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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Act of 1934
Date of Report (Date of earliest event reported): January 19, 1999
BOSTON CHICKEN, INC.
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(Exact name of registrant as specified in this charter)
Delaware 0-22802 36-3904053
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(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
14123 Denver West Parkway, P.O. Box 4086, Golden, Colorado 80401-4086
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(Address of principal executive offices)
(303) 278-9500
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changes since last report)
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Item 5. Other Events.
On January 19, 1999, Boston Chicken, Inc. (the "Company") was informed that
Scott A. Beck, Saad J. Nadhir and Mark W. Stephens, each a former officer and
director of the Company and a defendant (the "Individual Defendants"), along
with the Company, the underwriters of the Company's securities and the Company's
former independent public accountants, in class action lawsuits filed in the
United States District Court for the District of Colorado and the Jefferson
County District Court in the State of Colorado, had entered into a memorandum of
understanding with counsel for the plaintiffs (the "MOU") setting forth an
agreement in principle to settle the class action lawsuit solely with respect to
claims pending against the Individual Defendants. The underwriters of the
Company's securities have previously entered into a separate memorandum of
understanding setting forth an agreement in principle with respect to claims
pending against the underwriters in the class action lawsuit. The complaint
alleges, among other things, violations of Sections 11, 12(2) and 15 of the
Securities Act of 1933 and Section 10(b) of, and Rule 10b-5 promulgated under,
the Securities Exchange Act of 1934. The Individual Defendants' agreement in
principle contained in the MOU does not include the settlement of any claims
pending against the Company or the Company's former independent public
accountants, nor are the Company or the Company's former public accountants
party to the MOU.
As set forth in the MOU, the settlement of the litigation against Messrs.
Beck, Nadhir and Stephens would be funded entirely with proceeds of director and
officer liability insurance policies purchased by the Company, and is subject to
a number of conditions. These conditions include, among other things, approval
of the United States District Court for the District of Colorado and the grant
by the United States Bankruptcy Court for the District of Arizona, which has
jurisdiction over the Company's Chapter 11 bankruptcy proceedings, of relief
from the automatic stay in effect in the bankruptcy proceeding.
In addition to requiring releases by the plaintiffs of the Individual
Defendants, the MOU provides for a bar of all claims against the Individual
Defendants that are or could be asserted, now or in the future, by any other
defendant, including the Company, related to the subject matter of the
securities litigation and a bar of any future claims that may be brought by the
plaintiffs in the class action lawsuit, the class covered by the lawsuit or the
other defendants in the lawsuit, including the Company, relating to the "Company
or activities in connection with the purchase or sale of debt or equity
securities issued by the Company or the conduct of the Individual Defendants as
it relates thereto".
The Company is currently exploring the potential impact on the Company and
its security holders of the terms of the Individual Defendants' proposed
settlement agreement, specifically with respect to the Company's exclusion as a
party to the agreement and the possible negative consequences of the proposed
bar of any claims the Company has, or may in the future have, against the
Individual Defendants. The Company has put the Individual Defendants on notice
that the Company does not believe the terms of the Individual Defendants'
settlement agreement is in the best interests of the Company and its security
holders, and that the Company intends to vigorously oppose the proposed
settlement in the appropriate forum.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: January 22, 1999
BOSTON CHICKEN, INC.
By: /s/Michael R. Daigle
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Michael R. Daigle
Senior Vice President
