-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, At0R6S7/4qQCNj/xzYwb821xiBxcpBll8yq6kRS4PMIXAxduPBz2upYftmxomuS+ LJydSCPnRC2KjDlHKEUDww== 0000892569-97-002710.txt : 19971002 0000892569-97-002710.hdr.sgml : 19971002 ACCESSION NUMBER: 0000892569-97-002710 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19971001 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RALLYS HAMBURGERS INC CENTRAL INDEX KEY: 0000854873 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 621210077 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-40496 FILM NUMBER: 97689473 BUSINESS ADDRESS: STREET 1: 10002 SHELBYVILLE RD STE 150 CITY: LOUISVILLE STATE: KY ZIP: 40223 BUSINESS PHONE: 5022458900 MAIL ADDRESS: STREET 1: 10002 SHELBYVILLE RD STREET 2: STE 150 CITY: LOUISVILLE STATE: KY ZIP: 40223 FORMER COMPANY: FORMER CONFORMED NAME: RALLYS INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY NATIONAL FINANCIAL INC /DE/ CENTRAL INDEX KEY: 0000809398 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 860498599 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 17911 VON KARMAN AVE STREET 2: STE 300 CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 7148529770 MAIL ADDRESS: STREET 1: MLISS JONES KANE STREET 2: 17911 VON KARMAN AVE STE 300 CITY: IRVINE STATE: CA ZIP: 92614 SC 13D/A 1 AMENDMENT NO. 5 TO SCHEDULE 13 D 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 5) RALLY'S HAMBURGERS, INC. ------------------------ (Name of Issuer) Common Stock, par value $.10 per share -------------------------------------- Title of Class of Securities 751203-10-0 ----------- (CUSIP Number) M'Liss Jones Kane Senior Vice President, General Counsel and Corporate Secretary Fidelity National Financial, Inc. 17911 Von Karman Avenue Irvine, California 92614 Tel. (714) 622-5000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) SEPTEMBER 21, 1997 ------------------ (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement. [ ] 2 SCHEDULE 13D/A CUSIP NO.: 374503 1 10 0 (1) NAME OF REPORTING PERSON: Fidelity National Financial, Inc. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: IRS No. 86-0498599 (2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [x] (3) SEC USE ONLY (4) SOURCE OF FUNDS: WC (5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] (6) CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: (7) SOLE VOTING POWER: 2,009,788 (1) (2) (8) SHARED VOTING POWER: 0 (9) SOLE DISPOSITIVE POWER: 2,009,788 (1) (2) (10) SHARED DISPOSITIVE POWER: 0 (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 2,009,788 (1) (2) (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [X] (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.8% (3) (14) TYPE OF REPORTING PERSON: CO - ------------------------- (1) Mr. William P. Foley, II, owns 19.6% of the outstanding common stock of Fidelity, and he is Chairman of the Board and Chief Executive Officer of Fidelity. By virtue of such stock ownership and positions, Mr. Foley may be deemed a "controlling person" of Fidelity. Mr. Foley disclaims beneficial ownership of any of the shares of Common Stock held by Fidelity. (2) Does not include warrants to purchase 750,000 shares of common stock at an exercise price of $4.375 which vest on December 20, 1997. See Item 5 of this Amendment Number 4 to Schedule 13D/A. (3) Based upon 20,567,547 shares of Common Stock outstanding as of August 1, 1997. 3 ITEM 1. SECURITY AND ISSUER. This Amendment Number 5 amends Amendment No. 4 on Schedule 13D filed with the Securities and Exchange Commission on March 21, 1997, as heretofore amended (the "Schedule 13D/A") with respect to the common stock, par value $0.10 per share (the "Common Stock") of Rally's Hamburgers, Inc., a Delaware corporation (the "Company"), with its principal executive offices located at 10002 Shelbyville Road, Suite 150, Louisville, Kentucky 40223. Other than as set forth herein, there has been no material change in the information set forth in the Schedule 13D. ITEM 4. PURPOSE OF TRANSACTION Item 4 of the Schedule 13D is hereby amended to add a paragraph as follows: On September 21, 1997, CKE Restaurants, Inc. ("CKE"), Fidelity National Financial, Inc. ("Fidelity"), GIANT and Rally's entered into a nonbinding letter of intent (the "Letter of Intent"), a copy of which is attached hereto as Exhibit 99.02 and incorporated herein by reference. Pursuant to the Letter of Intent, Rally's would acquire all of the shares of the common stock of Checker's Drive- In Restaurants, Inc., a Delaware corporation ("Checkers") held by CKE, Fidelity and GIANT (as well as certain of GIANT's affiliates and related parties) in exchange for shares of Rally's common stock and a new series of Rally's preferred stock. On September 22, 1997 Rally's issued a press release regarding the Letter of Intent and the transactions contemplated thereby, a copy of which is attached hereto as Exhibit 99.03 and incorporated herein by reference. After consummation of the acquisition, it is anticipated that certain administrative and operational functions may be combined. Except as set forth herein, Fidelity has no current plans or proposals of the type set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. See Item 4 to this Amendment, which is incorporated herein by this reference. 4 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. October 1, 1997 FIDELITY NATIONAL FINANCIAL, INC. By: /s/ M'LISS JONES KANE --------------------------------------- M'Liss Jones Kane Senior Vice President, General Counsel and Corporate Secretary 5 EXHIBIT INDEX 99.02 Letter of Intent, dated September 21, 1997, from Rally's Hamburgers, Inc., to CKE Restaurants, Inc., Fidelity National Financial, Inc., and GIANT GROUP, LTD. 99.03 Press release, dated September 22, 1997, issued by Rally's Hamburgers, Inc. EX-99.02 2 LETTER OF INTENT DATED SEPTEMBER 21, 1997 1 EXHIBIT 99.02 Letter of Intent, dated September 21, 1997, from Rally's Hamburgers, Inc., to CKE Restaurants, Inc., Fidelity National Financial, Inc., and GIANT GROUP, LTD. 2 EXHIBIT 99.02 RALLY'S HAMBURGERS, INC. 10002 Shelbyville Road, Suite 150 Louisville, Kentucky 40223 September 21, 1997 CKE Restaurants, Inc. 1200 North Harbor Boulevard Anaheim, CA 92801 Fidelity National Financial, Inc. 17911 Von Karman Avenue, Suite 300 Irvine, CA 92614 GIANT GROUP, LTD. 9000 Sunset Boulevard, 16th Floor Los Angeles, CA 90069 Gentlemen: This letter of intent is in connection with a proposed exchange (the "Transaction") of shares of Rally's Hamburgers, Inc. ("Rally's") common stock, $.10 par value per share (the "Rally's Common Stock"), and a new series of preferred stock (the "Rally's Preferred Stock") for shares of Checkers Drive-In Restaurants, Inc. common stock, $.001 par value per share (the "Checkers Common Stock"), held by you and certain other persons. In that regard, and with a view toward our reaching an agreement on a definitive contract and related documents (collectively, the "Exchange Agreement"), Rally's proposes that this letter serve as a memorandum of our mutual intentions with respect to the business points of the proposed Transaction subject to the terms and conditions set forth in this correspondence. 1. EXCHANGE. Rally's proposes to acquire all of Checkers Common Stock held of record on September 19, 1997 by Fidelity National Financial, Inc. ("FNF") and CKE Restaurants, Inc. ("CKE"). In addition, pursuant to the Exchange Agreement, Rally's proposes to acquire all shares of Checkers Common Stock held by GIANT GROUP, LTD. and certain of its affiliates and related parties (the"GIANT Parties") on September 19, 1997 and may acquire from one or more other persons certain of the shares of Checkers Common Stock such persons purchased in a private placement in February 1997. -1- 3 2. EXCHANGE CONSIDERATION. Rally's will issue shares of Rally's Common Stock and Rally's Preferred Stock (with substantially the terms set forth in Appendix A hereto) as consideration for the Checkers Common Stock to be acquired in the Transaction. The number of shares of Rally's Common Stock and Rally's Preferred Stock to be so issued will be based upon the current market value of the Rally's Common Stock and the Checkers Common Stock. It is the intent of the parties that such market values will be the average closing sale price on the NASDAQ National Market for the five trading days immediately preceding the initial public announcement of the Transaction ($3.11 for the Rally's Common Stock and $1.33 for the Checkers Common Stock). Rally's will issue pro rata shares of Rally's Common Stock constituting 19% of the outstanding Rally's Common Stock, with the remainder of the consideration being in the form of Rally's Preferred Stock. 3. THE CLOSING. The closing ("Closing") of the Transaction shall occur as soon as practical following the completion of the following: (a) Rally's obtaining a written opinion from an investment banking firm acceptable to the Independent Committee appointed by Rally's Board of Directors for purposes of the Transaction ("Rally's Independent Committee") as to the fairness of the Transaction, from a financial point of view, to Rally's and its stockholders; (b) Rally's Independent Committee approving the Transaction and authorizing execution of the Exchange Agreement; (c) The execution of the Exchange Agreement by Rally's, FNF, CKE and the GIANT Parties; and (d) Each party obtaining all required corporate, governmental, regulatory and other third party approvals and completing all required governmental and regulatory filings. In no event shall the Closing date be extended beyond April 1, 1998, absent an express written agreement between the parties extending the Closing Date. 4. REGISTRATION OF RALLY'S COMMON STOCK. Rally's will file a Registration Statement with the Securities and Exchange Commission with respect to the issuance or resale of the Common Stock issued in connection with the Transaction (including upon conversion of the Rally's Preferred Stock). If such Registration Statement relates to the resale of the Rally's Common Stock, Rally's will maintain the effectiveness of such Registration Statement for a two-year period. Rally's shall bear all expenses in connection with the Registration Statement except for fees and expenses of counsel for the other parties to the Exchange Agreement. -2- 4 5. UNDERTAKINGS. In consideration of the substantial time, effort and expense Rally's will expend in connection with the preparation and execution of the Exchange Agreement, FNF and CKE each undertakes and agrees that, between the date of the execution of this letter and the earlier of the execution of the Exchange Agreement or the termination of the Transaction, each will use its commercially reasonable efforts to cause Checkers to: (a) do nothing to materially adversely affect the prospects or continued viability of Checker's business; (b) pay no extraordinary compensation to any of Checker's officers, directors or stockholders and shall not incur any additional debt other than in the ordinary course of business; (c) except in order to satisfy outstanding options and/or warrants, not issue or sell any of its securities or any securities of any of its subsidiaries, or any rights to acquire such securities; (d) not pay any dividends, redeem any securities or otherwise cause any asset to be distributed to its stockholders in their capacities as such; (e) not solicit or initiate any further discussions or engage in further negotiations or discussions with anyone concerning a sale or transfer of all or any part of Checker's stock or assets, and will promptly inform Rally's of any offer or proposal, directly or indirectly, with respect to the foregoing, and shall furnish such information with respect thereto as Rally's may request; provided that nothing herein shall preclude Checkers or its Board of Directors of acting in good faith to comply with the Board's fiduciary obligations under applicable law; and (f) use its best efforts to preserve intact Checker's business organization, its goodwill and its customers, suppliers, and others having business relations with it. 6. EXPENSES. Subject to Section 4 above, each party to the Exchange Agreement shall bear its respective expenses incurred in the Transaction. 7. ANNOUNCEMENTS. Prior to execution of the definitive Exchange Agreement, no party shall issue any statement or communication to the public regarding the Transaction without the consent of the other parties, which consent shall not be unreasonably withheld. Such restriction shall be subject to the parties obligations to comply with the applicable securities laws which will require public disclosure upon execution of this letter on intent. The parties will cooperate with respect to the preparation of such required disclosure. -3- 5 8. BROKERS. The agreement contemplated hereby will contain a representation by both parties that no broker or finder was involved in the proposed Transaction and an indemnification for any costs to the other party caused b y a breach or an alleged breach thereof. 9. OUTLINE ONLY: NO CONTRACT. The parties do not intend this letter of intent to be a legally binding and enforceable contract. A binding contract will not exist unless and until the parties have executed an Exchange Agreement approved by Rally's Board of Directors and Independent Committee regarding the subject matter of this letter of intent and containing all other essential terms of an agreed-upon transaction. The parties acknowledge that they have not set forth herein nor agreed upon all essential terms of the subject matter of the Transaction, including without limitation, warranties and representations, conditions precedent and indemnities, and that such essential terms will be the subject of further negotiation. Statements of intent or understandings in this letter shall not create any rights or obligations for or on the part of any party to this letter. Notwithstanding the foregoing, the parties agree that the provisions in paragraphs 5 (Undertakings), 6 (Expenses), 7 (Announcements), 8 (Brokers), 9 (Outline Only ), 10 (Termination), 11 (Representations), 12 (Expiration of Offer), and 13 (Waiver of Torts) represent the parties' legally binding agreements enforceable in accordance with their terms. The enforceability of such provisions is not conditioned on further negotiations or the successful outcome of any further negotiations. 10. TERMINATION. This letter of intent shall continue in effect so long as Rally's is proceeding diligently toward completion of the Transaction, provided that any party may terminate this letter of intent upon written notice to the other party any time after November 30, 1997 if the Exchange Agreement shall not have been executed by such date. This date may be extended by agreement of the parties. 11. REPRESENTATIONS. By signing this letter of intent in the spaces set forth below, all parties indicate their approval of the foregoing and represent to the other that no consent of another party is necessary in order to proceed to negotiate and structure a transaction along the lines set forth below. 12. EXPIRATION OF OFFER. This letter of intent shall expire for all purposes if it has not been accepted by FNF and CKE and returned to Rally's on or before 9:00 a.m. EST on September 22, 1997. 13. WAIVER OF TORT CLAIM. Each party hereby waives for itself and for its successors and assigns any claim for damages (including but not limited to punitive damages) against the other parties, their agents and representatives, for bad faith denial of the existence of a contract or for breach of the implied covenant of good faith and fair dealing in connection with the failure of the parties hereto to consummate a transaction as outlined above. -4- 6 If the foregoing meets with your approval, kindly execute both copies of this letter and return one copy to us immediately. RALLY'S HAMBURGERS, INC. By: /s/ BURT SUGARMAN ------------------------------------- Burt Sugarman AGREED TO AND ACCEPTED THIS 21ST DAY OF SEPTEMBER, 1997. CKE RESTAURANTS, INC. By: /S/ ANDREW PUZDER ------------------------------------- Andrew Puzder FIDELITY NATIONAL FINANCIAL, INC. By: /S/ ANDREW PUZDER ------------------------------------- Andrew Puzder GIANT GROUP, LTD. By: /S/ BURT SUGARMAN ------------------------------------- Burt Sugarman -5- 7 APPENDIX A RALLY'S HAMBURGERS, INC. PROPOSED SERIES A PREFERRED STOCK TERM SHEET A. LIQUIDATION PREFERENCE. $311.00 per share of Series A Preferred (100 times the market value of the Rally's Common Stock, as determined by the Letter of Intent to which this Appendix A is attached) upon liquidation of Rally's plus accrued unpaid dividends (the "Liquidation Preference"). B. DIVIDENDS. Right to receive $45.00 per annum (i.e., 14.5% of the initial Liquidation Preference), payable nine months from the date of issuance and quarterly thereafter in cash if, and only if, at the first action taken by Rally's stockholders after the execution of the Exchange Agreement, such stockholders fail to approve the conversion provisions of the Series A Preferred and any change in the number of authorized shares of Common Stock needed to enable Rally's to comply with the conversion provisions (the "Stockholder Approval") or if the Series A Preferred Stock is not converted into Common Stock on or prior to July 31, 1998. In either case, dividends shall accrue from the Closing date. C. VOTING RIGHTS. None, except (i) upon default of two dividends, the Board of Directors will be expanded by two directors and the holders of the Series A Preferred, voting as a class, will have the right to elect two directors and (ii) as required by the Delaware General Corporation Law. D. CONVERSION. If the Stockholder Approval is obtained, the Series A Preferred will be automatically converted into Common Stock at a per share Conversion Rate equal to the Liquidation Preference dividend by $3.11 (the per share market value of the Rally's Common Stock used in the Exchange), subject to adjustment. 8 E. MATURITY If the Stockholder Approval is not obtained, the Series A Preferred must be redeemed, on or prior to the second anniversary of the Closing at a redemption price equal to the Liquidation Preference. If the Company does not redeem the Series A Preferred as required, then: (i) the dividend which holders Series A Preferred are entitled to receive shall increase to $55.00 per annum (18% of the Liquidation Preference); and (ii) if such holders are not otherwise entitled to elect two directors, the number of directors constituting the Board of Directors shall be increased by two and such holders (voting as a separate class) will be entitled to elect two directors. 2 EX-99.03 3 PRESS RELEASE DATED SEPTEMBER 22, 1997 1 EXHIBIT 99.03 Press release, dated September 22, 1997, issued by Rally's Hamburgers, Inc. 2 RALLY'S HAMBURGERS, INC. 10002 Shelbyville Road, Suite 150, Louisville, Kentucky 40223 NEWS RELEASE CONTACT: Andrew Puzder (805) 898-7134 FOR IMMEDIATE RELEASE LOUISVILLE, KY--SEPTEMBER 22, 1997--RALLY'S HAMBURGERS, INC. (NASDAQ:RLLY) today announced that it has agreed in principle to acquire, in exchange for Rally's securities, an aggregate of approximately 14.4 million shares of the Common Stock of Checkers Drive-In Restaurants, Inc. ("Checkers"), held of record by CKE Restaurants, Inc. ("CKE") (NYSE:CKR) and Fidelity National Financial, Inc.("FNF") (NYSE:FNF). In the transaction, Rally's will also acquire an aggregate of approximately 2.4 million shares of Checkers Common Stock held by GIANT GROUP, LTD. ("GIANT") (NYSE:GPO) and certain of its affiliates and related parties (the "GIANT Parties"). CKE and FNF will continue to hold warrants to purchase an aggregate of approximately 9.46 million shares of Checkers Common Stock, and the GIANT Parties will continue to hold warrants to purchase an aggregate of approximately 5.3 million shares of Checkers Common Stock. Under the terms of the agreement in principle, Rally's would issue shares of Rally's Common Stock and a new series of Rally's Preferred Stock in exchange for the Checkers Common Stock it acquires. The number of shares of Rally's Common Stock and Preferred Stock to be issued would be based upon the average closing price of the Checkers Common Stock and the Rally's Common Stock on the NASDAQ National Market for the five trading days ended on September 19, 1997. The Rally's Preferred Stock would be automatically converted into Rally's Common Stock upon approval of such conversion by Rally's stockholders at their next meeting. Upon consummation of the transaction, Rally's will become Checkers' largest stockholder with a minimum of 24% of the outstanding Checkers Common Stock. As a result of the issuance of Rally's Common Stock in the transaction, including upon conversion of the Rally's Preferred Stock, CKE and FNF will own an aggregate of approximately 42% of the outstanding shares of Rally's Common Stock. Based upon the average closing price for the Checkers Common Stock for the five trading days ended September 19, 1997 ($1.33), Rally's equity will increase approximately $22 million as a result of the transaction. 3 Burt Sugarman, Chairman of Rally's and GIANT, stated: "We believe that this investment by Rally's reflects the strong belief of Rally's, CKE and FNF, as well as that of GIANT, in the potential of both Rally's and Checkers. In addition, this transaction will provide opportunities for further cost-cutting improvements for both Rally's and Checkers in the highly competitive fast food market." William P. Foley, II, Chairman of CKE, FNF and Checkers, stated: "This transaction allows both Checkers and Rally's to take advantage of cost saving opportunities by combining administrative and operational functions. The cost savings should make resources available to bolster each brand's competitive position. We believe this transaction will be very positive for the stockholders of both companies." The acquisition is subject to negotiation of definitive agreements, receipt of a fairness opinion from an investment banker engaged by an Independent Committee of the Rally's Board of Directors, whose members are Willie D. Davis and Ronald B. Maggard, and approval of the transaction by the Independent Committee. The transaction is also subject to any required governmental or third party approvals. Rally's Hamburgers, Inc., along with its franchisees, operates approximately 473 double drive-thru hamburger restaurants primarily in the Midwestern United States. Checkers Drive-In Restaurants, Inc., along with its franchisees, operates approximately 480 double drive-thru hamburger restaurants primarily located in the Southeastern United States. -----END PRIVACY-ENHANCED MESSAGE-----