 60 days after February 9, 2006,
(iii) 27,000 shares held in various retirement accounts, and (iv) 52,500 shares
held by the Lind Family Partnership. According to a Form 4 filed with the SEC on
August 21, 2006, Mr. Lind increased his direct beneficial ownership of shares of
Common Stock by 1,000 to 995,852 shares of Common Stock.
(15) Consists of options to purchase 403,000 shares that were exercisable within
60 days after February 9, 2006.
(16) Includes options to purchase 392,662 shares that were exercisable within 60
days after February 9, 2006.
(17) Consists of options to purchase 286,250 shares that were exercisable within
60 days after February 9, 2006.
(18) Includes options to purchase 247,500 shares that were exercisable within 60
days after February 9, 2006. Mr. Heinen ceased serving as an executive officer
of the Company upon his transition in November 2005 from Senior Vice President
of Operations to Development Executive.
(19) Represents beneficial ownership of less than one percent.
(20) Consists of options to purchase 220,000 shares that were exercisable within
60 days after February 9, 2006.
(21) Consists of options to purchase 172,500 shares that were exercisable within
60 days after February 9, 2006.
(22) Consists of options to purchase 150,000 shares that were exercisable within
60 days after February 9, 2006.
(23) Consists of options to purchase 47,500 shares that were exercisable within
60 days after February 9, 2006.
(24) Includes options to purchase 3,183,920 shares that were exercisable within
60 days after February 9, 2006. The reported number of shares does not include
shares held by Mr. Heinen, who was a "named executive officer" for the purposes
of the Company's March 2, 2006 definitive proxy statement but who ceased serving
as an executive officer in November 2005.
13
REQUEST OF SHAREHOLDERS OF MULTIMEDIA GAMES, INC., A TEXAS CORPORATION
(THE "COMPANY")
SOLICITED BY LIBERATION INVESTMENTS, L.P. ("LILP"), LIBERATION INVESTMENTS,
LTD. ("LILTD"), LIBERATION INVESTMENT GROUP, LLC ("LIGLLC") AND EMANUEL R.
PEARLMAN (COLLECTIVELY, "LIBERATION INVESTMENTS")
TO CALL A SPECIAL MEETING OF THE SHAREHOLDERS OF THE COMPANY
The undersigned hereby constitutes and appoints [__], [__] and [__], and each
of them, with full power of substitution, the proxies and agents of the
undersigned (said proxies and agents, together with each substitute appointed by
any of them, if any, collectively, the "Designated Agents") in respect of all
common stock, par value $0.01 per share ("Common Stock"), of the Company owned
by the undersigned to do any or all of the following, to which the undersigned
hereby consents, to (1) take all action necessary to call (BUT NOT TO VOTE AT) a
special meeting the Company's shareholders (the "Special Meeting"), for the
purposes of considering and voting upon the Proposals described in the
Solicitation Statement previously sent by Liberation Investments to the
shareholders of the Company, and incorporated by reference herein, (2) set the
place, date and time of the Special Meeting, if held to be permissible, or any
adjournment thereof, and to give notice of the Special Meeting or any
adjournment thereof and the purposes for which the Special Meeting or any
adjournment thereof has been called, and (3) exercise all rights of the
undersigned incidental to calling and convening the Special Meeting.
NOTHING CONTAINED IN THIS INSTRUMENT SHALL BE CONSTRUED TO GRANT THE
DESIGNATED AGENTS THE RIGHT, POWER OR AUTHORITY TO VOTE ANY SHARES OWNED BY THE
UNDERSIGNED AT THE SPECIAL MEETING.
The undersigned hereby authorizes Liberation Investments and its agents to
collect and, if necessary, deliver this request to the Company, and to deliver
any other information required in connection therewith.
This request supercedes, and the undersigned hereby revokes, any earlier
dated revocation which the undersigned may have submitted to Liberation
Investments, the Company or any designees of either.
Print Name:_____________________________________________________________________
Signature:______________________________________________________________________
Signature (if held jointly):____________________________________________________
Title (only if shares are held by an entity):___________________________________
Number of shares beneficially owned (and as to which you have the right to
vote):__________________________________________________________________________
Dated:__________________________________________________________________________
Please sign exactly as your shares are registered. When shares are held by
joint tenants, both should sign. When signing as an attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporation name by the President or other duly
authorized officer. If a partnership, please sign in partnership name by
authorized person. This request will represent all shares held in all
capacities.
PLEASE COMPLETE, SIGN, DATE, AND MAIL IN THE ENCLOSED ENVELOPE AS PROMPTLY AS
POSSIBLE.