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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
-------------
(Amendment No. 9)
Ground Round Restaurants, Inc.
- --------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.16-2/3 460200-1-8
per share
- ----------------------------------- -----------------------------------
(Title of class of securities) (CUSIP number)
George H. Hempstead, III, c/o Hanson Industries
99 Wood Avenue South, Iselin, New Jersey 08830 (908) 603-6600
- --------------------------------------------------------------------------
(Name, address and telephone number of person authorized to receive
notices and communications)
August 23, 1994
- --------------------------------------------------------------------------
(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(b)(3) or (4), check the
following box [_].
Check the following box if a fee is being paid with the statement [_].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7.)
Note: When filing this statement in paper format, six copies of this
statement, including exhibits, should be filed with the Commission. See
Rule 13d-1(a) for other parties to whom copies are to be sent.
(Continued on following page(s))
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CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: HANSON PLC
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF ENGLAND
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 3,680,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 3,680,000
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 3,680,000
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 33.1%
14 TYPE OF REPORTING PERSON: CO
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CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: HANSON HOLDINGS (1) LTD.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF ENGLAND
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 3,680,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 3,680,000
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 3,680,000
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 33.1%
14 TYPE OF REPORTING PERSON: CO
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CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: HANSON OVERSEAS HOLDINGS LTD.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF ENGLAND
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 3,680,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 3,680,000
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 3,680,000
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 33.1%
14 TYPE OF REPORTING PERSON: CO
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CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: HANSON HOLDINGS NETHERLANDS B.V.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF KINGDOM OF THE NETHERLANDS
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 3,680,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 3,680,000
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 3,680,000
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 33.1%
14 TYPE OF REPORTING PERSON: CO
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CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: HM ANGLO-AMERICAN, LTD.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF DELAWARE
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 3,680,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 3,680,000
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 3,680,000
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 33.1%
14 TYPE OF REPORTING PERSON: CO
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CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: HANSON AMERICA INC.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF DELAWARE
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 3,680,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 3,680,000
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 3,680,000
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 33.1%
14 TYPE OF REPORTING PERSON: CO
<PAGE>
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CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: HM HOLDINGS, INC.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF DELAWARE
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 3,680,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 3,680,000
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 3,680,000
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 33.1%
14 TYPE OF REPORTING PERSON: CO
<PAGE>
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This Statement amends and restates the Statement on Schedule
13D filed with the Securities and Exchange Commission (the
"Commission") by HM Holdings, Inc. ("HM Holdings"), Hanson America
Inc. ("Hanson America", formerly known as HM Investments, Ltd.), HM
Anglo-American, Ltd. ("Anglo"), Hanson Holdings Netherlands B.V.
("Netherlands"), Hanson Overseas Holdings Limited ("Overseas"), Hanson
Holdings (1) Limited ("HH-1") and Hanson PLC (collectively referred to
herein as the "Beneficial Owners"), with respect to their beneficial
ownership of the Common Stock, par value $.16-2/3 per share ("Common
Stock") of Ground Round Restaurants, Inc., a New York corporation (the
"Company"), as previously amended by Amendments Nos. 1 through 8
thereto.
Item 1. Security and Issuer.
-------------------
This statement relates to the Common Stock issued by the
Company. The address of the principal executive office of the Company
is 35 Braintree Office Hill Park, Braintree, Massachusetts 02184-9078.
Item 2. Identity and Background.
-----------------------
(a) - (c), (f) HM Holdings, a Delaware corporation, is
engaged principally in the business of holding investments. The
outstanding capital stock of HM Holdings is owned 85.59% by Hanson
America, a Delaware corporation, and 14.41% by Netherlands, a company
organized under the laws of the Kingdom of the Netherlands. Hanson
America is the principal holding company for Hanson PLC's operating
subsidiaries in the United States. Netherlands is engaged principally
in the business of holding investments.
Hanson America is a direct wholly-owned subsidiary of Anglo,
a Delaware corporation. Each of Netherlands and Anglo is a direct
wholly-owned subsidiary of Overseas, an English company. Overseas is
a direct wholly-owned subsidiary of HH-1, an English company, which,
in turn, is a direct wholly-owned subsidiary of Hanson PLC, a public
limited company incorporated in England. Each of Anglo, Overseas and
HH-1 is principally engaged in the business of holding investments.
Hanson PLC is an industrial management company with
operating subsidiaries based principally in the United Kingdom and the
United States, employing approximately 80,000 people worldwide. In
the United Kingdom, Hanson PLC's principal operating units are
Imperial Tobacco Limited, which manufactures
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tobacco products; ARC Limited, which produces aggregates, coated stone
and concrete products; and London Brick Company Limited and Butterley
Brick Limited, which produce clay bricks. In the United States,
Hanson PLC's principal operating units are Peabody Holding Company,
Inc., its subsidiaries and Lee Ranch Coal Company, which produce and
market coal; SCM Chemicals Inc., which produces titanium dioxide;
Quantum Chemical Company, which manufacturers polyethylene and other
industrial chemicals; the Aggregates Group, which produces aggregates,
sand and gravel; Grove North America, which manufacturers hydraulic
lift cranes; Suburban Propane Company, which is engaged in the retail
distribution of propane gas; and Cavenham Forest Industries, which
harvests and sells timber and manufacturers lumber. Other Hanson PLC
operating units mine coal and manufacture a wide range of chemical,
building, materials handling, industrial and consumer products in the
United Kingdom, the United States, Australia, South Africa and other
countries. In addition, Hanson PLC has equity interests in a number
of public and private companies.
The principal business address of each of the Beneficial
Owners and the name, business address, citizenship and principal
occupation or employment of each director and executive officer of
each of the Beneficial Owners are listed on Schedule A.
(d) - (e) Neither any of the Beneficial Owners nor, to the
best of their knowledge, any of their respective directors and
executive officers has, during the last five years, (i) been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation
of such laws.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
Not applicable.
Item 4. Purpose of Transaction.
----------------------
On August 23, 1994, the Company entered into an Agreement
and Plan of Merger (the "Merger Agreement") by and among GRR, Inc.
("Parent"), GRR Acquisition Corp. ("Purchaser") and the Company. The
Merger Agreement provides that, upon the terms and subject to the
conditions set forth therein, Purchaser will merge with and into the
Company (the "Merger") and each
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share of Common Stock will be converted into the right to receive
$9.00 per share in cash. The Beneficial Owners have been advised that
the business address of Parent and Purchaser is c/o 399 Ventures,
Inc., 399 Park Avenue, New York, New York 10022 and that 399 Ventures,
Inc. is an affiliate of Citicorp.
As a condition to their willingness to enter into the Merger
Agreement, HM Holdings entered into a Shareholder Agreement, dated
August 23, 1994, with Parent and Purchaser (the "Shareholder
Agreement"). Pursuant to the Shareholder Agreement, HM Holdings
granted Parent and Purchaser an option (the "Option") to purchase all
of the shares of Common Stock owned by it (the "Option Shares") at
$9.00 per share. The Option is exercisable in whole (but not in part)
at any time after (x) the Company terminates the Merger Agreement
pursuant to Section 6.1(g) thereof and (y) the fair market value (as
defined in the Shareholder Agreement) of the consideration with
respect to the Qualifying Acquisition Proposal (as defined below) is
or becomes less than or equal to $10.50 per share of Common Stock.
Pursuant to Section 6.1(g) of the Merger Agreement the Company may
terminate the Merger Agreement if it receives, prior to shareholder
adoption of the Merger Agreement, a proposal meeting certain criteria
described in the Merger Agreement regarding an acquisition or purchase
of all or a substantial portion of the Company's assets or equity, a
merger or other business combination involving the Company or certain
recapitalizations involving the Company (a "Qualifying Acquisition
Proposal"), provided that it pays the Fee and Expenses (each as
defined in the Merger Agreement) to Parent.
Pursuant to the Shareholder Agreement, Parent and Purchaser
have agreed, for the benefit of the Company's shareholders, that in
the event they acquire the Option Shares upon exercise of the Option
and the Qualifying Acquisition Proposal is not consummated, they will
to use their best efforts to consummate a merger with the Company or
other similar transaction (on terms substantially similar to the
Merger Agreement) as soon as practicable thereafter which results in
all shareholders (other than Parent and Purchaser) receiving
consideration of not less than $9.00 per share of Common Stock in cash
(the per share exercise price of the Option).
Pursuant to the Shareholder Agreement, HM Holdings agreed
to vote all Option Shares in favor of the Merger and in the manner
specified by Parent or Purchaser with respect to any other matter
which, in Parent or Purchaser's reasonable judgment, may contradict
any provision of the Shareholder Agreement or the Merger Agreement,
make it more difficult for or less desirable to Parent and Purchaser
to consummate the Merger or delay or hinder
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the consummation of the Merger; provided, that HM Holdings has not
agreed to vote against a Qualifying Acquisition Proposal unless the
Option has been exercised and the exercise price has been tendered to
HM Holdings (in which event Parent and Purchaser shall have the
obligation to use their best efforts to effect a merger or similar
transaction involving the Company, as described in the preceding
paragraph). In addition, HM Holdings granted an irrevocable proxy
(the "Irrevocable Proxy") to Parent and Purchaser to vote all the
Option Shares as described in the preceding sentence.
In the Shareholder Agreement, HM Holdings has also agreed
not to sell, exchange, pledge, encumber or otherwise transfer or
dispose of, or agree to sell, exchange, pledge, encumber or otherwise
transfer or dispose of, any Option Shares, or any interest therein,
except upon exercise of the Option or pursuant to the Merger
Agreement. In addition, HM Holdings agreed to certain non-
solicitation provisions.
Concurrently with the execution of the Shareholder
Agreement, GSB Holdings, Inc., another shareholder of the Company,
entered into a substantially identical agreement with Parent and
Purchaser. Parent and Purchaser agreed that they would not exercise
or terminate the Option without also exercising or terminating the
option granted by GSB Holdings, Inc. David H. Clarke, a director of
Hanson PLC and Deputy Chairman of Hanson Industries, is an officer of
GSB Holdings, Inc. and a majority shareholder of its parent
corporation.
A copy of the Shareholder Agreement has been filed as
Exhibit 3 to this Amendment No. 9 and is incorporated herein by
reference.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) (i) As of the date of this Amendment, HM Holdings was
the direct beneficial owner of 3,680,000 shares of Common Stock, which
constitute approximately 33.1% of the 11,113,269 shares of Common
Stock outstanding as of August 23, 1994.
(ii) By virtue of their ownership of 85.59% and 14.41%,
respectively, of the outstanding shares of capital stock of HM
Holdings, Hanson America and Netherlands may be deemed to be, for
purposes of this Schedule 13D, beneficial owners of all the shares of
Common Stock beneficially owned by HM Holdings.
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(iii) By virtue of its ownership of all of the outstanding
capital stock of Hanson America, Anglo may be deemed to be, for
purposes of this Schedule 13D, the beneficial owner of all the shares
of Common Stock beneficially owned by Hanson America.
(iv) By virtue of its ownership of all of the outstanding
capital stock of each of Anglo and Netherlands, Overseas may be deemed
to be, for purposes of this Schedule 13D, the beneficial owner of all
the shares of Common Stock beneficially owned by each of Anglo and
Netherlands.
(v) By virtue of its ownership of all of the outstanding
capital stock of Overseas, HH-1 may be deemed to be, for purposes of
this Schedule 13D, the beneficial owner of all the shares of Common
Stock beneficially owned by Overseas.
(vi) By virtue of its ownership of all of the outstanding
capital stock of HH-1, Hanson PLC may be deemed to be, for purposes of
this Schedule 13D, the beneficial owner of all the shares of Common
Stock beneficially owned by HH-1.
(vii) Certain directors, executive officers and/or
employees of the Beneficial Owners may beneficially own shares of
Common Stock, directly or through individual employee savings plan
accounts. The Beneficial Owners disclaim beneficial ownership of such
shares.
(b) (i) Each of the Beneficial Owners, by virtue of its
direct or indirect ownership of all of the outstanding capital stock
of HM Holdings, is deemed to have, with HM Holdings, shared power to
vote or to direct the vote and shared power to dispose or direct the
disposition of the 3,680,000 shares of Common Stock directly
beneficially owned by HM Holdings.
(ii) The Beneficial Owners have no power to vote, direct
the vote, dispose or direct the disposition of the shares of Common
Stock owned by the persons referred to in paragraph (a) other than the
Beneficial Owners.
(c) Except as set forth above, none of the Beneficial
Owners has effected any transactions in the Common Stock during the
past 60 days.
(d) Not applicable.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships
--------------------------------------------------------
with Respect to Securities of the Issuer.
----------------------------------------
HM Holdings and the Company are parties to a Stockholder
Agreement, dated as of August 1, 1991 (the "HMH Agreement"), providing
for certain rights and restrictions with respect to HM Holding's
ownership of Common Stock. In the HMH Agreement, the Company agreed
that, upon HM Holdings' request, the Company will use its best efforts
to nominate and cause the election to the Company's Board of Directors
of two persons designated by HM Holdings for so long as HM Holdings
and its corporate affiliates own 20% or more of the outstanding shares
of Common Stock, and one person designated by HM Holdings for so long
as HM Holdings and its corporate affiliates own less than 20%, but
more than 10% of the outstanding shares of Common Stock. Messrs.
Robert E. Lee and Thomas J. Russo are the current designees of HM
Holdings serving on the Company's Board of Directors. HM Holdings has
the right to propose for election and/or to solicit proxies in favor
of the election of any number of directors of the Company, but has
advised the Company that it has no present intention to seek to have
additional designees elected to the Board.
In the HMH Agreement, HM Holdings agreed that neither HM
Holdings nor any of its corporate affiliates will acquire, directly or
indirectly, additional shares of Common Stock which would result in HM
Holdings and such affiliates beneficially owning 50% or more of the
outstanding shares of Common Stock unless, in such acquisition, HM
Holdings and such corporate affiliates offer to acquire all
outstanding shares of Common Stock not held by them upon substantially
the same terms and conditions. In addition, in the HMH Agreement, HM
Holdings agreed that for so long as HM Holdings and its corporate
affiliates own 20% or more of the outstanding shares of Common Stock,
except in certain limited circumstances, should HM Holdings or any of
its corporate affiliates seek to sell or otherwise dispose of all or
substantially all of the shares of Common Stock owned by it to a third
party, except as may be otherwise approved by a majority of the
members of the Board of Directors not designated by HM Holdings, it
will use its best efforts to cause such third party to offer to
purchase all other outstanding shares of Common Stock upon
substantially the same terms and conditions as are available to it.
HM Holdings also agreed that, if such third party fails to make such
offer, HM Holdings or such corporate affiliate will not so sell or
otherwise dispose of such shares unless such third party agrees to be
subject to the same limitation on its ability to sell and to the
requirements set forth in the immediately preceding
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paragraph with respect to the acquisition of 50% or more of the
outstanding shares of the Common Stock.
In addition, in the HMH Agreement the Company agreed that,
if at any time it shall propose to sell any shares of Common Stock or
any other security entitling the holder thereof to vote for the
election of directors of the Company, or any warrants or rights
therefor or securities convertible into or exchangeable therefor, to
any person or entity other than HM Holdings or its affiliates, it
shall give HM Holdings the opportunity to purchase such number of
shares or other securities as will permit HM Holdings and its
corporate affiliates to retain their percentage of the Company's
voting power.
The Company also agreed in the HMH Agreement that, as long
as HM Holdings owns 5% or more of the outstanding shares of Common
Stock, upon the request of HM Holdings, the Company will cause up to
four registration statements to be filed with the SEC in order to
permit HM Holdings or an affiliate to sell all or a portion of its
shares of Common Stock. In addition, the Company agreed, if
requested, to include some or all shares of Common Stock owned by HM
Holdings or an affiliate in any registration statement it otherwise
files (other than registration statements relating to employee stock
options). The Company and HM Holdings also agreed to indemnify each
other for certain liabilities that may arise in connection with any
such registration statement.
It is an event of default under the Company's Credit
Agreement with Citibank, N.A., as Agent, if HM Holdings does not
beneficially own at least 25% of the Company's outstanding Common
Stock or the Company's Board of Directors does not include two
designees of HM Holdings, but if the Company raises $10 million of
additional common equity capital after October 1993, the 25% ownership
requirement is reduced to 0% and no HM Holdings nominees are required.
HM Holdings has agreed that, as long as the Credit Agreement is
outstanding, it will not take any action to cause its beneficial
ownership to fall below such percentage and has agreed to nominate two
individuals for election as directors of the Company. The Company
does not have an agreement with HM Holdings or its affiliates
requiring them to provide financial support in connection with the
Credit Agreement.
Prior to the execution of the Shareholder Agreement
described in Item 4 (the description of which is incorporated in this
Item 6 by reference), the Company's Board of Directors (with HM
Holdings' designees abstaining) approved HM Holdings' grant of the
Option and the Irrevocable Proxy and the performance by HM Holdings of
its obligations under the Shareholder Agreement.
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Except for the agreements described or referred to in this
Item 6 and the Group Agreement filed as Exhibit 7 to Amendment No. 4
to this Statement on Schedule 13D, there are no contracts,
arrangements, understandings or relationships (legal or otherwise)
among the Beneficial Owners, as named in Item 2, or between any of the
Beneficial Owners and any person, with respect to the securities of
the Company.
Item 7. Material to be Filed as Exhibits.
--------------------------------
The following is filed herewith as an Exhibit to this
Schedule 13D:
1. Group Agreement (incorporated by reference to Amendment
No. 4 to this Schedule 13D).
2. Stockholder Agreement dated as of August 1, 1991
between HM Holdings and the Company (incorporated by reference to
Amendment No. 8 to this Schedule 13D).
3. Shareholder Agreement, dated August 23, 1994, by and
among Parent, Purchaser and HM Holdings.
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SIGNATURES
----------
After due 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.
Dated: August 25, 1994
HANSON PLC
HANSON HOLDINGS (1) LIMITED
HANSON OVERSEAS HOLDINGS LIMITED
HANSON HOLDINGS NETHERLANDS B.V.
By: /s/ George H. Hempstead, III
---------------------------------------------
George H. Hempstead, III
Attorney-in-Fact
HM ANGLO-AMERICAN, LTD.
HANSON AMERICA INC.
HM HOLDINGS, INC.
By: /s/ George H. Hempstead, III
---------------------------------------------
George H. Hempstead, III
Vice President
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Schedule A
----------
1. HANSON PLC
Set forth below are the name, business address and position
with Hanson PLC ("Hanson") and the present principal occupation or
employment of each director, associate director and executive officer
(as defined in the regulations of the Securities and Exchange
Commission (the "Commission")) of Hanson. The principal business
address of Hanson is One Grosvenor Place, London, SW1X 7JH, England,
and unless otherwise indicated, the business address of each person
listed below is the aforesaid address. Each person listed below whose
name is followed by an asterisk is a citizen of the United Kingdom.
Alexander C. Notter is a citizen of Switzerland. All others are
citizens of the United States.
Position with Hanson
and Present Principal
Name and Business Address Occupation or Employment
------------------------- ------------------------
Lord Hanson* . . . . . . . . . Chairman
Derek C. Bonham* . . . . . . . Deputy Chairman, Chief
Executive Officer and
Director
Martin G. Taylor* . . . . . . . Vice Chairman and Director
David H. Clarke . . . . . . . . Vice Chairman and Director;
Hanson Industries Deputy Chairman of Hanson
99 Wood Avenue South Industries, a division of
Iselin, NJ 08830 Tillotson Commercial
Motors Limited, a
subsidiary of Hanson
Anthony G.L. Alexander* . . . . Chief Operating Officer and
Director
Brian A. Hellings* . . . . . . Director
2 Third Street
Rumson, NJ 07760
John G. Raos . . . . . . . . . Director; President of
Hanson Industries Hanson Industries
99 Wood Avenue South
Iselin, NJ 08830
NYFS02...:\13\51513\0116\1323\SCH82294.Y20
<PAGE>
<PAGE>
Schedule A
----------
Anthony R. Cotton* . . . . . . Director
Renison Goldfields
Consolidated Ltd.
Gold Fields House
24th Floor
1 Alfred Street
Sydney NSW 2000, Australia
Peter J. Harper* . . . . . . . Director
Christopher D. Collins* . . . . Director
William M. Landuyt . . . . . . Finance Director
The Hon. Robert W. Hanson* . . Director
Graham Dransfield* . . . . . . Legal Director
Sir Christopher Harding MA* . . Non-executive Director
BET Public Limited Company
Stratton House
Piccadilly
London W1X 6AS, England
The Hon. Charles H. Price II . Non-executive Director
Mercantile Bank of Kansas
City
Suite 300
One West Armour Blvd.
Kansas City, Missouri 64111
The Rt. Hon. Kenneth Baker CH Non-executive Director
MP*
Sir David Hardy FCA* . . . . . Non-executive Director
1 Appold Street
Broadgate
London EC2A 2HE, England
Simon L. Keswick* . . . . . . . Non-executive Director
Matheson & Co. Limited
3 Lombard Street
London EC3V 9AQ, England
Jonathan Scott-Barrett* . . . . Non-executive Director
Centaur Communications Limited
St. Giles House
50 Poland Street
London W1V 4AX, England
Ronald S. Fulford* . . . . . . Senior Associate Director
Malcolm J. Ablett* . . . . . . Associate Director
Mark A. Alexander . . . . . . . Associate Director
NYFS02...:\13\51513\0116\1323\SCH82294.Y20
<PAGE>
<PAGE>
Schedule A
----------
Anthony Branson* . . . . . . . Associate Director
Andrew J.H. Dougal* . . . . . . Associate Director and
Deputy Finance Director
George H. Hempstead, III . . . Associate Director
Robert E. Lee . . . . . . . . . Associate Director
Karen B. Levy . . . . . . . . . Non-executive Associate
Director
Kenneth J. Ludlam* . . . . . . Associate Director and Chief
Accountant
R. Ian Menzies-Gow* . . . . . . Associate Director
Alexander C. Notter . . . . . . Associate Director
Hanson PLC
3 quai du Mont Blanc
CH-1201
Geneva, Switzerland
John S. Oldford . . . . . . . . Associate Director
Dorothy E. Sander . . . . . . . Associate Director
Craig C. Sergeant . . . . . . . Associate Director
Edwin Silverstone . . . . . . . Associate Director
David J. Snowdon* . . . . . . . Associate Director
Paul Spencer* . . . . . . . . . Associate Director and
Treasurer (U.K.)
Peter J. Turner* . . . . . . . Associate Director
John F. Whitehead* . . . . . . Associate Director
John H. Wimberly . . . . . . . Associate Director
Yvette M. Newbold* . . . . . . Secretary
Management of the United States operations of Hanson is
provided by Hanson Industries, a division of Tillotson Commercial
Motors Limited, a subsidiary of Hanson. Set forth below are the name,
business address and position with Hanson Industries and the present
principal occupation or employment of each director and executive
officer (as defined in the regulations of the Commission) of Hanson
Industries. The principal business address of Hanson Industries and
the business address of each of the persons listed below is 99 Wood
Avenue South, Iselin, New Jersey 08830, except for the Lord White of
Hull, whose principal business address is 410 Park Avenue, New York,
New York 10022. Each person listed below is a citizen of the United
States,
NYFS02...:\13\51513\0116\1323\SCH82294.Y20
<PAGE>
<PAGE>
Schedule A
----------
except for the Lord White of Hull, who is a citizen of the United
Kingdom.
Position with Hanson
Industries and
Present Principal
Name and Business Address Occupation or Employment
------------------------- ------------------------
The Lord White of Hull, KBE . . . . Chairman
David H. Clarke . . . . . . . . . . Director, Deputy Chairman
and Chief Executive
Officer
John G. Raos . . . . . . . . . . . Director, President and Chief
Operating Officer
George H. Hempstead, III . . . . . Director, Senior Vice
President and General
Counsel
Mark A. Alexander . . . . . . . . . Vice President
Robert M. Brier . . . . . . . . . . Vice President - Finance
A.M. (Mickey) Foster . . . . . . . Vice President
Robert E. Lee . . . . . . . . . . . Vice President and Chief
Financial Officer
Frank V. Lloyd . . . . . . . . . . Vice President - Taxes
George H. MacLean . . . . . . . . . Vice President
John S. Oldford . . . . . . . . . . Vice President
Dorothy E. Sander . . . . . . . . . Vice President
Craig C. Sergeant . . . . . . . . . Vice President
Edwin Silverstone . . . . . . . . . Vice President
Peter J. Statile . . . . . . . . . Vice President and
Controller
John H. Wimberly . . . . . . . . . Vice President
Christine Wubbolding . . . . . . . Treasurer
NYFS02...:\13\51513\0116\1323\SCH82294.Y20
<PAGE>
<PAGE>
Schedule A
----------
2. HANSON HOLDINGS (1) LIMITED
Set forth below are the name, business address and position
with Hanson Holdings (1) Limited ("HH-1") and the present principal
occupation or employment of each director and executive officer of HH-
1. The principal business address of HH-1 and the business address
of each person listed below is One Grosvenor Place, London SW1X 7JH,
England. Each person listed below is a citizen of the United Kingdom,
except for William M. Landuyt, who is a citizen of the United States.
Principal Occupation
Name Position or Employment
---- -------- --------------------
Malcolm J. Ablett Director See Part 1 of this
Schedule A
Derek C. Bonham Director See Part 1 of this
Schedule A
Anthony Branson Director See Part 1 of this
Schedule A
Andrew J.H. Dougal Director See Part 1 of this
Schedule A
Graham Dransfield Director See Part 1 of this
Schedule A
Ronald S. Fulford Director See Part 1 of this
Schedule A
William M. Landuyt Director See Part 1 of this
Schedule A
Kenneth J. Ludlam Director See Part 1 of this
Schedule A
R. Ian Menzies-Gow Director See Part 1 of this
Schedule A
Martin C. Murray Director See Part 1 of this
Schedule A
John H. Pattisson Director See Part 1 of this
Schedule A
David J. Snowdon Director See Part 1 of this
Schedule A
Paul Spencer Director See Part 1 of this
Schedule A
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<PAGE>
<PAGE>
Schedule A
----------
Peter J. Turner Director See Part 1 of this
Schedule A
3. HANSON OVERSEAS HOLDINGS LIMITED
Set forth below are the name, business address and position
with Hanson Overseas Holdings Limited ("Overseas") and present
principal occupation or employment of each director and executive
officer of Overseas. The principal business address is One Grosvenor
Place, London SW1X 7JH, England. Each person listed below is a
citizen of the United Kingdom, except for William M. Landuyt, who is a
citizen of the United States.
Principal Occupation
Name Position or Employment
---- -------- --------------------
Derek C. Bonham Director See Part 1 of this
Schedule A
Graham Dransfield Director See Part 1 of this
Schedule A
William M. Landuyt Director See Part 1 of this
Schedule A
Kenneth J. Ludlam Director See Part 1 of this
Schedule A
Paul Spencer Director See Part 1 of this
Schedule A
4. HANSON HOLDINGS NETHERLANDS B.V.
Set forth below are the name, business address, citizenship,
position with Hanson Holdings Netherlands B.V. ("Netherlands") and the
present principal occupation or employment of each director and
executive officer of Netherlands. The principal business address of
Netherlands is Schottegatwey-Oost, P.O. Box 3141, Curacao, Netherland
Antilles.
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<PAGE>
<PAGE>
Schedule A
----------
Brian A. Hellings Managing See Part 1 of this
2 Third Street Director Schedule A
Rumson, NJ 07760
John Farell Whitehead Managing Citizen of the
Hirzel House, Director United
Smith Street Kingdom;
St. Peter Port, Chief Executive
Guernsey, Officer
Channel Islands Hanson Island
Management
Limited,
Hirzel House,
Smith Street,
St. Peter Port,
Guernsey,
Channel Islands
Harry Peter Felix Managing Citizen of the
von Aasch Director Kingdom
Kaya W F G (Jombi) of the
Mensing 36, Netherlands;
Curacao, Joint Managing
Netherlands Antilles Director;
Antillean
Management
Corporation
"AMACO"
Kaya W F G (Jombi)
Mensing 36,
Curacao,
Netherlands
Antilles
Edmund Franklin Promes Managing Citizen of the
Julianaplein 22, Director Kingdom
Willemstad, of the
Curacao, Netherlands;
Netherlands Antilles Partner of the law
firm:
Promies, Trenite
van Doorne
Julianaplein 22,
Willemstad,
Curacao,
Netherlands
Antilles
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<PAGE>
<PAGE>
Schedule A
----------
5. HM ANGLO-AMERICAN, LTD.
Set forth below are the name, business address, citizenship,
position with HM Anglo-American Ltd. ("Anglo") and present principal
occupation or employment of each director and executive officer of
Anglo. The principal business address of Anglo is 410 Park Avenue,
New York, New York 10022. Unless otherwise indicated, the business
address of each person listed below is 99 Wood Avenue South, Iselin,
New Jersey 08830.
Citizenship and
Principal
Name and Occupation
Business Address Position or Employment
---------------- -------- ---------------
The Lord White of Hull, KBE Chairman See Part 1 of
410 Park Avenue this
New York, NY 10022 Schedule A
David H. Clarke Deputy See Part 1 of
Chairman, this
Director and Schedule A
Chief
Executive
Officer
John G. Raos Director, See Part 1 of
President and this
Chief Schedule A
Operating
Officer
George H. Hempstead, III Director, See Part 1 of
Senior Vice this
President Schedule A
and Secretary
Mark A. Alexander Vice President See Part 1 of
this
Schedule A
Robert M. Brier Vice President See Part 1 of
- Finance this
Schedule A
Robert E. Lee Vice President See Part 1 of
and Chief this
Financial Schedule A
Officer
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<PAGE>
<PAGE>
Schedule A
----------
Frank V. Lloyd Vice President See Part 1 of
- Taxes this
Schedule A
George H. MacLean Vice President See Part 1 of
and Assistant this
Secretary Schedule A
Dorothy E. Sander Vice President See Part 1 of
this Schedule A
Peter J. Statile Vice President See Part 1 of
and Controller this Schedule A
Christine Wubbolding Treasurer See Part 1 of
this Schedule A
6. HANSON AMERICA INC.
Set forth below are the name, business address, citizenship,
position with Hanson America Inc. ("Hanson America") and present
principal occupation or employment of each director and executive
officer of Hanson America. The principal business address of Hanson
America is 2644 Capitol Trail, Suite B1, Newark, Delaware 19711.
Citizenship and
Principal
Name and Occupation
Business Address Position or Employment
---------------- -------- ---------------
The Lord White of Hull, Chairman See Part 1 of
KBE this Schedule A
David H. Clarke Deputy See Part 1 of
Chairman, this Schedule A
Director and
Chief Executive
Officer
John G. Raos Director, See Part 1 of
President and this Schedule A
Chief Operating
Officer
George H. Hempstead, III Director, See Part 1 of
Senior Vice this Schedule A
President
and Secretary
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<PAGE>
<PAGE>
Schedule A
----------
Mark A. Alexander Vice President See Part 1 of
this Schedule A
Robert M. Brier Vice President See Part 1 of
- Finance this Schedule A
Robert E. Lee Vice President See Part 1 of
and Chief this Schedule A
Financial
Officer
Frank V. Lloyd Vice President See Part 1 of
- Taxes this Schedule A
George H. MacLean Vice President See Part 1 of
and Assistant this Schedule A
Secretary
Dorothy E. Sander Vice President See Part 1 of
this Schedule A
Peter J. Statile Vice President See Part 1 of
and Controller this Schedule A
Christine Wubbolding Treasurer See Part 1 of
this Schedule A
7. HM HOLDINGS INC.
Set forth below are the name, business address, citizenship,
position with HM Holdings Inc. ("HM Holdings") and present principal
occupation or employment of each director and executive officer of HM
Holdings. The principal business address of HM Holdings is 99 Wood
Avenue South, Iselin, NJ 08830.
Citizenship and
Principal
Name and Occupation
Business Address Position or Employment
---------------- -------- ---------------
The Lord White of Hull, Chairman See Part 1 of this
KBE Schedule A
David H. Clarke Deputy See Part 1 of this
Chairman, Schedule A
Director and
Chief
Executive
Officer
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<PAGE>
<PAGE>
Schedule A
----------
John G. Raos Director, See Part 1 of this
President and Schedule A
Chief
Operating
Officer
George H. Hempstead, III Director, See Part 1 of this
Senior Vice Schedule A
President
and Secretary
Mark A. Alexander Vice President See Part 1 of this
Schedule A
Robert M. Brier Vice President See Part 1 of this
- Finance Schedule A
Robert E. Lee Vice President See Part 1 of this
and Chief Schedule A
Financial
Officer
Frank V. Lloyd Vice President See Part 1 of this
- Taxes Schedule A
George H. MacLean Vice President See Part 1 of this
and Assistant Schedule A
Secretary
John S. Oldford Vice President See Part 1 of this
Schedule A
Dorothy E. Sander Vice President See Part 1 of this
Schedule A
Craig C. Sergeant Vice President See Part 1 of this
Schedule A
Edwin Silverstone Vice President
Peter J. Statile Vice President
and Controller
John H. Wimberly Vice President
Christine Wubbolding Treasurer
<PAGE>
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
1. Group Agreement (incorporated by reference to Amendment
No. 4 to this Schedule 13D).
2. Stockholder Agreement dated as of August 1, 1991 between
HM Holdings and the Company (incorporated by reference to
Amendment No. 8 to this Schedule 13D).
3. Shareholder Agreement, dated August 23, 1994, by and
among Parent, Purchaser and HM Holdings.
NYFS02...:\13\51513\0116\1323\SCH82294.Y20
<PAGE>
EXECUTION COPY
--------------
SHAREHOLDER AGREEMENT
AGREEMENT (this "Agreement"), dated August 23, 1994, by and
among GRR, Inc., a Delaware corporation ("Parent"), GRR Acquisition
Corp., a New York corporation ("Purchaser") , and HM Holdings, Inc., a
Delaware corporation ("HMH")
RECITALS
A. Parent, Purchaser and Ground Round Restaurants, Inc., a
New York corporation (the "Company"), are concurrently entering into
an Agreement and Plan of Merger of even date herewith (the "Merger
Agreement") which provides, among other things, that Purchaser will
merge with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in the Merger Agreement.
B. As a condition to the willingness of Parent and
Purchaser to enter into the Merger Agreement, HMH has agreed to grant
Parent and Purchaser an option to purchase all of the shares of the
Company's common stock, par value $.16-2/3 per share (the "Common
Stock"), owned by it (the "Option Shares") and an irrevocable proxy
with respect to such Option Shares, upon the terms and subject to the
conditions of this Agreement.
The parties therefore agree as follows:
1. Grant of Option. HMH hereby grants to Parent and
---------------
Purchaser an option (the "Option") to purchase all of the Option
Shares in the manner and circumstance and at the purchase price set
forth in Sections 2 and 3 of this Agreement.
2. Exercise of Option.
------------------
(a) The Option may be exercised by Parent or Purchaser in
whole (but not in part) at any time after (x) the Merger Agreement has
been terminated pursuant to Section 6.1(g) thereof and (y) the fair
market value of the consideration with respect to the Qualifying
Acquisition Proposal (as such term is defined in the Merger Agreement)
is or becomes less than or equal to $10.50 per share (adjusted to
reflect any change in the issued and outstanding Common Stock by
reason of any stock dividend, split-up, recapitalization, merger or
other change in the corporate or capital structure of the Company).
The "fair market
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<PAGE>
<PAGE>
value" shall mean for non-cash consideration (x) in the event of
publicly traded securities, the average closing price for the 10
trading days prior to the announcement of the Qualifying Acquisition
Proposal and (y) otherwise as determined by the Company's financial
advisor.
(b) As long as this Agreement and the GSB Agreement (as
defined below) remain in full force and effect, Parent and Purchaser
(i) may not exercise the Option without also exercising the option
granted to Parent and Purchaser pursuant to that certain Shareholder
Agreement, dated the date hereof, among Parent, Purchaser and GSB
Holdings, Inc., a Delaware corporation (the "GSB Agreement") and (ii)
may not terminate this Option without also terminating the option
granted pursuant to the GSB Agreement.
(c) In the event Parent or Purchaser wishes to exercise the
Option, Parent or Purchaser shall send a written notice to HMH stating
that Parent or Purchaser intends to purchase the Option Shares from
HMH and specifying the place, date and time (but not later than 10
business days from the date such notice is given) for the closing of
such purchase. Parent's or Purchaser's obligation to purchase and pay
for Option Shares upon the exercise of the Option are subject to (i)
the truth and correctness in all material respects of HMH's
representations and warranties contained in this Agreement as of the
date specified for the closing of such purchase as though then made,
(ii) the compliance by HMH in all material respects with each covenant
and agreement made by HMH in this Agreement and (iii) the expiration
or termination of any applicable waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "Hart-Scott
Act"). HMH's obligation to sell and deliver Option Shares upon
exercise of the Option is subject to (i) the expiration or termination
of any applicable waiting period under the Hart-Scott Act, (ii) the
truth and correctness of the representation made in Section 5(e) and
(iii) the compliance by Parent and Purchaser with their covenant and
agreement in Section 2(b). Upon 5 business days prior written notice
by Parent or Purchaser, HMH shall promptly take all action required to
effect all necessary filings by HMH under the Hart-Scott Act.
(d) In the event Parent or Purchaser acquires the Option
Shares and the Qualifying Acquisition Proposal is not consummated,
Parent and Purchaser agree, for the benefit of the Company's
shareholders, to use their best efforts to consummate a merger with
the Company, or other similar transaction (on terms substantially
similar to the Merger Agreement), as soon as practicable thereafter
which results in all shareholders (other
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<PAGE>
<PAGE>
than Parent and Purchaser) receiving consideration of not less than
$9.00 per share in cash (adjusted to reflect any change in the issued
and outstanding Common Stock by reason of any stock dividend, split-
up, recapitalization, merger or other change in the corporate or
capital structure of the Company).
3. Purchase of Option Shares. At the closing under
-------------------------
Section 2(c) of this Agreement, HMH shall deliver to Parent or
Purchaser the certificate or certificates representing the number of
Option Shares being purchased in proper form for transfer, and Parent
or Purchaser will purchase such Option Shares at a price of $9.00 per
Option Share in cash (the "Exercise Price"). Any payment made by
Parent or Purchaser pursuant to this Agreement shall be made by Parent
or Purchaser by wire transfer of immediately available funds to an
account designated by HMH.
4. Certain Option Adjustments. In the event of any change
--------------------------
in the issued and outstanding shares of Common Stock by reason of any
stock dividend, split-up, recapitalization, merger or other change in
the corporate or capital structure of the Company, Parent or Purchaser
shall be entitled to receive, upon exercise of the Option and upon
payment of the applicable Exercise Price, the stock or other
securities, cash or property which HMH received or is entitled to
receive as a consequence of such change.
5. Representations and Warranties of Parent and Purchaser.
-------------------------------------------- ---------
Parent and Purchaser hereby represent and warrant to HMH that (a)
Parent is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite
corporate power to enter into and perform this Agreement; (b)
Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York and has the
requisite corporate power to enter into and perform this Agreement;
(c) this Agreement has been duly authorized by all necessary corporate
action on the part of Parent and Purchaser; (d) Parent and Purchaser
are not subject to or obligated under any provision of (i) their
respective certificate of incorporation or by-laws, (ii) any contract,
(iii) any license, franchise or permit; or (iv) any law, regulation,
order, judgment or decree, which would be breached or violated by its
execution, delivery and performance of this Agreement and the
consummation by it of the transactions contemplated hereby; (d) other
than in connection with or in compliance with the provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Hart-Scott Act and the securities or blue sky laws of the various
states, no authorization, consent or approval of, or filing with, any
public
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<PAGE>
<PAGE>
body, court or authority is necessary on the part of Parent or
Purchaser for the consummation by Parent and Purchaser of the trans-
actions contemplated by this Agreement; and (e) Parent and Purchaser
will not dispose of any acquired Option Shares in contravention of the
Securities Act of 1933, as amended, or any applicable state securities
laws. Such representations and warranties shall be deemed to be made
again upon and as of the date of the closing under Section 2 of this
Agreement.
6. Representations and Warranties of HMH; Restriction on
-----------------------------------------------------
Transfer. HMH represents and warrants to Parent and Purchaser that
--------
(a) HMH is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite
corporate power to enter into and perform this Agreement, (b) this
Agreement has been duly authorized by all necessary corporate action
on the part of HMH, (c) HMH is not subject to or obligated under any
provision of (i) its certificate of incorporation or by-laws, (ii) any
contract,
(iii) any license, franchise or permit or (iv) any law, regulation,
order, judgment or decree which would be breached or violated by its
execution, delivery and performance of this Agreement and the
consummation by it of the transactions contemplated hereby; (d) other
than in connection with or in compliance with the provisions of the
Exchange Act and the Hart-Scott Act, no authorization, consent or
approval of, or any filing with, any public body or authority is
necessary for consummation by HMH of the transactions contemplated by
this Agreement; (e) when delivered by HMH to Parent or Purchaser upon
exercise of the Option, good, legal and valid title in and to the
Option Shares will be vested in Parent or Purchaser, free and clear of
any claims, liens, encumbrances, security interests and charges of any
nature whatsoever except for any liens, claims or encumbrances which
may attach thereto by virtue of any contract, agreement or arrangement
to which Purchaser or Parent may be a party; and (f) the Option Shares
constitute all of the shares of the Company over which HMH possesses
dispositive or voting power. Such representations and warranties
shall be deemed to be made again upon and as of the date of the
closing under Section 2 of this Agreement. Until and unless this
Agreement has been terminated, HMH shall not sell, exchange, pledge,
encumber or otherwise transfer or dispose of, or agree to sell,
exchange, pledge, encumber or otherwise transfer or dispose of, any
Option Shares beneficially owned by HMH, or any interest therein,
except transfers to Parent and Purchaser upon exercise of the Option
or pursuant to the Merger Agreement.
7. Voting Agreement. HMH shall vote, or cause to be
----------------
voted, all Option Shares held by it as follows:
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<PAGE>
<PAGE>
(a) in favor of the Merger at the Special Meeting (as such
term is defined in the Merger Agreement; and
(b) in the manner specified by Parent or Purchaser from
time to time with respect to any other matter which, in Parent's
or Purchaser's reasonable judgment, may contradict any provision
of this Agreement or the Merger Agreement or may make it more
difficult for or less desirable to Parent and Purchaser to
consummate the Merger or may delay or hinder the consummation of
the Merger; provided, however, that HMH shall not vote against a
--------
Qualifying Acquisition Proposal unless Parent or Purchaser first
exercises the Option and has tendered to HMH the Exercise Price
thereof.
8. Irrevocable Proxy. Additionally, HMH hereby appoints
-----------------
Parent and Purchaser and the proper officers of each of Parent and
Purchaser with full power of substitution in the premises, its proxies
to vote all Option Shares at the Special Meeting as provided above,
and hereby appoints Parent and Purchaser and the proper officers of
Parent and Purchaser, with full power of substitution in the premises,
its true and lawful attorneys-in-fact to execute one or more consents
or other instruments from time to time in order to take such actions
informally without the necessity of a meeting of the shareholders of
the Company (to the extent permitted by law and the Company's
certificate of incorporation and bylaws); provided, however, that
--------
Parent or Purchaser may not use the proxy granted herein to vote
against a Qualifying Acquisition Proposal unless Parent or Purchaser
first exercises the Option and has tendered to HMH the Exercise Price
thereof.
The proxy and power of attorney granted herein shall be
-------------------------------------------------------
irrevocable during the term of this Agreement, shall be deemed to be
--------------------------------------------------------------------
coupled with an interest and shall revoke all prior proxies granted by
----------------------------------------------------------------------
HMH.
---
During the term of this Agreement, HMH shall not grant any
----------------------------------------------------------
proxy to any person which conflicts with the proxy granted herein and
---------------------------------------------------------------------
any attempt to do so shall be void.
----------------------------------
9. Expenses. All costs and expenses incurred in
--------
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses.
10. Non-Solicitation. HMH shall immediately cease, and
----------------
cause each of its subsidiaries, representatives, agents, advisors and
affiliates to terminate any existing activities, discussions or
negotiations previously conducted with any parties
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<PAGE>
<PAGE>
other than Parent and Purchaser with respect to any Alternative
Transaction (as defined in the Merger Agreement) or the sale or
assignment of any Option Shares (an "Option Share Disposition"); and
HMH shall not, and shall cause each of its subsidiaries, officers,
directors, representatives, agents, advisors and affiliates not to,
solicit or encourage inquiries or proposals with respect to, or
furnish any non-public information relating to or participate in any
negotiations or discussions concerning, any Acquisition Proposal (as
defined in the Merger Agreement) or any Option Share Disposition. HMH
shall notify Parent and Purchaser promptly if any Acquisition Proposal
is received by, or any such negotiations or discussions are sought to
be initiated with, HMH or any of its subsidiaries or, to the best of
HMH's knowledge, any of its affiliates regarding an Acquisition
Proposal or an Option Share Disposition; provided, however, that this
--------
Section 10 shall not restrict any individual who is a designee of HMH
on the Company's Board of Directors from taking any action in his
capacity as a director of the Company.
11. Amendment; Assignment. This Agreement may not be
---------------------
modified, amended, altered or supplemented except by a writing signed
by Parent, Purchaser and HMH. No party to this Agreement may assign
any of its rights or obligations under this Agreement without the
prior written consent of the other parties hereto, except that the
rights and obligations of Parent and Purchaser hereunder may be
assigned by Parent and Purchaser to any of their affiliates, but no
such transfer shall relieve Parent and Purchaser of its obligations
hereunder if such transferee does not perform such obligations.
12. Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be given
(and, except as otherwise provided in this Agreement, shall be deemed
to have been duly given if so given) if delivered in person, by cable,
telegram or telex, or sent by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as
follows:
If to HMH:
HM Holdings, Inc.
99 Wood Avenue South
Iselin, New Jersey 08830
Attention: General Counsel
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If to Parent or Purchaser:
GRR Acquisition Corp.
c/o 399 Ventures, Inc.
399 Park Avenue
New York, New York 10022
Attention: Harold O. Rosser
with a copy to:
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022
Attention: Kirk A. Radke, Esq.
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change
of address shall only be effective upon receipt.
13. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed to be an original,
but each of which together shall constitute one and the same document.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
15. Specific Performance. The parties hereto agree that if
--------------------
any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy at law would exist
and damages would be difficult to determine, and that the parties
shall (without the posting of bond or other security), be entitled to
obtain from any court of competent jurisdiction specific performance
of the terms hereof, in addition to any other remedy at law or equity.
16. Binding Effect. This Agreement shall be binding upon,
--------------
inure to the benefit of, and be enforceable by the successors and
assigns of the parties hereto. Nothing expressed or referred to in
this Agreement is intended or shall be construed to give any person
other than the parties to this Agreement, or their respective
successors or assigns, any legal or equitable right, remedy or claim
under or in respect of this
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<PAGE>
Agreement or any provision contained herein other than with respect to
Section 2(d).
17. Entire Agreement. This Agreement constitutes the
----------------
entire agreement between the parties hereto with respect to the
subject matter hereof.
18. Termination. This Agreement shall terminate on the
-----------
first to occur of (i) the Expiration Date (as defined in the Merger
Agreement), (ii) the date when all the Option Shares are purchased,
(iii) the date when a Qualifying Acquisition Proposal is consummated
pursuant to which all of the Company's shareholders shall become
entitled to receive consideration the fair market value of which
exceeds $10.50 per share (adjusted to reflect any stock dividend,
split-up, recapitalization, merger or other change in the corporate or
capital structure of the Company), (iv) the valid termination of the
Merger Agreement pursuant to Section 6.1(a), 6.1(b) (provided that
--------
Parent or Purchaser is not contesting or disputing such termination or
if Parent or Purchaser is so contesting or disputing such termination,
the date such adjudication is completed), 6.1(c), 6.1(d), 6.1(e) (as
long as HMH has not breached its obligations pursuant to Section 7 or
Section 8 hereof), 6.1(f) or 6.1(h), and (v) if after exercise of the
Option, Parent or Purchaser does not tender the Exercise Price to HMH
on the date specified pursuant to Section 2(c), such date. In the
event of the termination of this Agreement, this Agreement shall
forthwith become void and there shall be no liability on the part of
Parent, Purchaser or HMH under this Agreement, except that no such
termination shall affect any party's obligations if prior to such
termination, Parent or Purchaser has exercised the Option and has
tendered to HMH the Exercise Price thereof.
19. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
20. Further Assurances. HMH will, upon the request of
------------------
Parent or Purchaser, execute and deliver such documents and take such
action reasonably deemed by Parent or Purchaser to be necessary or
desirable to more effectively complete and evidence the sale and
transfer of Option Shares purchased by Parent or Purchaser pursuant to
this Agreement.
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<PAGE>
21. Miscellaneous. The headings contained in this
-------------
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. References to
Sections, subsections and clauses refer to Sections, subsections and
clauses of this Agreement unless otherwise stated.
* * * * *
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<PAGE>
SHAREHOLDER AGREEMENT
Signature Page
--------------
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed on the day and year first above written.
GRR, INC.
By:/s/ Joseph Silvestri
---------------------------
Name: Joseph Silvestri
Title: Vice President
GRR ACQUISITION CORP.
By:/s/ Joseph Silvestri
---------------------------
Name: Joseph Silvestri
Title: Vice President
HM HOLDINGS, INC.
By:/s/ George H. Hempstead, III
----------------------------
Name: George H. Hempstead, III
Title: Vice President
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