UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): September 10,
2010
NATHAN'S FAMOUS,
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-3189
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11-3166443
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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One Jericho Plaza, Jericho, New
York
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11753
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area
code (516)
338-8500
N/A
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry into a
Material Definitive Agreement.
(1) On
September 10, 2010, the Company Famous, Inc., a Delaware corporation (the
“Company”) and Mutual Securities, Inc. (“MSI”) entered into an
agreement pursuant to which MSI has been authorized to purchase
shares of the Company’s common stock, having a value of up to an aggregate
$4.8 million, which purchases may commence on September 20,
2010. The Agreement was adopted under the safe harbor
provided by Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act
of 1934 in order to assist the Company in implementing two of its previously
announced stock purchase plans for the purchase of up to an aggregate
one million (1,000,000) shares, under which an aggregate seven hundred
fifty-nine thousand two hundred sixty (759,260) shares are still available for
purchase.
(2) At
the Annual Meeting of Stockholders of the Company held on September 14,
2010 (the “2010 Annual Meeting”), the stockholders of the Company approved the
proposed adoption of the Company’s 2010 Stock Incentive Plan (“2010
Plan”).
The
principal features of the 2010 Stock Plan are summarized below.
Stock
Subject to the Plan
The
Company will be able to issue up to 150,000 shares of common stock under the
2010 Plan, together with any shares which have not been issued under the 2001
Stock Option Plan and the 2002 Stock Incentive Plan as of July 19, 2010
(171,000 shares), plus any shares subject to any outstanding options or
restricted stock grants under the 2001 Stock Option Plan or the 2002 Stock
Incentive Plan that the were outstanding as of July 19, 2010 and
that subsequently expire unexercised, or are otherwise forfeited, up to a
maximum of an additional 100,000 shares. The stock to be offered under the 2010
Plan consists of shares of the Company’s common stock, whether
authorized but unissued or reacquired. The number of shares issuable and the
exercise price of outstanding options are subject to adjustment upon the
occurrence of certain events, including stock dividends, stock splits, mergers,
consolidations, reorganizations, recapitalizations, or other capital
adjustments.
Administration
of the Plan
The
Compensation Committee of the Board of Directors will have the discretion to
grant awards to the Company’s executive officers, other key employees of and
consultants to the Company, its affiliates and subsidiaries, and non-employee
directors of the Company. The Committee will determine whether to make any such
grant and, if it so determines, the nature of the award and the number of shares
applicable to such award. However, in any calendar year, a participant may not
receive awards of options or stock appreciation rights that relate to more than
50,000 shares or other awards that relate to more than 25,000 shares. The
Committee has authority to interpret the 2010 Plan, including to prescribe,
amend and rescind the rules and regulations relating to the 2010
Plan.
Repricing
The
Committee does not have the right to reprice any outstanding awards without the
affirmative vote of a majority of the stockholders voting on the repricing
proposal.
Participants
The
Company’s executive officers, other employees of and consultants to the Company,
its affiliates and subsidiaries, and non-employee directors of the Company are
eligible to participate in the 2010 Plan.
Forms
of Equity-Based Awards Available
Under the
2010 Plan, the Committee may grant stock options, stock appreciation rights and
other stock-based awards, restricted stock, and restricted stock units, all of
which will vest over the period of time established by the Committee at the time
of the grant of the award. Any shares subject to options or stock appreciation
rights shall be counted against the number of shares issuable under the 2010
Plan as one share for every share subject to such an award. Any awards other
than options or stock appreciation rights shall be counted against the number of
shares issuable under the 2010 Plan as 3.2 shares for every one share
subject to such award. To the extent that a share that was subject to an award
that counted as 3.2 shares against the number of shares issuable under the
2010 Plan is recycled back into the 2010 Plan due to a cancellation, forfeiture
or otherwise, the 2010 Plan shall be credited with 3.2 shares.
Stock
Options — Exercise Price, Term and Vesting Schedule
Stock
options granted under the 2010 Plan will be non-qualified stock options. The
exercise price for the options will be not less than the market value of the
Company’s common stock on the date of grant of the stock option. Stock options
granted under the 2010 Plan shall expire not later than five years from the date
of grant and will become exercisable in installments, as determined at the time
of the grant.
Upon the
exercise of a stock option, optionees may pay the exercise price plus any taxes
due in respect of such exercise in cash, by certified or bank cashier’s check
or, at the Company’s option, in shares of common stock valued at their fair
market value on the date of exercise, or a combination of cash and
stock.
A stock
option is exercisable during the optionee’s lifetime only by him and cannot be
exercised by him unless, at all times since the date of grant and at the time of
exercise, he is serving as an employee, director or consultant, except that,
upon termination of his service (other than by death or by total disability), he
may exercise an option for a period of three months after his termination but
only to the extent such option is exercisable on the date of such
termination.
Upon
termination of service by total disability or death, the optionee, the
optionee’s estate or any person who acquires the right to exercise such option
by bequest or inheritance or by reason of the total disability or death of the
optionee, as the case may be, may exercise such option at any time within twelve
months after his or her termination, but only to the extent such option is
exercisable on the date of such termination.
Stock
Appreciation Rights and Other Stock-Based Awards
The
Committee may grant stock appreciation rights (“SARs”), which represent the
right to receive an amount equal to the excess of the fair market value of a
share of stock on the date of redemption over an amount set by the Committee
that is not less than the fair market value of a share of stock on the date of
the award. Amounts paid on the exercise of a SAR may be paid in cash, in stock
or in any combination thereof; provided that a SAR, including one that entitles
the holder to a cash payment on redemption, will have terms that ensure that
participants will not incur a tax penalty under Section 409A of the
Internal Revenue Code. Upon termination of employment, directorship or provision
of consulting services, including by death or disability, awards of SARs shall
be payable in accordance with their terms. The Committee may also grant rights
to dividends and dividend equivalents (which may not be granted in connection
with options or stock appreciation rights). The terms of any rights to dividends
or dividend equivalents will be determined by the Committee at the time of
grant.
Restricted
Stock
The
Committee may grant awards of restricted stock which are awards of common stock
of the Company subject to such terms, conditions and restrictions as the
Committee may provide in the award instruments granting the restricted stock.
Conditions attached to the restricted stock may include, but are not limited to,
restrictions upon the sale, assignment, transfer or other disposition of the
restricted stock and the requirement of forfeitures of the restricted stock upon
certain terminations of employment. Restricted stock will vest over such period
as the Committee determines at the time of grant. When the period of restriction
on restricted stock terminates, the unrestricted shares are delivered to the
participant. Upon termination of employment, directorship or provision of
consulting services, including by death or disability, rights to awards of
restricted stock shall vest or be forfeited in accordance with their
terms.
Restricted
Stock Units
The
Committee may grant awards of restricted stock units which units represent the
participant’s right to receive shares of stock subject to such terms, conditions
and restrictions as the Committee may provide in the award instruments granting
the restricted stock units. Restricted stock units awarded generally will vest
over such period as the Committee determines at the time of grant. The award
agreement will specify whether dividend equivalents on the restricted stock
units will be paid in cash or deemed reinvested in additional restricted stock
units. The Company’s stock will be paid to the participant, or the participant’s
beneficiary in case of the participant’s death, in exchange for restricted stock
units within ninety days following the participant’s separation from service,
the expiration of a director’s service, or death.
Change
in Control
In the
event of a “change in control,” at the option of the Board, (a) all options
and other awards outstanding on the date of the change in control shall become
immediately and fully exercisable and/or payable, and (b) an optionee will
be permitted to surrender for cancellation within 60 days after the change in
control any option or portion of an option which was granted more than six
months prior to the date of such surrender, to the extent not yet exercised, and
to receive a cash payment in an amount equal to the excess, if any, of the fair
market value (on the date of surrender) of the shares of common stock subject to
the option or portion thereof surrendered, over the aggregate purchase price for
such shares.
For
purposes of the 2010 Plan, a change in control is defined as
• a
change in control as such term is presently defined in Rule 12b-2 under the
Securities Exchange Act of 1934 (the “Exchange Act”); or
• if any
“person” (as such term is used in Section 13(d) and 14(d) of the Exchange
Act) other than the Company or any “person” who on the date of the
adoption of the 2010 Plan is a director or officer of the Company, becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act)
directly or indirectly, of securities representing thirty percent (30%) or more
of the voting power of the Company’s then outstanding securities;
or
• if
during any period of two consecutive years during the term of the 2010 Plan,
individuals who at the beginning of such period constitute the Board of
Directors, cease for any reason to constitute at least a majority of the
Board.
Grants
Under the Plan
No grants
of awards have been made under the 2010 Plan. Grants under the 2010 Plan are to
be granted to the persons and in the amounts determined by the
Committee.
Federal
Income Tax Consequences
The
following is a brief summary of the Federal income tax consequences as of the
date hereof with respect to awards under the 2010 Plan for participants who are
both citizens and residents of the United States. This description of the
Federal income tax consequences is based upon law and Treasury interpretations
in effect on the date hereof (including proposed and temporary regulations which
may be changed when finalized), and it should be understood that this summary is
not exhaustive, that the law may change and further that special rules may apply
with respect to situations not specifically discussed herein, including Federal
employment taxes, foreign, state and local taxes and estate or inheritance
taxes. As such, participants have been urged to consult with their own qualified
tax advisors. The 2010 Plan is not qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the “Code”). In addition, this
summary assumes that all awards are exempt from, or comply with, the rules under
Section 409A of the Internal Revenue Code regarding nonqualified deferred
compensation.
Stock
Options
The
options to be granted under the 2010 Plan are non-qualified stock options. No
taxable income will be realized by the participant upon the grant of a
non-qualified option and the Company will not receive a tax
deduction.
Exercise
with Cash
On
exercise, the excess of the fair market value of the stock at the time of
exercise over the option price of such stock will be compensation and
(i) will be taxable at ordinary income tax rates in the year of exercise,
(ii) will be subject to withholding for Federal income tax purposes and
(iii) generally will be an allowable income tax deduction to the Company.
The participant’s tax basis for stock acquired upon exercise of a non-qualified
option will be equal to the option price paid for the stock, plus any amounts
included in income as compensation.
Exercise
with Common Stock
The
participant’s compensation income and the Company’s deduction will not be
affected by whether the exercise price is paid in cash or in shares of common
stock. However, if the participant pays the exercise price of an option in whole
or in part with previously-owned shares of common stock, the participant’s tax
basis and holding period for the newly-acquired shares is determined as follows:
As to a number of newly-acquired shares equal to the number of previously-owned
shares used by the participant to pay the exercise price, no gain or loss will
be recognized by the participant on the date of exercise and the participant’s
tax basis and holding period for the previously-owned shares will carry over to
the newly-acquired shares on a share-for-share basis, thereby deferring any gain
inherent in the previously-owned shares. As to each remaining newly-acquired
share, the participant’s tax basis will equal the fair market value of the share
on the date of exercise and the participant’s holding period will begin on the
day after the exercise date.
Disposition
of Option Shares
When a
sale of the acquired shares occurs, a participant will recognize gain or loss
equal to the difference between the sales proceeds and the tax basis of the
shares. Such gain or loss will be treated as capital gain or loss if the shares
are capital assets. The capital gain or loss will be long-term capital gain or
loss treatment if the shares have been held for more than 12 months. There will
be no tax consequences to us in connection with a sale of shares acquired under
an option.
Stock
Appreciation Rights and Other Stock-Based Awards
Under
existing tax laws, a participant will not realize any taxable income when a SAR
is granted and the Company will not receive a tax deduction. When a SAR is
exercised, the spread between the price received at exercise and the fair market
value of the SAR at the time of exercise is ordinary income to the participant
(subject to withholding), and the Company receives a tax deduction for the
amount of income recognized by the participant. Further, under existing tax
laws, a participant will not realize taxable income upon the grant of a
stock-based award that provides for dividend rights, and the Company will not
receive a tax deduction. Upon payment of the dividend, the participant will be
required to include as taxable ordinary income in the year of receipt an amount
equal to the amount of cash received, and the Company will receive a tax
deduction for the same amount.
Restricted
Stock
A
participant who is granted restricted stock generally will realize taxable
income on the fair market value of the restricted stock, less any amount paid by
the employee, at the time the award is no longer subject to restrictions on
transfer or a substantial risk for forfeiture. However, a participant can elect
under Code Section 83(b), within 30 days of receipt of the award, to recognize
taxable ordinary income equal to the fair market value of the Company common
stock, less any amount paid by the employee, on the date of the award. The
Company receives a deduction in an amount equal to the ordinary income
recognized by the participant in the taxable year in which restrictions lapse
(or in the taxable year of the award if, at that time, the participant filed a
timely election to accelerate recognition of income under Section 83(b) of
the Code).
Restricted
Stock Units
A
participant who is granted restricted stock units will not realize any taxable
income when the restricted stock unit is granted and the Company will not
receive a tax deduction at that time. A participant will realize taxable income
on the fair market value of unrestricted common shares, less any amount paid by
the participant, on the date such shares are transferred to the participant and
the Company will receive a deduction for the same amount.
Section
162(m) Provisions
Section
162(m) of the Code imposes a limitation on the deductibility of certain
compensation paid to certain executive officers of publicly traded companies.
Compensation (including with respect to stock options or stock rights) paid to
these officers in excess of $1,000,000 cannot be claimed as a tax deduction by
such companies, unless such compensation qualifies for an exemption as
performance-based compensation under Code Section 162(m). The Company does not
anticipate that Code Section 162(m) will impact on the Company’s ability to
deduct compensation due to awards made under the 2010 Plan.
Sections
280G and 4999
Section
280G of the Code limits the Company’s income tax deductions for compensation in
the event that the Company undergoes a change in control. Accordingly, all or
some of the amount that would otherwise be deductible by us may not be
deductible with respect to those options and restricted shares that become
immediately exercisable or vested in the event of a change in control. In
addition, if Code Section 280G limits the Company’s deduction with respect to an
award to a given participant, a 20% federal excise tax (i.e., in addition to the
federal income tax) will be withheld from that participant under Section 4999 on
that portion of the cash or value of the common stock received by that
participant that is non-deductible under Code Section 280G.
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Item
5.07
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Submission
of Matters to a Vote of Security
Holders.
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At the
2010 Annual Meeting, stockholders voted on the matters set forth below. Each
issued common share was entitled to one vote on the proposals voted on at the
meeting.
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1.
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The
proposal to elect nine directors was approved based upon the following
votes:
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Name
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For
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Withheld
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Broker Non-Votes
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|||
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Robert
J. Eide
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3,122,111
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302,694
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1,422,372
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|||
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Eric
Gatoff
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3,136,910
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287,895
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1,422,372
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|||
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Brian
S. Genson
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3,346,150
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78,655
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1,422,372
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|||
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Barry
Leistner
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3,346,138
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78,667
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1,422,372
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|||
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Howard
M. Lorber
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2,970,246
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454,559
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1,422,372
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|||
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Wayne
Norbitz
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3,137,098
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287,707
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1,422,372
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|||
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Donald
Perlyn
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3,137,529
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287,276
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1,422,372
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A.F.
Petrocelli
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2,870,170
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554,635
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1,422,372
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Charles
Raich
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3,020,662
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404,143
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1,422,372
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2.
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The
proposal to adopt the 2010 Stock Incentive Plan was approved based on the
following votes:
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For
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Against
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Abstain
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Broker Non-Votes
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|||
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2,764,406
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568,645
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91,754
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1,422,372
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3.
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The
proposal to ratify the appointment of Grant Thornton LLP as the Company’s
auditors for fiscal 2011 was approved based on the following
votes:
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For
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Against
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Abstain
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Broker Non-Votes
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4,776,613
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59,792
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10,772
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0
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits.
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The
following exhibits are filed herewith:
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Exhibit No.
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Description
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10.1
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10b5-1
Issuer Repurchase Instructions
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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NATHAN'S
FAMOUS, INC.
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By:
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/s/ Ronald DeVos
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Ronald
DeVos
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Vice-President
Finance
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and
Chief Financial Officer
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(Principal
Financial and Accounting Officer)
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Dated: September
15, 2010
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||
10b5-1 Issuer Repurchase
Instructions
Issuer
Securities Repurchase Instructions, dated September 10, 2010 (the
“Instructions”), between Nathan’s Famous, Inc. (the “Issuer”) and Mutual
Securities, Inc. (the “Broker”).
WHEREAS, Issuer has previously publicly announced Securities Repurchase Programs (the
“Programs”) for the repurchase of up to one million (1,000,000) shares of its common
stock, par value $0.01 per share (the “Common Stock”);
WHEREAS, pursuant to the
Programs, seven hundred fifty-nine thousand two hundred sixty (759,260) shares
of Common Stock remain available for repurchase.
WHEREAS, as part of the Programs for the repurchase of its Common Stock, Issuer desires to implement the
instructions set forth herein (the
“Instructions”); and
WHEREAS, Issuer desires to
appoint Broker as its single broker to repurchase shares of Common Stock on its
behalf in accordance with these Instructions and the Program;
NOW, THEREFORE, the Issuer and
Broker hereby agree as follows:
1. Trading
Requirements
(a) Broker
shall effect a repurchase (each a “Purchase”) of shares of Common Stock on each
day on which the Nasdaq Global Market (“Nasdaq”) is open for trading at a price
not in excess of the price per share limitations set forth in Exhibit A to this
Agreement.
(b) Broker
shall purchase shares of Common Stock on the open Nasdaq market or in block
purchases, subject to the (i) price per share and volume limitations set forth
in Exhibit A to this Agreement, (ii) the termination provisions for these
Instructions as set forth in Section 2 below, and (iii) any other limitation as
set forth in these Instructions.
2. Effective
Date/Termination. The Instructions shall become effective as
of September 20, 2010, and shall terminate upon the earlier of:
(a) September 19, 2011;
(b) such
time as the aggregate purchase price for all shares of Common Stock purchased
under these Instructions equals Four Million Eight Hundred Thousand Dollars
($4,800,000.00), including without limitation all applicable fees, costs and
expenses;
(c) the
receipt of written notice from the Issuer requesting the termination of the
Instructions; provided that Issuer may request termination under this
subsection 2(c) whenever a failure to do so would cause or contribute to,
or allow or contribute to the continuation of, a breach of a covenant or
obligation of Issuer in connection with any obligation other than those arising
solely under these Instructions; or
1
(d) any
time any trade contemplated hereunder shall result in a violation of, or adverse
consequences under, applicable securities laws.
3. Representations
and Warranties.
(a) Issuer
represents and warrants that the Purchase of Common Stock pursuant to these
Instructions has been duly authorized by the Issuer and is consistent with the
Issuer’s Program.
(b) Issuer
understands that Broker may not be able to effect a Purchase due to a market
disruption or a legal, regulatory or contractual restriction applicable to the
Broker, in contrast with an exercise of discretion by Broker. If any
Purchase cannot be executed due to a market disruption, a legal, regulatory or
contractual restriction applicable to the Broker or any other event, Broker
shall effect such Purchase as promptly as practical after the cessation or
termination of such market disruption, applicable restriction or other
event.
(c) Issuer
represents and warrants that it is not aware of material, nonpublic information
and is entering into these Instructions in good faith and not as part of a plan
or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange
Act.
(d) Issuer
agrees that it shall not, directly or indirectly, communicate any information
relating to the Common Stock or the Issuer to any employee of Broker or its
affiliates who is involved, directly or indirectly, in executing these
Instructions at any time while these Instructions are in
effect. Issuer acknowledges and agrees that it does not have, and
shall not attempt to exercise, any influence over how, when or whether to effect
purchases of Common Stock pursuant to these Instructions.
(e) Broker
agrees to notify Issuer by telephone and email, at the following number and
e-mail address, of a Purchase pursuant to these Instructions within
24 hours of any such purchase:
Nathan’s
Famous, Inc.
Ronald G.
DeVos
516-338-8500
Email
Address: redevos@nathansfamous.com
(f) Broker
agrees to make appropriate arrangements with the Issuer and its transfer agent
to arrange for the delivery of the shares of Common Stock purchased pursuant to
these Instructions.
2
4. Compliance
with the Securities Laws.
It is the
intent of the parties that these Instructions comply with the requirements of
Rule 10b5-1(c)(1)(i)(B) and (c)(2) under the Exchange Act, and these
Instructions shall be interpreted to comply with the requirements of
Rule 10b5-1(c).
5. Confidentiality. “Confidential
Information” means these Instructions and all information disclosed by the
Issuer to the Broker, in writing, orally or by inspection of tangible
media. Confidential Information shall not include any information
which (a) was publicly known prior to the time of disclosure;
(b) becomes publicly known after disclosure by the Issuer through no
wrongful action or omission of the Broker; (c) is obtained by the Broker
from a third party without breach of such third party’s obligations of
confidentiality; or (d) is independently developed by the Broker without
access to the Issuer’s Confidential Information. Broker agrees
(i) not to use or disclose to any third party Confidential Information for
any purpose other than as contemplated by these Instructions, and (ii) to
use reasonable efforts to protect the secrecy of and avoid unauthorized use and
disclosure of the Confidential Information, including without limitation, using
at least the same degree of care it uses to protect its own confidential
information. Notwithstanding the foregoing, Broker may use or
disclose Confidential Information to the extent necessary to exercise its rights
or fulfill its obligations hereunder, and/or to comply with applicable
governmental regulations; provided that if Broker is required by law to make any
public disclosure of Confidential Information to the extent it may legally do
so, it will give reasonable advance notice to the Issuer of such disclosure and
will use its reasonable efforts to secure confidential treatment of Confidential
Information prior to its disclosure.
6. Modification. These
Instructions may be modified by Issuer provided such modification (i) is in
writing; (ii) is made in good faith and not as a part of a plan or scheme
to evade prohibitions of Rule 10b-5; and (iii) is in accordance with
the terms of the Program.
7. Governing
Law. These Instructions shall be governed by and constructed
in accordance with the laws of the State of New York.
[SIGNATURE
PAGE FOLLOWS]
3
IN WITNESS
WHEREOF, the undersigned have signed these Instructions as of
the date first written above.
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Nathan’s
Famous, Inc.
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||||
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By:
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/s/
Eric Gatoff
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Name:
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Eric
Gatoff
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Title:
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Chief
Executive Officer
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Mutual
Securities, Inc.
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||||
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By:
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/s/ Julie Cohen | |||
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Name:
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Julie Cohen | |||
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Title:
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Chief
Compliance
Officer
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4