<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
CHECKERS DRIVE-IN RESTAURANTS, INC.
-----------------------------------
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(TITLE OF CLASS OF SECURITIES)
162809-10-7
-----------
(CUSIP NUMBER)
Janet S. McCloud, Esq.
Christensen, Miller Fink, Jacobs, Glaser, Weil & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, CA 90067
(310) 553-3000
--------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
September 25, 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 subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP No. 162809-10-7 Page 2 of 6 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rally's Hamburgers, Inc., a Delaware corporation
I.R.S. #62-1210077
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
19,130,930 shares
NUMBER OF
SHARES ---------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH
REPORTING ---------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
19,130,930 shares
---------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,130,930 shares
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.1%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
CO
<PAGE> 3
Reference is herby made to that certain Statement on Schedule 13D, dated
December 18, 1997, as amended by Amendment No. 1 thereto, dated January 9, 1998
(collectively, the "Statement"), filed by Rally's Hamburgers, Inc., a Delaware
corporation ("Rally's"), with respect to the common stock, par value $.001 per
share (the "Common Stock"), of Checkers Drive-In Restaurants, Inc., a Delaware
corporation ("Checkers"). Unless otherwise indicated, capitalized terms used
herein have the meanings ascribed to them in the Statement. Unless otherwise
indicated herein, the information contained in the Statement remains unchanged.
The Statement is hereby amended as follows:
ITEM 1. SECURITY AND ISSUER.
Item 1 of the Statement is hereby amended to state that the principal
executive offices of Checkers are located at 14255 49th Street North, Building
I, Clearwater, Florida 33762.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 of the Statement is hereby amended to state that the principal
executive offices of Rally's are located at 14255 49th Street North, Building I,
Clearwater, Florida 33762.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 of the Statement is hereby amended by adding the following:
On September 28, 1998, Rally's announced that it has entered into a
letter of intent with GIANT GROUP, LTD., a Delaware corporation ("GIANT"), and
Checkers, a copy of which is attached hereto as Exhibit 99.1 and incorporated
herein by reference, whereby Rally's will merge with GIANT and Checkers in an
all-stock transaction. Rally's intends to vote its shares of Checkers Common
Stock in favor of the merger when the transaction is presented to Checkers'
stockholders for their approval. A copy of the press release announcing the
transaction is attached hereto as Exhibit 99.2 and incorporated herein by
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 99.1 Letter of Intent, dated as of September 25, 1998, among Rally's,
GIANT and Checkers.
Exhibit 99.2 Press Release, dated September 28, 1998.
<PAGE> 4
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/s/ JAMES T. HOLDER
------------------------------
Date: September 29, 1998 James T. Holder
Senior Vice President, General
Counsel & Secretary
<PAGE> 1
EXHIBIT 99.1
LETTER OF INTENT
This Letter of Intent is entered into as of September 25, 1998 by and
among Rally's Hamburgers, Inc. ("Rally's"), Checkers Drive-In Restaurants, Inc.
("Checkers") and GIANT GROUP, LTD. ("GIANT") with respect to a series of
transactions pursuant to which Rally's would acquire Checkers and GIANT (the
"Merger"). While the terms and conditions of the transactions will be set forth
in definitive documentation to be negotiated among the parties, the principal
terms of the transactions are as follows:
1. Rally's, Checkers and GIANT would enter into a merger agreement
pursuant to which Checkers and GIANT would become wholly-owned
subsidiaries of Rally's in a tax-free reorganization, and Rally's
would change its corporate name to "Checkers Drive-In Restaurants,
Inc." or a variant thereof. The holders of Checkers' common stock
would receive in the Merger, for each share of Checkers' common stock
held, 0.5 shares of Rally's common stock (the "Checkers Merger
Consideration"), and the holders of GIANT's common stock would receive
in the Merger, for each share of GIANT's common stock held, 10.48
shares of Rally's common stock (the "GIANT Merger Consideration" and
collectively with the Checkers Merger Consideration, the "Merger
Consideration").
2. Outstanding options shall be treated as follows (which may require the
cancellation and re-issuance of such options):
a. Options to acquire GIANT's common stock would continue to be
exercisable in accordance with their respective terms, except
that on exercise the holder would receive the GIANT Merger
Consideration; provided however, that the holders of not less
than 90% of the GIANT options will agree that: (i) in
consideration for Rally's agreeing to a five year extension
of the options held by the consenting option holders, the
exercise price of such options will be increased to the
equivalent of $1.50 per share of Rally's common stock to be
acquired; and (ii) such options will not be exercisable
without the consent of Rally's to the extent such exercise
would cause Section 4.14 of Rally's Indenture with respect to
its 9 7/8% Senior Notes to become applicable.
b. Options to acquire Checkers' common stock would continue to
be exercisable in accordance with their respective terms,
except that: (i) on exercise the holder will receive the
Checkers Merger Consideration (i.e. 0.5 share of Rally's);
(ii) the exercise price will, where above $.75, be reduced to
$.75; and (iii) there will be a five year extension of the
options.
<PAGE> 2
c. Options to acquire Rally's common stock would remain
unchanged except that: (i) the exercise price will, where
above $1.50, be reduced to $1.50; and (ii) there will be a
five year extension of the options.
3. Warrants to acquire Checker's common stock would continue to be
exercisable in accordance with their respective term except that on
exercise the holder will receive the Checkers Merger Consideration
(i.e., 0.5 share of Rally's).
4. Immediately following the Merger: the present management of Rally's
would remain in place; the Rally's Board of Directors would consist of
the members of the present Boards of Directors of Rally's and GIANT
plus Peter C. O'Hara; Mr. Sugarman would become Vice Chairman of the
Rally's Board and Chairman of its Executive Committee (whose other
members would consist of Mr. Foley, Andrew Puzder and Terry
Christensen); and there would be such other changes in the composition
of the Rally's Board of Directors and Executive Committee as Rally's,
Checkers and GIANT will agree. So long as the agreement referred to in
Section 6(j) remains in effect, Mr. Foley would be Chairman of Rally's
Board of Directors.
5. Mr. Sugarman's current employment agreement and perquisites with GIANT
would be assumed by Rally's on the same terms and conditions as
currently exist, except that: Mr. Sugarman's title will be Vice
Chairman of the Board and Chairman of the Executive Committee; he
would not be responsible for day-to-day operations, but would focus on
strategic planning, acquisition opportunities and other
responsibilities customary for such positions; he would waive any
"change of control" provisions which might be activated by the Merger
(but such provisions would remain in full force and effect with
respect to any subsequent transactions); the agreement would be
extended for such period of time as the Rally's Executive Committee
and Mr. Sugarman will agree; the agreement would contain other mutual
modifications as are appropriate and mutually agreeable to reflect the
new corporate structure. Among other things, following the Merger,
Rally's will maintain the current GIANT office (on a reduced scale) in
the Los Angeles area for use by Mr. Sugarman and appropriate support
staff, with Los Angeles corporate overhead being subject to agreement
with the Executive Committee.
6. The Merger would be subject to a number of conditions, including the
following:
a. preparation and execution of a definitive merger agreement and
other necessary documentation to implement the transactions;
-2-
<PAGE> 3
b. approval of the Merger by the respective shareholders and
Boards of Directors of each of GIANT, Checkers and Rally's,
which would entail the preparation, filing and effectiveness
of a Joint Proxy Statement/Prospectus with respect to the
Merger and the issuance of the Merger Consideration;
c. receipt by each of Rally's, Checkers and GIANT of an opinion
from an investment banking firm of its selection, in form and
substance satisfactory to Rally's, Checkers and GIANT, as
applicable, to the effect that the Merger and related
transactions are fair to its shareholders from a financial
point of view as of the time of execution of this Letter of
Intent;
d. Rally's, Checkers and GIANT completing to their respective
satisfaction due diligence investigations with respect to the
others' business, financial condition and other matters,
including confirming to their mutual satisfaction, that the
Merger will not constitute a change of control for purposes
of Rally's 9-7/8% Senior Notes;
e. compliance with the requirements of the Hart-Scott-Rodino Act;
f. obtaining such third party consents as are required and are
material to the operations of Rally's and its subsidiaries
following the Merger;
g. legal opinions customary for such transactions;
h. customary representations and warranties, which would
terminate at the closing of the Merger;
i. redemption or waiver prior to the closing of the Merger of
all outstanding Rights under GIANT's Stockholders Rights
Plan;
j. execution of an agreement among CKE Restaurants, Inc.
("CKE"), Fidelity National Financial, Inc. ("FNF"), Mr.
Sugarman and Rally's pursuant to which: (i) for a three year
period following the consummation of the Merger, CKE and FNF
(collectively "CKE-FNF"), on the one hand, and Mr. Sugarman,
on the other hand, each will agree not to dispose of their
Rally's shares, without the consent of Rally's, except for
dispositions of shares of Rally's common stock (x) in
transactions pursuant to Rule
-3-
<PAGE> 4
144, (y) in a tender offer, exchange offer or similar
transaction that has been approved by Rally's, or (z) other
dispositions not to exceed an aggregate of 1,000,000 shares
by Mr. Sugarman or CKE-FNF, as applicable, in any three month
period, provided that in such event, CKE-FNF and Mr.
Sugarman, as applicable, will have a right of first refusal
on customary terms (including window periods during which the
right may be exercised) to acquire any shares of Rally's
proposed to be sold by the other; and (ii) the parties will
agree to customary registration, "tag along" and "drag along"
rights;
k. execution of the amended employment agreement with Mr.
Sugarman described in Section 5 above; and
l. the satisfaction of such other conditions as are customary
for such transactions.
7. Concurrently with the execution of the Merger Agreement:
a. Mr. Sugarman will deliver to Rally's an agreement and/or
irrevocable proxy obligating him to vote all shares of
GIANT's common stock over which he has voting rights in favor
of the Merger.
b. CKE, FNF and Mr. Foley will deliver to GIANT an agreement
and/or irrevocable proxies obligating them to vote all shares
of Rally's common stock over which they have voting rights in
favor of the Merger.
c. Rally's will deliver to Checkers an agreement and/or
irrevocable proxy obligating it to vote all shares of
Checkers' common stock over which it has voting rights in
favor of the Merger.
d. CKE and Rally's will execute an agreement providing for joint
purchasing by Rally's (for its Rally's and Checkers
restaurant operations) and CKE (for its Carl's, Jr., Hardee's
and other restaurant operations) of all items presently being
jointly purchased and such additional items as may reasonably
be added in the future, including food, paper, beverage,
signs, building materials, kitchen equipment, construction
services, etc. CKE may terminate such agreement if Mr. Foley
or CKE's designee is not offered the position of Chairman of
the Board of Rally's.
-4-
<PAGE> 5
8. The merger agreement will provide that if the Merger is terminated by
reason of any party to the Merger exercising a "fiduciary out", the
terminating party will reimburse the non-terminating parties for
their reasonable and documented transaction costs.
9. In order to facilitate the Merger, from and after the date hereof
through and including the date the transactions are consummated or
abandoned, each of GIANT, Checkers and Rally's (the "Constituent
Corporations") shall afford the others and their respective
representatives with full access to its books, records and personnel
for the purpose of conducting due diligence. The Constituent
Corporations acknowledge that in the course of such due diligence,
each will be providing the others and their representatives with
information which is proprietary and confidential. The Constituent
Corporations, each on behalf of itself and its representatives, agrees
that it will treat as confidential all information provided to it by
the others which the others designate as such in writing
("Confidential Information), and that it will use such Confidential
Information solely in connection with the transactions. In the event
the transactions are abandoned, the Constituent Corporations, as
applicable, will return and/or destroy without retaining any copies
thereof, as requested by the party which provided the Confidential
Information to it, all such Confidential Information. The foregoing
restrictions shall not apply to any information which: (a) has not
been designated as Confidential Information; (b) which the recipient
has obtained from sources other than the Constituent Corporations,
which sources, to the best of the recipient's knowledge and belief,
are not subject to any confidentiality undertaking and did not acquire
such information from sources which are subject to such an
undertaking; or (c) has become known to the public other than through
a violation of this Section 9. The parties acknowledge that the
foregoing provisions shall not apply to information received by
directors of any Constituent Corporation who are also directors of any
other Constituent Corporation received by them in their capacities as
directors of a Constituent Corporation, all of which information is
subject to customary standards of confidentiality.
10. Subject to their respective Board of Directors complying with their
fiduciary obligations under applicable law on advice of counsel, in
order to induce the others to proceed with their due diligence and
negotiation of the definitive agreements necessary to implement the
transactions, without consent of the other Constituent Corporations,
each Constituent Corporation agrees not to solicit or negotiate with
any party other than the other Constituent Corporations and their
respective representatives with respect to a merger or business
combination for a thirty (30) day period from and after the date
hereof (the "Exclusivity Period"). Upon termination of this letter of
intent during the Exclusivity Period by reason of application of the
introductory clause of the prior sentence, the terminating party will
reimburse the non-terminating parties for their reasonable and
documented transaction costs. Upon termination of the Exclusivity
Period, any party may, on written notice to the other, terminate this
letter of intent.
-5-
<PAGE> 6
11. Rally's, Checkers and GIANT agree to issue a joint press release
concurrently with the execution of this letter of intent, and
thereafter to cooperate with each other with respect to such further
public disclosure as may be required or appropriate in connection with
applicable securities laws. Unless required in order to comply with
applicable law, neither GIANT, Checkers nor Rally's will make any
public announcements concerning the Merger and related transactions
without the consent of the other, not to be unreasonably withheld.
12. Except for their respective financial advisors to be engaged in
connection with the fairness opinions contemplated by this Letter of
Intent, each of GIANT, Checkers and Rally's represents and warrants
that it has not engaged any finders or brokers in connection with the
transactions described herein.
13. GIANT, Checkers and Rally's each agree to conduct their respective
businesses only in the ordinary course consistent with past practice
until earlier of the execution of a definitive merger agreement or the
termination of this Letter of Intent.
14. Subject to Sections 8 and 10, GIANT, Checkers and Rally's will bear
their own expenses in connection with the transactions described in
this Letter of Intent.
15. This Letter of Intent shall be governed by the laws of the state of
Delaware.
-6-
<PAGE> 7
The foregoing is an expression of mutual intent only, and except for
Sections 9, 10, 11, 12, 13, 14 and 15, does not constitute a binding agreement
among the parties. Upon execution of this letter of intent by Rally's, Checkers
and GIANT, each party shall work diligently and in good faith to complete the
due diligence and negotiate the definitive agreements necessary and appropriate
to implement the transactions as promptly as is practicable.
RALLY'S HAMBURGERS, INC.
By /s/ WILLIAM P. FOLEY, II
-------------------------------
Chairman
CHECKERS DRIVE-IN RESTAURANTS, INC.
By /s/ WILLIAM P. FOLEY, II
- -----------------------------------
Chairman
GIANT GROUP, LTD.
By /s/ BURT SUGARMAN
-------------------------------
-7-
<PAGE> 8
By their respective signatures below:
a. Fidelity National Financial, Inc. and CKE Restaurants, Inc.
each acknowledge its intent to enter into the agreements
referred to in Sections 6 and 7 above; and
b. Burt Sugarman acknowledges his consent to the changes in his
GIANT options, as described in Section 2(a) above and his
intent to enter into the agreements referred to in Sections 6
and 7 above.
c. William P. Foley, II, acknowledges his intent to enter into
the agreements referred to in Section 7 above.
CKE RESTAURANTS, INC.
By /s/ Andrew F. Puzder
-------------------------------
FIDELITY NATIONAL FINANCIAL, INC.
By /s/ Andrew F. Puzder
-------------------------------
/s/ William P. Foley, II
- ---------------------------------
WILLIAM P. FOLEY, II
/s/ Burt Sugarman
- ---------------------------------
BURT SUGARMAN
-8-
<PAGE> 1
Exhibit 99.2
RALLY'S HAMBURGERS, INC.
14255 49th Street North, Bldg 1 * Clearwater, Florida 33762
* 727/519-2000 Fax 727/519-2001
- --------------------------------------------------------------------------------
NEWS RELEASE
CONTACT: Jay Gillespie, Chief Executive Officer of Rally's
(727) 519-2000
Richard Peabody, Chief Financial Officer of Checkers
(727) 519-2000
Burt Sugarman of GIANT GROUP
(310) 273-5678
FOR IMMEDIATE RELEASE
RALLY'S ANNOUNCES MERGER WITH GIANT GROUP AND CHECKERS
CLEARWATER, FL --SEPTEMBER 28, 1998- RALLY'S HAMBURGERS, INC. (NASDAQ:RLLY),
GIANT GROUP, LTD (NYSE: GPO) AND CHECKERS DRIVE-IN RESTAURANTS, INC.
(NASDAQ:CHKR) announced today that they have entered into a letter of intent
whereby Rally's will merge with GIANT and Checkers Drive-In Restaurants in an
all-stock transaction. Under the agreement, each share of GIANT's common stock
will be exchanged for 10.48 shares of Rally's common stock and each share of
Checkers will be exchanged for 0.5 shares of Rally's common stock.
GIANT currently owns approximately 10.7% of Rally's common stock. Rally's owns
approximately 26% of Checkers' common stock. After the merger, the largest
shareholder of Rally's (which will be renamed Checkers in the merger) will be
Burt Sugarman, GIANT's chairman, with approximately 14.4% primary (24.2% fully
diluted), CKE Restaurants, Inc. (NYSE:CKR) with approximately 10.8% primary
(10.7% fully diluted) and Fidelity National Financial, Inc. (NYSE:FNF) with
approximately 2.8% primary (3.4% fully diluted).
Rally's present management will remain in place, with William P. Foley II
continuing as chairman of the board, Jay Gillespie as president and chief
executive officer, and Mr. Sugarman serving as vice chairman of the board and
chairman of the executive committee. Rally's and Checkers will continue to
expand joint purchasing and other cooperative arrangements with CKE, which have
significantly increased Rally's and Checkers' operating efficiencies.
Mr. Foley said, "The merger of Checkers and GIANT GROUP will bring to Rally's
approximately $50 million in cash, cash equivalents and other assets which can
be converted to cash, and unify the Rally's and Checkers' operations. The
combined companies' balance sheet will be strong and the combination of Rally's
and Checkers' complementary operations will strengthen management's efforts to
implement its business plan and achieve further operating efficiencies. Mr.
Sugarman, who has been active in Rally's for many years, will join Rally's on a
full-time basis and bring to us the benefit of his wide knowledge and
experience."
<PAGE> 2
Mr. Sugarman said, "GIANT and I have had significant direct involvement in
Rally's almost since its inception. We believe in the company and its
prospects. With its superb management team led by Bill Foley and Jay Gillespie,
the infusion of GIANT's capital and the merger with Checkers, we believe
Rally's will have the opportunity to realize its potential to be a leader in
the quick-service restaurant industry."
Mr. Gillespie commented, "This acquisition gives us the capital to move forward
with our growth initiatives, such as side dining rooms and image enhancements,
that are key components in creating sustained profitability at Rally's and
Checkers.
The transaction is subject to execution of a definitive merger agreement,
approval by the shareholders of Rally's, GIANT and Checkers, receipt by each
company of an investment banker's opinion as to the fairness of the
transactions to its stockholders, and the satisfaction of various other
conditions. The parties anticipate the transaction will be consummated in late
1998.
Rally's and Checkers, along with their franchisees, each operate 485 double
drive-thru hamburger restaurants. The Rally's system is primarily based in the
Western United States, while Checkers' operations are principally in the
Southeastern United States. The combined system will include 970 company owned
and franchised locations.
The private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information included in this press
release (as well as information included in oral statements or other written
statements made or to be made by Rally's, GIANT GROUP, or Checkers) contains
statements that are forward-looking, such as statements relating to plans for
future activities. Such forward-looking information involves important risks
and uncertainties.
