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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No.1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File No. 1-3189
NATHAN'S FAMOUS, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-3166443
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1400 Old Country Road, Westbury, New York 11590
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (516) 338-8500
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Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of Each Exchange on which Registered
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None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock - par value $.01
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
form 10-K [ ].
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of June 19, 1996 was approximately $15,347,202.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. As of June 19, 1996,
there were 4,722,216 shares of Common Stock, par value $.01 per share
outstanding.
Documents incorporated by reference: None.
Item 3. Legal Proceedings
The Company is from time to time involved in ordinary and routine
litigation. The Company is also involved in the following litigation.
The Company has been named as one of several "generator defendants" in an
action brought by CSX Transportation, Inc. ("CSX") and Staten Island -
Arlington, Inc. ("Arlington") in the Supreme Court of the State of New York,
County of New York.
According to the complaint, CSX, through its wholly owned subsidiary,
Arlington, owned certain property in Staten Island (the "Arlington Yard") which,
during the period from May 15, 1988 through September 14, 1988 was the site of
illegal solid waste dumping activity allegedly orchestrated by certain persons
convicted of such activity in a prior criminal proceeding.
Pursuant to an Order on Consent into which CSX alleges it entered with the
New York State Department of Environmental Conservation ("DEC"), CSX undertook
to remediate the site and to reimburse the DEC for amounts expended in
connection with a preliminary investigation of the site. CSX is now suing
several "transporter defendants" (i.e., those defendants who transported solid
waste to Arlington Yard) and "generator defendants" (ie., those who allegedly
had wastes generated by them transported to Arlington Yard), for damages and
injunctive relief based upon various theories of law, including private and
public nuisance, restitution, equitable indemnity and trespass.
The Company has filed an answer in which it has denied generally any
involvement with the site and, perforce, any liability to the plaintiffs or any
of the other defendants. Additionally, the Company has asserted affirmatively
several legal and equitable defenses to liability in these circumstances, and,
alternatively, interposed cross claims for contribution against the other
defendants. A Special Master has been appointed to oversee discovery.
In or about December, 1996, Nathan's Famous Systems, Inc. ("Systems")
instituted an action in the Supreme Court of New York, Nassau County, against
Phylli Foods, Inc., ("Foods") a franchisee, and Calvin Danzig as a guarantor of
Foods' payment and performance obligations, to recover royalty fees and
advertising contributions due to Systems in the aggregate amount of $35,567.20
under a Franchise Agreement between Systems and Foods dated June 1, 1994.
In their answer, the defendants essentially have denied the material
allegations of the complaint and interposed counterclaims against Systems in
which they allege essentially that Systems fraudulently induced the defendants
to purchase the franchise from Systems or did so by means of negligent
misrepresentations. Defendants are also alleging that reason of Systems'
allegedly fraudulent and deceitful conduct, Systems violated the General
Business Law of New York. As a consequence of the foregoing, the defendants are
seeking damages in excess of five million dollars, as well as statutory relief
under the General Business Law.
In or about December, 1996, the Company instituted an action in the Civil
Court of the City of New York, Bronx County, against Bay Plaza Famous, Inc.
("Bay Plaza"), as franchisee, and Daniel Rapoport ("Rapoport") and Theodore
Wenacur as a guarantors of Bay Plaza's payment and performance obligations, to
recover royalty fees and advertising contributions due to the Company in the
aggregate amount of $24,672.09 under a Franchise Agreement between Bay Plaza and
the Company dated November 20, 1989.
In their answer, Bay Plaza and Rapoport essentially have denied the
material allegations of the complaint and interposed counterclaims against the
Company in which they allege essentially that the Company fraudulently induced
the defendants to purchase the franchise from the Company or did so by means of
negligent misrepresentations. Bay Plaza and Rapoport are also alleging that by
reason of the Company's allegedly fraudulent and deceitful conduct, the Company
violated the General Business Law of New York. As a consequence of the
foregoing, the defendants are seeking damages in excess of 5.5 million dollars,
as well as statutory relief under the General Business Law.
On April 7, 1995, an action entitled Erwin Protter, et al. v. Nathan's
Famous Systems, Inc., et al. was instituted in the United States District Court
for the Eastern District of New York against a wholly owned subsidiary of the
Company and several of the Company's current or former executive officers. The
complaint relating to this action alleges that this subsidiary and such persons
made misstatements in connection with the acquisition by the plaintiffs of three
(3) franchised restaurants. This complaint seeks approximately $13,000,000 in
damages, plus punitive and treble damages, to the extent appropriate. On October
21, 1995, the original complaint was dismissed as inadequately pleaded and the
plaintiffs were granted leave to file an amended complaint. Plaintiffs did so,
and defendants again moved to dismiss it on several grounds. On May 10, 1996,
the Court granted the motion to dismiss, finding that plaintiff had failed to
plead violations of the RICO statute, which was the predicate for federal court
jurisdiction. The Court accordingly dismissed the complaint in its entirety,
refusing to assume jurisdiction over the remaining state court claims. On May
31, 1996, plaintiffs commenced an action in the Supreme Court of the State of
New York, Nassau County, alleging violations of the common law and state
franchise laws. The Company's time to respond to the complaint has not yet
expired. However, the Company denies any wrongdoing and intends to deny the
material allegations of the complaint, assert several defenses and defend this
action vigorously.
On February 28, 1995, an action entitled Textron Financial Corporation v.
1045 Rush Street Associates, Stephen Anfang, and Nathan's Famous, Inc. was
instituted in the Circuit Court of Cook County, Illinois County Department,
Chancery Division. The complaint alleges that the Company conspired to
perpetrate a fraud upon the plaintiff and alleges that the Company breached its
lease with 1045 Rush Street Associates and the estoppel agreement delivered to
the plaintiff in connection therewith by subleasing these premises and
thereafter assigning the lease with respect thereto to a third party franchisee,
and further by failing to pay rent under this lease on and after July 1990. This
complaint seeks damages in the amount of at least $1,500,000. The Company has
filed its answer to this complaint denying the material allegations of the
complaint and asserting several affirmative defenses to liability including, but
not limited to, the absence initially or subsequent failure of consideration for
the estoppel agreement, equitable estoppel, release, failure to mitigate and
other equitable and legal defenses. The Company intends to defend this action
vigorously.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(3) Exhibits
Certain of the following exhibits (as indicated in the footnotes to the
list), were previously filed as exhibits to other reports or registration
statements filed by the Registrant under the Securities Act of 1993 or under the
Securities Exchange Act of 1934 and are herein incorporated by reference.
Exhibit
No. Exhibit
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3.1 Certificate of Incorporation of the Company.(Incorporated by reference
to Exhibit 3.1 to Registration Statement on Form S-1 No. 33-56976.)
3.2 Amendment to the Certificate of Incorporation, filed December 15, 1992.
(Incorporated by reference to Exhibit 3.2 to Registration Statement
on Form S-1 No. 33-56976.)
3.3 By-Laws of the Company. (Incorporated by reference to Exhibit 3.3 to
Registration Statement on Form S-1 No. 33-56976.)
3.4 Amendment to By-Laws of the Company (Incorporated by reference to
Exhibit 3.4 to the Annual Report on form 10-K for the year ended
March 26, 1995.)
4.1 Specimen Stock Certificate.(Incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-1 No. 33-56976.)
4.2 Form of Warrant issued to Ladenburg, Thalmann & Co., Inc.
(Incorporated by reference to Exhibit 4.2 to Registration Statement on
Form S-1 No. 33-56976.)
4.3 Form of Warrant issued to Howard M. Lorber. (Incorporated by reference
to Exhibit 4.3 to the Annual Report filed on form 10-K for the fiscal
year ended March 27, 1994.)
4.4 Amendment to Warrant issued to Howard M. Lorber
4.5 Specimen Rights Certificate (Incorporated by reference to Exhibit 4 to
the Current Report on form 8-K dated July 14, 1995.)
10.1 Employment Agreement between the Company and Wayne Norbitz, dated
December 28, 1992. (Incorporated by reference to Exhibit 10.1 to
Registration Statement on Form S-1 No. 33-56976.)
10.2 Leases for premises at Coney Island, New York, as follows:
(Incorporated by reference to Exhibit 10.3 to Registration Statement
on Form S-1 No. 33-56976.)
a) Lease, dated November 22, 1967, between Nathan's Realty Associates
and the Company.
b) Lease, dated November 22, 1967, between Ida's Realty Associates and
the Company.
c) Lease, dated November 17, 1967, between Ida's Realty Associates and
the Company.
10.3 Leases for the premises at Yonkers, New York, as follows:
(Incorporated by reference to Exhibit 10.4 to Registration Statement on
Form S-1 No. 33-56976.)
a) Lease Modification of Land and Building Lease between the Yonkers
Corp. and the Company, dated November 19, 1980;
b) Lease Modification of Land and Building Lease between 787 Central
Park Avenue, Inc., and the Company dated May 1, 1980.
10.4 Lease between the Company and NWCM Corp. for premises at Oceanside, New
York, dated March 14, 1975. (Incorporated by reference to Exhibit 10.5
to Registration Statement on Form S-1 No. 33-56976.)
10.5 1992 Stock Option Plan of the Company, as amended. (Incorporated by
reference to Exhibit 10.8 to Registration Statement on Form S-8 No.
33-93396.)
10.6 Area Development Agreement between the Company and Marriott Corporation,
dated February 19, 1993. (Incorporated by reference to Exhibit 10.9(a)
to the Annual Report on Form 10-K for the fiscal year ended March 28,
1993.)
10.7 Area Development Agreement between the Company and Premiere Foods, dated
September 11, 1990. (Incorporated by reference to Exhibit 10.10 to
Registration Statement on Form S-1 No. 33-56976.)
10.8 Area Development Agreement between the Company and Caldor, Inc. dated
March 31, 1992. (Incorporated by reference to Exhibit 10.11 to
Registration Statement on Form S-1 No. 33-56976.)
10.9 Form of Standard Franchise Agreement. (Incorporated by reference to
Exhibit 10.12 to Registration Statement on Form S-1 No. 33-56976.)
10.10 The Company's 401K Plan and Trust. (Incorporated by reference to Exhibit
10.5 to Registration Statement on Form S-1 No. 33-56976.)
10.11 Settlement Agreement between the Company and Blackwell Estates, Inc. and
Ellen Investors Corp. relating to the 42nd Street urban development
condemnation award. (Incorporated by reference to Exhibit 10.16 to
Registration Statement on Form S-1 No. 33-56976.)
10.12 Restricted Stock Grant letter to Mr. Norbitz. (Incorporated by reference
to Exhibit 10.17 to Registration Statement on Form S-1 No. 33-56976.)
10.13 Agreement dated January 11, 1993, between the Company and Nathan's
Famous Associates. (Incorporated by reference to Exhibit 10.18 to
Registration Statement on Form S-1 No. 33-56976.)
10.14 Amendment dated November 8, 1993, to the Employment Agreement, dated
December 28, 1992, between the Company and Wayne Norbitz. (Incorporated
by reference to Exhibit 10.19 to the Annual Report filed on form 10-K
for the fiscal year ended March 27, 1994.)
10.15 Employment Agreement between the Company and Howard M. Lorber dated
November 8, 1993. (Incorporated by reference to Exhibit 10.20 to the
Annual Report filed on form 10-K for the fiscal year ended March 27,
1994.)
10.16 Amendment dated January 26, 1996, to the Employment Agreement, dated
November 8, 1993, between the Company and Howard M. Lorber.
10.17 License Agreement dated as of February 28, 1994, among Nathan's Famous
Systems, Inc. and SMG, Inc., including amendments and waivers thereto.
(Incorporated by reference to Exhibit 10.21 to the Annual Report filed
on form 10-K for the fiscal year ended March 27, 1994.)
10.18 Form of Grid Note from Nathan's Famous Operating Corp. to Chemical Bank.
10.19 Outside Director Stock Option Plan. (Incorporated by reference to
Exhibit 10.22 to Registration Statement on Form S-8 No. 33-89442.)
10.20 Home Depot Food Service Lease Agreement. (Incorporated by reference to
Exhibit 10.24 to the Annual Report filed on form 10-K for the fiscal year
ended March 26, 1995.)
10.21 Form of Rights Agreement dated July 14, 1995 between the Company and
American Stock Transfer & Trust Company. (Incorporated by reference to
Exhibit 4 to the Current Report filed on form 8-K dated July 14, 1995.)
21 List of Subsidiaries of the Registrant. (1)
24.1 Consent of KPMG Peat Marwick LLP. (1)
24.2 Consent of Arthur Andersen LLP. (2)
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(1) Filed with the Annual Report on form 10-K for the fiscal year ended March
31, 1996.
(2) Filed with this amendment to the Annual Report on form 10-K for the
fiscal year ended March 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized on the 21st day of
March, 1997.
Nathan's Famous, Inc.
/s/ WAYNE NORBITZ
Wayne Norbitz, President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant in
the capacities indicated on the 21st day of March, 1997.
/s/ HOWARD M. LORBER
Howard M. Lorber Chairman of the Board and Chief Executive
Officer (Principal Executive Officer)
/s/ WAYNE NORBITZ President, Chief Operating Officer and
Wayne Norbitz Director
/s/ RONALD G. DEVOS Vice President - Finance and Chief Financial
Ronald G. DeVos Officer (Principal Financial and Accounting
Officer)
/s/ ROBERT J. EIDE
Robert J. Eide Director
___________________________
Barry Leistner Director
/s/ JEFFREY A. LICHTENBERG
Jeffrey A. Lichtenberg Director
___________________________
Atillio F. Petrocelli Director
Exhibit 24.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 10-K/A into the Company's previously filed
Registration Statement File Nos. 33-89442, 33-72066 and 33-93396.
/s/
ARTHUR ANDERSEN LLP
Roseland, New Jersey
March 20, 1997