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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) May 15, 1997
Ground Round Restaurants, Inc.
(Exact name of registrant as specified in its charter)
New York 1-6192 13-5637682
State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
35 Braintree Hill Office Park, Braintree, Massachusetts 02184-9078
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (617) 380-3100
Not Applicable
(Former name or former address, if changed since last report.)
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Item 5. Other Events
AMENDMENT TO CREDIT FACILITY
Ground Round Restaurants, Inc. (the "Company") amended its
existing credit facility by entering into a Third Amendment (the "Amendment"),
dated as of May 23, 1997, to the Amended and Restated Credit Agreement (the
"Credit Agreement"), dated as of September 12, 1996, as amended, among The
Ground Round, Inc., GR of Minn., Inc. (collectively, the "Borrowers"), the
lenders listed therein (collectively, the "Lenders"), and The Bank of New York,
as Agent, and The Chase Manhattan Bank, as Co-Agent. The Amendment provides,
among other things, for the issuance by the Company of Amended and Restated
Convertible Notes (the "Amended Convertible Notes") to the Lenders to replace
the Convertible Notes issued to the Lenders on September 12, 1996. The Amended
Convertible Notes amended the original Convertible Notes to provide, among other
things, (y) that they shall become due thirty (30) days after written demand for
payment has been issued by any noteholder to the Company with a final maturity
date of December 31, 1997, and (z) that, commencing June 1, 1997, interest shall
accrue monthly on the unpaid principal balance of the Amended Convertible Notes,
at the rate of ten percent (10%) per annum, which interest shall be added to the
principal amount thereof, and shall be payable on the maturity date of the
Amended Convertible Notes.
The description of the Amendment and the Amended Convertible
Notes are qualified in their entirety by the terms and conditions contained in
such Amendment and the Amended Convertible Notes, copies of which are attached
as exhibits to this Form 8-K and are incorporated herein by reference.
EMPLOYMENT AGREEMENTS
On May 15, 1997, the Company entered into an employment
agreement (the "Bezsylko Employment Agreement") with Anthony E. Bezsylko,
pursuant to which Mr. Bezsylko will serve as Senior Vice President of Operations
of the Company for an initial term of one (1) year commencing May 15, 1997. Such
term shall be automatically extended for additional one-year terms unless, at
least ninety (90) days prior to the expiration of the original or any extended
term, either party shall notify the other in writing that it intends to
terminate the Bezsylko Employment Agreement as of the end of such term. As
compensation for his services pursuant to the Bezsylko Employment Agreement, Mr.
Bezsylko shall receive a base salary of One Hundred Fifty Thousand Dollars
($150,000) per year, be eligible to participate in the Company's Office
Incentive Plan and insurance programs and other fringe benefits customarily
provided to Company executives. The Bezsylko Employment Agreement further
provides that Mr. Bezsylko may be entitled to receive a severance payment
equivalent to twice his base salary if his employment is terminated under
certain circumstances following a "change of control" of the Company, as defined
in the Bezsylko Employment Agreement.
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On May 15, 1997, the Company entered into an employment
agreement (the "Evans Employment Agreement") with Henri R. Evans, pursuant to
which Mr. Evans will serve as Vice President of Marketing of the Company for an
initial term of one (1) year, commencing May 15, 1997. Such term shall be
automatically extended for additional one-year terms unless, at least ninety
(90) days prior to the expiration of the original or any extended term, either
party shall notify the other in writing that it intends to terminate the Evans
Employment Agreement as of the end of such term. As compensation for his
services pursuant to the Evans Employment Agreement, Mr. Evans shall receive a
base salary of One Hundred Thirty Thousand Dollars ($130,000) per year, be
eligible to participate in the Company's Office Incentive Plan and insurance
programs and other fringe benefits customarily provided to Company executives.
The Evans Employment Agreement further provides that Mr. Evans may be entitled
to receive a severance payment equivalent to twice his base salary if his
employment is terminated under certain circumstances following a "change of
control" of the Company, as defined in the Evans Employment Agreement.
On May 15, 1997, the Company entered into an Amendment to
the Employment Agreement dated September 1, 1996 with Stephen J. Kiel, the
Company's Chief Financial Officer, which provides, among other things, for a
severance payment equivalent to twice his salary, if his employment is
terminated under certain circumstances following a "change of control" of the
Company, as defined in such Amendment to the Employment Agreement.
The description of the foregoing employment agreements or
amendment to employment agreement, as the case may be, are qualified in their
entirety by the terms and conditions contained in such agreements, copies of
which are attached as exhibits to this Form 8-K and are incorporated herein by
reference.
Item 7. Financial Statements and Exhibits:
(a) Financial Statement of businesses acquired.
Not applicable.
(b) Pro Forma financial information.
Not applicable.
(c) Exhibits:
10.1 Third Amendment, dated as of May 23, 1997,
to Amended and Restated Credit Agreement,
dated as of September 12, 1996, as amended,
among The Ground Round, Inc.,
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and GR of Minn., Inc., and the Lenders named
therein, and The Bank of New York, as Agent,
and The Chase Manhattan Bank, as Co-Agent.
10.2 Form of Amended and Restated Convertible
Term Note payable to the Lenders.
10.3 Employment Agreement, effective as of May
15, 1997, between the Company and Anthony E.
Bezsylko.
10.4 Employment Agreement, effective as of May
15, 1997, between the Company and Henri R.
Evans.
10.5 Amendment to Employment Agreement, dated as
of May 15, 1997, between the Company and
Stephen J. Kiel.
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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.
GROUND ROUND RESTAURANTS, INC.
By: /s/ Stephen J. Kiel
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Name: Stephen J. Kiel
Title: Senior Vice-President and Chief
Financial Officer
Date: June 11, 1997
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EXHIBIT INDEX
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Exhibit
No. Description
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10.1 Third Amendment, dated as of May 23, 1997 to Amended and Restated
Credit Agreement, dated as of September 12, 1996, as amended, among The
Ground Round, Inc., and GR of Minn., Inc., and the Lenders named
therein, and The Bank of New York, as Agent, and The Chase Manhattan
Bank, as Co-Agent.
10.2 Form of Amended and Restated Convertible Term Note payable to the
Lenders.
10.3 Employment Agreement, effective as of May 15, 1997, between the
Company and Anthony E. Bezsylko.
10.4 Employment Agreement, effective as of May 15, 1997, between the
Company and Henri R. Evans.
10.5 Amendment to Employment Agreement, dated as of May 15, 1997, between
the Company and Stephen J. Kiel.