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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
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. 1)1
PIZZA INN, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
- --------------------------------------------------------------------------------
(Title of class of securities)
725848 10 5
- --------------------------------------------------------------------------------
(CUSIP number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
- --------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
December 18, 2002
- --------------------------------------------------------------------------------
(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
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 21 Pages)
- --------------------
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).
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CUSIP No. 725848 10 5 13D Page 2 of 21 pages
- ------------------------- ------------------------
================================================================================
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NEWCASTLE PARTNERS, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 3,277,700 (1)
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
372,700
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,905,000 (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,277,700 (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 725848 10 5 13D Page 3 of 21 pages
- ------------------------- ------------------------
(1) Includes 2,905,000 shares of Common Stock held by C. Jeffrey Rogers (the
"Pledged Shares") and pledged to Newcastle Partners L.P. ("NP") pursuant
to the terms of an Omnibus Agreement and Pledge Agreement, each dated as
of December 6, 2002 by and between NP and Mr. Rogers. The Omnibus
Agreement grants NP the option to acquire the Pledged Shares for
$7,373,726.42 (plus accrued interest through the exercise date). The
Pledge Agreement provides (i) that Mr. Rogers may not dispose of the
Pledged Shares without the prior written consent of NP and (ii) that NP
shall have voting power of the Pledged Shares.
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CUSIP No. 725848 10 5 13D Page 4 of 21 pages
- ------------------------- ------------------------
================================================================================
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NEWCASTLE CAPITAL GROUP, L.L.C.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 3,277,700 (1)
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
372,700
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,905,000 (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,277,700 (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 5 of 21 pages
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(1) Includes 2,905,000 shares of Common Stock held by C. Jeffrey Rogers (the
"Pledged Shares") and pledged to Newcastle Partners L.P. ("NP") pursuant
to the terms of an Omnibus Agreement and Pledge Agreement, each dated as
of December 6, 2002 by and between NP and Mr. Rogers. The Omnibus
Agreement grants NP the option to acquire the Pledged Shares for
$7,373,726.42 (plus accrued interest through the exercise date). The
Pledge Agreement provides (i) that Mr. Rogers may not dispose of the
Pledged Shares without the prior written consent of NP and (ii) that NP
shall have voting power of the Pledged Shares.
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CUSIP No. 725848 10 5 13D Page 6 of 21 pages
- ------------------------- ------------------------
================================================================================
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NEWCASTLE CAPITAL MANAGEMENT, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 3,277,700 (1)
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
372,700
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,905,000 (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,277,700 (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 725848 10 5 13D Page 7 of 21 pages
- ------------------------- ------------------------
(1) Includes 2,905,000 shares of Common Stock held by C. Jeffrey Rogers (the
"Pledged Shares") and pledged to Newcastle Partners L.P. ("NP") pursuant
to the terms of an Omnibus Agreement and Pledge Agreement, each dated as
of December 6, 2002 by and between NP and Mr. Rogers. The Omnibus
Agreement grants NP the option to acquire the Pledged Shares for
$7,373,726.42 (plus accrued interest through the exercise date). The
Pledge Agreement provides (i) that Mr. Rogers may not dispose of the
Pledged Shares without the prior written consent of NP and (ii) that NP
shall have voting power of the Pledged Shares.
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CUSIP No. 725848 10 5 13D Page 8 of 21 pages
- ------------------------- ------------------------
================================================================================
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
MARK E. SCHWARZ
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. Citizen
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 3,277,700(1)
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
372,700
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,905,000(1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,277,700(1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 725848 10 5 13D Page 9 of 21 pages
- ------------------------- ------------------------
(1) Includes 2,905,000 shares of Common Stock held by C. Jeffrey Rogers (the
"Pledged Shares") and pledged to Newcastle Partners L.P. ("NP") pursuant
to the terms of an Omnibus Agreement and Pledge Agreement, each dated as
of December 6, 2002 by and between NP and Mr. Rogers. The Omnibus
Agreement grants NP the option to acquire the Pledged Shares for
$7,373,726.42 (plus accrued interest through the exercise date). The
Pledge Agreement provides (i) that Mr. Rogers may not dispose of the
Pledged Shares without the prior written consent of NP and (ii) that NP
shall have voting power of the Pledged Shares.
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CUSIP No. 725848 10 5 13D Page 10 of 21 pages
- ------------------------- ------------------------
================================================================================
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
STEVEN PULLY
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. Citizen
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 11 of 21 pages
- ------------------------- ------------------------
The following statement constitutes Amendment No. 1 to the Schedule 13D
filed by the undersigned (the "Statement"). Except as specifically amended by
this Amendment No. 1, the Statement remains in full force and effect.
Item 2 is hereby amended in its entirety to read as follows:
Item 2. Identity and Background.
-----------------------
Items 2(a), 2(b) and 2(c). This Statement is jointly filed by Newcastle
Partners, L.P., a Texas limited partnership ("NP"), Newcastle Capital
Management, L.P., a Texas limited partnership ("NCM"), Newcastle Capital Group,
L.L.C., a Texas limited liability company ("NCG"), Mark Schwarz and Steven Pully
(together with NP, NCM, NCG and Mark Schwarz, the "Reporting Persons"). Because
Mark Schwarz is the managing member of NCG, which is the general partner of NCM
(with Mark Schwarz, NCG and NCM, hereinafter referred to as the "Controlling
Persons"), which in turn is the general partner of NP, the Controlling Persons
may be deemed, pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the "Act"), to be the beneficial owners of all shares of Common Stock
held by NP. The Reporting Persons are filing this joint Statement, as they may
be considered a "group" under Section 13(d)(3) of the Act. However, neither the
fact of this filing nor anything contained herein shall be deemed to be an
admission by the Reporting Persons that such a group exists.
As stated above, Mark Schwarz is the managing member of NCG. The principal
business of NCG is acting as the general partner of NCM. The principal business
of NCM is acting as the general partner of NP. The principal business of NP is
investing in securities. Steven Pully is an employee of NP. The principal place
of business for each of the Reporting Persons is 300 Crescent Court, Suite 1110,
Dallas, Texas 75201.
Item 2(d). During the last five years, none of the Reporting Persons have
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
Item 2(e). During the last five years, none of the Reporting Persons have
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.
Item 2(f). Mark Schwarz and Steven Pully are citizens of the United States.
Item 3 is hereby amended in its entirety to read as follows:
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The net investment cost (including commissions, if any) of the shares of
Common Stock held directly by NP was approximately $611,752.01, all of which was
obtained from NP's working capital. None of NCG, NCM, Mr. Schwarz or Mr. Pully
directly owns any shares of Common Stock.
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 12 of 21 pages
- ------------------------- ------------------------
NP also acquired an option to purchase 2,905,000 shares of Common Stock
held by C. Jeffrey Rogers for an aggregate exercise price of $7,373,726.42
pursuant to the Omnibus Agreement by and between NP and Mr. Rogers dated as of
December 6, 2002. If exercised, the option will be paid for by canceling the
Promissory Note dated as of December 6, 2002 in the aggregate principal amount
of $7,373,726.42 (plus accrued interest through the exercise date) made by Mr.
Rogers in favor of NP when NP refinanced certain of Mr. Rogers existing debts.
The funds used by NP to refinance certain of Mr. Rogers' existing debt were
obtained from NP's working capital.
Item 4 is hereby amended to include the following:
The Reporting Persons entered into discussions with the Company to obtain
representation on the Board of Directors. As a result of such discussions, the
Company entered into an agreement with NP (the "Agreement"), and Mark E. Schwarz
and Steven Pully were appointed to the Board of Directors of the Company. For a
description of the Agreement, see Item 6.
Item 5(a) is hereby amended in its entirety to read as follows:
(a) As of the filing date of this Statement, NP beneficially owned
3,277,700 shares of Common Stock, representing approximately 32.6% of the
Company's issued and outstanding Common Stock.
NCM, as the general partner of NP, may be deemed to beneficially own
the 3,277,700 shares of Common Stock beneficially owned by NP, representing
approximately 32.6% of the issued and outstanding Common Stock of the Company.
NCG, as the general partner of NCM, which in turn is the general
partner of NP, may also be deemed to beneficially own the 3,277,700 shares of
Common Stock beneficially owned by NP, representing approximately 32.6% of the
issued and outstanding Common Stock of the Company.
Mark Schwarz, as the managing member of NCG, the general partner of
NCM, which in turn is the general partner of NP, may also be deemed to
beneficially own the 3,277,700 shares of Common Stock beneficially owned by NP,
representing approximately 32.6% of the issued and outstanding Common Stock of
the Company.
Steven Pully currently does not own any shares of Common Stock.
Item 5(b) is hereby amended in its entirety to read as follows:
(b) Pursuant to the terms of the Omnibus Agreement and Pledge Agreement and
by virtue of his position with NP, NCG and NCM, Mark Schwarz has (i) the sole
power to vote over
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 13 of 21 pages
- ------------------------- ------------------------
3,277,700 shares of Common Stock or 32.6% of the issued and outstanding shares
of Common Stock, (ii) the sole power to dispose of 372,700 shares of Common
Stock or 3.7% of the issued and outstanding shares of Common Stock, and (iii)
shares the power to dispose over 2,905,000 shares of Common Stock or 28.9% of
the issued and outstanding shares of Common Stock.
Item 5(c) is hereby amended to add the following:
Schedule A annexed hereto lists all transactions by the Reporting Persons
in the Company's Common Stock since the filing of the initial Schedule 13D. All
of such transactions were effected in the open market.
Item 6 is hereby amended to include the following:
On December 18, 2002, NP entered into an Agreement with the Company
wherein the Company agreed, among others things, to have the Board of Directors
cause at least one member of each class of directors of the Company to resign
from the Board of Directors. Upon obtaining such resignations, the Board of
Directors shall appoint the following representatives of NP to replace the
resigning directors: (i) Mark E. Schwarz, as a Class I director, whose term will
expire at the 2004 annual meeting of stockholders of the Company and until his
replacement has been duly elected and qualifies, and (ii) Steven Pully, as a
Class II director, whose term will expire at the 2003 annual meeting of
stockholders of the Company and until his replacement has been duly elected and
qualifies. Reference is made to the Agreement which is filed as an exhibit
hereto and incorporated herein by reference.
Item 7 is hereby amended to include the following:
(5) Agreement by and between the Company and NP dated December 18, 2002.
(6) Joint Filing Agreement dated as of December 20, 2002 among NP, NCG, NCM,
Mark Schwarz and Steven Pully.
[Signature Page Follows]
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CUSIP No. 725848 10 5 13D Page 14 of 21 pages
- ------------------------- ------------------------
SIGNATURES
After due inquiry and to the best of his knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: December 20, 2002 NEWCASTLE PARTNERS, L.P.
By: Newcastle Capital Management, L.P., its
general partner
By: Newcastle Capital Group, L.L.C., its general
partner
By: /s/ Mark Schwarz
--------------------------------------------
Mark Schwarz, Managing Member
NEWCASTLE CAPITAL MANAGEMENT, L.P.
By: Newcastle Capital Group, L.L.C., its general
partner
By: /s/ Mark Schwarz
--------------------------------------------
Mark Schwarz, Managing Member
NEWCASTLE CAPITAL GROUP, L.L.C.
By: /s/ Mark Schwarz
--------------------------------------------
Mark Schwarz, Managing Member
/s/ Mark Schwarz
------------------------------------------------
MARK SCHWARZ
/s/ Steven Pully
------------------------------------------------
STEVEN PULLY
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 15 of 21 pages
- ------------------------- ------------------------
SCHEDULE A
Transactions in the Common Stock Since the Filing of the Initial Schedule 13D
-------------------------------------------------------------------------------
Shares of Common Stock Price Per Date of
Purchased Share($) Purchase
---------------------- -------------------------- -------------------
------------------------------------------------------------------------------
Newcastle Partners, L.P.
------------------------------------------------------------------------------
6,200 $2.28 12/11/02
------------------------------------------------------------------------------
1,500 $2.23 12/12/02
------------------------------------------------------------------------------
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 16 of 21 pages
- ------------------------- ------------------------
The Exhibit Index is hereby amended in its entirety to read as follows:
EXHIBIT INDEX
EXHIBIT PAGE
- ------- ----
1. Joint Filing Agreement dated as of December 11, 2002 among *
Newcastle Partners, L.P., Newcastle Capital Group L.L.C.,
Newcastle Capital Management, L.P. and Mark Schwarz.
2. Omnibus Agreement dated as of December 6, 2002 by and *
between Newcastle Partners, L.P. and C. Jeffrey Rogers.
3. Promissory Note dated December 6, 2002 in the aggregate *
principal amount of $7,373,726.42 made by C. Jeffrey
Rogers in favor of Newcastle Partners, L.P.
4. Pledge Agreement dated December 6, 2002 by and between C. *
Jeffrey Rogers and Newcastle Partners, L.P.
5. Agreement by and between Pizza Inn, Inc. and Newcastle 17
Partners, L.P. dated December 18, 2002.
6. Joint Filing Agreement dated as of December 20, 2002 among 21
Newcastle Partners, L.P., Newcastle Capital Group L.L.C.,
Newcastle Capital Management, L.P., Mark Schwarz and Steven
Pully.
* Filed with the initial Schedule 13D filed by the Reporting Persons with the
Securities and Exchange Commission on December 12, 2002.
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 17 of 21 pages
- ------------------------- ------------------------
EXHIBIT 5
AGREEMENT
THIS AGREEMENT, dated December 18, 2002, by and between Pizza Inn, Inc., a
Missouri corporation (the "Company"), and Newcastle Partners, L.P., a Texas
limited partnership ("Newcastle").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company acknowledges that Newcastle is the beneficial owner of
3,277,700 shares (the "Newcastle Shares") of common stock, $0.01 par value of
the Company (the "Common Stock"), or approximately 32.6% of the shares of Common
Stock issued and outstanding;
WHEREAS, the Newcastle Shares includes 2,905,000 shares of Common Stock
held by C. Jeffrey Rogers and pledged to Newcastle pursuant to the terms of an
Omnibus Agreement and a Pledge Agreement, each dated as of December 6, 2002 by
and between Newcastle and Mr. Rogers and which Newcastle has the option to
acquire commencing on January 3, 2003 (the "Pledged Shares");
WHEREAS, the 2002 annual meeting of stockholders of the Company is
scheduled to be held on December 18, 2002 (the "Annual Meeting");
WHEREAS, Newcastle has held discussions with the Board of Directors of the
Company (the "Board") seeking representation on the Board;
WHEREAS, Newcastle and the Board have agreed to grant Newcastle appropriate
representation on the Board following the conclusion of the Annual Meeting
subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, the parties hereto
hereby agree as follows:
Section 1. Representations, Warranties and Covenants of the Company.
---------------------------------------------------------
The Company hereby represents, warrants and agrees that (a) it has full
legal right, power and authority to execute, deliver and perform this Agreement,
and consummate the transactions contemplated hereby, (b) the execution and
delivery of this Agreement, and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate actions, and (c) this Agreement constitutes valid, legal and binding
obligations of the Company, enforceable against it in accordance with its terms,
except that such
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 18 of 21 pages
- ------------------------- ------------------------
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
(whether general or specific) or other laws now or hereafter in effect.
Section 2. Representations, Warranties and Covenants of Newcastle.
-------------------------------------------------------
Newcastle hereby represents, warrants and agrees that (a) it has full legal
right, power and authority to execute, deliver and perform this Agreement, and
consummate the transactions contemplated hereby, (b) the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary limited partnership actions, and (c)
this Agreement constitutes valid, legal and binding obligations of Newcastle,
enforceable against it in accordance with its terms, except that such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
(whether general or specific) or other laws now or hereafter in effect.
Section 3. Board Composition; Related Matters.
-----------------------------------
3.1 Prior to the close of business on the first business day following the
Annual Meeting which the Company will hold on December 18, 2002, the Board will
cause at least one member of each class of directors of the Company to resign
from the Board. Upon obtaining such resignations, the Board shall appoint the
following representatives of Newcastle to replace the resigning directors: (i)
Mark E. Schwarz, as a Class I director, whose term will expire at the 2004
annual meeting of stockholders of the Company and until his replacement has been
duly elected and qualifies, and (ii) Steven Pully, as a Class II director, whose
term will expire at the 2003 annual meeting of stockholders of the Company and
until his replacement has been duly elected and qualifies (together with Mr.
Schwarz, the "Newcastle Directors").
3.2 Reserved.
3.3 In the event that the Newcastle Directors are appointed to the Board
pursuant to Section 3.1, the Board shall immediately thereafter take all actions
necessary to amend the Company's By-laws to provide that during the period that
either of the Newcastle Directors is serving on the Board, the Company shall not
expand the size of the Board above seven members.
3.4 During the period from the date hereof until the first anniversary of
this Agreement, Newcastle shall not, directly or indirectly, beneficially own in
excess of 40% of the issued and outstanding shares of Common Stock of the
Company, during the period from the first anniversary of this Agreement until
the second anniversary of this Agreement, Newcastle shall not, directly or
indirectly, beneficially own in excess of 45% of the issued and outstanding
shares of Common Stock of the Company and the Company will take no action which
will limit Newcastle's ability to acquire shares of Common Stock up to the limit
of the outstanding shares set forth by this Section 3.4.
3.5 Newcastle agrees to attend the Company's Annual Meeting and Newcastle
agrees to vote any shares of Common Stock of the Company that it has the right
to vote at the Annual Meeting for the election of the Class I directors
nominated for election at the Annual Meeting.
- ------------------------- ------------------------
CUSIP No. 725848 10 5 13D Page 19 of 21 pages
- ------------------------- ------------------------
3.6 If (i) Newcastle does not become the beneficial owner of any of the
Pledged Shares prior to December 31, 2003 or (ii) in connection with any
bankruptcy filing by Jeffrey Rogers, the Pledged Shares become beneficially
owned by a party other than Newcastle, Jeffrey Rogers or any of their respective
affiliates, then in either such case, the Newcastle Directors will promptly
resign from the Company's Board of Directors.
Section 4. Miscellaneous.
4.1 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be delivered personally, by facsimile or
sent by certified, registered or express air mail, or overnight carrier, postage
prepaid, and shall be deemed given when so delivered personally, or by
facsimile, or if mailed, five (5) days after the date of mailing, or if sent by
overnight carrier, one (1) day after the date of mailing to the addresses set
forth in the signature page.
4.2 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Missouri, without reference
to the choice of law principles thereof.
4.3 ASSIGNMENT; SUCCESSORS AND ASSIGNS; NO THIRD PARTY RIGHTS. This
Agreement may not be assigned by operation of law or otherwise, and any
attempted assignment shall be null and void. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors, assigns and legal representatives.
4.4 ENTIRE AGREEMENT; COUNTERPARTS. This Agreement constitutes the entire
agreement among the parties with respect to the matters covered hereby and
supersedes all previous written, oral or implied understandings among them with
respect to such matters. This Agreement may be executed in counterparts, each of
which shall be deemed an original agreement, but all of which together shall
constitute one and the same instrument.
4.5 TITLES. The titles in this Agreement are for reference purposes only,
and shall not in any way affect the meaning or interpretation of this Agreement.
4.6 AMENDMENT AND MODIFICATION. This Agreement may only be amended or
modified in writing signed by the party against whom enforcement of such
amendment or modification is sought.
4.7 EXPENSES. Upon execution of this Agreement, the Company shall reimburse
Newcastle for its reasonable fees and expenses not to exceed $45,000 (subject to
presentation of documentation for such fees and expenses) incurred in connection
with this Agreement and related matters.
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CUSIP No. 725848 10 5 13D Page 20 of 21 pages
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement or
caused this Agreement to be duly executed by their authorized representative, as
of the day and year first above written.
PIZZA INN, INC.
By: /s/ Ronald W. Parker
-----------------------------------------
Name: Ronald W. Parker
Title: President and CEO
Address: 3551 Plano Parkway,
The Colony, Texas 75056
Telephone: (469) 384-5000
Facsimile: (469) 384-5060
NEWCASTLE PARTNERS, L.P.
By: Newcastle Capital Management, L.P.,
its general partner
By: Newcastle Capital Group, L.L.C.,
its general partner
By: /s/ Mark Schwarz
-----------------------------------------
Mark Schwarz, Managing Member
Address: 300 Crescent Court, Suite 1110
Dallas, Texas 75201
Telephone: (214) 661-7474
Facsimile: (214) 661-7475
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CUSIP No. 725848 10 5 13D Page 21 of 21 pages
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EXHIBIT 6
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of
1934, as amended, the persons named below agree to the joint filing on behalf of
each of them of a Statement on Schedule 13D dated December 20, 2002 (including
amendments thereto) with respect to the Common Stock of Pizza Inn, Inc. This
Joint Filing Agreement shall be filed as an Exhibit to such Statement.
Dated: December 20, 2002 NEWCASTLE PARTNERS, L.P.
By: Newcastle Capital Management, L.P., its
general partner
By: Newcastle Capital Group, L.L.C., its
general partner
By: /s/ Mark Schwarz
----------------------------------------
Mark Schwarz, Managing Member
NEWCASTLE CAPITAL MANAGEMENT, L.P.
By: Newcastle Capital Group, L.L.C., its
general partner
By: /s/ Mark Schwarz
----------------------------------------
Mark Schwarz, Managing Member
NEWCASTLE CAPITAL GROUP, L.L.C.
By: /s/ Mark Schwarz
----------------------------------------
Mark Schwarz, Managing Member
/s/ Mark Schwarz
--------------------------------------------
MARK SCHWARZ
/s/ Steven Pully
--------------------------------------------
STEVEN PULLY