UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 1998
AMERICAN RESTAURANT GROUP, INC.
(Exact Name of registrant specified in its charter)
United States 33-48183 33-0193602
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(State or other (Commission File Number) (I.R.S. employer
Jurisdiction of Identification No.)
Incorporation)
450 Newport Center Drive
Newport Beach, California 92660
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(Address of principal executive offices)
Registrant's telephone number, including area code: (714) 721-8000
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Item 5. Other Events
On February 25, 1998, American Restaurant Group, Inc. (the
"Company") completed a recapitalization plan (the "Recapitalization Plan"),
the principal elements of which were the issuance, in an offering (the
"Offering") exempt from registration under the Securities Act of 1933, as
amended, of (i) $155,000,000 aggregate principal amount of 11-1/2% Senior
Secured Notes due 2003 of the Company (the "Notes") and (ii) 35,000 preferred
stock units of the Company (the "Units"), each Unit consisting of $1,000
initial liquidation preference of 12% Senior Pay-in-Kind Exchangeable
Preferred Stock and one Common Stock Purchase Warrant initially to purchase
2.66143 shares of the common stock, par value $.01 per share (the "Common
Stock"), of the Company at an initial exercise price of $.01 per share.
Also as part of the Recapitalization Plan, the Company concurrently
with the Offering, (i) redeemed $126.4 million aggregate principal amount of
its existing Senior Secured Notes due 1998 at par plus accrued and penalty
interest thereon and repaid certain other interest-bearing short-term
liabilities, (ii) repurchased $45.0 million aggregate principal amount of its
existing 10-1/4% Subordinated Notes (the "Subordinated Notes") at a price
equal to 65% of the aggregate principal amount of the Subordinated Notes,
plus accrued and penalty interest thereon, and cancelled the related warrants
to purchase common stock of the Company's parent, American Restaurant Group
Holdings, Inc. ("Holdings"), and (iii) established a $15.0 million revolving
credit facility.
As an additional component of the Recapitalization Plan, Holdings
extended the accretion period on its Senior Discount Debentures due 2005 (the
"Holdings Debentures"), with a current accreted value of approximately $83.9
million, from June 15, 1999 to maturity on December 15, 2005, and amended
certain provisions of the Holdings Debentures (as so amended, the "Amended
Debentures"). Such Amended Debentures will accrete at a rate of 14.25%.
compounded semi-annually (as opposed to 14% for the Holdings Debentures). In
addition, holders of Holdings Debentures with an accreted value of
approximately $10.8 million surrendered such Debentures for cancellation and
received $3.6 million principal amount of the Notes, in addition to the Notes
sold in the Offering.
In conjunction with the Recapitalization Plan, the Company issued
shares of Common Stock to certain members of the Company's management (the
"Management Stockholders") in an aggregate amount equal to 15% of the Common
Stock on a fully diluted basis. Such Management Stockholders have entered
into a voting trust agreement in accordance with which Anwar S. Soliman, the
Chairman and Chief Executive Officer of the Company, will exercise all voting
and substantially all other rights to which such Management Stockholders
would otherwise be entitled until August 15, 2005 or the earlier termination
of the agreement. The Management Stockholders also entered into a
stockholders agreement with Holdings, Jefferies & Company, the initial
purchaser in the Offering (the "Initial Purchaser"), and TCW Asset Management
Company ("TCW") and affiliates of TCW, purchasers of more than 50% of the
Units, which provides that the parties will agree to vote all of their shares
of the Company's equity securities so that the Board of Directors of the
Company consists of five directors, with two directors designated by TCW, two
by the Management Stockholders, with the remaining director being an
independent director initially designated by the Initial Purchaser.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
AMERICAN RESTAURANT GROUP, INC.
By: /s/ William J. McCaffrey, Jr.
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Name: William J. McCaffrey, Jr.
Title: Vice President and Chief
Financial Officer
Date: March 3, 1998
