<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
-------------
Ground Round Restaurants, Inc.
- --------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.16-2/3 460200-10-8
per share
- ----------------------------------- -----------------------------------
(Title of class of securities) (CUSIP number)
George H. MacLean, Senior Vice President and General Counsel,
USI American Holdings, Inc.
101 Wood Avenue South, Iselin, New Jersey 08830 (908) 767-0700
- --------------------------------------------------------------------------
(Name, address and telephone number of person authorized to receive
notices and communications)
June 5, 1995
- --------------------------------------------------------------------------
(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 [x].
(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))
<PAGE>
<PAGE>
CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: U.S. INDUSTRIES, 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>
<PAGE>
CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: USI AMERICAN 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: BK
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>
<PAGE>
CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: JACUZZI 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: AF
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>
<PAGE>
CUSIP No. 460200-10-8 13D
1 NAME OF REPORTING PERSON: JUSI 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>
<PAGE>
Item 1. Security and Issuer.
-------------------
This Statement relates to the common stock, par value $0.16-
2/3 per share ("Common Stock"), of Ground Round Restaurants, Inc., a
New York corporation (the "Company"). The address of the principal
executive office of the Company is 35 Braintree Office Hill Park,
Braintree, Massachusetts 02184-9078.
This Statement is being filed on behalf of JUSI Holdings,
Inc. ("JUSI"), Jacuzzi Inc. ("Jacuzzi"), USI American Holdings, Inc.
("USIAH") and U.S. Industries, Inc. ("USI"). JUSI, Jacuzzi, USIAH
and USI are hereinafter collectively referred to as the "Beneficial
Owners".
Item 2. Identity and Background.
-----------------------
(a) - (c), (f) JUSI, a Delaware corporation, is engaged
principally in the business of holding investments. JUSI is a direct
wholly-owned subsidiary of Jacuzzi, a Delaware corporation. Jacuzzi
is engaged principally in the business of manufacturing and
distributing whirlpool bath products, spas, shower systems, nonjetted
baths, swimming pool equipment, water systems and related products.
Jacuzzi is a direct wholly-owned subsidiary of USIAH, a
Delaware corporation. USIAH is principally engaged in the business of
holding investments. USIAH is a direct wholly-owned subsidiary of
USI, a Delaware corporation.
USI is engaged, through subsidiaries, in the manufacture and
distribution of a broad range of consumer, building and industrial
products. USI also holds various real estate interests as well as
minority interests in certain public companies, including the Company.
The principal business address of each of the Beneficial
Owners and the name, business address, principal occupation or
employment (including the name, principal business and address of any
corporation or organization, other than one of the Beneficial Owners,
in which such employment is conducted) and citizenship of each
director and executive officer of each of the Beneficial Owners is
listed on Schedule A.
(d) - (e) None of the Beneficial Owners and, to the best of
their knowledge, none of their respective directors and executive
officers listed on Schedule A has, during the last five years, (i)
been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors), or (ii) been a party
NYFS02...:\13\51513\0220\1733\13D6015W.510
<PAGE>
<PAGE>
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.
-------------------------------------------------
The shares of Common Stock beneficially owned by the
Beneficial Owners were acquired by Jacuzzi on June 5, 1995 pursuant to
a transfer made pursuant to the Proceeds Participation Agreement,
dated May 30, 1995 (the "Proceeds Participation Agreement"), between
HM Holdings, Inc. ("HM Holdings"), a subsidiary of Hanson PLC, and
USIAH. Jacuzzi assumed the rights and obligations of USIAH under the
Proceeds Participation Agreement pursuant to an assignment and
assumption agreement dated May 31, 1995 (the "Assignment Agreement").
Following its acquisition of the shares of Common Stock, Jacuzzi
contributed them to JUSI on June 5, 1995.
Jacuzzi paid HM Holdings $11,040,000 (the "GRR Amount") for
its rights under the Proceeds Participation Agreement. Jacuzzi
received the funds to pay the GRR Amount through an intercompany loan
from USIAH pursuant to a long-term promissory note. USIAH received
the funds to make the intercompany loan to Jacuzzi from a loan made
pursuant to the Credit Agreement, dated as of May 12, 1995, among
USIAH, USI, the banks listed on the signature pages thereof, Bank of
America Illinois, as Issuing Bank, Bank of America National Trust and
Savings Association as Swingline Bank, Bank of America National Trust
and Savings Association, as Agent and BA Securities Inc., as Arranger
(the "Credit Agreement").
Each of the Proceeds Participation Agreement, the Assignment
Agreement and the Credit Agreement has been filed as an exhibit to
this Statement on Schedule 13D and is incorporated herein by
reference.
Item 4. Purpose of Transaction.
----------------------
The transfer of the Common Stock to Jacuzzi pursuant to the
Proceeds Participation Agreement was made in connection with the
demerger (ie. spin-off) of Hanson PLC's non-core U.S. businesses to
--
USI and its subsidiaries. Except as discussed in the following
paragraph and in Item 6 below, the Beneficial Owners have no present
plans or proposals which relate to or would result in any of the
transactions described in Item 4 of Schedule 13D.
<PAGE>
<PAGE>
In order to meet debt amortization requirements under the
Credit Agreement, USIAH must dispose of a significant amount of assets
within the next two years. These assets may consist of operating
units, surplus real estate and equity investments (such as the shares
of Common Stock beneficially owned by it). USIAH's determination of
the assets to be sold will be made in light of the results of a
disposition program, which has been commenced, pursuant to which
management of USIAH will solicit proposals, and respond to unsolicited
proposals, about individual assets as well as various groupings of
assets from parties considered to be financially qualified. There can
be no assurance that USIAH will make any particular disposition or
group of dispositions (including a disposition of the shares of Common
Stock beneficially owned by it).
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) (i) JUSI may be deemed to be the beneficial owner of
3,680,000 shares of Common Stock, which constitute approximately 33.1%
of the 11,158,896 shares of Common Stock reported to be outstanding by
the Company in its Quarterly Report on Form 10-Q for the fiscal
quarter ended April 2, 1995.
(ii) By virtue of its ownership of all of the
outstanding capital stock of JUSI, Jacuzzi may be deemed to be, for
purposes of this Schedule 13D, the beneficial owner of all of the
shares of Common Stock beneficially owned by JUSI.
(iii) By virtue of its ownership of all of the
outstanding capital stock of Jacuzzi, USIAH may be deemed to be, for
purposes of this Schedule 13D, the beneficial owner of all of the
shares of Common Stock beneficially owned by Jacuzzi.
(iv) By virtue of its ownership of all of the
outstanding capital stock of USIAH, USI may be deemed to be, for
purposes of this Schedule 13D, the beneficial owner of all of the
shares of Common Stock beneficially owned by USIAH.
(v) 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 JUSI, is deemed to have, with JUSI, shared power to vote or to
direct the vote and shared power to dispose or
<PAGE>
<PAGE>
direct the disposition of all shares of Common Stock beneficially
owned by JUSI.
(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.
Item 6. Contracts, Arrangements, Understandings or Relationships
--------------------------------------------------------
with Respect to Securities of the Issuer.
----------------------------------------
The information set forth in response to Items 3 and 4 is
incorporated herein by reference.
In conjunction with the transfer of the Common Stock
described in Item 3, HM Holdings assigned and JUSI assumed, pursuant
to an agreement dated June 5, 1995 (the "Stockholder Assignment
Agreement"), all of HM Holdings' rights and obligations under a
Stockholder Agreement, dated as of August 1, 1991, between HM Holdings
and the Company (the "HMH Agreement"). As assignee of HM Holdings,
JUSI will enjoy certain rights and is subject to certain restrictions
under the HMH Agreement with respect to its ownership of Common Stock.
Pursuant to the HMH Agreement, the Company, upon JUSI's
request, is required to use its best efforts to nominate and cause the
election to the Company's Board of Directors of two persons designated
by JUSI for so long as JUSI and its corporate affiliates own 20% or
more of the outstanding shares of Common Stock, and one person
designated by JUSI for so long as JUSI and its corporate affiliates
own less than 20%, but more than 10% of the outstanding shares of
Common Stock. Messrs. John A. Mistretta, a Group Vice President of
USI, and Thomas J. Russo are the current designees of JUSI serving on
the Company's Board of Directors. JUSI 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.
Pursuant to the HMH Agreement, neither JUSI nor any of its
corporate affiliates may acquire, directly or indirectly, additional
shares of Common Stock which would result in JUSI and
<PAGE>
<PAGE>
such affiliates beneficially owning 50% or more of the outstanding
shares of Common Stock unless, in such acquisition, JUSI 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, for so long as JUSI and its corporate
affiliates own 20% or more of the outstanding shares of Common Stock,
except in certain limited circumstances, should JUSI 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 JUSI, JUSI must
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. If such third party
fails to make such offer, JUSI or such corporate affiliate may not
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 paragraph
with respect to the acquisition of 50% or more of the outstanding
shares of the Common Stock.
In addition, pursuant to the HMH Agreement the Company must,
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 JUSI or its affiliates (as assignee of
HM Holdings), give JUSI the opportunity to purchase such number of
shares or other securities as will permit JUSI and its corporate
affiliates to retain their percentage of the Company's voting power.
Also pursuant to the HMH Agreement, as long as JUSI (as
assignee of HM Holdings) owns 5% or more of the outstanding shares of
Common Stock, upon the request of JUSI, the Company will cause up to
four registration statements to be filed with the Securities and
Exchange Commission in order to permit JUSI or an affiliate to sell
all or a portion of its shares of Common Stock. In addition, the
Company must, if requested, include some or all shares of Common Stock
owned by JUSI or an affiliate in any registration statement it
otherwise files (other than registration statements relating to
employee stock options). The Company and JUSI also must, pursuant to
the HMH Agreement, indemnify each other for certain liabilities that
may arise in connection with any such registration statement.
Prior to the execution of the Stockholder Assignment
Agreement, GRR executed a consent agreement (the "GRR Consent")
<PAGE>
<PAGE>
consenting to the transfer and assignment of HM Holdings' rights and
obligations under the HMH Agreement to USI.
The HMH Agreement, the Stockholder Assignment Agreement and
the GRR Consent are filed as exhibits to this Statement on Schedule
13D and are incorporated herein by reference.
Item 7. Materials to be Filed as Exhibits.
---------------------------------
The following are filed herewith as Exhibits to this
Schedule 13D:
1. Group Agreement, dated June 5, 1995.
2. Proceeds Participation Agreement, dated May 30,
1995, between HM Holdings, Inc. and USI American
Holdings, Inc.
3. Assignment and Assumption Agreement, dated May 31,
1995, between USI American Holdings, Inc. and Jacuzzi
Inc.
4. Credit Agreement, dated May 12, 1995, among USI
American Holdings, Inc., U.S. Industries, Inc.,
the banks listed on the signature pages thereof,
Bank of America Illinois, as Issuing Bank, Bank of
America National Trust and Savings Association as
Swingline Bank, Bank of America National Trust and
Savings Association, as Agent and BA Securities
Inc., as Arranger (incorporated by reference to
Exhibit 2 to U.S. Industries, Inc.'s Quarterly
Report on Form 10-Q for the fiscal quarter ended
March 31, 1995).
5. Consent Agreement dated June 1, 1995 between HM
Holdings, Inc., Ground Round Restaurants, Inc. and U.S.
Industries, Inc.
6. Assignment and Assumption Agreement, dated June 5, 1995
between HM Holdings, Inc. and JUSI Holdings, Inc.
7. Stockholder Agreement dated as of August 1, 1991
between HM Holdings, Inc. and Ground Round Restaurants,
Inc.
<PAGE>
<PAGE>
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: June 5, 1995
U.S. INDUSTRIES, INC.
USI AMERICAN HOLDINGS, INC.
JACUZZI INC.
JUSI HOLDINGS, INC.
By: /s/ George H. MacLean
-----------------------------
George H. MacLean
Senior Vice President
<PAGE>
<PAGE>
Schedule A
----------
1. U.S. INDUSTRIES, INC.
Set forth below are the name, business address, position
with U.S. Industries, Inc. ("USI") and the present principal
occupation or employment of each director and executive officer of
USI. The principal business address of USI is 17 Mount Street,
Mayfair W14 5RA, England, and its principal business address in the
United States is 101 Wood Avenue South, Iselin, New Jersey 08830.
Unless otherwise indicated, the business address of each person listed
below is USI's United States address. Each person listed below is a
citizen of the United States, except for Mr. Bonham and, who is a
citizen of the United Kingdom.
Position with USI
and Present Principal
Name and Business Address Occupation or Employment
------------------------- ------------------------
David H. Clarke . . . . . . . . Chairman of the Board and
Chief Executive Officer of
USI
John G. Raos . . . . . . . . . President, Chief Operating
Officer and Director of USI
Frank R. Reilly . . . . . . . . Senior Vice President, Chief
Financial Officer and
Director of USI
Derek C. Bonham . . . . . . . . Director of USI; Deputy
Hanson PLC Chairman of Hanson PLC
One Grosvenor Place
London SW1X 7JH
John J. McAtee, Jr. . . . . . . Director of USI; Vice
Smith Barney Inc. Chairman of Smith Barney,
388 Greenwich Street Inc.
New York, New York 10013
The Hon. Charles H. Price II . Director of USI; Chairman of
Mercantile Bank of Kansas City Mercantile Bank of Kansas
Suite 300 City
One West Armour Blvd.
Kansas City, Missouri 64111
Royall Victor III . . . . . . . Director of USI; Managing
Chemical Securities, Inc. Director, Investment Banking
270 Park Avenue Group, Chemical Securities,
New York, New York 10017 Inc.
<PAGE>
<PAGE>
Schedule A
----------
Mark Vorder Bruegge . . . . . . Director of USI; Chairman of
United American Bank of Memphis United American Bank of
5384 Popular Memphis
Memphis, Tennessee 38119
Christian R. Guntner . . . . . Senior Vice President -
Corporate Development of USI
George H. MacLean . . . . . . . Senior Vice President,
General Counsel and
Secretary of USI
John A. Mistretta . . . . . . . Group Vice President of USI
John S. Oldford . . . . . . . . Group Vice President of USI
Edwin Silverstone . . . . . . . Group Vice President of USI
Robert M. Brier . . . . . . . . Vice President - Finance and
Treasurer of USI
Richard A. Buccarelli . . . . . Vice President - Properties
of USI
Diana E. Burton . . . . . . . . Vice President - Investor
Relations of USI
Dorothy E. Sander . . . . . . . Vice President -
Administration of USI
James O'Leary . . . . . . . . . Corporate Controller of USI
2. USI AMERICAN HOLDINGS, INC.
Set forth below are the name, business address, position
with USI American Holdings, Inc. ("USIAH") and present principal
occupation or employment of each director and executive officer of
USIAH. The principal business address of USIAH is 101 Wood Avenue
South, Iselin, New Jersey 08830. Unless otherwise indicated, the
business address of each person listed below is such address. Each
person listed below is a citizen of the United States.
<PAGE>
<PAGE>
Schedule A
----------
Principal
Name and Occupation
Business Address Position or Employment
---------------- -------- -------------
David H. Clarke . . . . . . Chairman of the See Part 1 of
Board and this Schedule A
Chief
Executive
Officer
John G. Raos . . . . . . . President; Chief See Part 1 of
Operating this Schedule A
Officer and
Director
Frank R. Reilly . . . . . . Senior Vice See Part 1 of
President and this Schedule A
Chief Financial
Officer
Christian R. Guntner . . . Senior Vice See Part 1 of
President - this Schedule A
Corporate
Development
George H. MacLean . . . . . Senior Vice See Part 1 of
President, this Schedule A
General Counsel,
Secretary and
Director
John A. Mistretta . . . . . Group Vice See Part 1 of
President this Schedule A
John S. Oldford . . . . . . Group Vice See Part 1 of
President this Schedule A
Edwin Silverstone . . . . . Group Vice See Part 1 of
President this Schedule A
Robert M. Brier . . . . . . Vice President - See Part 1 of
Finance & this Schedule A
Treasurer
Richard A. Buccarelli . . . Vice President - See Part 1 of
Properties this Schedule A
Diana E. Burton . . . . . . Vice President - See Part 1 of
Investor this Schedule A
Relations
Dorothy E. Sander . . . . . Vice President - See Part 1 of
Administration this Schedule A
<PAGE>
<PAGE>
Schedule A
----------
James O'Leary . . . . . . . Corporate See Part 1 of
Controller this Schedule A
=================================================================
3. JACUZZI INC.
Set forth below are the name, position with Jacuzzi Inc.
("Jacuzzi") and present principal occupation or employment of each
director and executive officer of Jacuzzi. The principal business
address of Jacuzzi is 2121 North California Blvd., Suite 475, Walnut
Creek, CA 94956. The business address of each of Messrs. Jacuzzi,
Duncan and Herrmann is such address; the business address of all other
persons listed below is 101 Wood Avenue South, Iselin, New Jersey
08830. Each person listed below is a citizen of the United States.
Principal
Name and Occupation
Business Address Position or Employment
---------------- -------- -------------
Roy A. Jacuzzi . . . . . . Chairman of the Same
Board, Presi-
dent, Chief
Executive
Officer and
Director
George H. MacLean . . . . . Senior Vice See Part 1 of
President, this Schedule A
General Counsel
and Director
Edwin Silverstone . . . . . Vice President See Part 1 of
this Schedule A
Gary A. Duncan . . . . . . Vice President- Same
Operations and
Secretary
Paul A. Herrmann . . . . . Vice President- Same
Finance and
Treasurer
=================================================================
4. JUSI HOLDINGS, INC.
Set forth below are the name, business address, position
with JUSI Holdings, Inc. ("JUSI") and present principal occupation or
employment of each director and executive officer of JUSI. The
principal business address of JUSI and each person
<PAGE>
<PAGE>
Schedule A
----------
listed below is 101 Wood Avenue South, Iselin, New Jersey 08830. Each
person listed below is a citizen of the United States.
Principal
Name and Occupation
Business Address Position or Employment
---------------- -------- -------------
John G. Raos . . . . . . . President See Part 1 of
this Schedule A
Frank R. Reilly . . . . . . Senior Vice See Part 1 of
President and this Schedule A
Chief Financial
Officer
George H. MacLean . . . . . Senior Vice See Part 1 of
President, this Schedule A
General Counsel,
Secretary and
Director
Robert M. Brier . . . . . . Vice President - See Part 1 of
Finance & this Schedule A
Treasurer
James O'Leary . . . . . . . Corporate See Part 1 of
Controller this Schedule A
<PAGE>
<PAGE>
EXHIBIT INDEX
-------------
Item No. Page No.
-------- --------
1. Group Agreement, dated June 5, 1995.
2. Proceeds Participation Agreement, dated May 30,
1995, between HM Holdings, Inc. and USI American
Holdings, Inc.
3. Assignment and Assumption Agreement, dated May 31,
1995, between USI American Holdings, Inc. and
Jacuzzi Inc.
4. Credit Agreement, dated May 12, 1995, among USI
American Holdings, Inc., U.S. Industries, Inc.,
the banks listed on the signature pages thereof,
Bank of America Illinois, as Issuing Bank, Bank of
America National Trust and Savings Association as
Swingline Bank, Bank of America National Trust and
Savings Association, as Agent and BA Securities
Inc., as Arranger (incorporated by reference to
Exhibit 2 to U.S. Industries, Inc.'s Quarterly
Report on Form 10-Q for the fiscal quarter ended
March 31, 1995).
5. Consent Agreement dated June 1, 1995 between HM
Holdings, Inc., Ground Round Restaurants, Inc. and
U.S. Industries, Inc.
6. Assignment and Assumption Agreement, dated June 5,
1995 between HM Holdings, Inc. and JUSI Holdings,
Inc.
7. Stockholder Agreement dated as of August 1, 1991
between HM Holdings, Inc. and Ground Round
Restaurants, Inc.
<PAGE>
EXHIBIT 1
---------
AGREEMENT
---------
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, the persons named below agree to the
joint filing on behalf of each of them of the Schedule 13D (and any
further amendment filed by them) with respect to the shares of the
Common Stock, $.16-2/3 par value, of Ground Round Restaurants, Inc.
Dated as of: June 5, 1995
JUSI HOLDINGS, INC.
JACUZZI INC.
USI AMERICAN HOLDINGS, INC.
U.S. INDUSTRIES, INC.
By: /s/ George H. MacLean
--------------------------------
George H. MacLean
Senior Vice President
NYFS02...:\13\51513\0220\1733\13D6015W.510
<PAGE>
<PAGE>
Exhibit 2
PROCEEDS PARTICIPATION AGREEMENT RELATING TO
THE STOCK OF GROUND ROUND RESTAURANTS, INC.
THIS AGREEMENT is made the 30th day of May, 1995
BETWEEN:
(1) HM HOLDINGS INC., a Delaware corporation ("HMH"); and
(2) USI AMERICAN HOLDINGS, INC., a Delaware corporation ("USI").
WHEREAS:
(A) HMH is the registered and beneficial owner of 3,680,000 shares
(the "Shares") of the common stock, par value $.16-2/3 per share,
of Ground Round Restaurants, Inc. ("GRR").
(B) HMH wishes to sell and USI wishes to purchase the right to
receive the proceeds from the sale of the Shares on the terms and
subject to the conditions of this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
1. Grant of Proceeds Participation Right.
-------------------------------------
Subject to the terms and conditions of this Agreement, HMH
hereby sells and grants to USI, and USI hereby purchases and accepts
from HMH, effective upon the Closing (as defined below), the exclusive
and irrevocable right (the "Right") to receive all Sale Proceeds (as
defined below) from the sale by HMH of any or all of the Shares during
the period from the Closing Date (as defined below), to June 5, 1996
(the "Term").
2. Consideration.
-------------
(a) The total consideration for the sale and grant of the
Right (the "Consideration") shall be Eleven Million Forty Thousand
Dollars ($11,040,000), payable in cash at the Closing, subject to
post-Closing adjustment as provided herein.
(b) The Consideration for the Right shall be adjusted
by the amount by which (x) the product of 3,680,000 multiplied by the
average of the high and low sale prices for a share of the Company's
common stock on NASDAQ on the Closing Date (as defined below) is
greater or less than (y) the Consideration set forth in Section 2(a).
Payment of this amount shall be made within 60 days after the Closing
(in the event the amount set forth in clause (x) is greater than the
amount set forth in
NYFS02...:\13\51513\0220\1323\GRRPROP.26A
<PAGE>
<PAGE>
clause (y), such payment to be made by USI, and in the event the
amount set forth in clause (y) is greater than the amount set forth in
clause (x), such payment to be made by HMH), in U.S. dollars, together
with interest accruing on such amount from and including the Closing
Date to but excluding the date of payment at the prime rate charged by
Chemical Bank to its corporate customers during such period.
3. Closing.
-------
Subject to the satisfaction of each of the conditions set
forth in Section 4, the closing of the sale and purchase of the Right
hereunder (the "Closing") shall take place at the offices of Weil,
Gotshal & Manges, 767 Fifth Avenue, New York, New York, 10153 (or at
such other place as the parties may agree in writing) at 10:00 a.m.,
New York City time, on June 5, 1995 (the "Closing Date"). At the
Closing, USI shall transfer to HMH (to such account as shall be
designated by HMH) the Consideration in immediately available funds,
and the Right shall become effective.
4. Conditions of Closing.
---------------------
USI's obligation to pay the Consideration and the
effectiveness of the Right are subject to the fulfillment, prior to or
at the Closing, of each of the following:
a. Hanson PLC shall have paid a stock dividend to its
shareholders consisting of all of the outstanding shares of
capital stock of Purchaser's parent, U.S. Industries, Inc.; and
b. There shall not be in effect any injunction or
restraining order issued by a court of competent jurisdiction
barring the consummation of the sale and purchase of the Right
pursuant to this Agreement.
5. Obligation to Deliver Sale Proceeds.
-----------------------------------
If at any time during the Term HMH sells any of the Shares,
HMH shall deliver the Sale Proceeds applicable to such Shares to USI
promptly following HMH's receipt thereof upon completion of such sale
(and in any event within five business days after such receipt).
As used in this Agreement, the "Sale Proceeds" from the sale
of any Shares means the total consideration actually received by HMH
for such Shares, net of any applicable underwriting or brokerage
commissions, transfer taxes, stamp duties and similar charges, and
other reasonable costs of sale
<PAGE>
<PAGE>
(including reasonable attorney's fees and expenses) incurred by HMH in
connection with the sale of such Shares.
6. Right of Refund.
---------------
If, prior to expiration of the Term, HMH has not delivered
Sale Proceeds which, in the aggregate, are equal to or exceed the
Consideration, then immediately upon the expiration of the Term HMH
will refund to USI an amount of cash equal to the difference between
the Consideration and the aggregate Sale Proceeds delivered by HMH to
USI hereunder (the "Refund Amount"), plus interest accruing on the
Refund Amount during the entire Term at the prime rate charged by
Chemical Bank to its corporate customers during such period.
USI's right to receive the Refund Amount may be terminated
at any time upon HMH delivering to USI (or its permitted successors
and assigns) all unsold Shares free and clear of any liens, claims and
encumbrances together with an assignment of HMH's rights under that
certain Stockholder Agreement dated as of August 1, 1991 between HMH
and GRR, which assignment shall have been executed and agreed to by
GRR.
7. Ownership of Shares During the Term.
-----------------------------------
It is understood and acknowledged that all times during the
Term, HMH shall continue to be the record and beneficial owner of the
Shares with full right, title and interest in and to the Shares,
including the right to receive any dividends, distributions or
payments made with respect to the Shares, and the right to vote the
Shares.
8. Arbitration.
-----------
Resolution of any and all disputes arising from or in
connection with this Agreement, whether based on contract, tort,
statute or otherwise, including, but not limited to, disputes over
arbitrability and disputes in connection with claims by third parties
(collectively, "Disputes") shall be exclusively governed by and
settled in accordance with the provisions of this Section 8; provided,
--------
however, that nothing contained herein shall preclude either party
-------
from seeking or obtaining (a) injunctive relief or (b) equitable or
other judicial relief to enforce the provisions hereof or pending
resolution of Disputes hereunder, to preserve the status quo. HMH or
USI (each a "Party") may commence proceedings hereunder by delivering
a written notice to the other Party providing reasonable description
of the Dispute to the other, and expressly requesting arbitration
hereunder. The parties hereby agree to submit all Disputes to
arbitration under the terms hereof, which arbitration shall be final,
<PAGE>
<PAGE>
conclusive and binding upon the parties, their successors and assigns.
The arbitration shall be conducted in New York City by three
arbitrators acting by majority vote (the "Panel") selected by
agreement of the Parties not later than ten (10) days after delivery
of the Demand or, failing such agreement, appointed pursuant to the
commercial arbitration rules of the American Arbitration Association,
as amended from time to time (the "AAA Rules"). If an arbitrator so
selected becomes unable to serve, his or her successors shall be
similarly selected or appointed. The arbitration shall be conducted
pursuant to the Federal Arbitration Act and such procedures as the
Parties may agree, or, in the absence of or failing such agreement,
pursuant to the AAA Rules. Notwithstanding the foregoing: (i) each
Party shall have the right to audit the books and records of the other
Party that are reasonably related to the Dispute; (ii) each Party
shall provide to the other, reasonably in advance of any hearing,
copies of all documents which a Party intends to present in such
hearing; and (iii) each party shall be allowed to conduct reasonable
discovery through written requests for information, document requests,
requests for stipulation of fact and depositions, the nature and
extent of which discovery shall be determined by the Panel, taking
into account the needs of the Parties and the desirability of making
discovery expeditious and cost effective. All hearings shall be
conducted on an expedited schedule, and all proceedings shall be
confidential. Either party may at its expense make a stenographic
record thereof. The Panel shall complete all hearings not later than
ninety (90) days after its selection or appointment, and shall make a
final award not later than thirty (30) days thereafter. The award
shall be in writing and shall specify the factual and legal basis for
the award. The Panel shall apportion all costs and expenses of
arbitration, including the Panel's fees and expenses and fees and
expenses of experts, between the prevailing and non-prevailing Party
as the Panel deems fair and reasonable. Notwithstanding the
foregoing, in no event may the Panel award multiple, punitive or
exemplary damages. Any arbitration award shall be binding and
enforceable against the parties hereto and judgment may be entered
thereon in any court of competent jurisdiction.
9. Miscellaneous.
-------------
9.1 No Impeachment. Neither of the parties hereto shall
--------------
impeach this Agreement on the grounds that any of the Directors of HMH
stand in any fiduciary position to USI or that any of the Directors of
USI stand in any fiduciary position to HMH or that the Directors of
either party do not constitute an independent Board.
9.2 Assignments. Except as provided in this Section 9.2,
-----------
neither party may assign or transfer any of its rights and
<PAGE>
<PAGE>
obligations under this Agreement without the prior written consent of
the other party. Notwithstanding the foregoing, HMH acknowledges and
agrees that USI may assign its rights and obligations under this
Agreement to Jacuzzi, Inc. and Jacuzzi, Inc. may assign such rights
and obligations to JUSI Holdings, Inc. or subsidiaries thereof,
provided that such an assignment or assignments shall have no effect
on, and shall not be deemed to constitute a release of USI (or
Jacuzzi, Inc.) from, its obligations under this Agreement.
9.3 Governing Law; Counterparts. This Agreement shall be
---------------------------
governed by and construed in accordance with the internal laws of the
State of New York and may be executed in more than one counterpart and
by different parties of each counterpart and all such counterparts
when executed shall form one and the same agreement.
<PAGE>
<PAGE>
AS WITNESS this Agreement has been signed by or on behalf of
each of the parties hereto.
HM HOLDINGS INC.
By:/s/ George H. Hempstead
-------------------------------------
Name: George H. Hempstead
Title: Vice President
USI AMERICAN HOLDINGS, INC.
By:/s/ Graham Dransfield
-------------------------------------
Name: Graham Dransfield
Title: Vice President
<PAGE>
Exhibit 3
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT is made the 31st day of May, 1995
BETWEEN:
(1) USI American Holdings, Inc., a Delaware corporation (the
"Assignor"); and
(2) Jacuzzi Inc., a Delaware corporation (the "Assignee").
WHEREAS:
(A) Assignor has entered into the agreements listed on Annex A hereto
(collectively, the "Agreements") and wishes to assign its rights and
obligations under the Agreements to Assignee.
(B) Assignee wishes to acquire the Assignor's rights and to assume
all of the Assignor's obligations and liabilities under the
Agreements.
NOW, THEREFORE, it is hereby agreed as follows:
1. Assignor hereby assigns, transfers, conveys and delivers all of
its rights and interest in and to each of the Agreements to the
Assignee. For the avoidance of doubt, Assignor does not hereby
assign its rights or obligations under any Indemnification
Agreement or Tax Sharing and Indemnification Agreement attached
to or referred to in any of the Agreements.
2. Assignee hereby accepts the assignment of the Assignor's rights
and interest in each of the Agreements and assumes all the
obligations and liabilities of Assignor under each of the
Agreements.
3. This Assignment and Assumption Agreement shall be binding on and
inure to the benefit of the Assignor and the Assignee and their
respective successors and assigns.
4. This Assignment and Assumption Agreement shall be governed by and
construed in accordance with the internal laws of the State of
New York.
5. Neither of the parties hereto shall impeach this Agreement on the
grounds that any of the Directors of Assignor stand in any
fiduciary position to Assignee or that any of the Directors of
Assignee stand in any fiduciary position to
NYFS02...:\13\51513\0220\1323\ASSIGNUS.57A
<PAGE>
<PAGE>
Assignor or that the Directors of either party do not constitute
an independent Board.
IN WITNESS WHEREOF, Assignor and Assignee have caused this
Agreement to be signed and delivered by their respective officers,
thereunto duly authorized, all as of the date first written above.
USI AMERICAN HOLDINGS, INC.
By: /s/ George H. MacLean
-------------------------------------
Name: George H. MacLean
Title: Vice President
JACUZZI INC.
By: /s/ George H. MacLean
-------------------------------------
Name: George H. MacLean
Title: Vice President
<PAGE>
<PAGE>
ANNEX A
Assigned Agreements
-------------------
1. Stock Purchase Agreement between HM Holdings, Inc. and USI
American Holdings, Inc., dated May 30, 1995.
2. Purchase Price Allocation Agreement between HM Holdings, Inc. and
USI American Holdings, Inc., dated May 30, 1995.
3. Stock Purchase Agreement between Kaiser Cement Corporation and
USI American Holdings, Inc., dated May 30, 1995.
4. Stock Purchase Agreement between Kidde Industries, Inc. and USI
American Holdings, Inc., dated May 30, 1995.
5. Purchase Price Allocation Agreement between Kidde Industries,
Inc. and USI American Holdings, Inc., dated May 30, 1995.
6. Stock Purchase Agreement between HMB Holdings, Inc. and USI
American Holdings, Inc., dated May 30, 1995.
7. Stock Purchase Agreement between Kidde Industries, Inc. and USI
American Holdings, Inc. for 1,009,443 shares of IAH owned by
Kidde, dated May 30, 1995.
8. Proceeds Participation Agreement between Hanson Natural Resources
Company and USI American Holdings, Inc. with respect to the
shares of Smith Corona Corporation, dated May 30, 1995.
9. Proceeds Participation Agreement between HM Holdings, Inc. and
USI American Holdings, Inc. with respect to the shares of Ground
Round Restaurants, Inc., dated May 30, 1995.
10. Stock Purchase Agreement between Kidde Industries, Inc. and USI
American Holdings, Inc. for 258,600 shares of Richton
International Corporation, dated May 30, 1995.
11. Asset Purchase Agreement between Quantum Chemical Corporation and
USI American Holdings, Inc., dated May 30, 1995.
12. Asset Purchase Agreement between Spartus Corporation and USI
American Holdings, Inc., dated May 30, 1995.
<PAGE>
<PAGE>
13. Stock Purchase Agreement between Endicott Johnson Corporation and
USI American Holdings, Inc., dated May 30, 1995.
14. Purchase Price Allocation Agreement between Endicott Johnson
Corporation and USI American Holdings, Inc., dated May 30, 1995.
15. Asset Purchase Agreement between Endicott Johnson Corporation and
USI American Holdings, Inc., dated May 30, 1995.
16. Asset Purchase Agreement between Hanson America Inc. and USI
American Holdings, Inc., dated May 30, 1995.
17. Real Estate Purchase Agreement between Gold Fields America Corp.
and USI American Holdings, Inc., dated May 30, 1995.
<PAGE>
Exhibit 5
CONSENT AGREEMENT
Effective June 1, 1995, HM Holdings, Inc., a Delaware
corporation ("HMH"), Ground Round Restaurants, Inc., a New York
corporation ("GRR"), and U.S. Industries, Inc., a Delaware corporation
("USI"), hereby act and agree as follows:
1. Reference is made to the Stockholder Agreement dated as
of August 1, 1991 (the "Stockholder Agreement").
2. GRR hereby waives the application of Section 3.2(b) of
the Stockholder Agreement to the proposed transfer by HMH to USI of
all (but not less than all) of the Shares (as defined in the
Stockholder Agreement) and in connection therewith consents to the
assignment by HMH to USI of the Stockholder Agreement, provided that
such transfer and assignment are effected on or prior to June 5, 1995.
3. Effective upon such transfer and assignment, USI agrees
to be bound by the Stockholder Agreement and shall have the same
rights and obligations of HMH under the Stockholder Agreement. For
purposes thereof, (a) "USI" shall mean USI or, if USI so notifies GRR
in accordance with Section 3.2 of the Stockholder Agreement, a
subsidiary or affiliate of USI (USI and such subsidiaries and
affiliates shall constitute the "USI Group" for purposes of the
Stockholder Agreement), and (b) the "Credit Agreement" referred to in
Section 4 of the Stockholder Agreement shall mean the Amended and
Restated Credit Agreement with the banks named therein dated as of
October 8, 1993, as heretofore and hereafter amended, and any
successor or replacement credit facility.
4. This Agreement shall be binding upon the parties hereto
and shall inure to the benefit of their respective successors, assigns
and representatives.
NYFS02...:\13\51513\0220\1323\AGR6055V.080<PAGE>
<PAGE>
WITNESS the execution hereof under seal effective as of the
day and year first above written.
HM HOLDINGS, INC.
By/s/ George H. Hempstead
---------------------------------
Its Vice President
GROUND ROUND RESTAURANTS, INC.
By/s/ Michael R. Jorgensen
---------------------------------
Its Vice President
U.S. INDUSTRIES, INC.
By/s/ George H. MacLean
---------------------------------
Its Vice President
NYFS02...:\13\51513\0220\1323\AGR6055V.080
<PAGE>
Exhibit 6
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT is made the 5th day of June, 1995
BETWEEN:
(1) HM Holdings, Inc., a Delaware corporation (the "Assignor"); and
(2) JUSI Holdings, Inc., a Delaware corporation and a wholly-owned
indirect subsidiary of U.S. Industries, Inc. (the "Assignee").
WHEREAS:
(A) Assignor is a party to that certain Stockholder Agreement dated
as of August 1, 1991 between HM Holdings, Inc. and Ground Round
Restaurants, Inc. (the "Agreement"), and wishes to assign its rights
and obligations under the Agreement to Assignee.
(B) Assignee wishes to acquire the Assignor's rights and to assume
all of the Assignor's obligations and liabilities under the Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. Assignor hereby assigns, transfers, conveys and delivers all of
its rights and interest in and to the Agreement to the Assignee.
2. Assignee hereby accepts the assignment of the Assignor's rights
and interest in the Agreement and agrees to be bound by, and
assumes all the obligations and liabilities of Assignor under,
the Agreement.
3. This Assignment and Assumption Agreement shall be binding on and
inure to the benefit of the Assignor and the Assignee and their
respective successors and assigns.
4. This Assignment and Assumption Agreement shall be governed by and
construed in accordance with the internal laws of the State of
New York.
5. Neither of the parties hereto shall impeach this Agreement on the
grounds that any of the Directors of Assignor stand in any
fiduciary position to Assignee or that any of the Directors of
Assignee stand in any fiduciary position to
NYFS02...:\13\51513\0220\1664\ASI5205S.25A
<PAGE>
<PAGE>
Assignor or that the Directors of either party do not constitute
an independent Board.
IN WITNESS WHEREOF, Assignor and Assignee have caused this
Agreement to be signed and delivered by their respective officers,
thereunto duly authorized, all as of the date first written above.
HM HOLDINGS, INC.
By:/s/ George H. Hempstead
------------------------------------------
Name: George H. Hempstead
Title: Vice President
JUSI HOLDINGS, INC.
By:/s/ George H. MacLean
------------------------------------------
Name: George H. MacLean
Title: Vice President
<PAGE>
Exhibit 7
STOCKHOLDER AGREEMENT
Dated as of August 1, 1991
The parties to this Stockholder Agreement (this "Agreement")
are HM Holdings, Inc., a Delaware corporation ("HMH"), and Ground
Round Restaurants, Inc, a New York corporation ("GRR").
HMH is the owner of 3,180,000 shares of Common Stock, par
value $.16 2/3 per share, of GRR ("GRR Common Stock"), and HMH and GRR
(then known as International Proteins Corporation), are parties to a
Stock Purchase Agreement, dated October 18, 1989 (the "Stock Purchase
Agreement"), which contains certain provisions relating to HMH's
ownership of shares of GRR Common Stock. GRR is proposing to make a
public offering of additional shares of GRR Common Stock in which it
is contemplated that HMH shall purchase 500,000 shares of GRR Common
Stock. In connection with such public offering, the parties wish to
provide that HMH will waive certain rights granted to it pursuant to
the Stock Purchase Agreement and will agree to certain other terms in
order to comply with requirements of the bank financing arrangements
being entered into by GRR at the time of the proposed public offering
and to replace certain provisions of the Stock Purchase Agreement.
The term "HMH" shall mean HMH or, if HMH so notifies GRR in accordance
with Section 3.2 of this Agreement, a subsidiary or affiliate of HMH
(HMH and such subsidiaries and affiliates being hereinafter referred
to as the "Hanson Group") which has agreed to be bound by this
Agreement pursuant to Section 3.2(a) hereof. The term "Shares" shall
mean the GRR Common Stock and any other security of GRR entitling its
holder to vote for the election of directors and, for purposes of
calculating percentages in this Agreement, each voting right shall be
counted as a Share.
It is therefore agreed as follows:
1. Waiver of Rights.
----------------
In connection with the public offering proposed to be made
by GRR, HMH hereby agrees to waive its right to register shares of GRR
Common Stock to Paragraph (b) of Annex A to the Stock Purchase
Agreement and to waive its rights to buy additional shares of GRR
Common Stock pursuant to Section 10.4(b) of the Stock Purchase
Agreement.
NYFS02...:\13\51513\0220\1627\AGR6065S.020
<PAGE>
<PAGE>
2. Termination of Certain Provisions of the Stock Purchase
-------------------------------------------------------
Agreement.
---------
HMH and GRR hereby agree that the provisions of Sections
10.1, 10.2, 10.4, 10.5 and 10.6 of the Stock Purchase Agreement shall
be terminated and of no further force and effect, and that such
provisions shall be replaced by those set forth in Article 3 of this
Agreement.
3. Certain Agreements
------------------
3.1. Designation of Directors by HMH.
-------------------------------
(a) From and after the date hereof, GRR shall, upon
HMH's request, use its best efforts to nominate for election by its
shareholders, cause the election of and thereafter to continue in
office, two persons designated by HMH to serve on GRR's Board of
Directors (the "Board") so long as the Hanson Group beneficially owns
20% or more of the outstanding Shares, and one person designated by
HMH to serve on the Board so long as the Hanson Group beneficially
owns at least 10% but less than 20% of the outstanding Shares.
(b) HMH may at any time cause any of the persons
designated by it to serve as a member of the Board to be removed as a
member of the Board with or without cause and, upon the request of
HMH, GRR and the Board shall each use its best efforts to effect, or
cause GRR's shareholders to effect, such removal. In the event that
there is a vacancy in the Board caused by the death, resignation or
removal of any of the persons designated by HMH to serve as a member
of the Board, GRR and the Board shall each use its best efforts to
elect or nominate for election by GRR's shareholders, and thereafter
to continue in office, such substitute director as HMH may so
designate.
(c) Notwithstanding anything to the contrary contained
in this Section 3.1, no restrictions shall apply to HMH's ability to
propose for election and/or to solicit proxies in favor of the
election of any number of directors of GRR.
3.2. Disposition of Shares by HMH.
----------------------------
(a) HMH or any member of the Hanson Group to which
Shares are transferred in accordance with this Section 3.2 shall have
the right at any time during the term of this Agreement to sell,
transfer or otherwise dispose of any or all of the Shares owned by it
(i) to any member of the Hanson Group which agrees to be bound by this
Agreement and which shall have
<PAGE>
<PAGE>
the same rights and obligations of HMH hereunder, (ii) to any third
party pursuant to Rule 144 under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act or
(iii) in a public offering pursuant to the exercise of registration
rights set forth in Annex A. HMH and any other member of the Hanson
Group which owns Shares shall promptly notify GRR of any disposition
of Shares made by it pursuant to clauses (i) and (ii) of this Section
3.2(a).
(b) Except as otherwise permitted by Sections
3.2(a)(i) or (iii), or approved by a majority of the members of the
Board not designated by HMH, in the event HMH or any other member of
the Hanson Group which owns Shares seeks to sell, transfer or
otherwise dispose of all or substantially all of the Shares owned by
the Hanson Group to a third party, HMH or such other member of the
Hanson Group shall use its best efforts to cause such third party to
offer to purchase all other outstanding Shares on substantially the
same terms and conditions as are available to HMH or such other member
of the Hanson Group. In the event such third party fails to offer to
purchase all such other outstanding Shares as provided in the
immediately preceding sentence, HMH or such other member of the Hanson
Group shall not sell, transfer or otherwise dispose of all or
substantially all of the Shares owned by the Hanson Group to such
third party unless HMH or such other member of the Hanson Group has
provided GRR with prior written notice of such sale, transfer or other
disposition and such third party agrees to be bound by the provisions
of Sections 3.2(a), 3.2(b) and 3.3(a). The restrictions set forth in
this Section 3.2(b) shall cease to be applicable at such time as the
Hanson Group becomes the beneficial owner of less than 20% of the
outstanding Shares.
3.3. Acquisition of Additional Shares.
--------------------------------
(a) Except as hereinafter specifically provided, no
member of the Hanson Group will acquire, directly or indirectly or in
concert with any person who is not a member of the Hanson Group, by
purchase or otherwise, additional Shares bringing the total beneficial
ownership of the Hanson Group to 50% or more of the outstanding
Shares, unless, in such acquisition, the Hanson Group offers to
acquire all outstanding Shares not held by it on substantially the
same terms and conditions. For purposes of this paragraph (a), the
word "affiliate" shall not apply to individuals.
(b) If at any time GRR shall propose to sell any
Shares or any warrants or rights therefor or securities convertible
into or exchangeable therefor (other than options
<PAGE>
<PAGE>
granted to employees pursuant to a stock option plan or stock sold to
employees pursuant to a stock plan), to any person or persons or
entity or entities other than the Hanson Group then, at least forty-
five (45) days prior to such issuance or delivery, GRR shall give HMH
written notice of such proposed issuance, together with full
particulars of the proposed issuance, including the identity of the
proposed beneficial owner thereof and the per unit price and, in such
notice, GRR shall offer to HMH, subject to consummation of such
proposed issuance and delivery, for thirty (30) days commencing on the
date of HMH's receipt of such notice, at the same price per unit and
on substantially the same terms and conditions, the opportunity to
purchase from GRR that number of Shares (or, at HMH's election, such
warrants, rights or convertible or exchangeable securities) such that
immediately following the consummation of the proposed issuance the
Hanson Group shall own the same percentage of outstanding Shares
(assuming for this purpose that any warrants, rights or convertible or
exchangeable securities issued in such proposed issuance and any prior
issuance covered by this Section 3.4(b) are exercised, converted or
exchanged, as the case may be) as it did immediately prior to the
proposed issuance.
If HMH elects to accept such offer, HMH shall so signify
within such thirty (30) day period by written notice to GRR,
indicating the percentage of each security which HMH elects to
purchase, and deliver the purchase price to GRR on the date of such
proposed issuance. If the number of shares proposed to be issued or
delivered is changed or the identity at the proposed beneficial owner
thereof or any of the price, terms or conditions is changed in any
manner after HMH has received such written notice, then whether or not
HMH has previously accepted such opportunity, GRR shall notify HMH of
any such change and HMH shall have a reasonable period of time within
which to accept the initial offer as so changed. The obligations of
GRR and rights of HMH set forth in this Section 3.4(b) shall lapse at
such time as the Hanson Group becomes the beneficial owner of less
than 25% of the outstanding Shares.
3.4. Specific Performance. The parties hereto acknowledge
--------------------
and agree that irreparable damage would result if the provisions of
this Agreement were not specifically enforced. Therefore, the parties
consent that the rights and obligations with respect to the agreements
contained in this Article 3 shall be enforceable by either HMH or GRR,
as the case may be, in any court of competent jurisdiction by a decree
of specific performance and consent that injunctive relief may be
granted in conjunction therewith. Such remedies shall be cumulative
and not exclusive and shall be in addition to any other rights or
<PAGE>
<PAGE>
remedies (including, without limitation, any action for damages) the
parties hereto may have under this Agreement or otherwise.
4. Certain Additional Agreements
-----------------------------
For so long as any amounts remain outstanding under the
Credit Agreement to be entered into by The Group Round, Inc., a
wholly-owned subsidiary of GRR, certain banks and Citibank, N.A., as
agent, or any of the lenders under such Credit Agreement has any
commitment to lend thereunder, HMH shall take no action which would
cause its legal and beneficial ownership of Shares to fall below 25%
of the outstanding Shares, shall nominate two persons to serve on the
Board of Directors of GRR and shall use its best efforts to cause the
election of such persons and thereafter to continue them in office at
all times and, if either of such persons dies or resigns, shall
nominate a replacement within five days and shall use its best efforts
to cause the election of such person within ten days of such death or
resignation and thereafter to continue him or her in office at all
times.
5. Miscellaneous
-------------
5.1. Entire Agreement. This Agreement (with its Annex)
----------------
contains, and is intended as, a complete statement of all the terms of
the arrangements between the parties with respect to the matters
provided for herein, supersedes any previous agreements and
understandings between the parties with respect to those matters and
cannot be changed or terminated orally.
5.2. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware without
giving effect to conflicts of law principles thereof.
5.3. Notices. All notices and other communications under
-------
this Agreement shall be in writing and shall be deemed given when
delivered personally or mailed by registered mail, return receipt
requested, or sent by facsimile transmission, to the parties at the
following addresses or facsimile numbers (or to such address or number
as a party may have specified by notice given to the other party
pursuant to this provision).
<PAGE>
<PAGE>
If to HMH, to:
HM Holdings, Inc.
c/o Hanson Industries
99 Wood Avenue South
Iselin, New Jersey 08830
Attention: General Counsel
Fax: (908) 603-6857
If to GRR, to:
Ground Round Restaurants, Inc.
35 Braintree Hill Office Park
Braintree, Massachusetts 02184
Attention: President
Fax: (617) 380-3168
5.4. Separability. The invalidity or unenforceability of
------------
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement which shall
remain in full force and effect.
5.5. Waiver. Either party may waive compliance by the other
------
with any of the provisions of this Agreement. No waiver of any
provision shall be construed as a waiver of any other provision. Any
waiver must be in writing.
5.6. Binding Effect; Assignment. This Agreement shall be
--------------------------
binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party
beneficiary rights in any person or entity, including, without
litigation, employees, not a party to this Agreement. Except as
permitted in Section 3.2 hereof, no assignment of this Agreement or of
any rights or obligations hereunder may be made by either party (by
operation of law or otherwise) without the prior written consent of
the other and any attempted assignment without the required consent
shall be void; provided, however, that no such consent shall be
required for GRR to assign part or all of its rights under this
Agreement to one wholly-owned subsidiary (direct or indirect) but no
such assignment by GRR of its rights or obligations hereunder shall
relieve GRR of any of its obligations under this Agreement.
<PAGE>
<PAGE>
5.7. Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be an original, but which together
shall constitute one and the same Agreement.
HM HOLDINGS, INC.
By: /s/ George H. Hempstead, III
-----------------------------
George H. Hempstead, III
Vice President
GROUND ROUND RESTAURANTS, INC.
By: /s/ J. Eric Hanson
---------------------------
J. Eric Hanson
Vice Chairman and
Chief Executive Officer
<PAGE>
<PAGE>
Annex A
To the Stockholders
Agreement
(a) Demand Registration Rights. Subject to the provisions
--------------------------
of the last sentence of this Paragraph (a) and to Paragraph (c), if at
any time, GRR shall receive written notice (a "Demand") from any
member of the Hanson Group which states that such member of the Hanson
Group desires to transfer Shares under circumstances that would
require the filing of a registration statement under the Securities
Act, GRR shall then cause to be prepared and filed an appropriate
registration Statement under the Securities Act to the end that such
Shares may be sold thereunder as soon as practicable thereafter, and
GRR will use its best efforts to cause the registration statement to
become effective and remain effective for not less than 120 days.
Subject to the provisions of Paragraph (c), GRR shall have the right
to include in such registration statement shares of GRR ("Other
Shares") held by other shareholders ("Other Holders") pursuant to
arrangements entered into by GRR and such Other Holders. Hanson
Group's rights under this Paragraph (a) shall terminate at such time
as the Hanson Group owns fewer than 5% of the outstanding GRR Shares
and in no event shall GRR be required to effect more than four
registrations of Hanson Group's Shares pursuant to this Paragraph (a).
(b) "Piggyback" Registration Rights. GRR shall, at least
-------------------------------
thirty (30) days prior to the filing at any registration statement
under the Securities Act (other than a registration statement on Form
S-8 or any successor form) relating to the public offering of any
class of its equity securities by GRR or any Other Holders, give
written notice of such proposed filing and of the proposed date
thereof to HMH, and if, on or before the tenth (10th) day following
the date on which such notice is given, GRR shall receive a written
request from HMH requesting that GRR include among the securities
covered by such registration statement some or all of the Shares owned
by HMH or any other member of the Hanson Group, GRR shall include such
Shares in such registration statement, if filed
(c) Terms and Conditions of Registration. In connection
------------------------------------
with any registration statement filed pursuant to Paragraph (a) or (b)
the following provisions shall apply:
(i) If such registration statement shall be filed
pursuant to Paragraph (a) or (b) hereof, all members of the
Hanson Group owning Shares shall, if requested by
<PAGE>
<PAGE>
the managing underwriter, agree not to sell publicly any
Shares (other than the Shares so registered), for the same
period as may be agreed to by GRR, following the effective
date as of the registration statement relating to such
offering.
(ii) If such registration statement shall be filed
pursuant to Paragraph (a) or (b) hereof and if the managing
underwriter advises that the inclusion in such registration
of some or all of the Other Shares or the Shares, as the
case may be, sought to be registered by the Other Holders or
HMH or any other member of the Hanson Group seeking to
register Shares pursuant to Paragraph (a) or (b), as the
case may be, creates a substantial risk that the proceeds or
price per share to be derived from such registration by the
party initiating the filing of such registration statement
will be reduced or that the number of shares sought to be
registered is too large a number to be reasonably sold, the
number of shares sought to be registered by all shareholders
other than the initiating party shall be reduced, pro rata
in proportion to the number of shares sought to be
registered by all such persons, to the extent necessary to
reduce the number of all shares to be registered to the
number recommended by the managing underwriter.
(iii) HMH or any other member of the Hanson Group
seeking to register Shares will promptly provide GRR with
such information as it shall reasonably request in order to
prepare such registration statement.
(iv) All expenses (excluding underwriters' commissions,
transfer taxes and legal and accounting expenses of HMH or
any other member of the Hanson Group seeking to register
Shares) in connection with the preparation of the first two
registration statements filed pursuant to Paragraph (a) and
all registration statements filed pursuant to Paragraph (b
shall be borne solely by GRR. In the event a registration
statement filed pursuant to Paragraph (a) is subsequently
withdrawn at the request of HMH or any other member of the
Hanson Group seeking to register Shares, such registration
statement shall count as one of two registration statements
file pursuant to Paragraph (a) for purposes of this clause
(iv).
<PAGE>
<PAGE>
(v) Following the effective date of such registration
statement, GRR shall, upon the request of HMH or such other
ember of the Hanson Group seeking to register Shares,
forthwith supply such number of prospectuses (including
preliminary prospectuses and amendments and supplements
thereto) meeting the requirements of the Securities Act and
such other documents as are referred to in the prospectus as
shall be reasonably requested by HMH or such other member of
the Hanson Group to permit HMH or such other member of the
Hanson Group to make a pubLic distribution of its Shares,
provided that HMH or such other member of the Hanson Group
furnishes GRR with such appropriate information relating to
HMH's intentions in connection therewith as GRR shall
reasonably request in writing.
(vi) GRR shall prepare and file such amendments and
supplements to such registration statement filed under
paragraphs (a) or (b) as may be necessary to keep such
registration statement effective and to comply with the
provisions of the Securities Act and applicable "Blue Sky"
laws with respect to the offer and sale or other disposition
of the Shares covered by such registration statement during
the period required for distribution of the Shares.
(vii) HMH or any other member of the Hanson Group
seeking to register Shares shall select the underwriter or
underwriters, if any, who are to undertake the offering and
distribution of the Shares to be included in a registration
statement tiled under the provisions of Paragraph (a),
subject to GRR's prior approval of the underwriter, which
approval shall not be unreasonably withheld, but GRR alone
shall make such selection with respect to a registration
statement as to which HMH or any other member of the Hanson
Group may have registration rights pursuant to Paragraph
(b).
(viii) If a request for registration is made pursuant
to Paragraph (a), GRR may postpone for up to four months
from the date of request the filing of a registration
statement if, based on the good faith judgment of the GRR's
Board of Directors, (A) such postponement is necessary in
order to avoid premature disclosure of a matter the Board
has determined would not be in the best interest of GRR to
prematurely disclose or (B) the filing of a registration
statement at such time would interfere, in a material
manner,
<PAGE>
<PAGE>
with a material transaction then undertaken by GRR, provided
that in no event shall GRR be permitted to postpone the
filing of a registration statement pursuant to this
subparagraph (viii) more than once in any twelve month
period.
(ix) GRR shall use its best efforts to register the
Shares of HMH or any other member of the Hanson Group
seeking to register Shares covered by any such registration
statement under such securities or Blue Sky laws in such
jurisdictions as HMH or such other member of the Hanson
Group may reasonably request; provided, however, that GRR
shall not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph (ix) or (B)
consent to general service of process in any such
jurisdiction.
(x) GRR shall not be obligated to file a registration
statement pursuant to Paragraph (a) within six months
following the effective date of a previous registration
statement filed pursuant to Paragraph (a) or Paragraph (b),
provided that in the case of such registration statement
filed pursuant to Paragraph (b), piggyback registration
rights had been available to the Hanson Group at such time.
(d) Indemnification.
---------------
(i) In the event of the registration of any Shares of
HMH or any other member of the Hanson Group under the
Securities Act pursuant to the provisions of Paragraphs (a)
or (b), GRR agrees to indemnify and hold harmless HMH or
such other member of the Hanson Group, its agents and
representatives, each underwriter, broker or dealer, if any,
of such Shares, and each other person, if any, who controls
HMH or such other member of the Hanson Group, such
underwriter, broker or dealer within the meaning of the
Securities Act, and each officer and director of HMH or such
other member of the Hanson Group, from and against any and
all losses, claims, damages or liabilities (or actions in
respect thereof), joint or several, to which HMH or such
other member of the Hanson Group, its agents and
representatives, or such underwriter, broker or dealer or
controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect
<PAGE>
<PAGE>
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained
in any registration statement under which such Shares were
registered under the Securities Act, any preliminary
prospectus or final prospectus relating to such Shares, or
any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary
to make the statements therein not misleading, or any
violation by GRR of any rule or regulation under the
Securities Act applicable to GRR or relating to any action
or inaction required by GRR in connection with any such
registration and will reimburse HMH or such other member of
the Hanson Group, its agents and representatives and each
such underwriter, broker or dealer and controlling person
for any legal or other expenses reasonably incurred by HMH
or such other member of the Hanson Group or such
underwriter, broker or dealer or controlling person in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that
-------- -------
GRR will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such
registration statement, such preliminary prospectus, such
final prospectus or such amendment or supplement thereto in
reliance upon and in conformity with written information
furnished to GRR by HMH or such other member of the Hanson
Group, its agents and representatives, or such underwriter,
broker, dealer or controlling person specifically and
expressly for use in the preparation thereof.
(ii) In the event of the registration of any Shares of
HMH or any other member of the Hanson Group under the
Securities Act for sale pursuant to the provisions of this
Agreement, HMH or such other member of the Hanson Group
agrees, and shall cause each underwriter, broker and dealer,
if any, of such Shares, and each other person, if any, who
controls HMH or such other member of the Hanson Group, such
underwriter, broker or dealer within the meaning of the
Securities Act to, agree severally, and not jointly, to
indemnify and hold harmless GRR, its agents and
representatives, each underwriter, broker or dealer, if any,
and each other person, if any, who controls GRR, such
<PAGE>
<PAGE>
underwriter, broker or dealer within the meaning of the
Securities Act, and each officer and director of GRR, from
and against any losses, claim, damages or liabilities, joint
or several, to which GRR, its agents and representatives, or
such underwriter, broker or dealer or controLling person may
become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under
which such Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus relating to
such Shares, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, which untrue statement or alleged untrue
statement or omission or alleged omission was made therein
in reliance upon and in conformity with written information
furnished to GRR by HMH or such other member of the Hanson
Group, such underwriter, broker or dealer or controlling
person specifically for use in connection with the
preparation thereof or arise out of or are based upon any
violation by HMH or such other member of the Hanson Group,
such underwriter, broker or dealer or controlling person or
any rule or regulation under the Securities Act, and will
reimburse GRR, its agents and representatives, such
controlling person and each such officer or director for any
legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss,
claim, damage, liability, or action.
(iii) Promptly after receipt by a person entitled to
indemnification under this Paragraph (d) (an "indemnified
party") of notice of the commencement of any action or claim
relating to any registration statement filed under
Paragraphs (a) or (b) as to which indemnity may be sought
hereunder, such indemnified party will, if a claim for
indemnification hereunder in respect thereof is to be made
against any other party hereto (an "indemnifying party"),
give written notice to such indemnifying party of the
commencement of such action or claim, but the omission so to
notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party
<PAGE>
<PAGE>
otherwise than pursuant to the provisions of this Paragraph
(d) and shall also not relieve the indemnifying party of its
obligations under this Paragraph (d) except to the extent
that the omission results in a failure of actual timely
notice to the indemnifying party or such indemnifying party
is damaged solely as a result of the failure to give timely
notice. In case any such action is brought against an
indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be
entitled (at its own expense) to participate in and, to the
extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense, with
counsel satisfactory to such indemnified party, of such
action and/or to settle such action and, after notice from
the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party for any
legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof,
other than the reasonable cost of investigation; provided,
--------
however, that no indemnifying party or indemnified party
-------
shall enter into any settlement agreement which would impose
any liability on such other party or parties without the
prior written consent of such other party or parties.
