SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
SBARRO, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of class of securities)
805844-10-7
(CUSIP Number)
Arthur A. Katz, Esq.
Warshaw Burstein Cohen Schlesinger & Kuh, LLP
555 Fifth Avenue
New York, New York 10017
212-984-7700
(Person Authorized to Receive Notices and Communications)
January 12, 1998
(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 [_]
<PAGE>
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CUSIP NO. 805844 10 7 13D PAGE 2 OF 12 PAGES
- ----------------------- ------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF
ABOVE PERSON
Mario Sbarro
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
[_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,802,130
--------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,504,074
OWNED BY --------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,802,130
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,504,074
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,306,204 (may be deemed to beneficially own all shares
beneficially owned by each member of the group, or 7,662,918
shares)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.78% (may be deemed beneficially own all shares beneficially
owned by each member of the group, or 36.43%)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
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CUSIP NO. 805844 10 7 13D PAGE 3 OF 12 PAGES
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1 NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF
ABOVE PERSON
Joseph Sbarro
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
[_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,957,914
--------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY --------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,957,914
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,957,914 (may be deemed to beneficially own all shares
beneficially owned by each member of the group, or 7,662,918
shares)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.51% (may be deemed to beneficially own all shares beneficially
owned by each member of the group, or 36.43%)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
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CUSIP NO. 805844 10 7 13D PAGE 4 OF 12 PAGES
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1 NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF
ABOVE PERSON
Anthony Sbarro
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [_]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,398,800
--------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY --------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,398,800
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,398,800 (may be deemed to beneficially own all shares
beneficially owned by each member of the group, or 7,662,918
shares)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.79% (may be deemed to beneficially own all shares beneficially
owned by each member of the group, or 36.43%)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
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CUSIP NO. 805844 10 7 13D PAGE 5 OF 12 PAGES
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- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF
ABOVE PERSON
Franklin Montgomery, as co-trustee of the Trust of Carmela
Sbarro
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [_]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
[_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
--------------------------------------------------
8 SHARED VOTING POWER
2,497,884
--------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,497,884
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,497,884 (may be deemed to beneficially own all shares
beneficially owned by each member of the group, or 7,662,918
shares)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.22% (may be deemed to beneficially own all shares
beneficially owned by each member of the group, 36.43%)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 805844 10 7 13D Page 6 of 12
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of the Common Stock, par value $.01
per share (the "Common Stock"), of Sbarro, Inc., a New York corporation (the
"Company"). The Company's principal executive office is at 763 Larkfield Road,
Commack, New York 11725.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed jointly pursuant to
Rule 13d-1 (f)(1) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), by: (i) Mario Sbarro individually and as co-trustee of the
Trust of Carmela Sbarro, (ii) Anthony Sbarro, (iii) Joseph Sbarro and (iv)
Franklin Montgomery, as co-trustee of the Trust of Carmela Sbarro (individually,
a "Reporting Person" and, collectively, the "Reporting Persons").
Information with respect to each Reporting Person is given solely by
such Reporting Person, no Reporting Person has responsibility for the accuracy
or completeness of the information supplied by any other Reporting Person, and
each Reporting Person agrees that this statement is filed on behalf of such
Reporting Person only.
The Reporting Persons may be deemed to constitute a "group" for
purposes of Rule 13d-3 under the Exchange Act.
(b) The business address of each of Mario Sbarro, Anthony
Sbarro and Joseph Sbarro is 763 Larkfield Road, Commack, New York 11725. The
business address of Franklin Montgomery is 488 Madison Avenue, New York, New
York 10022.
(c) The principal occupation or employment of each of the
following Reporting Persons is: (i) Mario Sbarro is the Chairman of the Board of
Directors, Chief Executive Officer, President and a director of the Company;
(ii) Anthony Sbarro is the Vice Chairman of the Board of Directors, Treasurer
and a director of the Company; and (iii) Joseph Sbarro is Senior Executive Vice
President, Secretary and a director of the Company.
The Company is a leading operator and franchisor of family-style
Italian restaurants. The address of the Company is 761 Larkfield Road, Commack,
New York 11725.
Franklin Montgomery, a Reporting Person, is an attorney in sole
practice conducting his law business at 488 Madison Avenue, New York, New York
10022.
(d) During the last five years, no Reporting Person
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
<PAGE>
CUSIP No. 805844 10 7 13D Page 7 of 12
(e) During the last five years, no Reporting Person
has been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person or entity was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities laws
or finding any violation with respect to such laws.
(f) Each of the Reporting Persons is a citizen of the
United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Each of the Reporting Persons (in the case of Franklin Montgomery, as
one of two trustees of the Trust of Carmela Sbarro) has held the shares of
Common Stock beneficially owned as reported herein for more than ten years. No
funds were involved in the formation of the group by the Reporting Persons. It
is anticipated that the source of funds for the transactions proposed by the
Reporting Persons as described in Item 4 will be loans from banks and other
institutional lenders, the issuance or issuances of debt securities or a
combination of the foregoing. The exact forms of such loans and securities have
not been determined.
ITEM 4. PURPOSE OF TRANSACTION.
On January 12, 1998, the Reporting Persons presented to the Company's
Board of Directors a proposal, which was subsequently supplemented and amended,
for the merger of the Company with a company (to be formed) which would be owned
by the Reporting Persons, pursuant to which the shareholders of the Company,
other than the Reporting Persons, would receive $28.50 per share in cash for
each of their shares of Common Stock (the "Proposed Transaction"). The Proposed
Transaction is subject, among other things, to (i) entering into a definitive
merger agreement with the Company, (ii) approval of the transaction by a special
committee of the Board of Directors of the Company, the full Board of Directors
of the Company and the Company's shareholders, (iii) receipt of satisfactory
financing for the Proposed Transaction, (iv) the immediate suspension of
dividends by the Company, and (v) receipt of a fairness opinion from the
financial advisor to the special committee of the Board of Directors of the
Company stating that the Proposed Transaction is fair, from a financial point of
view, to the shareholders of the Company. The Reporting Persons have received a
letter from an investment banking firm which indicates that, subject to certain
conditions, the firm was highly confident that financing for the Proposed
Transaction could be obtained. The Reporting Persons also have advised the
Company that they are not interested in selling their interests in the Company.
The Proposed Transaction would, if and when consummated, result in the Company's
Common Stock (i) ceasing to be authorized for listing on the New York Stock
Exchange, Inc. and (ii) becoming eligible for termination of registration under
Section 12(g)(4) of the Exchange Act.
Except as set forth herein, and until such time, if at all, as the
Proposed Transaction is consummated, no Reporting Person has any present plans
or proposals that relate to or would result in: (i) the acquisition of
additional securities of the Company or the disposition of securities of the
Company; (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation
<PAGE>
CUSIP No. 805844 10 7 13D Page 8 of 12
of the Company; (iii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (iv) any change in the present board of
directors or management of the Company, including any plans or proposals to
change the number or term of directors or to fill any existing vacancies on the
board; (v) any material change in the present capitalization or dividend policy
of the Company; (vi) any other material change in the Company's business or
corporate structure, (vii) any changes in the Company's charter, by-laws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person; (viii) causing a class of
securities of the Company to be delisted from a national securities exchange or
cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (ix) causing a class of equity
securities of the Company to become eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (x) any action similar to
any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The Reporting Persons may be deemed a group within
the meaning of Rule 13d-5 under the Exchange Act and, therefore, each Reporting
Person may be deemed to be the beneficial owner, within the meaning of Rule
13d-3 under the Exchange Act, of all of the shares of Common Stock beneficially
owned by each member of such group, or an aggregate of 7,662,918 shares of
Common Stock of the Company, representing (based on the 20,448,320 shares of
Common Stock which were issued and outstanding on January 19, 1998 and the
portion of options to purchase shares of Common Stock held by any of the
Reporting Persons which were then exercisable or become exercisable within 60
days after the date hereof) approximately 36.43% of the total of the outstanding
shares of Common Stock and such portion of such options.
Mario Sbarro may be deemed to be the beneficial owner of 4,306,204
(20.78%) of shares of Common Stock.
Anthony Sbarro is the beneficial owner of 1,398,800 (6.79%) of shares
of Common Stock.
Joseph Sbarro is the beneficial owner of 1,957,914 (9.51%) shares of
Common Stock.
<PAGE>
CUSIP No. 805844 10 7 13D Page 9 of 12
Franklin Montgomery, as co-trustee of the Trust of Carmela Sbarro, may
be deemed to be the beneficial owner of 2,497,884 (12.22%) of shares of Common
Stock (which also are included in the shares of Common Stock which Mario Sbarro
may be deemed to beneficially own).
(b) The following is information concerning the nature of each
Reporting Person's beneficial ownership of Common Stock:
Sole Power to Vote or Shared Power to Vote or
Direct the Vote/ Direct the Vote/
Sole Power to Dispose or Shared Power to Dispose or
Direct the Disposition Direct the Disposition
---------------------- ----------------------
Number of Shares Number of Shares
---------------- ----------------
Mario Sbarro 1,802,130 (a) 2,504,074 (b)
Anthony Sbarro 1,398,800 (c) --
Joseph Sbarro 1,957,914 (d) --
Franklin Montgomery, as -- 2,497,884 (e)
co-trustee of the Trust
of Carmela Sbarro
- --------------------
(a) Includes 270,000 shares of Common Stock which are not outstanding
but are subject to issuance upon exercise of options held by Mario Sbarro
that are presently exercisable or which will become exercisable within 60
days after the date hereof.
(b) Includes (i) 5,450 shares of Common Stock held by a family
foundation, of which Mario Sbarro is one of three directors, (ii) 2,497,884
shares of Common Stock held by the Trust of Carmela Sbarro, of which Mario
Sbarro is one of two trustees, and (iii) 740 shares of Common Stock owned
by his spouse. The reporting of these shares should not be construed as an
admission that Mario Sbarro is, for purposes of Section 13 of the Exchange
Act or otherwise, the beneficial owner of these shares.
(c) Includes 165,000 shares of Common Stock which are not outstanding
but are subject to issuance upon exercise of options held by Anthony Sbarro
that are presently exercisable or which will become exercisable within 60
days after the date hereof.
(d) Includes (i) 150,000 shares of Common Stock which are not
outstanding but are subject to issuance upon exercise of options held by
Joseph Sbarro that are presently exercisable or which will become
exercisable within 60 days after the date hereof, and (ii) 609,000 shares
of Common Stock owned by a family partnership, of which Joseph Sbarro is
the sole general partner. The reporting of such 609,000 shares should not
be construed as an admission that Joseph Sbarro is, for purposes of Section
13 of the Exchange Act or otherwise, the beneficial owner of these shares.
(e) Represents shares of Common Stock owned by the Trust of Carmela
Sbarro, of which Mr. Montgomery is one of two trustees.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
To the knowledge of each Reporting Person on the date hereof, except to
the extent reflected in the proposal described in Item 4, and as set forth below
or in the Exhibits filed herewith, no Reporting Person has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to securities issued by the Company, including, but not
limited to, transfer or voting of any such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
divisions of profits or loss or the giving or withholding of proxies:
<PAGE>
CUSIP No. 805844 10 7 13D Page 10 of 12
(a) Mario Sbarro holds options to purchase (i) 150,000 shares
of Common Stock at an exercise price of $20.67 per share granted to him on May
30, 1990 by action of the Board of Directors of the Company and approved by the
shareholders of the Company, which option is presently exercisable in full and
expires on May 29, 2000; (ii) 120,000 shares of Common Stock at an exercise
price of $27.08 per share granted to him on December 28, 1993 under the
Company's 1991 Stock Incentive Plan (the "1991 Plan"), which option is presently
exercisable in full and expires on December 27, 2003; (iii) 100,000 shares of
Common Stock at an exercise price of $24.75 per share granted to him on August
20, 1996 under the 1991 Plan, which option becomes exercisable as to one-third
of the number of shares of Common Stock subject to the option annually, on a
cumulative basis, commencing on August 20, 1998 and expires on August 19, 2006;
(iv) 100,000 shares of Common Stock at an exercise price of $25.125 per share
granted to him on February 19, 1997 under the 1991 Plan, which option becomes
exercisable as to one-third of the number of shares of Common Stock subject to
the option annually, on a cumulative basis, commencing February 19, 1999 and
expires on February 18, 2007; and (v) 150,000 shares of Common Stock at an
exercise price of $28.875 granted to him on May 21, 1997 under the 1991 Plan,
which option becomes exercisable as to one-third of the number of shares of
Common Stock subject to the option annually, on a cumulative basis, commencing
May 21, 1999 and expires on May 20, 2007.
(b) Anthony Sbarro holds options to purchase (i) 75,000 shares
of Common Stock at an exercise price of $20.67 per share granted to him on May
30, 1990 by action of the Board of Directors of the Company and approved by the
shareholders of the Company, which option is presently exercisable in full and
expires on May 29, 2000; (ii) 90,000 shares of Common Stock at an exercise price
of $27.08 per share granted to him on December 28, 1993 under the 1991 Plan,
which option is presently exercisable in full and expires on December 27, 2003
and (iii) 100,000 shares of Common Stock at an exercise price of $25.125 per
share granted to him on February 19, 1997 under the 1991 Plan, which option
becomes exercisable as to one-third of the number of shares subject to the
option annually, on a cumulative basis, commencing February 19, 1999 and expires
on February 18, 2007.
(c) Joseph Sbarro holds options to purchase (i) 75,000 shares
of Common Stock at an exercise price of $20.67 per share granted to him on May
30, 1990 by action of the Board of Directors of the Company and approved by the
shareholders of the Company, which option is presently exercisable in full and
expires on May 29, 2000; (ii) 75,000 shares of Common Stock at an exercise price
of $27.08 per share granted to him on December 28, 1993 under the 1991 Plan,
which option is presently exercisable in full and expires on December 27, 2000;
(iii) 50,000 shares of Common Stock at an exercise price of $24.75 per share
granted to him on August 20, 1996 under the 1991 Plan, which option becomes
exercisable as to one-third of the number of shares subject to the option
annually, on a cumulative basis, commencing on August 20, 1998 and expires on
August 19, 2006; and (iv) 100, 000 shares of Common Stock at an exercise price
of $25.125 per share granted to him on February 19, 1997 under the 1991 Plan,
which option becomes exercisable as to one-third of the number of shares subject
to the option annually, on a cumulative basis, commencing February 19, 1999 and
expires on February 18, 2007.
<PAGE>
CUSIP No. 805844 10 7 13D Page 11 of 12
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit Description
1 Joint Filing Agreement dated as of January 21,
1998 among Mario Sbarro, Anthony Sbarro,
Joseph Sbarro and Franklin Montgomery as
co-trustee of the Trust of Carmela Sbarro.
2 Proposal dated January 12, 1998 on behalf of
Mario Sbarro, Anthony Sbarro, Joseph Sbarro
and the Trust of Carmela Sbarro to the Board of
Directors of the Company.
3 Amendment and supplement dated January 20,
1998 to the January 14, 1998 Proposal on
behalf of Mario Sbarro, Anthony Sbarro,
Joseph Sbarro and the Trust of Carmela Sbarro
to the Board of Directors of the Company.
<PAGE>
CUSIP No. 805844 10 7 13D Page 12 of 12
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 21, 1998
/s/ Mario Sbarro
------------------------------------
Mario Sbarro
/s/ Joseph Sbarro
------------------------------------
Joseph Sbarro
/s/ Anthony Sbarro
------------------------------------
Anthony Sbarro
/s/ Franklin Montgomery
------------------------------------
Franklin Montgomery
as co-trustee of the Trust of
Carmela Sbarro
<PAGE>
EXHIBIT 1
The undersigned agree that the statement on Schedule 13D to
which this Agreement is attached is filed on behalf of each of them.
Dated: January 21, 1998
/s/ Mario Sbarro
------------------------------------------
Mario Sbarro
/s/ Joseph Sbarro
------------------------------------------
Joseph Sbarro
/s/ Anthony Sbarro
------------------------------------------
Anthony Sbarro
/s/ Franklin Montgomery
------------------------------------------
Franklin Montgomery
as co-trustee of the Trust of Carmela Sbarro
<PAGE>
EXHIBIT 2
January 12, 1998
Board of Directors of Sbarro, Inc.
Gentlemen:
I am pleased to extend a proposal, on behalf of myself,
Joseph Sbarro, Anthony Sbarro and the Trust of Carmela Sbarro (the
"Sbarro Family"), to acquire all of the outstanding shares of Common
Stock of Sbarro, Inc. (the "Company") not currently owned by the
Sbarro Family (the "Public Shares"). The transaction would be
structured as a cash merger in which each holder of Public Shares
would receive $28.50 per share, or an aggregate of approximately $380
million, based on the number of Public Shares outstanding as of
December 28, 1997.
Consummation of the acquisition would be subject, among
other things, to (i) entering into a definitive agreement with the
Company with respect to the transaction, (ii) approval of the
transaction by a special committee of the Company's Board of
Directors (the "Special Committee"), the Company's Board of Directors
and its shareholders, (iii) receipt of satisfactory financing for the
transaction (the Sbarro Family has received a highly confident letter
from Bear Stearns with respect to receipt of such financing) and (iv)
receipt of a fairness opinion from the financial advisor to the
Special Committee that indicates that the proposed transaction is
fair from a financial point of view to the holders of Public Shares.
We are in the process of drafting such an agreement, which will
reflect all of the aspects of our proposed offer, and will provide
the agreement to you shortly.
We believe that our proposal is beneficial to both the
Company and its public shareholders and is a fair one to the public
shareholders. The proposed acquisition price of $28.50 represents a
significant premium over Friday's closing price on the New York Stock
Exchange of $25.50, as well as a premium over the average closing
price for each trading day during the last twelve months.
We wish to make it clear that we are not interested under
any circumstances in selling our interest in the Company.
We look forward to working with you and the advisors to the
Special Committee to complete this transaction and hope you will give
this proposal your prompt attention. We reserve the right to amend or
withdraw this proposal at any time in our discretion.
Sincerely,
/s/ Mario Sbarro
Mario Sbarro
<PAGE>
EXHIBIT 3
January 20, 1998
Board of Directors of Sbarro, Inc.
Gentlemen:
This letter will supplement and amend the second paragraph
in the proposal made in the letter dated January 12, 1998 on behalf
of myself, Joseph Sbarro, Anthony Sbarro and the Trust of Carmela
Sbarro (the "Sbarro Family") for the merger of the Company with a
company to be owned by the Sbarro Family.
Consummation of the acquisition would be subject, among
other things, to (i) entering into a definitive merger agreement with
the Company with respect to the transaction, (ii) approval of the
transaction by the special committee of the Company's Board of
Directors (the "Special Committee"), the full Board of Directors and
the Company's shareholders, (iii) receipt of satisfactory financing
for the transaction (the Sbarro family has received a highly
confident letter from Bear Stearns with respect to receipt of such
financing), (iv) the immediate suspension of dividends by the Company
and (v) receipt of a fairness opinion from the financial advisor to
the Special Committee stating that the proposed transaction is fair,
from a financial point of view, to the public shareholders.
Other than as set forth in the paragraph above, the
provisions in our letter dated January 12, 1998 remain the same.
We look forward to working with you and the advisors to the
Special Committee to complete this transaction and trust you will
give this proposal your prompt attention. We reserve the right to
amend or withdraw this proposal at any time in our discretion.
Sincerely,
/s/ Mario Sbarro
Mario Sbarro
