SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 3)
SHELLS SEAFOOD RESTAURANTS, INC.
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE PER SHARE
(Title of Class of Securities)
822809 10 9
(CUSIP Number)
Jonathan E. Cole, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, FL 33480
(561) 833-7700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
SEPTEMBER 19, 1997
(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 the 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.
<PAGE>
(1) Name of Reporting Persons: ROBERT E. DEZIEL
S.S. or I.R.S. Identification Nos. of Above Persons:
###-##-####
(2) Check the Appropriate Box if a Member of a Group* (a) [ ]
(b) [ ]
(3) SEC Use Only
(4) Source of Funds*
PF
(5) Check if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization: UNITED STATES
Number of Shares Beneficially Owned (7) Sole Voting Power 127,665
by Each Reporting Person With
(8) Shared Voting Power -0-
(9) Sole Dispositive Power 127,665
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned by Each Reporting Person: 292,465
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares* []
(13) Percent of Class Represented by Amount of Row (11): 7.1%
(14) Type of Reporting Person*: IN
<PAGE>
This Amendment No. 3 to the Schedule 13D filed on June 4, 1997 (the "Original
Schedule 13D"), as amended by Amendment No. 1 thereto filed on June 20, 1997 and
Amendment No. 2 thereto filed on August 28, 1997 (as amended, the "Amended
Schedule 13D"), is filed by Robert E. Deziel to reflect the settlement among Mr.
Deziel, L&L Foods and related parties of the dispute surrounding the May 25
Agreement. Capitalized terms used herein without definition which are defined in
the Amended Schedule 13D shall have the meanings set forth therein.
ITEM 4. PURPOSE OF TRANSACTION.
(a) Deziel purchased 100,000 shares of Shells common stock reported in this
Amendment No. 3 from L&L Foods, pursuant to a Compromise and Settlement
Agreement dated September 19, 1997 (the "Compromise and Settlement Agreement").
The Compromise and Settlement Agreement is attached hereto as Exhibit 99.3.1.
Sub-items (b)-(j) are not applicable.
ITEM 5. INTEREST IN SECURITIES OF SHELLS.
The response of Mr. Deziel to Item 5(a) in the Amended Schedule 13D is
hereby supplemented and modified as follows:
Pursuant to the terms of the Compromise and Settlement Agreement, Mr.
Deziel purchased from L&L Foods on September 19, 1997 100,000 shares of Shells
common stock at a purchase price of $6.00 per share, for an aggregate purchase
price of $600,000. Under the Compromise and Settlement Agreement, L&L Foods has
granted Mr. Deziel (1) an option to purchase an additional 100,000 shares of
Shells common stock at an exercise price of $6.00 per share, and (2) an option
to purchase an additional 64,800 shares of Shells common stock at an exercise
price of $12.00 per share. Each option is exercisable at any time prior to the
close of business on October 31, 1997. Mr. Deziel is the beneficial owner of
292,465 shares, or 7.1% of Shells' issued and outstanding common stock. Of these
292,465 shares beneficially owned, Mr. Deziel has (i) sole power to vote and to
direct the vote, and sole power to dispose or direct the disposition, of 127,665
shares, and (ii) no shared power to vote and to direct the vote, and no shared
power to dispose or direct the disposition, of any shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF SHELLS.
As described in Item 4, Mr. Deziel, L&L Foods and related parties entered
into a Compromise and Settlement Agreement on September 19, 1997. Pursuant to
the terms of the Compromise and Settlement Agreement, Mr. Deziel purchased from
L&L Foods 100,000 shares of Shells common stock at a purchase price of $6.00 per
share. Under the Compromise and Settlement Agreement, L&L Foods has granted Mr.
Deziel (1) an option to purchase an additional 100,000 shares of Shells common
stock at an exercise price of $6.00 per share, and (2) an option to purchase an
additional 64,800 shares of Shells common stock at an exercise price of $12.00
per share. Each option is exercisable at any time prior to the close of business
on October 31, 1997. See Exhibit 99.3.1.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99.3.1 Compromise and Settlement Agreement dated September 19, 1997
by and among Mr. Deziel, L&L Foods, Linn Heaton, Lee Heaton,
George Heaton and Bush Ross Gardner Warren & Rudy, P.A.
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.
Dated: September 25, 1997 /S/ ROBERT E. DEZIEL
--------------------
Robert E. Deziel
<PAGE>
EXHIBIT 99.3.1
COMPROMISE AND SETTLEMENT AGREEMENT
This Compromise and Settlement Agreement (the "Settlement Agreement") is
effective and made as of September 19, 1997. This Settlement Agreement is by and
among Robert E. Deziel ("Deziel"); L & L Foods, Inc. ("L & L"), a Florida
corporation; George Heaton; Linn Heaton; Lee Heaton and for the limited purposes
set forth herein, Bush Ross Gardner Warren & Rudy, P.A. ("Bush Ross")
(collectively the "Parties").
RECITALS
There is currently pending in the Circuit Court of the Fifteenth Judicial
Circuit, in and for Palm Beach County, Florida, a civil action styled ROBERT E.
DEZIEL V. L & L FOODS, INC., A FLORIDA CORPORATION; GEORGE HEATON; LINN HEATON;
AND LEE HEATON, Case No. CL-97-005594-AO (the "Civil Action").
It is the Parties' intention to settle and finally resolve all matters
raised or which could have been raised in that Civil Action.
Therefore, for the mutual promises and covenants herein contained, along
with other good and valuable consideration, receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:
1. AGREEMENT DATED AUGUST 7, 1997.
On August 7, 1997, Deziel partially released the LIS PENDENS (the "LIS
PENDENS") he filed against the shares of Shells Seafood Restaurants, Inc.
("Shells Seafood") owned by L & L in order to permit L & L to sell 129,600
shares of Shells Seafood, which L & L has sold. By letter agreement dated August
22, 1997, Deziel modified his partial release of the LIS PENDENS in order to
permit L & L to sell an additional 135,200 shares of Shells Seafood, which L & L
has also sold. Subject to the completion of the transactions contemplated by
Section 2 hereof, Deziel hereby directs Bush Ross to release all funds received
by L & L from the sale of the shares referred in this Paragraph 1 to L & L.
2. SALE OF SHARES TO DEZIEL.
L & L hereby sells to Deziel 100,000 shares of Shells Seafood (the "Initial
Shares") in exchange for $600,000, payable, in cash, on September 19, 1997 (the
"Closing Date"). L & L has delivered to Roger Coe, Senior Vice President at the
Boston, Massachusetts office of Oppenheimer & Co., Inc. ("Oppenheimer"), a stock
certificate for 264,800 shares, to be held in L & L's account at Oppenheimer for
the benefit of L & L. L & L hereby instructs Oppenheimer to transfer 100,000
shares to Deziel's account at Oppenheimer, with the balance of the 264,800
shares to continue to be held in L & L's account at Oppenheimer so long as
either the $6.00 Option or the $12.00 Option described below are in effect.
Deziel directs Bush Ross to release the $460,000 of funds previously transferred
to it by Deziel to L & L and has delivered attorney trust account funds, in the
amount of $140,000, to L & L on the Closing Date. Bush Ross shall deliver all
interest earned on the $460,000 amount to Deziel.
The certificate for the Initial Shares to be issued to Deziel shall contain
a restrictive legend indicating that the shares are "restricted securities" as
such term is defined in Rule 144, promulgated by the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended ("Rule 144").
3. GRANT OF OPTION TO SELL SHARES TO DEZIEL.
L & L hereby grants to Deziel the following options to purchase 164,800
shares of the common stock of Shells Seafood that it owns: (a) an option to
purchase 100,000 shares of Shells Seafood at a price of $6.00 per share (the
"$6.00 Option"); and (b) an option to purchase 64,800 shares at a price of
$12.00 per share (the "$12.00 Option"). Deziel shall, contemporaneously with the
execution of this Settlement Agreement, deliver to L & L $150,000, in attorney
trust account funds, which shall be a nonrefundable payment for the grant of the
options, which Deziel may credit against the purchase price of the $12.00
Option, if Deziel exercises the $12.00 Option. While the options may be
separately exercised, each option must, if exercised, be exercised in whole, not
in part. Each option is exercisable at any time prior to the close of business
October 31, 1997, by Deziel delivering: (a) written notice to that effect to L &
L; and (b) immediately available funds to Oppenheimer which are then made
immediately available, without restriction (except that such funds shall be held
in escrow until delivery of an updated Bush Ross Opinion and an additional
updated representation letter of L & L), to L & L. If Deziel exercises the
$12.00 Option he may credit the $150,000 payment against the purchase price of
the shares underlying the $12.00 Option ($777,600), however, if the $12.00
Option is not timely exercised, Deziel shall forfeit the $150,000 to L & L. Time
is of the essence, and if the options are not timely exercised, L & L shall have
no further obligation to Deziel.
Provided that the applicable option exercise price is received by
Oppenheimer and then made immediately available to L & L, on or before the close
of business October 31, 1997, L & L directs Oppenheimer to transfer to Deziel
the applicable shares underlying the option that was exercised, which shares are
being held in L & L's account at Oppenheimer, together with appropriate stock
powers. L & L has today deposited with Oppenheimer stock powers for the shares
underlying each of the $6.00 Option and the $12.00 Option each with signature
guaranteed. The Parties have jointly executed a letter of instruction to
Oppenheimer as to the precise mechanics of such delivery.
The shares underlying the options shall contain a restrictive legend
indicating that the shares are "restricted securities" as such term is defined
in Rule 144, promulgated by the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended ("Rule 144").
4. GENERAL RELEASES AND NON COMPETE.
The Parties shall exchange General Releases; and Deziel hereby acknowledges
that he has no interest in American Powersports Company, or any subsidiary or
affiliate thereof, as creditor, equity owner, or otherwise. Deziel agrees not to
compete in the powersports business (motorcycles, waverunners, etc.) for the two
year period following the date of this agreement and agrees to execute a
non-compete agreement in the form attached hereto.
5. DISMISSAL OF THE CIVIL ACTION
Deziel shall, as soon as practicable after the date of this Settlement
Agreement, discharge the LIS PENDENS in full and dismiss the Civil Action with
prejudice, with all parties paying their own costs and legal fees. Should the
transfer agent for Shells Seafood require a court order discharging the LIS
PENDENS, Deziel shall, as soon as practicable, obtain that order and provide it
to the transfer agent.
6. COOPERATION AND OPINION LETTER
All Parties will cooperate in effectuating this Settlement Agreement and in
making the stock conveyances contemplated above, including the execution and
delivery of documents and the taking of any action, reasonably requested by
another Party. Specifically, and without limitation, L & L has agreed to issue a
representation letter to Bush Ross in the form attached hereto (the "L & L
Representation Letter") which shall be updated at the time such options are
exercised, and Bush Ross has agreed to issue an opinion letter in the form
attached hereto (the "Bush Ross Opinion"), which provides, in part that with
regard to the shares that Deziel acquires, Deziel will, on or after October 18,
1997, have satisfied the holding period requirement set forth in Rule 144(d)(1).
Bush Ross shall keep such opinion effective and shall update such opinion in
connection with the exercise of the options granted hereby at no cost or expense
to Deziel. Deziel has caused a General Release to be prepared in favor of Bush
Ross, in form acceptable to Bush Ross. The Parties shall coordinate the Schedule
13-D filings, if any, required by the Securities & Exchange Commission.
7. REPRESENTATIONS AND WARRANTIES
L & L, Linn Heaton, Lee Heaton and George Heaton jointly and severally
represent to Deziel that:
A. L & L has good, valid and marketable title to the shares of Shells
Seafood made the subject of this Settlement Agreement, free and clear of all
liabilities, obligations, claims, liens, and encumbrances of any kind
("Encumbrances"). L & L has full and unrestricted legal right, power and
authority to sell assign and transfer such shares to Deziel, without obtaining
the consent or approval of any person or governmental authority, and the
delivery of any such shares to Deziel pursuant to this Settlement Agreement will
transfer valid title thereto, free and clear of all Encumbrances.
B. The execution of the Settlement Agreement and the consummation of the
transactions contemplated hereby will not constitute a default under any
provision of any agreement by which L & L is bound.
C. No consent, approval, authorization of or registration, qualification,
designation, declaration or filing with any governmental authority or person or
entity on the part of L & L or Shells Seafood is required.
D. L & L has full and unrestricted legal right, power and authority to sell
and transfer the shares to Deziel, and has obtained all necessary consents from
its directors, officers and shareholders to execute and perform the transactions
contemplated by this Settlement Agreement.
E. Deziel will have, on or after October 18, 1997, satisfied the holding
period requirement set forth in Rule 144(d)(1) promulgated under the Securities
Act of 1933, as amended.
F. The facts set forth in Paragraph 1-16 of the Bush Ross Opinion and in
the L & L Representation Letter are true.
8. NO ADMISSION OF LIABILITY
This Settlement Agreement is not intended to constitute, nor shall it be
construed to constitute, nor is it an admission of liability on the part of any
Party hereto, such liability being expressly denied, and this Settlement
Agreement is entered into exclusively to settle the Civil Action and resolve all
claims made therein.
9. MISCELLANEOUS
A. Notices: All notices and other communications hereunder shall be in
writing and shall be given to the person either personally or by sending a copy
thereof by first class or express mail, postage prepaid, by facsimile
transmission or courier services, charges prepaid, or by telecopier, to such
Party's address (or to such Party's telecopier or telephone number). If the
notice is sent by mail or courier services, it shall be deemed to have been
given to the person entitled thereto when deposited in the United States mail or
with a courier service for delivery to that person or, in the case of
telecopier, when received.
i. If to L & L:
Linn Heaton, President
215 5th Street, Suite 108
West Palm Beach, Florida 33401
Facsimile: 407-832-4737
with a copy to;
John N. Giordano, Esq.
Bush Ross Gardner Warren & Rudy, P.A.
220 South Franklin Street
Tampa, Florida 33602
Facsimile No. (813) 223-9620
or at such other addresses as L & L may have advised Deziel in
writing; and
ii. If to Deziel:
Robert E. Deziel
239 South County Road
Palm Beach, Florida 33480
Facsimile No.: 561-655-5421
with a copy to;
Jon Cole, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
Facsimile No. (561) 655-8719
or at such other addresses as Deziel have advised L & L in writing.
Notice of any change in any such address shall also be given in the manner
set forth above. Whenever the giving of notice is required, the giving of
such notice may be waived by the party entitled to receive such notice.
B. It is expressly understood and agreed that the terms of this Settlement
Agreement are contractual and not merely recitals and that the promises, mutual
covenants, and conditions contained herein, and the consideration transferred is
to compromise disputed claims, avoid litigation, and buy peace.
C. This Settlement Agreement shall be effective only when signed by all
Parties hereto.
D. This Settlement Agreement shall be binding upon and shall inure to the
benefit of the Parties, their successors or assigns, parent companies,
subsidiaries and affiliates.
E. This Settlement Agreement contains the entire agreement between the
Parties, and includes and supersedes all prior negotiations agreements,
conversations, representations, and guaranties pertinent to the subject matter
hereof. No oral agreements, understandings, statements, promises, or inducements
contrary to the terms of this Settlement Agreement exist. This Settlement
Agreement cannot be changed or terminated orally. No waiver of any of the terms
of this Settlement Agreement shall be valid unless in writing and signed by all
Parties to this Settlement Agreement.
F. All Parties hereto shall pay their own costs, expenses and attorneys'
fees.
G. Headings used in this Settlement Agreement are for the convenience of
the Parties and are not to be interpreted as having any substance or effect.
H. Should any clause, paragraph, or part of this Settlement Agreement be
held or declared by a court of competent jurisdiction to be void or illegal for
any reason, all other clauses, paragraphs, or parts of this Settlement Agreement
which can be performed or effected without such an illegal clause, paragraph, or
part, shall nevertheless remain in full force and effect.
I. In making this Settlement Agreement, it is understood that each Party
relies wholly upon its own judgment, belief, and knowledge of the nature,
extent, and duration of any liability or injuries involved, and none of the
Parties have been influenced, to any extent whatsoever, in making this
Settlement Agreement, by any representation or statements regarding such
matters. Each Party has had the opportunity to, and has, retained separate
counsel to review this Settlement Agreement and to advise such Party as to the
legal consequences thereof.
J. This Settlement Agreement may be executed in multiple counterparts, each
of which shall be deemed an original for all purposes. Each Party shall execute
this Settlement Agreement by signature at the designated signature line.
K. Each Party acknowledges that he or it has read this Settlement
Agreement, including all documents or exhibits, and that he or it fully
understands his or its respective rights and obligations.
L. From the date of this Settlement Agreement, the Parties shall keep
confidential in all respects this Settlement Agreement, except as they shall be
required by law or regulation to report either the settlement of the Civil
Action or the terms of or actions required by this Settlement Agreement.
In witness whereof, the Parties have executed this Settlement Agreement on
the 19th day of September, 1997.
Robert E. Deziel
L & L FOODS, INC.
By:/s/Linn Heaton
-----------------------------------------
Linn Heaton, Its President
By:/s/George Heaton
-----------------------------------------
George Heaton
By:/s/Lee Heaton
-----------------------------------------
Lee Heaton
By:/s/Linn Heaton
-----------------------------------------
Linn Heaton
BUSH ROSS GARDNER WARREN & RUDY, P.A., for
the limited purposes described in Sections 1,
2, 6 and 9
By:/s/John Giordano
-------------------------------------------
John Giordano, Vice President
<PAGE>
L & L CORPORATE AUTHORIZATION
Lee and Linn Heaton, constituting all officers, directors and shareholders
of L & L, and after holding a meeting of L & L's Board of Directors and its
shareholders, this 18th day of September, 1997, all notice required having been
duly waived, hereby authorize, ratify, approve, and consent to all corporate
actions set forth above.
By:/s/Linn Heaton
------------------------------------------
Linn Heaton, President,
Director and Shareholder
By:/s/Lee Heaton
------------------------------------------
Lee Heaton, Vice President & Secretary,
Director and Shareholder
