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) . . . . . . . . April 26, 1996
GIANT GROUP, LTD.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-4323 23-0622690
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
150 El Camino Drive, Suite 303
Beverly Hills, California 90212
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(Address of principal executive offices)
Registrant's telephone number, including area code . . . . . . . (310) 273-5678
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events.
On April 26, 1996 GIANT GROUP, LTD. ("GIANT"), Fidelity National
Financial, Inc. ("Fidelity") and CKE Restaurants, Inc. ("CKE") and certain other
persons entered into a Settlement Agreement and Release, a copy of which is
attached hereto as Exhibit 99.1 and incorporated herein by reference (the
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"Settlement Agreement"), pursuant to which the litigation among the parties to
the Settlement Agreement was settled.
Pursuant to the Settlement Agreement, GIANT, Fidelity and CKE entered into
a Purchase and Standstill Agreement (the "Purchase Agreement"), a copy of which
is attached hereto as Exhibit 99.2 and incorporated herein by reference. The
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Purchase Agreement provides, among other things, that GIANT will acquire from
Fidelity 705,489 shares of common stock of GIANT for a purchase price of $8.625
per share, payable in cash. Fidelity has also agreed for a period of ten years
not to acquire any common stock or other voting securities of GIANT if following
such acquisition Fidelity or its officers, directors, affiliates and their
family members would own more than .05% of the outstanding voting securities of
GIANT.
In addition, Fidelity will purchase from GIANT or its wholly owned
subsidiary, KCC Delaware Company ("KCC"), 767,807 shares of common stock of
Rally's Hamburgers, Inc. ("Rallys") for an aggregate purchase price of
$638,172.38 and CKE will purchase from GIANT or KCC 2,350,432 shares of common
stock of Rally's for $1.75 per share, to be paid in cash. The Purchase
Agreement also provides that Fidelity and CKE will have options to purchase a
total of an additional 2,350,428 shares of common stock of Rally's from GIANT.
One-half of such options have an exercise price of $3.00 per share and expire on
April 26, 1997 and one-half of such options have an exercise price of $4.00 per
share and expire on April 26, 1998. The obligations of Fidelity and CKE to
purchase the Rally's common stock is subject to satisfactory completion of a due
diligence review by them. In addition, the obligation of CKE to purchase the
Rally's common stock from GIANT is conditioned upon (i) the approval by the
Board of Directors of Rally's of CKE as an Interested Stockholder (as defined in
Section 203 of the General Corporation Law of the State of Delaware) and (ii)
the election of two (2) persons designated by CKE to the Board of Directors of
Rally's. If Fidelity or CKE do not purchase the Rally's common stock, the
options granted pursuant to the Purchase Agreement will be void.
The Purchase Agreement further provides that if GIANT or its affiliates
purchase additional shares of Rally's common stock, Fidelity and CKE will have
rights to purchase shares of Rally's common stock from GIANT such that the
proportional ownership of Rally's common stock among GIANT, Fidelity and CKE
will be the same as immediately prior to such purchases (without giving effect
to shares which may be purchased upon exercise of the options granted pursuant
to the Purchase Agreement). In addition, GIANT, on the one hand, and Fidelity
and CKE, on the other hand, have agreed to
provide the other with rights of first refusal in the event that they propose to
dispose of shares of Rally's common stock. The parties further agreed that if
GIANT, on the one hand, and Fidelity and CKE, on the other hand, each own at
least 34.0% of the outstanding Rally's common stock (without giving effect to
shares which may be acquired upon exercise of the options granted pursuant to
the Purchase Agreement to the extent such options have not been exercised), then
at each election of directors of Rally's, GIANT may nominate up to one-half of
the number of directors to be elected and Fidelity and CKE may nominate up to
one-half of the number of directors to be nominated and the parties will vote
all their shares in favor of the other parties' nominees. Also, if one, but not
both of GIANT, on the one hand, and Fidelity and CKE, on the other hand, own at
least 34.0% of the outstanding Rally's common stock (without giving effect to
the shares which may be purchased upon exercise of the options granted pursuant
to the Purchase Agreement to the extent such options have not been exercised),
the parties agreed that at each election of directors the party owning at least
34.0% of the outstanding Rally's common stock may nominate up to one-half of the
number of directors to be elected and the other party will vote all shares of
Rally's common stock owned by them in favor of such nominees. The foregoing
provisions regarding the voting of shares of Rally's common stock will expire on
the tenth anniversary of the Purchase Agreement and will be of no force or
effect if Fidelity or CKE do not purchase the Rally's common stock.
A copy of the press release issued by GIANT, Fidelity and CKE is attached
hereto as Exhibit 99.3 and incorporated herein by reference.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit No. Description of Exhibit Page
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99.1 Form of Settlement Agreement and
Release dated April 26, 1996
among GIANT, Fidelity, CKE and
the other parties named therein
99.2 Purchase and Standstill Agreement
dated April 26, 1996 among GIANT,
Fidelity and CKE
99.3 Press Release dated April 26,
1996 issued by GIANT
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.
Date: May 1, 1996 GIANT GROUP, LTD., a Delaware
corporation
by: /s/ CATHY WOOD
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Cathy Wood
Vice President and Chief
Financial Officer