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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D (AMENDMENT NO. 9)
Under the Securities Exchange Act of 1934
Family Steak Houses of Florida, Inc..
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(Name of Issuer)
Common Stock, Par Value $.01 Per Share
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(Title of Class of Securities)
CUSIP Number: 307059105
Glen F. Ceiley
Bisco Industries, Inc.
704 W. Southern Ave.
Orange, CA 92865
(714) 283-7140
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 26, 1998
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(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 subject of this Schedule 13D,
and is filing this statement because of Rule 13d-1(b)(3) or (4),
check the following box: ( )
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SCHEDULE 13D
CUSIP No. 307059105
1. Name of Reporting Person
Mr. Glen F. Ceiley
2. Check the Appropriate Box if a Member of a group (a) (X)
(b) ( )
3. SEC Use Only
4. Source of Funds
PF
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) ( )
6. Citizenship or Place of Organization
U.S.A.
Number of 7. Sole Voting Power
Shares
Beneficially 112,470 shares of Common Stock
Owned By
Each 8. Shared Voting Power
Reporting
Person 2,244,144 shares of Common Stock (See Item 5)
With
9. Sole Dispositive Power
112,470 shares of Common Stock
10. Shared Dispositive Power
2,244,144 shares of Common Stock (See Item 5)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,356,614 shares of Common Stock (See Item 5)
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares ( )
13. Percent of Class Represented by Amount in Row (11)
19.9%
14. Type of Reporting Person
IN
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SCHEDULE 13D
CUSIP No. 307059105
1. Name of Reporting Person
Bisco Industries, Inc.
2. Check the Appropriate Box if a Member of a Group (a) (X)
(b) ( )
3. SEC Use Only
4. Source of Funds
WC
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) ( )
6. Citizenship or Place of Organization
Illinois
Number of 7. Sole Voting Power
Shares
Beneficially 1,720,154 shares of Common Stock (See Item 5)
Owned By
Each
Reporting 8. Shared Voting Power
Person
With 0
9. Sole Dispositive Power
1,720,154 shares of Common Stock (See Item 5)
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,720,154 shares of Common Stock (See Item 5)
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares ( )
13. Percent of Class Represented by Amount in Row (11)
14.5%
14. Type of Reporting Person
CO
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SCHEDULE 13D
CUSIP No. 307059105
1. Name of Reporting Person
Bisco Industries, Inc. Profit Sharing and Savings Plan
2. Check the Appropriate Box if a Member of a Group (a) (X)
(b) ( )
3. SEC Use Only
4. Source of Funds
00
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) ( )
6. Citizenship or Place of Organization
U.S.A.
Number of 7. Sole Voting Power
Shares
Beneficially 523,990 shares of Common Stock (See Item 5)
Owned By
Each
Reporting 8. Shared Voting Power
Person
With 0
9. Sole Dispositive Power
523,990 shares of Common Stock (See Item 5)
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
523,990 shares of Common Stock (See Item 5).
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares ( )
13. Percent of Class Represented by Amount in Row (11)
4.4%
14. Type of Reporting Person
EP
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Item 1. Security and Issuer
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This Amendment No. 9 to Schedule 13D constitutes an amendment to the
Schedule 13D filed with the Securities and Exchange Commission on December 26,
1996 by Glen F. Ceiley ("Ceiley"), Bisco Industries, Inc. ("Bisco") and the
Bisco Industries, Inc. Profit Sharing Plan (the "Plan") (collectively, the
"Reporting Persons"), with respect to shares of common stock, $.01 par value per
share (the "Shares"), of Family Steak Houses of Florida, Inc., a Florida
corporation (the "Issuer") (the Schedule 13D, as previously amended, is referred
to herein as the "Schedule"). Except as set forth herein, there has been no
material change in the information set forth in the Schedule.
Item 3. Source and Amount of Funds or Other Consideration
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Item 3 of the Schedule is amended as follows:
Mr. Ceiley purchased directly 112,470 Shares for a total consideration
of $75,042.36 from his personal funds. Bisco purchased 1,720,154 shares for a
total consideration of $1,033,196.40. Bisco paid for such Shares from its
working capital, including funds made available in the ordinary course of
business under its working capital credit facility. The Plan purchased 523,990
shares for a total consideration of $297,902.64 using funds held in the Plan for
investment purposes.
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Item 4. Purpose of Transaction
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On February 24, 1998, the Reporting Persons entered into a Standstill and
Settlement Agreement with the Issuer (the "Standstill Agreement"), a copy of
which is included as Exhibit 1 to this Amendment No. 9 to Schedule 13D and the
terms of which are incorporated herein by this reference. For a description of
the material terms of the Standstill Agreement, see Item 6 of this Amendment No.
9 to Schedule 13D.
Pursuant to the Standstill Agreement, on February 26, 1998, Bisco purchased
directly from the Issuer 706,700 Shares at a purchase price of $0.432 per Share.
The Reporting Persons presently consider the Shares an attractive investment and
currently intend to hold the Shares they own for investment purposes. The
Reporting Persons have agreed in the Standstill Agreement, among other things,
that they will not, directly or indirectly, acquire, or acquire beneficial
ownership of, any Shares, except pursuant to the Standstill Agreement and
pursuant to any dividends or distributions made on or to the Shares beneficially
owned by them, such that at all times during the term of the Standstill
Agreement, the Reporting Persons shall own no more than 19.9% of the Issuer's
voting securities.
The Reporting Persons will continue to review their investment in the Shares on
an ongoing basis. Such continuing review may result in the Reporting Persons
selling all or a portion of their holdings in the open market or in privately
negotiated transactions. Any such actions the Reporting Persons undertake will
be dependent upon, among other things, the price levels of such Shares; general
market and economic conditions; on-going evaluation of the Issuer's business,
financial condition, operations and prospects; the relative attractiveness of
alternative business and investment opportunities; the actions of the management
and Board of Directors of the Issuer; and other future developments.
The Reporting Persons have no present intention to seek to acquire the entire
equity interest in the Issuer or to consummate a merger or other business
combination transaction between the Issuer and the Reporting Persons or any of
their affiliates. However, depending upon their continuing assessment of the
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factors enumerated above (including the Issuer's financial condition, market
conditions and the actions of the management and Board of Directors of the
Issuer), and subject to the restrictions contained in the Standstill Agreement,
the Reporting Persons may seek to propose to the Board of Directors an
acquisition of all or part of the Issuer or another extraordinary corporate
transaction involving the Issuer or the sale of a material amount of assets of
the Issuer. There can be no assurance that the Reporting Persons (or any of
their affiliates) will take any of the actions described above with respect to
the Shares or the Issuer.
Although the foregoing reflects activities presently contemplated by the
Reporting Persons with respect to the Issuer, the foregoing is subject to change
at any time. Except as set forth above, the Reporting Persons have no present
plans or intentions which would result in or relate to any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
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Item 5. Interest in Securities of the Issuer
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Item 5 of the Schedule is amended as follows:
(a) As of the close of business on February 26, 1998, the Reporting
Persons owned in the aggregate, 2,356,614 Shares, which represent approximately
19.9% of the 11,838,840 Shares outstanding as of February 24, 1998 (as
represented to the Reporting Persons by the Issuer in the Standstill Agreement
attached as Exhibit 1 to this Amendment No. 9 to Schedule 13D). In accordance
with Rule 13d-5(b)(1) of the General Rules and regulations under the Securities
Exchange Act of 1934, as amended, each of Mr. Ceiley, individually and as
Trustee of the Plan, the Plan and Bisco may be deemed to have acted as a group
and such group may be deemed to have acquired beneficial ownership of Shares
beneficially owned by any of such persons.
As of the close of business on February 26, 1998, Mr. Ceiley
beneficially owned an aggregate of 2,356,614 Shares, of which 112,470 Shares
were owned by Mr. Ceiley individually, 1,720,154 Shares were owned by Bisco, of
which Mr. Ceiley is the sole stockholder and President, and 523,990 Shares were
held by Mr. Ceiley as sole Trustee of the Plan.
(b) Mr. Ceiley has the sole power to vote and dispose of the Shares
which he owns individually and the power to vote and to dispose of the Shares
owned by the Plan and Bisco.
(c) Pursuant to the Standstill Agreement, on February 26, 1998, Bisco
purchased directly from the Issuer 706,700 Shares at a purchase price of $0.432
per Share. In addition, since January 30, 1998, the last day on which a
transaction in the Shares by the Reporting Persons was reported on the Schedule
13D, the Reporting Persons purchased and sold Shares in the manner, in the
amounts, on the dates and at the prices set forth on Schedule 1 attached hereto
and incorporated herein by reference.
(d) Not applicable
(e) Not applicable
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
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to Securities of the Issuer.
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Item 6 of the Schedule is amended as follows:
On February 24, 1998, the Reporting Persons entered into the Standstill
Agreement, a copy of which is included as Exhibit 1 to this Amendment No. 9 to
Schedule 13D and the terms of which are incorporated herein by this reference.
Pursuant to the Standstill Agreement, among other things:
1. On February 24, 1998, two designees of the Reporting Persons were
nominated and elected to the Board of Directors of the Issuer. The Issuer also
agreed to propose and support two nominees of the Reporting Persons, as
designated by Mr. Ceiley, to stand for election at the Issuer's 1998 Annual
Meeting of Shareholders and to include such nominees on the Issuer's 1998 proxy
statement.
2. The Issuer agreed to dismiss without prejudice its claims in the
action styled as Family Steak Houses of Florida, Inc. v. Bisco Industries, Inc.
et al., Civil Action No. 97-1101-CIV-J20-C, in the United States District Court
in and for the Middle District of Florida, Jacksonville Division (the
"Litigation"). The Issuer also agreed not to re-file the Litigation or any
other litigation involving the same or similar claims during the term of the
Standstill Agreement.
3. The Issuer amended its Shareholder Rights Agreement with ChaseMellon
Shareholder Services, Inc. (the "Rights Agreement"), as it applies to the
Reporting Persons, to exempt the Reporting Persons' acquisition of up to 20% of
the Shares from the operation of the Rights Agreement. The Issuer also agreed
that so long as the Reporting Persons comply with their respective obligations
under the Standstill Agreement and beneficially own less than 20% of the Shares,
the Rights will not be distributed or utilized by the Issuer with respect to the
ownership of Shares by the Reporting Persons (whether during the term of the
agreement or thereafter), and that it will not exercise its discretionary
authority to distribute the Rights.
4. The Reporting Persons agreed that the Shares owned by them as of the
record date for the Issuer's 1998 Annual Meeting of Shareholders will be voted
to elect the slate of Director Nominees duly authorized and recommended to the
Issuer's shareholders by its Board of Directors (which shall include the
Reporting Persons' designees), and that all such shares will be voted and deemed
to be present, in person or by proxy, at the 1998 Annual Meeting of Shareholders
so that they may be counted for the purpose of determining the presence of a
quorum at such meeting.
5. The Reporting Persons agreed that neither they nor their affiliates or
associates will: (i) engage in certain activities with respect to any tender
offer or exchange offer for Shares or any merger, acquisition of all or
substantially all of the stock or assets of, or other business combination
involving the Issuer, other than (x) submitting proposals or offers to the Board
of Directors for their consideration, or (y) discussing any proposal or offer
made by a third party; (ii) initiate the solicitation of or solicit proxies or
consents or become a "participant" in a "solicitation" with respect to any
Shares in opposition to the recommendation of the Issuer's Board of Directors
with respect to any matter, other than soliciting proxies in opposition to any
proposal by the Board of Directors with respect to the adoption by the
shareholders of any "anti-takeover" measures (whether in the form of an
amendment to the Issuer's Articles of Incorporation by Bylaws or otherwise) or
other measures which have the purpose or effect of restricting or limiting the
voting rights and powers held by the Reporting Persons; (iii) initiate or
institute, or participate in the initiation or institution of, any shareholder
vote (whether pursuant to Rule 14a-8 of the Exchange Act or otherwise) with
respect to any matter which is not required by the Issuer's Articles of
Incorporation or Bylaws, the rules of the National Association of Securities
Dealers, Inc. or any national securities exchange on which Shares are then
traded, or by any similar laws or rules to be submitted to the Issuer's
shareholders; (iv) initiate or institute, or participate in the initiation or
institution of any legal, regulatory or administrative action or proceeding in
any court of competent jurisdiction or appropriate regulatory or administrative
body or agency with respect to the Issuer or any of its associates, employees,
accountants, legal counsel or other advisors, which action or proceeding in any
way contests, or otherwise seeks to void, the validity of, or the enforceability
of any provision of the Standstill Agreement (although the Reporting Persons can
defend any such action or proceeding brought by or on behalf of the Issuer or
its affiliates or associates); (v) nominate or cause others to nominate or
otherwise seek to elect directors of
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the Issuer other than those nominated by the Board of Directors (including the
Reporting Persons' designees); or (vi) join or become a part of any group, or
otherwise act in concert with any other Person, for the purpose of acquiring,
holding, voting, or disposing of Shares, or otherwise act as a partnership,
limited partnership, syndicate, or other group, with any third party so as to be
deemed to be a "person" within the meaning of Section 13(d)(3) of the Exchange
Act with respect to Shares, except as a member of a group consisting solely of
the Reporting Persons and their affiliates and associates with respect to the
ownership or voting of the Shares currently owned by them or acquired by them
pursuant to the Standstill Agreement.
6. The Reporting Persons agreed that they will not, directly or
indirectly, acquire, or acquire beneficial ownership of, any Shares, except
pursuant to the Standstill Agreement and pursuant to any dividends or
distributions made on or to the Company shares beneficially owned by the
Reporting Persons, such that at all times during the term of the Standstill
Agreement, the Reporting Persons shall own no more than 19.9% of the Company's
voting securities.
7. On February 26, 1998, Bisco purchased directly from the Issuer 706,700
Shares at a purchase price of $0.432 per Share.
Item 7. Material to be Filed as Exhibits
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The following documents are filed as exhibits to this Amendment No. 9 to
Schedule 13D:
1. Standstill and Settlement Agreement dated as of February 24, 1998, among
Family Steak Houses of Florida, Inc., Bisco Industries, Inc., Bisco Industries,
Inc. Profit Sharing and Savings Plan and Glen F. Ceiley
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EXHIBIT 1 TO SCHEDULE 13D
STANDSTILL AND SETTLEMENT AGREEMENT
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THIS STANDSTILL AND SETTLEMENT AGREEMENT (this "Agreement") is made and
entered into as the 24th day of February, 1998, by and among (i) FAMILY STEAK
HOUSES OF FLORIDA, INC, a corporation organized and existing under the laws of
the State of Florida (the "Company"), and (ii) BISCO INDUSTRIES, INC., an
Illinois corporation with its principal office located in Orange, California
("Bisco"), the BISCO INDUSTRIES, INC. PROFIT SHARING AND SAVINGS PLAN ( the
"Bisco Plan"), and GLEN F. CEILEY ("Ceiley" and, together with Bisco and the
Bisco Plan, the "Bisco Parties").
PREAMBLE
Bisco launched an unsolicited tender offer to acquire 2,600,000 shares of
common stock, par value $.01, of the Company, on March 6, 1997 (the "Tender
Offer"). The Board of Directors of the Company opposed the Tender Offer and, on
March 18, 1997, in response to the Tender Offer, the Board of Directors adopted
Amended and Restated Bylaws and entered into a Shareholder Rights Agreement with
ChaseMellon Shareholder Services, Inc. (the "Rights Agreement"). The Tender
Offer was subsequently withdrawn.
On April 30, 1997, Bisco filed a Proxy Statement for a Consent Solicitation
(the "Consent Solicitation") seeking to (i) repeal the Amended and Restated
Bylaws, (ii) amend the bylaws of the Company to opt out of the provisions of the
Florida Control Share Act, (iii) amend the bylaws of the Company to redeem the
Rights Agreement, and (iv) amend the bylaws to provide that the bylaws would not
be subject to amendment by the Board of Directors. The Company opposed the
Consent Solicitation. The Consent Solicitation failed for lack of sufficient
consents.
On July 23, 1997, the Bisco Parties delivered to the Company a demand for a
special meeting of shareholders to consider certain proposals of the Bisco
Parties. The Company contends that the demand, and other similar demands later
delivered by the Bisco Parties, was legally insufficient. The Bisco Parties
have advised the Company that they seek to nominate their own slate of directors
at the 1998 annual meeting of shareholders.
On September 5, 1997, the Company filed a complaint against the Bisco
Parties, styled as Family Steak Houses of Florida, Inc. v. Bisco Industries,
Inc. et al., Civil Action No. 97-1101-CIV-J20-C, in the United States District
Court in and for the Middle District of Florida, Jacksonville Division (the
"Litigation"). In the Litigation, the Company alleges that the Bisco Parties
violated various provisions of state and federal law in connection with the
Tender Offer and the ensuing proxy contest and seeks various forms of relief,
including a preliminary and permanent injunction against the exercise of voting
rights by the Bisco Parties with respect to certain of the shares of common
stock of the Company owned by them.
On or about January 15, 1998, the Company caused to be mailed to its
shareholders a Notice of Meeting and Proxy Statement for a Special Meeting of
Shareholders to consider a proposal to implement a one-for-five reverse stock
split (the "Reverse Split"), in order to avoid de-listing of the Company's
common stock from NASDAQ. The Bisco Parties have advised that they will oppose
the proposed reverse stock split and filed a Proxy Statement in Opposition to
the
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Board of Directors (the "Opposition Proxy Statement") on February 10, 1998.
The parties are aware of the costs and uncertainties attendant to the
Litigation and the ongoing proxy contest. The Company desires to obtain the
support of the Bisco Parties for the proposed reverse stock split. Therefore,
the parties have now reached an agreement for the settlement of their
differences and desire to memorialize their agreement herein.
NOW, THEREFORE, for and in consideration of the mutual warranties,
representations, covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE ONE
DEFINITIONS
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As used in this Agreement and any amendments hereto, the following terms
shall have the following meanings respectively:
"Affiliate" shall have the meaning set forth in regulations of the SEC
included in 17 C.F.R. (S) 230.405, or, if amended, then as amended and in effect
at the time in question.
"Associate" shall have the meaning set forth in regulations of the SEC
included in 17 C.F.R. (S) 230.405, or, if amended, then as amended and in effect
at the time in question.
"Bankruptcy Exception" shall mean all applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally.
"Beneficial Owner" (and various derivations of such term such as
"beneficially owned") shall have the meaning set forth in the regulations of the
SEC included in 17 C.F.R. (S) 240.13d-3, or, if amended, then as amended and in
effect at the time in question; provided that for purposes of this Agreement,
any option, warrant, right, conversion privilege or arrangement to purchase,
acquire or vote Company Voting Securities regardless of the time period during
or at which it may be exercised and regardless of the consideration paid shall
be deemed to give the holder thereof beneficial ownership of the Company Voting
Securities to which it relates. Any Company Voting Securities which are subject
to such options, warrants, rights, conversion privileges or other arrangements
shall be deemed to be outstanding for purposes of computing the percentage of
outstanding securities owned by such Person but shall not be deemed to be
outstanding for the purpose of computing the percentage of outstanding
securities owned by any other Person.
"Closing Date" shall mean the date of consummation of the transactions
contemplated by Section 2 hereof.
"Common Stock" shall mean the $.01 par value common stock of the Company
and any security which is exchanged for such common stock.
"Company Voting Securities" shall mean all classes of capital stock of the
Company which are then entitled to vote generally in the election of directors
and any securities exchanged for such classes of capital stock and any
securities convertible into or exchangeable or
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exercisable for such classes of capital stock. For purposes of determining the
amount or percentage of outstanding Company Voting Securities beneficially owned
by a Person, and for purposes of calculating the aggregate voting power relating
to such Company Voting Securities, securities that are deemed to be outstanding
shall be included to the extent provided in the definition of "Beneficial
owner."
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
included in 15 U.S.C. (S)(S) 78a-78jj, or, if further amended, then as amended
and in effect at the time in question.
"Extraordinary Transaction" shall mean the consummation of any tender offer
or exchange offer for Company Voting Securities or any merger, acquisition of
all or substantially all of the stock or assets of, or other business
combination involving the Company.
"New Shares" shall mean the 706,700 shares of Common Stock to be acquired
by Bisco on the Closing Date, as specified in Section 4.1 hereof.
"Party" shall mean either the Company, on the one hand, or the Bisco
Parties, on the other hand, and "Parties" shall mean all of the foregoing.
"Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"Restricted Stock" shall mean the New Shares, excluding any of such that
may have been (a) registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them or (b) publicly sold pursuant to Rule 144
under the Securities Act.
"SEC" shall mean the Securities and Exchange Commission, or any successor
agency which has primary authority to interpret and enforce the provisions of
the Securities Act and the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended,
included in 15 U.S.C. (S)(S) 77a-77z, or, if further amended, then as amended
and in effect at the time in question.
ARTICLE TWO
COVENANTS AND AGREEMENTS OF THE COMPANY
---------------------------------------
The Company hereby covenants and agrees with the Bisco Parties as follows:
2.1 Board Representation. During the Term (as defined in Section 6.1),
--------------------
(i) the Bisco Parties shall have the right to designate two (2) individuals to
serve as directors of the Company and (ii) the Board of Directors of the Company
shall consist of no more than seven (7) individuals, unless otherwise consented
to by the Bisco Parties. The Company agrees to use its best efforts to cause
the nomination and election of the Bisco Parties' designees as provided in this
Section 2.1. The Board of Directors of the Company, as evidenced by their
unanimous adoption of resolutions approving this Agreement and specifically this
Article Two, agree to:
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(a) propose two nominees of the Bisco Parties, as designated by Ceiley, to
fill vacancies on the Board of Directors at the Board of Directors meeting
scheduled for February 24, 1998 (the "February 24 Meeting");
(b) vote in favor of such nominees;
(c) propose and support two nominees of the Bisco Parties, as designated by
Ceiley, to stand for election at the 1998 Annual Meeting of Shareholders of the
Company and include such nominees on the Company's 1998 proxy statement; and
(d) oppose and vote against any proposal to increase the size of the Board
of Directors beyond seven (7) members during the term of this Agreement, unless
Bisco consents to such increase.
In any election of directors of the Company during the Term, whether
at the Company's 1998 Annual Meeting of Shareholders or any special meeting of
shareholders, each of the Directors agrees to vote any Company Voting Securities
owned by him to elect the Bisco Parties' designees. Each Director further
agrees not to vote any Company Voting Securities owned by him, or to take any
other actions, that would be reasonably likely to defeat, impair, be
inconsistent with or adversely affect the rights of the Bisco Parties under this
Section 2.1.
2.2. Dismissal of Litigation. The Company agrees to prepare and file,
-----------------------
within three (3) business days of execution and delivery of this Agreement, a
Dismissal Without Prejudice dismissing its claims as set forth in the
Litigation. The Company agrees not to re-file the Litigation or any other
litigation involving the same or similar claims during the Term, provided the
Bisco Parties shall not be in breach of any of the provisions hereof.
2.3 Rights Agreement. At the February 24 Meeting, the Board of Directors
----------------
shall amend the Rights Agreement, as it applies to the Bisco Parties, (and each
Director agrees to vote in favor of such amendment) to increase to 20% (i) the
percentage of shares of common Stock and Company Voting Securities set forth in
Section 1(a) of the Rights Agreement (for purposes of determining whether any
Person is an "Acquiring Person," as defined in the Rights Agreement), (ii) the
percentage of shares of Common Stock and Company Voting Securities as set forth
in Section 3(a)(ii) of the Rights Agreement (for purposes of determining whether
any tender offer or exchange offer would trigger the distribution of Rights
under the Rights Agreement), and (iii) the percentage of shares of Common Stock
and Company Voting Securities set forth in Section 11(a)(ii)(B) of the Rights
Agreement (for purposes of determining whether any Person is an "Adverse
Person," as defined in the Rights Agreement.
2.4 No Distribution of Rights. It is the intention of the Parties that
-------------------------
so long as the Bisco Parties comply with their respective obligations under this
Agreement and Beneficially Own less than 20% of the Company Voting Securities,
the Rights shall neither be distributed nor utilized by the Company with respect
to the ownership by the Bisco Parties of Company Voting Securities (whether
during the Term or thereafter). The Company agrees, for the Term of this
Agreement and for so long as the Bisco Parties shall not be in breach of any of
their obligations hereunder, that it will not exercise its discretionary
authority to distribute the Rights.
2.5 No Action to Impair Bisco Parties' Rights. During the Term and so
-----------------------------------------
long as the
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Bisco Parties comply with their respective obligations hereunder, the Company
will not, by any voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Agreement, and shall use its best
efforts to prevent any of its directors or shareholders from doing so, and in
good faith assist in taking of all such actions as may be necessary or
appropriate to protect the rights of the Bisco Parties under this Section 2.1
against impairment. Without limiting the generality of the foregoing, the
Company agrees not to assert or challenge the Bisco Parties' rights to own or
vote, or seek to restrict or limit the Bisco Parties rights to own or exercise
voting rights and privileges with respect to, any Company Voting Securities
presently owned by the Bisco Parties or acquired by them pursuant to this
Agreement. Provided, however, the Company does not hereby waive its right to
challenge any action by the Bisco Parties in violation of their obligations
under this Agreement. In addition, the Company shall not initiate or institute,
or participate in the initiation or institution of any legal, regulatory or
administrative action or proceeding in any court of competent jurisdiction or
regulatory or administrative body or agency with respect to the Bisco Parties or
any of their Affiliates, Associates, employees, accountants, legal counsel or
other advisors, which action or proceeding in any way contests, or otherwise
seeks to void, the validity of, or the enforceability of any provision of this
Agreement (provided, that nothing herein shall prevent the Company from
defending any such action or proceeding brought by or on behalf of the Bisco
Parties or their Affiliates or Associates).
2.6 Limited Release. At the expiration of the Term, and provided the
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Bisco Parties have complied with their obligations under this Agreement, the
Company shall execute and deliver to the Bisco Parties a general release from
and against all claims, demands, damages, actions and causes of action of every
kind and nature whatsoever which the Company has or may have against the Bisco
Parties arising out of the acquisition and/or voting of Company Voting
Securities owned by the Bisco Parties as of the date hereof; provided, such
release shall not cover any rights of the Parties arising under this Agreement
or with respect to acts, failures to act, facts, event, happenings, occurrences
or omissions occurring, or claims as to which the Company first learns of, after
the date hereof. Provided, further, the Company does not hereby release any
claims it may have against the Bisco Parties arising out of, pursuant to, or in
connection with (i) the 330,800 shares acquired by certain of the Bisco Parties
during but outside the course of the Tender Offer, (ii) the Florida Control
Share Act, or (iii) the Rights Agreement.
ARTICLE THREE
COVENANTS AND AGREEMENTS OF BISCO PARTIES
-----------------------------------------
The Bisco Parties hereby individually covenant and agree with the Company
as follows:
3.1. Reverse Split. The Bisco Parties agree to vote all shares
-------------
Beneficially Owned by them in favor of the Reverse Split. Further, the Bisco
Parties agree to notify, or cause their proxy solicitors to notify, ADP and any
brokers, nominees or shareholders of the Company previously contacted by them
that (a) the Bisco Parties have withdrawn their proxy in opposition to the
Reverse Split, and (b) the Bisco Parties encourage and recommend such persons
vote their shares in support of the Reverse Split. The Bisco Parties also agree
to take such other and further action as the Company may reasonably request in
an effort to obtain approval of the Reverse Split.
3.2 Voting of Company Voting Securities. Notwithstanding any other
-----------------------------------
provision of
15
<PAGE>
this Agreement, during the Term, the Bisco Parties shall take or effect such
action as may be necessary to ensure that (i) the Company Voting Securities that
are beneficially owned by the Bisco Parties or any of their Affiliates or
Associates as of the appropriate record date for the 1998 Annual Meeting of
Shareholders are voted to elect the slate of Director Nominees duly authorized
and recommended to the Company's shareholders by the Company's Board of
Directors (which shall include Bisco's designees), and (ii) all shares of
Company Voting Securities beneficially owned by the Bisco Parties or any of
their Affiliates or Associates are voted and deemed to be present, in person or
by proxy, at the 1998 Annual Meeting of Shareholders of the Company so that all
Company Voting Securities so beneficially owned may be counted for the purpose
of determining the presence of a quorum at such meetings.
3.3 General Restrictions. During the Term, and so long as neither the
--------------------
Company nor any Director breaches any of the provisions of this Agreement,
neither of the Bisco Parties nor any of their Affiliates or Associates shall,
directly or indirectly: (i) make or participate in the making of any public
announcement with respect to, or submit or participate in the submission of a
proposal for, or offer of, any Extraordinary Transaction or any acquisition of
Company Voting Securities or of any significant portion of the assets of the
Company or any of its Affiliates; provided, that nothing herein shall prevent
the Bisco Parties from (x) submitting any such proposals or offers to the Board
of Directors for their consideration, or (y) discussing any proposal or offer
made by a third party, provided the Bisco Parties inform such third party that
any such proposal or offer is subject to approval by the Board of Directors;
(ii) initiate the solicitation of or solicit proxies or consents or become a
"participant" in a "solicitation" (as such terms are defined in the SEC's
Regulation 14A under the Exchange Act) with respect to any Company Voting
Securities in opposition to the recommendation of the Board of Directors of the
Company with respect to any matter, except that the foregoing shall not prevent
the Bisco Parties from soliciting proxies in opposition to any proposal by the
Board of Directors with respect to the adoption by the shareholders of any
"anti-takeover" measures (whether in the form of an amendment to the Company's
Articles of Incorporation by Bylaws or otherwise) or other measures which have
the purpose or effect of restricting or limiting the voting rights and powers
held by the Bisco Parties; (iii) initiate or institute, or participate in the
initiation or institution of, any shareholder vote (whether pursuant to Rule
14a-8 of the Exchange Act or otherwise) with respect to any matter which is not
required by the Company's Articles of Incorporation or Bylaws, the rules of the
National Association of Securities Dealers, Inc. or any national securities
exchange on which Company Voting Securities are then traded, or by any similar
laws or rules to be submitted to the Company's shareholders; (iv) initiate or
institute, or participate in the initiation or institution of any legal,
regulatory or administrative action or proceeding in any court of competent
jurisdiction or appropriate regulatory or administrative body or agency with
respect to the Company or any of its Associates, employees, accountants, legal
counsel or other advisors, which action or proceeding in any way contests, or
otherwise seeks to void, the validity of, or the enforceability of any provision
of this Agreement (provided, that nothing herein shall prevent the Bisco Parties
from defending any such action or proceeding brought by or on behalf of the
Company or its Affiliates or Associates); (v) nominate or cause others to
nominate or otherwise seek to elect directors of the Company other than those
nominated by the Board of Directors (which shall at all times during the Term
include the Bisco Parties' designees, as provided in Section 2.1); or (vi) join
or become a part of any group, or otherwise act in concert with any other
Person, for the purpose of acquiring, holding, voting, or disposing of Company
Voting Securities, or otherwise act as a partnership, limited partnership,
syndicate, or other group, with any third party so as to be deemed to be a
"person" within the meaning of Section 13(d)(3) of the Exchange Act with respect
to Company Voting Securities, except as a member of
16
<PAGE>
a group consisting solely of the Bisco Parties and their Affiliates and
Associates with respect to the ownership or voting of the Company Voting
Securities currently owned by them or acquired by them pursuant to this
Agreement.
3.4 Acquisition of Voting Securities. During the Term, and so long as
--------------------------------
neither Company nor any Director breaches any of the provisions of this
Agreement, neither the Bisco Parties or any of their Affiliates or Associates
shall, directly or indirectly, acquire, or acquire beneficial ownership of, any
Company Voting Securities, except as contemplated by Section 4.1 hereof and
pursuant to any dividends or distributions of Company Voting Securities made on
or to the Company shares beneficially owned by such Person, such that at all
times during the term hereof, the Bisco Parties and their Affiliates and
Associates shall own no more than 19.9% of the Company's Voting Securities.
ARTICLE FOUR
SALE OF NEW SHARES
------------------
4.1 Sale of Shares. The Company agrees to sell to Bisco, and Bisco
--------------
agrees to purchase, 706,700 shares of the Company's Common Stock (the "New
Shares"), subject to the terms and conditions of this Agreement.
(a) The closing on the sale of the New Shares shall take place at such
time and place as the parties may agree, but not later than February 27, 1998
(the "Closing Date").
(b) The purchase price for the New Shares (the "Purchase Price") shall be
the average of the closing price for the Company's Common Stock for the ten (10)
trading days ending on the day immediately preceding the Closing Date.
(c) The Closing Date shall occur prior to the effective date of the Reverse
Split.
(d) On the Closing Date (i) Bisco shall pay the Purchase Price to the
Company by wire transfer of immediately available funds to the Company's bank
account or by such other means as the Parties may mutually agree upon, and (ii)
the Company shall deliver or cause to be delivered to Bisco, against payment by
Bisco of the Purchase Price, a certificate representing the New Shares
registered in the name of Bisco.
4.2 Restrictive Legend. Each certificate representing the New Shares
------------------
shall, except as otherwise provided in Section 4.3 of this Agreement, be stamped
or otherwise imprinted with a legend substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT
BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SUCH SHARES HAVE BEEN
REGISTERED UNDER THAT ACT OR UNDER ANY APPLICABLE STATE SECURITIES LAWS OR
AN EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE.
The Company may enter a stop transfer order with the transfer agent or
agents of
17
<PAGE>
Company Voting Securities against the transfer of the New Shares except in
compliance with the requirements of this Agreement. The Company agrees to remove
promptly any stop transfer order with respect to, and issue promptly unlegended
certificates in substitution for, certificates for the New Shares that are no
longer subject to the restrictions contained in this Agreement.
4.3 Notice of Proposed Transfer. Prior to any proposed transfer of any of
---------------------------
the New Shares, the holder thereof shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner of the proposed transfer and shall be accompanied by a written opinion of
counsel satisfactory to the Company (it being agreed that Greenberg Traurig
Hoffman Lipoff Rosen & Quentel, P.A. shall be satisfactory) to the effect that
the proposed transfer may be effected without registration under the Securities
Act, whereupon the holder of such stock shall be entitled to transfer such stock
in accordance with the terms of its notice. Each certificate for the New Shares
transferred as above provided shall bear the legend set forth in Section 4.2,
except that such certificate shall not bear such legend if (i) such transfer is
in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an Affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act.
4.4 Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of The Company under the
Securities Act and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of such Rule 144 and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed by the Company as such holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such holder to sell any Restricted Stock without
registration.
4.5 Stock Legend. The following legend shall be placed on all
------------
certificates evidencing the New Shares, which legend will remain thereon until
the earlier of the expiration of the Term or as long as such Company Voting
Securities are subject to the restrictions contained in this Agreement:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS
OF AN AGREEMENT, DATED AS OF FEBRUARY 24, 1998, BETWEEN FAMILY STEAK HOUSES
OF FLORIDA, INC., BISCO INDUSTRIES, INC., THE BISCO INDUSTRIES PROFIT
SHARING AND SAVINGS PLAN AND GLEN F. CEILEY. A COPY OF SUCH AGREEMENT IS
ON FILE AT THE OFFICE OF THE SECRETARY OF
18
<PAGE>
FAMILY STEAK HOUSES OF FLORIDA, INC. AND THE SECRETARY WILL FURNISH TO ANY
SHAREHOLDER, UPON REQUEST AND WITHOUT CHARGE, A FULL STATEMENT OF THE
RIGHTS, TERMS AND CONDITIONS OF SUCH AGREEMENT."
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES
------------------------------
5.1 Representations and Warranties of The Company. The Company hereby
---------------------------------------------
represents and warrants to the Bisco Parties as follows:
(a) The Company is a corporation in good standing under the laws of
the State of Florida. The Company has corporate power and authority to execute
and deliver this Agreement and to perform its terms.
(b) The execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions contemplated herein, have
been duly and validly authorized by all necessary corporate or other action in
respect thereof on the part of the Company. This Agreement has been duly and
validly executed by the Company and, assuming this Agreement constitutes a valid
and binding agreement of the Bisco Parties, represents a valid and binding
obligation of the Company, enforceable in accordance with its terms subject to
the Bankruptcy Exception. The execution, delivery and performance of this
Agreement by the Company the consummation of the transactions contemplated
hereby, will not constitute a breach, violation or default, or create a lien,
under any law, rule or regulation or any judgment, decree, governmental permit
or license or permit, indenture or instrument of the Company or to which the
Company is subject.
(c) As of the date hereof, there are 11,132,140 shares of Common Stock
outstanding.
5.2 Representations and Warranties of the Bisco Parties. The Bisco
---------------------------------------------------
Parties hereby represent and warrant to the Company as follows:
(a) Bisco is a corporation in good standing under the laws of the
State of Illinois. Bisco and the Bisco Plan each have the power and authority
to execute and deliver this Agreement and to perform its terms.
(b) The execution and delivery of this Agreement by the Bisco Parties
and the consummation by the Bisco Parties of the transactions contemplated
herein, have been duly and validly authorized by all necessary corporate or
other action in respect thereof on the part of Bisco and the Bisco Plan. This
Agreement has been duly and validly executed by each of the Bisco Parties and,
assuming this Agreement constitutes a valid and binding agreement of the
Company, represents a valid and binding obligation of each of the Bisco Parties,
enforceable against each of them in accordance with its terms, subject to the
Bankruptcy Exception. The execution, delivery and performance of this Agreement
by the Bisco Parties, and the consummation by the Bisco Parties of the
transactions contemplated hereby, will not constitute a breach, violation or
default, or create a lien, under any law, rule or regulation or any judgment,
decree, governmental permit or license or permit, indenture or instrument of any
of the Bisco Parties or to which any of the Bisco Parties is subject.
19
<PAGE>
(c) As of the date hereof and the Closing Date (before the purchase of
the New Shares), the Bisco Parties own of record and beneficially 1,649,914
shares of the Company's Common Stock.
(d) Prior to the date of this Agreement, neither Bisco nor any of its
Affiliates or Associates has acted in concert with any other Person, for the
purpose of acquiring, holding, voting, or disposing of Company Voting
Securities, or otherwise acted as a partnership, limited partnership, syndicate,
or other group, with a third party so as to be deemed to be a "person" within
the meaning of Section 13(d)(3) of the Exchange Act with respect to any Company
Voting Securities.
ARTICLE SIX
TERM OF AGREEMENT
-----------------
6.1 Term of Agreement. Except as otherwise expressly provided in this
-----------------
Agreement, the respective rights and obligations of the Parties under this
Agreement become effective on the date of this Agreement is executed by each of
the parties hereto and shall continue in full force and effect through the
earlier of (i) the first anniversary of the Closing Date and (ii) the occurrence
of an Extraordinary Transaction (the "Term").
6.2 Survival of Covenants. From and after the expiration of the Term,
---------------------
none of the Parties shall have any continuing liability or obligation to perform
any of their covenants or agreements pursuant to this Agreement.
6.3 Remedies. The Parties recognize and hereby acknowledge that it may be
--------
difficult to accurately measure the amount of damages that would result to a
Party by reason of a failure of the other Party to perform any of the
obligations imposed on it by this Agreement. The Parties accordingly agree that
each such Party shall be entitled to an injunction to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, in addition to any
other remedies to which such Party may be entitled at law or in equity in
accordance with this Agreement.
ARTICLE SEVEN
MISCELLANEOUS
-------------
7.1 Notices. Any notices or other communications required or permitted
-------
under this Agreement shall be effective only if it is in writing and delivered
personally, by facsimile transmission, or by registered or certified mail,
postage pre-paid, addressed as follows:
The Company: Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
Telecopy: (904) 249-1466
Attention: President
20
<PAGE>
Copy to Counsel: G. Alan Howard, Esq.
Milam, Otero, Larsen, Dawson & Traylor, P.A.
1301 Riverplace Blvd., Suite 1301
Jacksonville, FL 32207
Bisco Parties: Bisco Industries, Inc.
704 W. Southern Ave.
Orange, California 92865
(714) 283-7140
Attention: President
Copy to Counsel: Kenneth C. Hoffman, Esq.
Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel, P.A.
1221 Brickell Avenue
Miami, Florida 33131
or such other address as shall be furnished in writing by any of the Parties.
Any such notice or communication shall be deemed to have been given as of the
date so personally delivered or mailed.
7.2 Amendments. This Agreement may be amended by a subsequent writing
----------
signed by both Parties upon the approval of each of the Parties.
7.3 Counterparts. This Agreement may be executed in two or more
------------
counterparts all of which shall be one and the same Agreement and shall become
effective when one or more counterparts have been signed by each Party and
delivered to the other Party.
7.4 Headings. The headings in this Agreement are for convenience only and
--------
shall not affect the construction or interpretation of this Agreement.
7.5 Successors and Assigns. All terms and conditions of this Agreement
----------------------
shall be binding upon and inure to the benefit of and be enforceable by any
successor to any of the Bisco Parties and any successor to the Company. Any
assignment of the rights and obligations of the Parties under this Agreement
shall be effective upon a written agreement signed by all the Parties.
7.6 Severability. If any provision of this Agreement shall be held to be
------------
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
7.7 Entire Agreement. This Agreement constitutes the entire understanding
----------------
between and among the Parties with respect to the subject matter hereof and
shall supersede any prior agreements and understandings among the Parties with
respect to such subject matter.
21
<PAGE>
7.8 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Florida.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
22
<PAGE>
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
duly executed and delivered as of the date above written.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By:___________________________________
Lewis E. Christman, Jr.
President and Chief Executive Officer
BISCO INDUSTRIES, INC.
By:___________________________________
Glen F. Ceiley
President and Chief Executive Officer
BISCO INDUSTRIES PROFIT SHARING
AND SAVINGS PLAN
By:___________________________________
Glen F. Ceiley
Trustee
___________________________________
Glen F. Ceiley, Individually
23
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: March 9, 1998
Glen F. Ceiley
--------------------------
Name: Glen F. Ceiley
24
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: March 9, 1998
Bisco Industries, Inc.
Glen F. Ceiley
---------------------------------
Name: Glen F. Ceiley
Title: President
25
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: March 9, 1998
Bisco Industries, Inc.
Profit Sharing And Savings Plan
Glen F. Ceiley
_______________________________
Name: Glen F. Ceiley
Title: Trustee
26
<PAGE>
SCHEDULE 1
The Reporting Persons have engaged in the following transactions in Shares since
January 30 1998, the last day on which a transaction in the Shares by the
Reporting Persons was reported on the Schedule 13D.
<TABLE>
<CAPTION>
Transaction Number of Price
Date Shares Per Share* Purchaser
- ----------- ----------- ----------- -----------
<S> <C> <C> <C>
2-3-98 7,499 .484375 Bisco
2-5-98 2,000 .46875 Bisco
2-11-98 10,000 .453125 Bisco
2-13-98 2,000 .4375 Bisco
2-26-98 706,700 .4316 Bisco
</TABLE>
* Excluding commissions
27
