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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)
----------
QUALITY DINING, INC.
(Name of Issuer)
Common Stock, no par value 747456P 10 5
(Title of class of securities) (CUSIP number)
David W. Schostak
NBO, LLC
25800 Northwestern Highway
Suite 750
Southfield, Michigan 48075
(248) 262-1000
(Name, address and telephone number of person authorized
to receive notices and communications)
April 18, 2000
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7 for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 10 pages)
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NY2:\904239\02\72816.0003
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<S> <C> <C> <C> <C> <C>
CUSIP No. 747456P 10 5 13D Page 2 of 10 Pages
- ----------------------------------------------------------- --------------------------------------------------------
- ---------------------- -------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON NBO, LLC
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
- ---------------------- -------------------------------------------------------------------------------------------------------
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 ITEM 2(d) OR 2(e): [ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Michigan
- ---------------------- -------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 1,200,000
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 1,200,000
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
- ---------------------- -------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.8%
- ---------------------- -------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON: OO
- ---------------------- -------------------------------------------------------------------------------------------------------
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CUSIP No. 747456P 10 5 13D Page 3 of 10 Pages
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1 NAME OF REPORTING PERSON Jerome L. Schostak
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
- ---------------------- -------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------- -------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS: PF, OO
- ---------------------- -------------------------------------------------------------------------------------------------------
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
- ---------------------- -------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 1,200,000
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.8%
- ---------------------- -------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON: IN
- ---------------------- -------------------------------------------------------------------------------------------------------
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CUSIP No. 747456P 10 5 13D Page 4 of 10 Pages
- ----------------------------------------------------------- --------------------------------------------------------
- ---------------------- -------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON David W. Schostak
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
- ---------------------- -------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------- -------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS: PF, OO
- ---------------------- -------------------------------------------------------------------------------------------------------
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
- ---------------------- -------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 1,200,000
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.8%
- ---------------------- -------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON: IN
- ---------------------- -------------------------------------------------------------------------------------------------------
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CUSIP No. 747456P 10 5 13D Page 5 of 10 Pages
- ----------------------------------------------------------- --------------------------------------------------------
- ---------------------- -------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON Robert I. Schostak
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
- ---------------------- -------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------- -------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS: PF, OO
- ---------------------- -------------------------------------------------------------------------------------------------------
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
- ---------------------- -------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 1,200,000
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.8%
- ---------------------- -------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON: IN
- ---------------------- -------------------------------------------------------------------------------------------------------
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CUSIP No. 747456P 10 5 13D Page 6 of 10 Pages
- ----------------------------------------------------------- --------------------------------------------------------
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1 NAME OF REPORTING PERSON Mark S. Schostak
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
- ---------------------- -------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------- -------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS: PF, OO
- ---------------------- -------------------------------------------------------------------------------------------------------
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
- ---------------------- -------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 1,200,000
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
1,200,000
- ---------------------- -------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
- ---------------------- -------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.8%
- ---------------------- -------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON: IN
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This Amendment No. 7 ("Amendment No. 7") amends the Statement on
Schedule 13D filed on March 26, 1999, as amended by Amendment No. 1 filed on
October 5, 1999, Amendment No. 2 filed on January 13, 2000, Amendment No. 3
filed on February 22, 2000, Amendment No. 4 filed on February 24, 2000,
Amendment No. 5 filed on February 28, 2000 and Amendment No. 6 filed on April 7,
2000 (the "Schedule 13D") by and on behalf of the following persons: NBO, LLC
("NBO"), Jerome L. Schostak, David W. Schostak, Robert I. Schostak and Mark S.
Schostak (collectively, the "Schostaks" and together with NBO, the "Reporting
Persons").
Except as otherwise indicated, capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Schedule 13D. As used
herein, the "Company" or the "Issuer" shall mean Quality Dining, Inc.
ITEM 4. PURPOSE OF TRANSACTION.
On April 18, 2000, NBO announced its intention to commence a tender
offer to purchase all shares of the Company's Common Stock at a price of $5.00
per share. Following completion of the tender offer, NBO intends to effect a
merger in which all remaining shareholders of the Company will also receive the
same cash price paid in the tender offer.
This action was taken in response to the decision of the Company's
Board of Directors (the "Quality Dining Board") to permit Daniel B. Fitzpatrick,
the Company's CEO who already owns nearly 19% of the Company's Common Stock, to
purchase an additional 1,000,000 shares without triggering the Company's "poison
pill" shareholder rights plan. Directors and officers, including Mr.
Fitzpatrick, already own approximately 30% of the Company's Common Stock, and
the Company has stated its intention to buy back shares in the market. In March
2000, the Quality Dining Board rejected NBO's cash merger proposal under which
all Quality Dining shareholders would have received $5.00 per share.
By letter sent to the Quality Dining Board on April 18, 2000, Mr.
David W. Schostak, on behalf of NBO, urged the Quality Dining Board to give the
Company's shareholders the right to decide whether to accept NBO's $5.00 per
share offer before permitting Mr. Fitzpatrick and management to acquire
effective control at no premium to market prices. Mr. Schostak further urged the
Board to protect all shareholders by not permitting Mr. Fitzpatrick to buy any
additional shares at a price below NBO's offer price and requiring him to offer
the same price for all outstanding shares.
NBO indicated that its tender offer will not contain a financing or
due diligence condition. To enable NBO to consummate the tender offer in a
commercially reasonable manner, NBO's tender offer will be conditioned, among
other things, upon (1) there being properly tendered and not withdrawn a number
of shares that, when added to the number of shares beneficially owned by NBO,
would represent a majority of the outstanding shares of Common Stock, (2) the
Company's approval of the offer for purposes of its "poison pill" shareholder
rights plan and Indiana corporate statutes, (3) the Company agreeing with NBO
that its representatives will constitute a majority of the Quality Dining Board
7
<PAGE>
if the tender offer is successful and (4) NBO being satisfied that the Company
will not be in default under any instrument evidencing its outstanding
indebtedness upon consummation of the tender offer.
A copy of NBO's April 18, 2000 press release announcing its intention
to commence the tender offer and its April 18, 2000 letter to the Company's
Board of Directors are attached as Exhibits hereto and are incorporated herein
by reference.
Except as indicated above, the information set forth in Item 4 of the
Schedule 13D remains unchanged.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following Exhibits are filed herewith:
9. Press Release of NBO dated April 18, 2000 (without
attached letter).
10. Letter, dated April 18, 2000, from NBO to the Quality
Dining Board.
8
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SIGNATURES
The undersigned, after reasonable inquiry and to the best of their knowledge and
belief, certify that the information set forth in this Statement is true,
complete and correct.
Dated: April 19, 2000
NBO, LLC
By: /s/ David W. Schostak
------------------------------
David W. Schostak, Member
/s/ Jerome L. Schostak
------------------------------
Jerome L. Schostak
/s/ David W. Schostak
------------------------------
David W. Schostak
/s/ Robert I. Schostak
------------------------------
Robert I. Schostak
/s/ Mark S. Schostak
------------------------------
Mark S. Schostak
9
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EXHIBIT INDEX
Exhibit No. DESCRIPTION
----------- -----------
9. Press Release of NBO dated April 18, 2000 (without
attached letter).
10. Letter, dated April 18, 2000, from NBO to the Quality
Dining Board
10
EXHIBIT 9
FOR IMMEDIATE RELEASE
- ---------------------
Contact
- -------
David W. Schostak
(248) 357-6126
NBO ANNOUNCES INTENTION TO COMMENCE $5.00 PER SHARE TENDER OFFER FOR QUALITY
DINING
- --------------------------------------------------------------------------------
Southfield, MI, April 18, 2000 - NBO, LLC, a 9.8% shareholder of Quality Dining,
Inc. (Nasdaq/NM: QDIN), today announced its intention to commence a tender offer
to purchase all Quality Dining shares at a price of $5.00 per share. NBO
indicated that, as described below, the tender offer will be subject to certain
conditions, but will not be subject to a financing or due diligence condition.
Following completion of the tender offer, NBO intends to effect a merger in
which all remaining Quality Dining shareholders will also receive the same cash
price paid in the tender offer.
This action was taken in response to the Quality Dining Board's decision to
permit Daniel B. Fitzpatrick, the Company's CEO who already owns nearly 19% of
the Company's shares, to purchase an additional 1,000,000 shares. Directors and
officers, including Mr. Fitzpatrick, already own approximately 30% of the
Company's shares, and the Company has stated its intention to buy back shares in
the market. In March 2000, the Quality Dining Board rejected NBO's cash merger
proposal under which all Quality Dining shareholders would have received $5.00
per share.
Mr. David Schostak, a principal of NBO, stated, "I am hopeful that the Quality
Dining Board will not block our $5.00 per share offer while permitting Dan
Fitzpatrick to buy shares at current market prices of less than half our offer
price, enabling him and the other managers to obtain effective control without
paying a premium to shareholders." In a letter to the Board, Mr. Schostak urged
the Board to let the matter be resolved by shareholders in the marketplace,
stating, "Please give your shareholders, the owners of Quality Dining, the right
to decide whether to accept our $5.00 per share offer before handing effective
control to Dan Fitzpatrick and management at no premium to market prices." Mr.
Schostak further urged the Board to protect all shareholders by not permitting
<PAGE>
Mr. Fitzpatrick to buy any additional shares at a price below NBO's offer price
and requiring him to offer the same price for all outstanding shares.
NBO indicated that its offer will be conditioned, among other things, upon (1)
there being properly tendered and not withdrawn a number of shares that, when
added to the number of shares beneficially owned by NBO, would represent a
majority of the outstanding shares, (2) Quality Dining's approval of the offer
for purposes of its "poison pill" shareholder rights plan and Indiana corporate
statutes, (3) Quality Dining agreeing with NBO that its representatives will
constitute a majority of the Quality Dining Board if the tender offer is
successful and (4) NBO being satisfied that Quality Dining will not be in
default under any instrument evidencing its outstanding indebtedness upon
consummation of the tender offer.
A copy of NBO's April 18, 2000 letter to the Quality Dining Board is attached.
EXHIBIT 10
NBO, LLC
25800 NORTHWESTERN HIGHWAY
SUITE 750
SOUTHFIELD, MICHIGAN 48075
TEL. (248) 262-1000 FAX (248) 357-6116
April 18, 2000
BY FACSIMILE AND FEDERAL EXPRESS
- --------------------------------
Board of Directors
Quality Dining, Inc.
4220 Edison Lakes Parkway
Mishawaka, Indiana 46545
Dear Directors:
I am writing on behalf of NBO, LLC to urge you to take immediate
action to give all Quality Dining shareholders the opportunity to receive a fair
price for their shares before Daniel B. Fitzpatrick and other members of
management lock-up control of the Company forever. I am concerned that your
close relationship with Dan has consciously or unconsciously led you to follow a
course of action that will cause grave and irreparable financial injury to the
Company's public shareholders.
After rejecting our $5.00 per share cash merger proposal in March,
Quality Dining announced on April 4, 2000 that you authorized Daniel Fitzpatrick
and other members of management to purchase up to 1,000,000 additional shares of
Quality Dining common stock without triggering the "poison pill" that stops
others from buying over 15% of the Company's shares. Late on April 14, obviously
in response to our April 6 letter pointing out corporate and securities law
issues with respect to the purchase arrangements, you issued a "clarification"
seeking (unsuccessfully) to "paper over" issues we raised. IN ADDITION, YOU HAVE
NOT ADDRESSED THE VERY SERIOUS DAMAGE TO SHAREHOLDERS YOU HAVE AUTHORIZED -
ALLOWING DAN AND MANAGEMENT TO OBTAIN EFFECTIVE CONTROL OF THE COMPANY AT NO
PREMIUM TO CURRENT MARKET PRICES. The Company's purchase of shares from other
shareholders through its buyback program compounds the problem by further
increasing management's percentage ownership.
We are announcing that we intend to offer directly to your
shareholders an alternative to sales in the market and increased ownership by
management - the ability to sell all of their shares to us at $5.00 per share.
We intend to commence a tender offer for all shares which will not be subject to
a financing or due diligence condition. Following completion of the tender
offer, NBO intends to effect a merger in which all remaining Quality Dining
shareholders will also receive the same cash price paid in the tender offer.
<PAGE>
To allow us to consummate the tender offer in a commercially
reasonable manner, NBO's tender offer will be conditioned, among other things,
upon (1) there being properly tendered and not withdrawn a number of shares
that, when added to the number of shares beneficially owned by NBO, would
represent a majority of the outstanding shares, (2) Quality Dining's approval of
the offer for purposes of its "poison pill" shareholder rights plan and Indiana
corporate statutes, (3) Quality Dining agreeing with NBO that its
representatives will constitute a majority of the Quality Dining Board if the
tender offer is successful and (4) NBO being satisfied that Quality Dining will
not be in default under any instrument evidencing its outstanding indebtedness
upon consummation of the tender offer.
We further urge you to protect all shareholders by not permitting Mr.
Fitzpatrick to buy shares at a price below our offer price and require him to
offer the same price for all outstanding shares.
We believe that, if you deny the right of shareholders to receive a
control premium while permitting Mr. Fitzpatrick to buy without paying one, you
will be violating your fiduciary duties to Quality Dining's shareholders and
should be held accountable for the loss of value that results, including any
lost control premium that shareholders would have otherwise received.
Please give your shareholders, the owners of Quality Dining, the
right to decide whether to accept our $5.00 per share offer before handing
effective control to Dan Fitzpatrick and management at no premium to market
prices.
Very truly yours,
/s/ David W. Schostak
David W. Schostak
cc: Philip J. Faccenda
Daniel B. Fitzpatrick
James K. Fitzpatrick
Ezra H. Friedlander
Steven M. Lewis
Christopher J. Murphy III
Bruce M. Jacobson
