-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P3IQGFr4CVhHk6Ps0Lz3SH/0xS9PJeQ6CZKSnuxrkKGixdjpPLrlThLl6QTWy+FP KHu+dpO3awKDSRsMCD+vLA== 0000914121-06-002728.txt : 20060830 0000914121-06-002728.hdr.sgml : 20060830 20060830090811 ACCESSION NUMBER: 0000914121-06-002728 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060830 DATE AS OF CHANGE: 20060830 GROUP MEMBERS: EMANUEL R. PEARLMAN GROUP MEMBERS: LIBERATION INVESTMENTS L.P. GROUP MEMBERS: LIBERATION INVESTMENTS LTD. FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LIBERATION INVESTMENT GROUP LLC CENTRAL INDEX KEY: 0001259272 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 11766 WILSHIRE BLVD., STREET 2: SUITE 870 CITY: LOS ANGELES STATE: CA ZIP: 90025 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MULTIMEDIA GAMES INC CENTRAL INDEX KEY: 0000896400 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 742611034 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-60113 FILM NUMBER: 061064066 BUSINESS ADDRESS: STREET 1: 206 WILD BASIN RD. STREET 2: BUILDING B, FOURTH FLOOR CITY: AUSTIN STATE: TX ZIP: 78746 BUSINESS PHONE: 5123347500 MAIL ADDRESS: STREET 1: 206 WILD BASIN RD. STREET 2: BUILDING B, FOURTH FLOOR CITY: AUSTIN STATE: TX ZIP: 78746 FORMER COMPANY: FORMER CONFORMED NAME: TV BINGO NETWORK INC /TX/ DATE OF NAME CHANGE: 19930126 SC 13D/A 1 li5331369-13da3.txt SCHEDULE 13D (AMENDMENT NO. 3) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) (Amendment No. 3) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Multimedia Games, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 625-453-10-5 -------------------------------------------------------------- (CUSIP Number) Emanuel R. Pearlman Liberation Investment Group, LLC 330 Madison Ave., 6th Floor New York, NY 10017 (212) 832-5100 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 29, 2006 -------------------------------------------------------------- (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), Rule 13d-1(f) or Rule 13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *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). - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Liberation Investments L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)(a)[ ] (b)[X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ---------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 1,543,418 OWNED BY ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ---------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 1,543,418 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,543,418 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)[ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.62% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Liberation Investments Ltd. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)(a)[ ] (b)[X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ---------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 767,909 OWNED BY ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ---------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 767,909 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 767,909 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)[ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.79% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) CO - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Liberation Investment Group LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)(a)[ ] (b)[X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ---------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 2,311,327 OWNED BY ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ---------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 2,311,327 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,311,327 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)[ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.41% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO, IA - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Emanuel R. Pearlman - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)(a)[ ] (b)[X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ---------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 2,311,327 OWNED BY ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ---------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 2,311,327 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,311,327 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)[ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.41% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) IN, HC - -------------------------------------------------------------------------------- INTRODUCTION This Amendment No. 3 (this "Amendment") relates to the Schedule 13D filed on behalf of (i) Liberation Investments, L.P., a Delaware limited partnership ("LILP"); (ii) Liberation Investments, Ltd., a private offshore investment corporation ("LILtd"); (iii) Liberation Investment Group, LLC, a Delaware limited liability company and general partner of LILP and discretionary investment adviser to LILtd ("LIGLLC"); and (iv) Emanuel R. Pearlman, as Chief Executive Officer and majority member of LIGLLC (collectively, the "Reporting Persons"), with the Securities and Exchange Commission (the "SEC") on May 30, 2006, as amended by Amendment No. 1 filed with the SEC on June 30, 2006 and Amendment No. 2 filed with the SEC on August 7, 2006 (the "Schedule 13D"), relating to shares of common stock, $0.01 par value per share ("Common Stock"), of Multimedia Games, Inc., a Texas corporation (the "Company"). Items 2(b), 4, 5(1) and 7 of the Schedule 13D are hereby amended to add the following: Item 2. Identity and Background. (b) The business address for each of LILP, LIGLLC and Mr. Pearlman is 330 Madison Avenue, 6th Floor, New York, NY 10017. Item 4. Purpose of Transaction. On August 29, 2006, the Reporting Persons filed with the SEC a preliminary solicitation statement (the "Preliminary Solicitation Statement") in connection with the solicitation of requests to call a special meeting of the Company's shareholders (the "Special Meeting"). The Reporting Persons seek to call the Special Meeting in the manner and for the purposes described under the captions "WHY YOU WERE SENT THIS SOLICITATION STATEMENT", "WE ARE DISSATISFIED WITH THE COMPANY'S PERFORMANCE AND THE MANAGEMENT OF ITS AFFAIRS", "THE SPECIAL MEETING", "THE PROPOSALS", "REQUEST PROCEDURES", "SOLICITATION OF REQUESTS; EXPENSES" and "CERTAIN INFORMATION REGARDING THE PARTICIPANTS" of the Preliminary Solicitation Statement, a copy of which is attached hereto as Exhibit 3 and is incorporated by reference herein. Item 5. Interest in Securities of the Issuer. (1) As of the date hereof, the Reporting Persons have the following interest in the securities of the Company: (i) LILP beneficially owns 1,543,418 shares of Common Stock and is the beneficial owner of 5.62% of the Common Stock. (ii) LILtd beneficially owns 767,909 shares of Common Stock and is the beneficial owner of 2.79% of the Common Stock. (iii) LIGLLC, as the sole general partner of LILP and the sole investment advisor to LILtd, beneficially owns 2,311,327 shares of Common Stock and is the beneficial owner of 8.41% of the Common Stock. (iv) Mr. Pearlman, as the Chief Executive Officer and majority member of LIGLLC, beneficially owns 2,311,327 shares of Common Stock and is the beneficial owner of 8.41% of the Common Stock. The Reporting Persons in the aggregate may be deemed to own an aggregate of 8.41% of the Common Stock. Item 7. Materials to be Filed as Exhibits. Exhibit Number Description - -------------- ----------- Exhibit 3 Preliminary solicitation statement filed with the SEC by the Reporting persons on August 29, 2006. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 30, 2006 LIBERATION INVESTMENTS, L.P. By: Liberation Investment Group LLC, general partner By: /s/ Emanuel R. Pearlman -------------------------------- Emanuel R. Pearlman Chief Executive Officer LIBERATION INVESTMENTS LTD. By: /s/ Emanuel R. Pearlman -------------------------------- Emanuel R. Pearlman Director LIBERATION INVESTMENT GROUP LLC By: /s/ Emanuel R. Pearlman -------------------------------- Emanuel R. Pearlman Chief Executive Officer Emanuel R. Pearlman /s/ Emanuel R. Pearlman - ----------------------------------- EXHIBIT INDEX Exhibit Number Description - -------------- ----------- Exhibit 3 Preliminary solicitation statement filed with the SEC by the Reporting persons on August 29, 2006. EX-3 2 li5331369-ex3.txt PRELIMINARY PROXY STATEMENT Exhibit 3 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 3 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 4 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. 5 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 6 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 7 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 8 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. 9 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 10 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. -----END PRIVACY-ENHANCED MESSAGE-----