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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the fiscal year ended December 28, 1997
OR
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from _______________
to _____________
Commission file no. 1-8881
SBARRO, INC.
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(Exact name of registrant as specified in its charter)
New York 11-2501939
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
763 Larkfield Road, Commack, New York 11725
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 864-0200
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange on
Title of each class which Registered
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COMMON STOCK, PAR VALUE $.01 PER SHARE NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
The aggregate market value of the Common Stock of the Registrant
held by non-affiliates of the Registrant on March 20, 1998 was approximately
$390,832,000.
The number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date: 20,517,311 shares of Common
Stock as of the close of business on March 20, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The directors and executive officers of the Company and their ages
at April 15, 1998, are:
Name Age Position
- ---- --- --------
Mario Sbarro 56 Chairman of the Board, President, Chief
Executive Officer and Director
Anthony Sbarro 51 Vice Chairman of the Board, Treasurer and
Director
Joseph Sbarro 57 Senior Executive Vice President, Secretary
and Director
Carmela Sbarro 76 Vice President and Director
John Bernabeo 41 Vice President - Architecture and
Engineering
George W. Herz II 42 Vice President and General Counsel
Robert S. Koebele 54 Vice President - Finance and Chief Financial
Officer
Carmela N. Merendino 33 Vice President - Administration
Anthony J. Missano 39 Corporate Vice President - Operations
Genarro A. Sbarro 31 Corporate Vice President - Franchising
Genarro J. Sbarro 35 Corporate Vice President - Operations
Leonard G. Skrosky 66 Senior Vice President - Real Estate and
Lease Administration
Harold L. Kestenbaum 48 Director
Richard A. Mandell 55 Director
Paul A. Vatter 73 Director
Terry Vince 69 Director
Bernard Zimmerman 65 Director
MARIO SBARRO has been an officer, a director and a principal
shareholder of the Company since its organization in 1977, serving as Chairman
of the Board of Directors and Chief Executive Officer for more than the past
five years. Mr. Sbarro re-assumed the position of President of the Company in
May 1996 (a position he held for more than five years prior to December 1993).
ANTHONY SBARRO has been an officer, a director and a principal
shareholder of the Company since its organization in 1977, serving as Vice
Chairman of the Board of Directors since May 1996 and as President and Chief
Operating Officer from December 1993 through May 1996. For more than five years
prior to December 1993, Mr. Sbarro was an Executive Vice President of the
Company. He has also served as Treasurer of the Company for more than the past
five years.
JOSEPH SBARRO has been an officer, a director and a principal
shareholder of the Company since its organization in 1977, serving as Senior
Executive Vice President since December 1993. For more than five years prior
thereto, Mr. Sbarro was an Executive Vice President of the Company. He has also
served as Secretary of the Company for more than the past five years.
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CARMELA SBARRO has been Vice President of the Company since March
1985. Mrs. Sbarro was a founder of the Company, together with her late husband,
Gennaro Sbarro. Mrs. Sbarro devotes a substantial portion of her time to recipe
and product development. The Board elected Mrs. Sbarro as a director of the
Company in January 1998. Mrs. Sbarro previously served as a director of the
Company from March 1985 until December 1988, when she was elected Director
Emeritus of the Company.
JOHN BERNABEO joined the Company in August 1992 and served in various
capacities prior to his election as Vice President - Architecture and
Engineering in May 1997.
GEORGE W. HERZ II joined the Company in November 1995 and was elected
Vice President and General Counsel in February 1996. Prior to joining the
Company, Mr. Herz served as General Counsel (from 1993) and Corporate Counsel
(from 1982 until 1992) of Minuteman Press International, Inc. (a franchisor of
printing centers).
ROBERT S. KOEBELE has served as Vice President - Finance and Chief
Financial Officer of the Company for more than the past five years. Mr. Koebele
has been a certified public accountant in New York for more than the past
twenty-five years.
CARMELA N. MERENDINO was elected Vice President - Administration in
October 1988. Ms. Merendino joined the Company in March 1985 and performed a
variety of corporate administrative functions for the Company prior to her
election as Vice President - Administration.
ANTHONY J. MISSANO was elected Corporate Vice President - Operations
in August 1996, prior to which he served as Vice President - Operations (West)
from February 1995, and as a Zone Vice President from June 1992 until February
1995. Mr. Missano served as a consultant to the Company from June 1992 until he
became a full time employee at the end of fiscal 1993. From November 1988 until
he joined the Company as an employee, Mr. Missano served as President of Anaton
Corp., a franchisee of the Company.
GENNARO A. SBARRO was elected Corporate Vice President-Franchising in
August 1996, prior to which he served as Vice President - Franchising since
February 1995. For more than five years prior thereto, Mr. Sbarro served in
various capacities for the Company.
GENNARO J. SBARRO was elected Corporate Vice President - Operations
in August 1996, prior to which he served as Vice President - Operations (East)
since February 1995. For more than five years prior thereto, Mr. Sbarro served
in various capacities for the Company.
LEONARD G. SKROSKY served the Company as Senior Vice President - Real
Estate and Lease Administration from February 1987 until December 1993. From
January 1994 until June 1996, Mr. Skrosky was President of The Skrosky Company,
a real estate firm dealing with site selection and lease negotiations for
several restaurant and other companies. He rejoined the Company in June 1996 and
was elected Senior Vice President - Real Estate in November 1996.
HAROLD L. KESTENBAUM has been a practicing attorney in New York since
1976. He became a director of the Company in March 1985.
RICHARD A. MANDELL, a private investor, was a Managing Director of
BlueStone Capital Partners, L.P., an investment banking firm, from February
until April 1998 and Vice President - Private Investments of Clariden Asset
Management (NY) Inc., a subsidiary of Clariden Bank, a private Swiss bank, from
January 1996 until February 1998. From 1982 until June 1995, Mr. Mandell served
as a Managing Director of Prudential Securities Incorporated, an investment
banking firm. He became a director of the Company in March 1986. Mr. Mandell is
also a director of Trend-Lines, Inc. and U.S.A. Detergents, Inc.
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PAUL A. VATTER has been, since his retirement in 1995, Professor
Emeritus, and from 1970 until his retirement was Lawrence E. Fouraker Professor
of Business Administration, at Harvard University's Graduate School of Business
Administration, where he served as a Professor since 1958. He became a director
of the Company in March 1985.
TERRY VINCE has been Chairman of the Board and President of Sovereign
Hotels (a company that operates hotels) since October 1991 and Chairman of the
Board of Fame Corp. (a food service management company) since January 1994. Mr.
Vince served as Chairman Emeritus (from November 1990 until October 1991) and
Chairman of the Board of Directors and President (from November 1988 until
November 1990) of daka International, Inc. (a food and restaurant service
company), prior to which Mr. Vince served as Chairman of the Board of Directors
and President of daka, Inc., the predecessor of daka International, Inc. (from
1973 until November 1988). He became a director of the Company in December 1988.
BERNARD ZIMMERMAN has been President of Bernard Zimmerman and Co.,
Inc. since October 1972 and was Senior Vice President of The Zimmerman Group,
Inc. from January 1991 to November 1996, financial and management consulting
firms. Mr. Zimmerman also served as President and a director of Beacon Hill
Mutual Fund, Inc. from December 1994 until October 1996. From September 1986
until September 1993, Mr. Zimmerman also served as Chairman and President of St.
Lawrence Seaway Corp., an owner and manager of agricultural properties. Mr.
Zimmerman has been a certified public accountant in New York for more than the
past thirty-five years. He became a director of the Company in March 1985.
The Company's Certificate of Incorporation provides that the Board of
Directors shall be divided into three classes, with such classes to be as nearly
equal in number as the then total number of directors constituting the entire
Board permits. The Company's Board of Directors presently consists of nine
members, with each class being elected for a term of three years. Anthony
Sbarro, Harold L. Kestenbaum and Paul A. Vatter serve as Class 1 directors,
Joseph Sbarro, Richard A. Mandell and Terry Vince serve as Class 2 directors and
Mario Sbarro, Carmela Sbarro and Bernard Zimmerman serve as Class 3 directors,
with terms of office scheduled to expire at the Company's 1999, 2000 and 1998
Annual Meetings of Shareholders, respectively. At each annual meeting, directors
are elected to succeed those in the class whose term expires at that annual
meeting, such newly-elected directors to hold office until the third succeeding
annual meeting and the election and qualification of their respective
successors.
The officers of the Company are elected annually by the Board of
Directors at its meeting held immediately after the annual meeting of the
shareholders, and hold their respective offices until their successors are duly
elected and qualified. Officers may be removed at any time by the Board.
FAMILY RELATIONSHIPS
Mario, Anthony and Joseph Sbarro are the sons of Carmela Sbarro.
Carmela N. Merendino is the daughter, and Gennaro A. Sbarro is the son, of Mario
Sbarro. Gennaro J. Sbarro is the son, and Anthony J. Missano is the son-in-law,
of Joseph Sbarro.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's
executive officers and directors, and persons who beneficially own more than 10%
of the Company's Common Stock, to file initial reports of beneficial ownership,
and reports of changes of beneficial ownership, of the Company's equity
securities with the Securities and Exchange Commission and furnish copies of
those reports to the Company. Based solely on a review of the copies of the
reports furnished to the Company to date and written representations that no
reports were required, the Company believes that all reports required to
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be filed by such persons with respect to the Company's fiscal year ended
December 28, 1997 were timely filed.
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and
long-term compensation of the Company's chief executive officer and other six
most highly compensated persons who were serving as executive officers of the
Company at the end of the Company's 1997 fiscal year for services in all
capacities to the Company and its subsidiaries during the Company's 1997, 1996
and 1995 fiscal years:
Name and Long Term
Principal Annual Compensation Compensation
Position Year Salary Bonus Options (#)
-------- ---- ------ ----- -----------
Mario Sbarro 1997 $700,000 $160,000 250,000
Chairman of 1996 460,000 500,000 100,000
the Board, President 1995 400,000 112,500 --
and Chief Executive
Officer(1)
Anthony Sbarro 1997 300,000 150,000 100,000
Vice Chairman of 1996 300,000 -- --
the Board 1995 300,000 87,500 --
and Treasurer(1)
Joseph Sbarro 1997 300,000 150,000 100,000
Senior 1996 276,000 150,000 50,000
Executive Vice 1995 250,000 75,000 --
President and
Secretary
Leonard G. Skrosky 1997 260,000 60,000 --
Senior Vice President- 1996 181,000 -- 100,000
Real Estate 1995 -- -- --
Anthony J. Missano 1997 200,000 75,000 80,000
Corporate Vice 1996 157,000 65,000 --
President-Operations 1995 144,000 30,000 --
Gennaro A. Sbarro 1997 200,000 75,000 80,000
Corporate Vice 1996 129,000 45,000 --
President-Franchising 1995 105,000 25,000 --
Gennaro J. Sbarro 1997 200,000 75,000 80,000
Corporate Vice 1996 155,000 65,000 --
President-Operations 1995 161,000 30,000 --
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(1) Prior to May 1996, Mario Sbarro served as Chairman of the Board of
Directors and Chief Executive Officer of the Company and Anthony Sbarro
served as President and Treasurer of the Company.
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<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Company's 1991 Stock Incentive Plan permits the grant of options
and stock appreciation rights to employees of, and consultants and advisors to,
the Company and its subsidiaries, including officers and directors who are
serving in such capacities. The following table contains information concerning
options granted during the Company's 1997 fiscal year to the executive officers
named in the Summary Compensation Table. No stock appreciation rights have been
granted to date.
<TABLE>
<CAPTION>
Individual Options Potential
- ------------------------------------------------------------------------ Realizable Value
Percent at Assumed Annual
Number of of Total Rates of Stock
Shares Options Price Appreciation
Underlying Granted to Exercise for Option Term (2)
Options Employees in Price Expiration --------------------------
Name Granted(1) Fiscal Year Per Share Date 5% 10%
- ---------------- ---------- ------------ ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Mario Sbarro 100,000 13.2% $25.125 2/18/07 $1,580,098 $4,004,278
150,000 19.8% $28.875 5/20/07 $2,723,300 $6,902,896
Anthony Sbarro 100,000 13.2% $25.125 2/18/07 $1,580,098 $4,004,278
Joseph Sbarro 100,000 13.2% $25.125 2/18/07 $1,580,098 $4,004,278
Anthony J. Missano 80,000 10.6% $25.125 2/18/07 $1,264,078 $3,203,422
Gennaro A. Sbarro 80,000 10.6% $25.125 2/18/07 $1,264,078 $3,203,422
Gennaro J. Sbarro 80,000 10.6% $25.125 2/18/07 $1,264,078 $3,203,422
</TABLE>
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(1) These options are exercisable as to one-third of the number of shares
subject to the options annually, on a cumulative basis, commencing one
year following the date of grant.
(2) These are hypothetical values using assumed compound growth rates
prescribed by the Securities and Exchange Commission and are not intended
to forecast possible future appreciation, if any, in the market price of
the Company's Common Stock.
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<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END VALUES
No options to purchase shares of the Company's Common Stock were
exercised during the Company's fiscal year ended December 28, 1997 by the
executive officers named in the Summary Compensation Table. The following table
sets forth certain information concerning the number and value at December 28,
1997 of shares of Common Stock subject to unexercised options held by the
executive officers named in the Summary Compensation Table.
Number of
Shares Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
at Fiscal at Fiscal
Year-End Year-End
(Exercisable/ (Exercisable/
Name Unexercisable) Unexercisable) (1)
- --------------------- -------------- ------------------
Mario Sbarro 270,000/350,000 $912,495/362,500
Anthony Sbarro 165,000/100,000 $456,248/162,500
Joseph Sbarro 150,000/150,000 $456,248/262,500
Leonard G. Skrosky -- /100,000 $ -- /162,500
Anthony J. Missano 10,833/ 81,667 $ 17,498/138,752
Gennaro A. Sbarro 16,584/ 81,667 $ 46,744/138,752
Gennaro J. Sbarro 10,833/ 81,667 $ 17,498/138,752
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(1) Represents the number of shares subject to the option multiplied by the
difference between the closing price of the Company's Common Stock on the
New York Stock Exchange on December 26, 1997, the last trading day of the
Company's 1997 fiscal year, and the respective exercise prices.
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<PAGE>
COMPENSATION OF DIRECTORS
Non-employee directors currently receive a retainer at the rate of
$16,000 per annum and $1,000 for each meeting of the Board of Directors attended
and $500 for each meeting of a Committee of the Board (other than meetings of
the Special Committee described below) attended if such meeting is not held on
the same day as a meeting of the Board of Directors. Directors are also
reimbursed for reasonable travel expenses incurred in attending Board and
Committee meetings.
The Company's 1993 Non-Employee Director Stock Option Plan, as
amended, which was approved by shareholders at the Company's 1993 Annual Meeting
of Shareholders, provides for the automatic grant of an option to purchase 3,750
shares of the Company's Common Stock to each non-employee director in office
immediately after each Annual Meeting of Shareholders. Each option has a ten
year term, subject to early termination in certain instances, and is exercisable
commencing one year following the date of grant at an exercise price equal to
100% of the fair market value of the Company's Common Stock on the date of
grant.
A corporation of which Bernard Zimmerman is President and a majority
shareholder renders financial and consulting assistance to the Company. See "-
Compensation Committee Interlocks and Insider Participation," below, for
information with respect to such arrangement.
In January 1998, the Board of Directors formed a special committee
(the "Special Committee"), consisting of Harold L. Kestenbaum, Richard A.
Mandell, Paul A. Vatter and Terry Vince, to evaluate a proposed merger of the
Company with a company controlled by certain members of the Sbarro family. Each
member of the Company's Special Committee is being paid a daily fee of $1,250 or
$2,500 for serving thereon depending upon the time expended during such day in
performing such services. Each committee member is also entitled to be
reimbursed for out-of-pocket expenses incurred in performing such services. In
addition, Richard A. Mandell, Chairman of the Special Committee, is to receive a
fee of $10,000. Compensation to members of the Special Committee is payable
without regard to whether the Special Committee approves such proposed merger or
whether such merger is consummated.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Bernard Zimmerman and Company, Inc., of which Bernard Zimmerman is
President and a majority shareholder, renders financial and consulting
assistance to the Company, for which it received fees of $116,400 during the
Company's fiscal year ended December 28, 1997. Mr. Zimmerman is Chairman of the
Compensation Committee of the Board of Directors, but does not serve on the
Performance Incentive Plan Subcommittee or Stock Option Committee of the Board.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding the
ownership of shares of the Company's Common Stock as of April 15, 1998 (except
as noted below) with respect to (i) holders known to the Company to beneficially
own more than five percent of the outstanding Common Stock of the Company, (ii)
each director of the Company, (iii) each executive officer named in the Summary
Compensation Table under the caption "Executive Compensation" in Item 11 of this
Report and (iv) all directors and executive officers of the Company as a group.
The Company understands that, except as noted below, each beneficial owner has
sole voting and investment power with respect to all shares attributable to such
owner.
Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership (1) Class (2)
- ---------------- ------------------------ ----------
Mario Sbarro (3)...................... 1,808,320 (4) 8.7%
Anthony Sbarro (3).................... 1,398,800 (5) 6.9%
Joseph Sbarro (3)..................... 1,957,914 (6) 9.5%
Trust of Carmela Sbarro (3)........... 2,497,884 (7) 12.2%
Carmela Sbarro 400 *
Harold L. Kestenbaum.................. 25,500 (8) *
Richard A. Mandell.................... 18,750 (9) *
Paul A. Vatter........................ 21,000 (9) *
Terry Vince........................... 22,050 (9) *
Bernard Zimmerman..................... 61,700 (10) *
Robert S. Koebele..................... 21,833 (11) *
Anthony J. Missano.................... 10,833 (12) *
Gennaro A. Sbarro 24,374 (13) *
Gennaro J. Sbarro 10,833 (12) *
First Chicago NBD Corporation......... 1,096,490 (14) 5.3%
All directors and executive
officers as a group
(17 persons)........................ 7,929,818 (15) 37.2%
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(1) Shares subject to options are considered beneficially owned to the extent
currently exercisable or exercisable within 60 days after April 15, 1998.
(2) Asterisk indicates less than 1%. Shares subject to such options are
considered outstanding only for the purpose of computing the percentage of
outstanding Common Stock which would be owned by the optionee if such
options were exercised, but (except for the calculation of beneficial
ownership by all executive officers and directors as a group) are not
considered outstanding for the purpose of computing the percentage of
outstanding Common Stock owned by any other person.
(3) The business address of each of Mario Sbarro, Joseph Sbarro, Anthony
Sbarro and the Trust of Carmela Sbarro is 763 Larkfield Road, Commack, New
York 11725.
(4) Includes (i) 5,450 and 740 shares owned by a charitable foundation
supported by Mario Sbarro and his wife, of which Mr. Sbarro, his wife and
another director of the Company are the directors, and by Mr. Sbarro's
wife, respectively (as to all of which shares Mr. Sbarro disclaims
beneficial ownership), and (ii) 270,000 shares subject to options.
Excludes (i) the shares held by the Trust of Carmela Sbarro, of which
trust Mario Sbarro serves as a trustee (as to which shares Mr. Sbarro may
be deemed a beneficial owner with shared voting and dispositive power.
(5) Includes 165,000 shares subject to options.
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(6) Includes (i) 609,000 shares owned by a partnership of which Mr. Sbarro is
the sole general partner and (ii) 150,000 shares subject to options.
(7) The trust was created by Carmela Sbarro for her benefit and for the
benefit of her descendants, including Mario, Joseph and Anthony Sbarro.
The trustees of the trust are Franklin Montgomery, whose business address
is 488 Madison Avenue, New York, New York 10022, and Mario Sbarro. As
trustees, Franklin Montgomery and Mario Sbarro may be deemed to be the
beneficial owners of these shares with shared voting and dispositive
power.
(8) Represents (i) 6,750 shares owned by Mr. Kestenbaum's wife, as to which
shares Mr. Kestenbaum disclaims beneficial ownership, and (ii) 18,750
shares subject to options.
(9) Includes 18,750 shares subject to options.
(10) Includes (i) 5,450 shares owned by a family foundation supported by Mario
Sbarro and Mario Sbarro's wife, of which Mr. Zimmerman is a director (as
to which shares Mr. Zimmerman disclaims beneficial ownership), and
(ii)18,750 and 37,500 shares subject to options held, respectively, by Mr.
Zimmerman individually and Bernard Zimmerman and Company, Inc., a company
of which Mr. Zimmerman is President and a majority shareholder.
(11) Includes 10,833 shares subject to options.
(12) Represents shares subject to options.
(13) Includes (i) 2,400 shares owned by Mr. Sbarro's wife, as to which shares
Mr. Sbarro disclaims beneficial ownership, and (ii) 16,584 shares subject
to options.
(14) Based solely upon information as of December 31, 1997 contained in a
Schedule 13G filed by First Chicago NBD Corporation with the Securities
and Exchange Commission and the Company.
(15) Includes (i) 5,450 owned by a charitable foundation, of which a director
and executive officer of the Company, his wife and another director of the
Company are directors, as to which shares each disclaims beneficial
ownership, (ii) an aggregate of 15,720 shares owned by spouses, and as
custodian for minor children, of directors and executive officers, as to
which shares beneficial ownership is disclaimed and (iii) 806,832 shares
subject to options.
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<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company is the sublessee of its headquarters office building (the
"Headquarters"), which is leased from the Suffolk County Industrial Development
Agency (the "Agency") by Sbarro Enterprises, L.P., a Delaware limited
partnership, and, in turn, subleased to the Company. The annual rent payable
pursuant to the sublease is $337,000 for the last five years of the sublease
term, which expires in 2001. In addition, the Company is obligated to pay real
estate taxes, utilities, insurance and certain other expenses for the facility.
Management believes that such rents are comparable to the rents that would be
charged by an unaffiliated third party. Payment of principal and interest and
any premium on the bonds issued by the Agency to fund construction of the
headquarters is severally guaranteed by Mario, Joseph and Anthony Sbarro. The
limited partners of Sbarro Enterprises, L.P. are Mario, Joseph, Anthony and
Carmela Sbarro.
In addition to Mario, Anthony, Joseph, Gennaro A. and Gennaro J.
Sbarro and Anthony J. Missano, Carmela Sbarro, the mother of Mario, Anthony and
Joseph Sbarro, who was a co-founder of the Company and serves as Vice President
and a director of the Company, and a daughter of Mario Sbarro, who serves as
Vice President - Administration of the Company, each received $100,000 for
services rendered during fiscal 1997. In addition, nine other members of the
immediate families of Mario, Anthony, Joseph and Carmela Sbarro received an
aggregate of $467,823 for services rendered as employees of the Company during
fiscal 1997.
The Company and its subsidiaries have purchased printing services
from a corporation owned by a son-in-law of Mario Sbarro in the amount of
approximately $220,000 during fiscal 1997. The Company believes that these
services were provided on terms comparable to those that would have been
available from unrelated third parties.
During fiscal 1997, companies owned by a son of Anthony Sbarro and a
company owned by the daughter of Joseph Sbarro paid royalties to the Company
aggregating approximately $71,660 and $33,053, respectively, under franchise
agreements containing terms similar to those in agreements entered into by the
Company with unrelated franchisees.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: April 27, 1998
SBARRO, INC.
By: /s/ Robert S. Koebele
-------------------------
Robert S. Koebele,
Vice President-Finance
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