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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 2000
GIANT GROUP, LTD.
9440 Santa Monica Boulevard, Suite 407
Beverly Hills, California, 90210
Registrant's telephone number (310) 273-5678
Commission File Number 1-4323
I.R.S. Employer Identification Number 23-0622690
State of Incorporation Delaware
Name of Each Exchange
Title of Class on Which Registered
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Securities registered pursuant to 12(b)
of the Act: None
Securities registered pursuant to 12(g) Common Stock, $.01 Par None
of the Act: Value (Together with
Preferred Stock Purchase
Rights)
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.
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 the 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.
As of March 27, 2001, 3,154,757 shares of the registrant's common stock,
par value $.01 per share, were outstanding, and the aggregate market value of
the registrant's common stock held by non-affiliates based on the last trade
reported on the March 27, 2001 was $311,939.
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PART III
Item 10. Directors and Executive Officers of the Registrant
Set forth below are the Directors and Executive Officers of the Company,
together with their ages, their positions with the Company, their business
experience during the past five years and the year in which they first became a
Director or Executive Officer of the Company. All Directors and Executive
Officers hold office until their respective successors are elected and
qualified, or until their earlier resignation or removal.
Burt Sugarman, 62, is President, Chief Executive Officer and Chairman of the
Board of the Company. Mr Sugarman has been President and Chief Executive
Officer of the Company since 1985 and Chairman of the Board of the Company
since 1983. Mr. Sugarman is also a director of Checkers Drive-In Restaurants
Inc. ("Checkers") and Santa Barbara Restaurant Group, Inc.
Pasquale A. Ambrogio, 49, is Vice-President, Chief Financial Officer,
Secretary and Treasurer of the Company. He has held these positions since May
2000. For the past five years, he held the position of Controller of the
Company.
David Gotterer, 72, is Vice-Chairman of the Company. Mr. Gotterer has been
Vice-Chairman of the Company since 1986 and has been a Board member since 1984.
Mr. Gotterer is the senior partner in the accounting firm of Mason & Company,
LLP. He has held this position for the past five years. Mr. Gotterer is a
director of Checkers.
Terry Christensen, 60, first became a Director of the Company in 1994. Mr
Christensen's principal occupation is senior partner of the law firm of
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP. He has held
this position since 1988. Mr. Christensen is a director of MGM Mirage, Inc. and
Checkers.
David Malcolm, 48, first became a Director of the Company in 1996. Mr.
Malcolm's principal occupation is Chairman of the Board of Suncoast Financial
Mortgage Corporation. He has held this position for the past twenty years.
Jeffrey Rosenthal, 43, first became a Director of the Company in 1997. Mr.
Rosenthal's principal occupation is Chairman of Fairfare Media Works. He has
held this position for the past ten years.
48
ITEM 11. Executive Compensation
The following table sets forth information concerning the annual and long-
term compensation for services in all capacities to the Company for the three
years ended December 31, 2000, 1999, and 1998 of those persons who were (i) the
Chief Executive Officer and (ii) executive officer of the Company and whose
cash compensation exceeded $100,000 for services performed by such persons for
the Company (collectively, the "Named Executives").
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation Awards
--------------------------------- -----------------------------------
Securities
Other Annual Restricted Underlying All Other
Name & Principal Bonus Compensation Stock Option/SARS Compensation
Position Year Salary $ $ $ Award(s) # $
---------------- ---- --------- ----- ------------ ---------- ----------- ------------
Burt Sugarman........... 2000 472,435 -0- 2,942(1) -0- -0- 27,481(2)
Chairman of the Board, 1999 1,000,000 -0- 7,644(1) -0- -0- 27,475(2)
President and Chief 1998 1,000,000 -0- 18,057(1) -0- 27,115(2)
Executive Officer
William H. Pennington... 2000 89,705 -0- -0- -0- -0- -0-
Vice President, 1999 166,704 -0- -0- -0- -0- -0-
Secretary, Treasurer 1998 158,446 -0- -0- -0- -0- -0-
and Chief Financial
Officer (3)
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(1) Amounts represent the value of use of the Company's airplane, which was
sold in April 1998, and use of the Company's automobile.
(2) Represents amounts paid to Mr. Sugarman by Rally's and Checkers.
(3) Mr. Pennington passed away in May 2000. Mr. Ambrogio assumed Mr.
Penington's position in May 2000. Mr. Ambrogio's combined salary for 2000,
serving as the Company's controller and than as Vice-President, Secretary,
Treasurer and Chief Financial Officer, was $95,740. In addition, in
December 31, 2000, the Board of Directors awarded a bonus of 20,000 shares
to Mr. Ambrogio. Based upon the closing price of the Common Stock on
December 31, 1999 of $.20, the value of this award was $2,000.
Employment Contract
Mr. Sugarman is employed as Chairman of the Board, President and Chief
Executive Officer of the Company pursuant to an employment agreement dated
December 3, 1998 and expiring on December 31, 2005. The agreement, which was an
amendment and restatement of his agreement of February 24, 1997, provides that
Mr. Sugarman is to receive an annual base salary of $1,000,000 increased
annually by 10% over the prior year to a maximum of $1,600,000, life insurance
in the face amount of $5,000,000, and an annual bonus in an amount determined
from year to year by the Compensation Committee of the Board of Directors, at
its discretion, and certain additional benefits. The employment agreement is
terminable prior to the expiration of the term of the Agreement (1) by the
Company for cause (as defined therein) and (2) by Mr. Sugarman (a) for cause
(as defined therein), (b) at any time for any reason, after January 1, 2000 or
(c) if Mr. Sugarman ceases to own or control at least 10% of the Common Stock
of the Company. Should the employment agreement be terminated by the Company
without cause or by Mr. Sugarman for cause or for other reasons described in
the preceding sentence, Mr. Sugarman would be entitled to (1) continuation of
all health insurance benefits through the expiration of the term of the
agreement, or for 40 months from termination, whichever period is longer and
(2) a lump sum payment in an amount equal to the greater of (a) two times the
annual base salary, and (b) the amount which would have been payable throughout
the remainder of the term of the agreement or 40 months, whichever is shorter,
provided that if the agreement is terminated within one year following a change
in ownership of the Company (as defined therein), Mr. Sugarman will receive a
lump sum payment equal to 2.99 times the average annual compensation paid to
Mr. Sugarman by the Company during the five years prior to such change in
ownership. In the event of Mr. Sugarman's death or disability he (or his
estate) would be entitled to receive a lump sum payment equal to the greater of
(a) two times the annual base salary and (b) the
49
amount which would have been payable throughout the remainder of the term of
the agreement and continuation of all health insurance benefits for the
remainder of the term. In the event of Mr. Sugarman's death, the Company would
also be obligated to continue all health insurance benefits for Mr. Sugarman's
immediate family for two years. Upon the expiration of the agreement, the
Company is obligated to pay to Mr. Sugarman a lump sum equal to two times the
then annual base salary and continue all health insurance benefits for two
years. Pursuant to the employment agreement, Mr. Sugarman has agreed during the
term of the agreement, not to render services to, or plan for or organize, a
business which is materially competitive with or similar to the business of the
Company or any of its subsidiaries. In January 2000, Mr. Sugarman voluntarily
authorized the Company to decrease his annual salary to $450,000. In addition,
Mr. Sugarman voluntarily agreed to retroactively cancel the termination payment
due to him at the end of his employment contract. No change to his benefits was
made. Mr. Sugarman, at his discretion, may, at any time, increase his salary to
the current level as stated in his current contract. In such case, no
retroactive salary adjustment will be made.
Option Plans
The Company has a 1985 Non-Qualified Stock Option Plan (the "1985 Stock
Option Plan"). The 1985 Stock Option Plan provided for the grant of options to
purchase 3,000,000 shares of Common Stock. As of December 31, 2000, options to
purchase 1,750,952 shares were outstanding (correcting the amount of 1,965,952
reported in the previously filed Form 10-K) and options for 307,500 shares had
been exercised.
The Company has a 1996 Employee Stock Option Plan (the "1996 Stock Option
Plan") and the Director Plan. The 1996 Stock Option Plan presently provides for
the grant of options to purchase 1,000,000 shares of Common Stock to officers
and key management personnel of the Company. As of December 31, 2000, options
to purchase 215,000 shares were outstanding, no options had been exercised and
during fiscal 2000 no options were granted. The Director Plan presently
provides for the grant of 400,000 shares of Common Stock. As of December 31,
2000, options to purchase 200,000 shares were outstanding and no options had
been exercised.
FISCAL YEAR END OPTION VALUE
Value of
Unexercised
Number of in the Money
Unexercised Options at
Shares Options at December 31,
Acquired December 31, 2000 2000
On -------------------- ------------
Name Exercise Value Exercisable Exercisable
- ---- -------- Realized ----------- ------------
Burt Sugarman........................ -0- -0- 1,799,202 $-0-(1)
Perry A. Ambrogio.................... -0- -0- 5,000 $-0-(2)
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(1) Based upon the closing price of the Common Stock on December 31, 2000 of
$.20 minus the option exercise price of $6.75 per share for 1,599,202
shares and $8.25 per share for 200,000 shares.
(2) Based upon the closing price of the Common Stock on December 31, 1999 of
$.20 minus the option exercise price of $7.8125 per share for 5,000 shares.
Compensation Committee Interlocks and Insider Participation
During 2000 the Compensation Committee and Option Committee of the Board of
Directors consisted of David Gotterer and Terry Christensen. David Gotterer is
Vice Chairman of the Company and a Senior Partner in the accounting firm of
Mason & Company, LLP, which received approximately $51,000 from the Company for
rendering consulting, financial and accounting services to the Company during
2000. Terry Christensen is a partner in the law firm of Christensen, Miller,
Fink, Jacobs, Glaser, Weil & Shapiro, LLP, which received approximately $28,000
representing the Company in certain corporate and litigation matters. Both Mr.
Gotterer and Mr. Christensen are directors of Checkers (formerly Rally's).
50
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the beneficial ownership as of March 27, 2001
of the Common Stock by each of the Company's Directors and Executive Officers
as well as all the Directors and Executive Officers as a group. There are no
other stockholders who, to the knowledge of management of the Company, based
upon filings with the SEC, are the beneficial owners of more than 5% of the
outstanding shares of Common Stock. On April 18, 2001, Gary Koncikowski, an
individual, filed a Form 13D with the SEC reporting that on April 9, 2001 he
beneficially owns 186,800 shares of the Company's Common Stock.
Amount and Percent
Nature of of
Beneficial Class
Name & Address of Beneficial Owner Ownership (1) (2)
---------------------------------- ---------------- -------
Burt Sugarman.................................. 2,988,672 shares(3) 56.2%
9440 Santa Monica Boulevard, Suite 407
Beverly Hills, CA 90210
David Gotterer................................. 245,875 shares(4) 4.6%
Mason & Company, LLP
400 Park Avenue
New York, New York 10022
Terry Christensen.............................. 94,250 shares(5) 1.8%
Christensen, Miller, Fink, Jacobs, Glaser,
Weil & Shapiro, LLP
2121 Avenue of the Stars, 18th Flr.
Los Angeles, CA 90067
Jeffrey Rosenthal.............................. 30,000 shares(6) .56%
Fairfate Media Works
25300 Rye Canyon Road
Valencia, CA 91355
David Malcolm.................................. 40,000 shares(7) .75%
Suncoast Financial Mortgage Corporation
750 "B" Street, Ste 3130
San Diego, CA 92101
Pasquale A. Ambrogio........................... 8,600 shares(8) .16%
9440 Santa Monica Blvd., Ste 407
Beverly Hills, CA 90210
All Directors and Executive Officers as a
group (6).................................... 3,407,397 shares 64%
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(1) Under the rules of the SEC a person is deemed to be the beneficial owner of
a security if such person has or shares the power to vote or to direct the
voting of such security, or the power to dispose or to direct the
disposition of such security. A person is also deemed to be the beneficial
owner of any securities which that person has the right to acquire
beneficial ownership within 60 days as well as any securities owned by such
person's spouse, children or other relatives living in the same house.
Unless otherwise indicated, the named person has sole voting and investment
power with respect to the shares held by them.
(2) Computed on the basis of 5,320,709 shares of Common Stock issued and
outstanding and options to purchase Common Stock as of March 27, 2001.
(3) Includes 1,799,202 options to purchase Common Stock that are currently
exercisable or will be exercisable within 60 days, but does not include
148,950 shares owned by Mr. Sugarman's spouse as to which he disclaims
beneficial ownership.
(4) Includes 133,375 options to purchase Common Stock that are currently
exercisable or will be exercisable within 60 days but excludes 63,375
shares underlying options held by Mr. Gotterer, as to which he disclaims
beneficial ownership since a business partner is entitled to the beneficial
ownership of such shares upon any exercise of such options.
51
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.
GIANT GROUP, LTD.
Registrant
/s/ Burt Sugarman
Date: March 31, 2000 By: _________________________________
Burt Sugarman
Chairman
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 and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Burt Sugarman Chairman of the Board and March 31, 2001
____________________________________ Chief Executive Officer
Burt Sugarman
/s/ Pasquale A. Ambrogio Vice President, Chief March 31, 2001
____________________________________ Financial Officer,
Pasquale A. Ambrogio Secretary and Treasurer
(Principal Financial and
Accounting Officer)
/s/ David Gotterer Director March 31, 2001
____________________________________
David Gotterer
/s/ Terry Christensen Director March 31, 2001
____________________________________
Terry Christensen
/s/ David Malcolm Director March 31, 2001
____________________________________
David Malcolm
/s/ Jeff Rosenthal Director March 31, 2001
____________________________________
Jeff Rosenthal
56