UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
MDI Entertainment, Inc.
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(Name of Issuer)
Common Stock, par value $0.001 per share
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(Title of Class of Securities)
552685109
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(CUSIP Number)
Kenneth R. Koch, Esq.
Mintz Levin Cohn Ferris Glovsky and Popeo, P.C.
666 Third Avenue, 25th Floor
New York, NY 10017
(212) 692-6800
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 16, 2003
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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 ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. |X|
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7 for other
parties to whom copies are to be sent.
*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 ("Act") 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).
Page 1 of 1 pages
SCHEDULE 13D
13D
CUSIP NO. 552685109
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1 NAMES OF REPORTING PERSONS
Steven M. Saferin
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a) | |
(b) | |
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
N/A
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) | |
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES | |
(See Instructions)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
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14 TYPE OF REPORTING PERSON (See Instructions)
IN
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Page 2 of 2 pages
INTRODUCTORY STATEMENT
This Amendment No. 3 (this "Amendment") relates to the common stock, par value
$0.001 per share, of MDI Entertainment, Inc., a Delaware corporation (the
"Issuer"). This Amendment amends and restates information in Items 1-6 from the
Schedule 13D (the "Schedule 13D") filed by Steven M. Saferin on February 7, 2000
with the Securities and Exchange Commission (the "Commission") as amended on an
amendment filed with the Commission on November 27, 2002 and as originally
reported in a Schedule 13G filed with the Commission on March 19, 1999. Except
as provided herein, the Schedule 13D remains in full force and effect.
Item 1. Security and Issuer
The title of the class of equity securities to which this Statement relates is
the common stock of the Issuer, par value $0.001 per share. The principal
executive offices of the Issuer are located at 201 Ann Street, Hartford,
Connecticut 06103.
Item 2. Identity and Background
This Statement is being filed by Steven M. Saferin (the "Reporting Person"), a
citizen of the United States with a business address of MDI Entertainment, Inc.,
201 Ann Street, Hartford, Connecticut 06103. Mr. Saferin is President, Chief
Executive Officer and a director of the Issuer.
Item 3. Source and Amount of Funds or Other Consideration
On November 19, 2002, the Issuer entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Scientific Games International, Inc., a Delaware
corporation ("Parent"), and Blue Suede Acquisition Corp., a Delaware corporation
and wholly-owned subsidiary of Parent ("Purchaser"), which provides for, among
other things: (i) the commencement by Purchaser of a cash tender offer for all
of the outstanding shares of common stock of the Issuer at a purchase price of
$1.60 per share, net to the seller in cash (the "Offer"); and (ii) following
consummation of the Offer, the merger of Purchaser with and into the Issuer (the
"Merger"). The consummation of the Offer is subject to certain conditions as set
forth in the Merger Agreement, including the condition that 75% of the Company's
outstanding shares (including the 708,333 shares which are currently owned by
Parent and the 3,695,169 shares owned by Mr. Saferin) are tendered in the Offer.
The consummation of the Merger and the transactions contemplated thereby are
subject to customary closing conditions as prescribed in the Merger Agreement.
The Offer closed on January 9, 2003.
Mr. Saferin has agreed to sell his shares to Purchaser at a purchase price of
$1.40 per share within five business days after the closing of the Offer
pursuant to a stock purchase agreement (the "Stock Purchase Agreement"). On
January 16, 2003, the transaction closed in which Mr. Saferin sold his shares to
the Purchaser for an aggregate consideration of $5,173,236.60. In addition, all
of Mr. Saferin's options to purchase shares of the Issuer's common stock were
cancelled for aggregate consideration of $242,750, less applicable withholding
taxes.
Page 3 of 3 pages
Mr. Saferin and Parent have also entered into a three-year employment agreement
(the "Employment Agreement") and a non-competition agreement (the
"Non-Competition Agreement"), which are both effective upon the closing of the
Offer.
Item 4. Purpose of Transaction
Except as reported in Item 3, Item 6, the Merger Agreement and the Stock
Purchase Agreement, the Reporting Person does not have any plan or proposal
which relates to, or would result in:
(a) the acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or any of
its subsidiaries;
(d) any change in the present board of directors or management of the Issuer,
including any plans or proposals to change the number or term of directors or to
fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend policy of the
Issuer;
(f) any other material change in the Issuer's business or corporate structure,
including but not limited to, if the Issuer is a registered closed-end
investment company, any plans or proposals to make any changes in its investment
policy for which a vote is required by Section 13 of the Investment Company Act
of 1940;
(g) changes in the Issuer's charter, bylaws or instruments corresponding thereto
or other actions which may impede the acquisition of control of the Issuer by
any person;
(h) causing a class of securities of the Issuer to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association;
(i) a class of equity securities of the Issuer becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Securities Act of 1933; or
(j) any action similar to any of those enumerated above.
Page 4 of 4 pages
Item 5. Interest in Securities of the Issuer
(a) Based on a total of 11,763,829 shares outstanding on November 19, 2002, Mr.
Saferin's beneficial ownership of 0 shares of common stock constitutes
beneficial ownership of 0% of the total number of shares of outstanding common
stock of the Issuer.
(b) Mr. Saferin has no power to vote or to direct the vote of, and no power to
dispose or direct the disposition of, any shares of the Issuer's common stock.
(c) Except as reported in Item 3, Item 6, the Merger Agreement and the Stock
Purchase Agreement, during the past sixty days, Mr. Saferin has not effected any
transactions in shares of common stock.
(d) Not applicable.
(e) As of January 16, 2003, Mr. Saferin ceased to be a beneficial owner of more
than 5% of the Issuer's common stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
Stock Purchase Agreement
Steven M. Saferin, the Issuer's President, Chief Executive Officer and a
director, who in the aggregate held voting and dispositive power with respect to
an aggregate of 3,695,169 shares and held options to purchase 250,000 shares,
immediately following the execution and delivery of the Merger Agreement entered
into the Stock Purchase Agreement, dated November 19, 2002, with Parent and the
Purchaser. Pursuant to the Stock Purchase Agreement, Mr. Saferin agreed, among
other things, to sell the shares held by him to the Purchaser at a purchase
price of $1.40 per share for an aggregate consideration of $5,173,236.60, within
five business days after the closing of the Offer, any extension thereof and any
subsequent offering period and to refrain from tendering the shares pursuant to
the Offer. In addition, all options to purchase shares held by Mr. Saferin will
be cancelled and he will receive from Purchaser an aggregate consideration of
$242,750, less applicable withholding taxes. The Offer closed on January 9,
2003, and the transactions contemplated by the Stock Purchase Agreement were
closed on January 16, 2003.
Pursuant to the Stock Purchase Agreement:
(i) Mr. Saferin has agreed to, vote (or cause to be voted) at any meeting of the
holders of the shares of the Issuer's common stock, however called, or in
connection with any written consent of the holders of the shares of the Issuer's
common stock all shares held by Mr. Saferin (a) in favor of the Merger, the
execution and delivery by the Issuer of the Merger Agreement and the approval of
the terms thereof and each of the other actions contemplated by the Merger
Agreement and any actions required in furtherance thereof and hereof and (b)
against any Acquisition Proposal (as defined in the Merger Agreement) and
against any action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
the Issuer under the Merger Agreement.
Page 4 of 4 pages
(ii) Mr. Saferin has covenanted and agreed that except as contemplated or
permitted by the Stock Purchase Agreement and the Merger Agreement, he shall not
(a) transfer (which term shall include, without limitation, any sale, gift,
pledge or other disposition), or consent to any transfer of, any or all of the
shares held by Mr. Saferin, options, warrants or other rights to receive shares
of the Issuer's common stock, or any interest therein, (b) enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of the shares held by Mr. Saferin, options, warrants or
other rights to receive shares of the Issuer's common stock, or any interest
therein, (c) grant any proxy, power-of-attorney or other authorization in or
with respect to any of the shares held by Mr. Saferin, (d) deposit any of the
shares held by Mr. Saferin into a voting trust or enter into a voting agreement
or arrangement with respect to any of the shares held by Mr. Saferin, (e)
exercise any of the options pursuant to which shares are issuable pursuant to
the Option or (f) take any other action that would in any way restrict, limit or
interfere with the performance of his obligations hereunder or the transactions
contemplated by the Stock Purchase Agreement or by the Merger Agreement.
(iii) Mr. Saferin has irrevocably granted to, and appointed, Parent and Martin
E. Schloss and C. Gray Bethea, or either of them, in their respective capacities
as officers of Parent, and any individual who shall hereafter succeed to any
such office of Parent, and each of them individually, Mr. Saferin's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of Mr. Saferin, to vote the shares held by Mr. Saferin, or grant a
consent or approval in respect of the shares held by Mr. Saferin the manner
described in the Stock Purchase Agreement.
Employment and Severance Benefits Agreement
On November 19, 2002, Steven M. Saferin entered into an Employment and Severance
Benefits Agreement with Parent and Purchaser (the "Employment Agreement").
Pursuant to the agreement, Mr. Saferin's title with the Parent will be Senior
Vice President-MDI and he will also be the President and Chief Executive Officer
of the Issuer. The agreement commences on the date of consummation of the Offer
(the "Commencement Date") and expires on December 31, 2005. The agreement
provides for an annual base salary of $250,000, subject to annual review by the
board of the Parent and raises each year by an amount equal to the percentage
increases in base salary generally provided to the executive officers of the
Parent (the "Base Salary"). In calendar year 2003 and thereafter, Mr. Saferin
shall be eligible for annual performance bonuses of up to 50% of his Base Salary
based on the attainment of performance objectives established by the board of
directors of the Parent and Mr. Saferin's contributions to the attainment of
those objectives. In addition, the agreement states that after the closing of
the Offer, Mr. Saferin is entitled to receive a bonus of $125,000 for services
provided to the Issuer in 2002 prior to, and in connection with, the Offer.
Page 6 of 6 pages
Pursuant to the agreement, Mr. Saferin is eligible to be considered for an
annual grant of stock options entitling him to purchase shares of Parent common
stock. In addition, the Parent will recommend to its Compensation Committee that
Mr. Saferin be granted, as of the Commencement Date, options to acquire 100,000
shares of Class A Common Stock of Parent; such options to be awarded pursuant to
a stock option award agreement of Parent containing the same terms as are
generally applicable to other executive officers of the Issuer. The Parent has
also agreed to reimburse Mr. Saferin for certain expenses incurred in relocating
from Fort Worth, Texas, to Atlanta, Georgia.
Either party may terminate the agreement on sixty days' prior written notice or
upon the occurrence of certain events constituting cause or constructive
termination. In the event the agreement is terminated without cause or for
constructive termination, Mr. Saferin would be entitled to: (i) a lump sum
severance payment equal to Mr. Saferin's annual Base Salary, to the extent that
such Base Salary has not previously been paid through such date and any bonus or
award payments theretofore made to Mr. Saferin; plus (ii) that pro rata portion
of any bonus or award which would have been payable to Mr. Saferin had Mr.
Saferin remained in employment with the Parent during the entire year in which
the date of termination occurred; plus (iii) (a) if such termination without
cause or constructive termination occurs after the date of the Employment
Agreement, but on or prior to the date of the first anniversary thereof, a sum
each month for a period of three years after the date of termination equal to
one-twelfth of Mr. Saferin's Base Salary then in effect; or (b) if such
termination without cause or constructive termination occurs after the date of
the first anniversary of the Employment Agreement, but on or before the date of
the second anniversary thereof, a sum each month for a period of two years after
the date of termination, equal to one-twelfth of Mr. Saferin's Base Salary then
in effect; or (c) if such termination without cause or constructive termination
occurs after the date of the second anniversary of the Employment Agreement but
on or before the date of the third anniversary thereof, a sum each month for a
period of one year after the date of termination, equal to one-twelfth of Mr.
Saferin's Base Salary then in effect; plus (iv) with certain exceptions, the
continuation of life, accident, medical and dental insurance benefits.
If Mr. Saferin is terminated because of disability, he is entitled to 12 months'
Base Salary, the continuation of medical and other benefits and a ratable
portion of bonuses earned through the date of termination.
If Mr. Saferin terminates his employment voluntarily, subject to certain limited
exceptions, he shall not be entitled to any severance pay or severance benefits,
but shall be entitled to all other consideration, compensation and reimbursement
otherwise due to him under the terms of the agreement but only through the date
of such termination. The agreement also contains customary provisions with
respect to benefits, reimbursement of expenses, and confidentiality.
Page 7 of 7 pages
Non-Competition Agreement
On November 19, 2002, Steven M. Saferin entered into a Non-Competition Agreement
(the "Non-Compete Agreement") with the Parent. The term of the agreement begins
on the date of the consummation of the Offer and expires on December 31, 2005
(the "Term"). In addition, the agreement contains an additional period of
restriction consisting of the period of time equal to the Term plus the period
equal to the longer of either (i) one year after termination of the agreement
for any reason, or (ii) any period after the Term during which Mr. Saferin
receives any compensation or other remuneration (including any severance
benefits payments) from the Parent or its affiliates (the "Restricted Period").
Until the Term expires, Mr. Saferin's non-compete obligation applies to any
geographical area in the United States in which Parent or its affiliates has
business or operations which are performed, supervised by or assisted in by Mr.
Saferin, or in which Parent or its affiliates have customers or have actively
sought prospective customers, in each case, with whom Mr. Saferin has or had
material contact while employed by Parent or any of its affiliates. After the
Term and during the remainder of the Restricted Period, this obligation shall
apply to any geographical area in the United States in which the Parent or any
affiliate thereof (i) either continues to have business or operations or
previously had business or operations within five years prior to the end of the
Term, which, in each case, were performed, supervised by or assisted in by Mr.
Saferin, or (ii) had customers within such five-year period or had actively
sought prospective customers, in each case, with whom Mr. Saferin had material
contact within five years prior to the end of the Term.
Pursuant to the agreement, Mr. Saferin has agreed that he will not: (i) during
the Term, engage in any business that is competitive with the Company or its
affiliates; (ii) during the Term, recruit or hire, or attempt to recruit or
hire, any employee who is employed by the Parent or its affiliates; (iii) after
the Term and during the remainder of the Restricted Period, recruit or hire or
attempt to recruit or hire, any employee who is employed by the Parent or its
affiliates to become an employee of any other person or entity whose products or
services compete with those of the Parent or its affiliates; (iv) during the
Term, solicit, entice or induce any customer or potential customer of the Parent
or its affiliates to become a customer of any person or entity whose products or
services compete with those of the Parent or its affiliates; and (v) after the
Term and during the remainder of the Restricted Period, solicit, entice or
induce any customer as of the end of the Term or as of any date during the Term,
to become a customer of any person or entity whose products or services compete
with those of the Parent or its affiliates.
Page 8 of 8 pages
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.
Steven M. Saferin
January 16, 2003
(Date)
/s/ Steven M. Saferin
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(Signature)
Page 9 of 9 pages