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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-2)
Under the Securities Exchange Act of 1934
(Amendment No. 2)
SHELLS SEAFOOD RESTAURANTS, INC.
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(Name of Issuer)
Common Stock, $.01 Par Value Per Share
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(Title of Class of Securities)
822809 10 9
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(CUSIP Number)
John N. Giordano, 220 South Franklin St.,
Tampa, Florida 33602 (813) 224-9255
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 19, 1997
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(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.
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CUSIP No. 822809 10 9 SCHEDULE 13D Page 2 of 4 Pages
--------------------- -------- --------
(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
L & L FOODS, INC.
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(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
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(3) SEC Use Only
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(4) SOURCE OF FUNDS
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(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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(6) Citizenship or Place of Organization
FLORIDA
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(7) Sole Voting Power
Number of
164,800
Shares --------------------------------------------------------
(8) Shared Voting Power
Beneficially
Owned by --------------------------------------------------------
(9) Sole Dispositive Power
Each
164,800
Reporting --------------------------------------------------------
(10) Shared Dispositive Power
Person With
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
164,800
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
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(13) Percent of Class Represented by Amount of Row (11)
3.9%
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(14) Type of Reporting Person
CO
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ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this amended Schedule 13D
relates is the common stock, $.01 par value, of Shells Seafood Restaurants,
Inc., a Delaware corporation ("Shells"). The address of the principal executive
office of Shells is 16313 North Dale Mabry Highway, Suite 100, Tampa, Florida
33618.
ITEM 2. IDENTITY AND BACKGROUND.
This amended Schedule 13D is filed by L & L Foods, Inc., a Florida
corporation ("L & L Foods"). L & L Foods has its principal business and office
address at 215 5th Street, Suite 108, West Palm Beach, Florida 33401. L & L
Foods was formed on September 20, 1996 for the purpose of holding shares of
Shells common stock.
For information requested in Item 2(a)-(f) see L & L Foods' initial
filing on Schedule 13D, pursuant to an event dated May 24, 1997, which required
such filing.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is not applicable; see Item 4, below, Purpose of Transaction.
ITEM 4. PURPOSE OF TRANSACTION.
(a) L & L Foods sold 100,000 shares of Shells reported in this
amendment to Robert E. Deziel, pursuant to a Compromise and Settlement
Agreement dated September 19, 1997 (the "Compromise and Settlement Agreement").
See Item 5. below.
Sub-items (b)-(j) are not applicable.
ITEM 5. INTEREST IN SECURITIES OF SHELLS.
(a) According to L & L Foods' filing on its first amended Schedule 13D,
pursuant to an event dated August 20, 1997, which required such filing (the
"First Amended 13D Filing"), L & L Foods was the direct and/or beneficial owner
of 264,800 shares, or 6.28%, of Shells' issued and outstanding common stock. As
a result of the sale to Robert E. Deziel that L & L Foods made on September 19,
1997, L & L Foods has reduced its holdings from 264,800 shares to 164,800
shares.
Linn Heaton is currently the beneficial owner of 82,400 shares, or
1.95%, of Shells common stock by reason of his ownership of 50% of the shares of
L & L Foods common stock.
Lee Heaton is currently the beneficial owner of 82,400 shares, or
1.95%, of Shells common stock by reason of his ownership of 50% of the shares of
L & L Foods common stock.
(b) Except as otherwise indicated in the response to Items 2, 5.(a)
and/or 6, each person or entity listed therein has the sole power to vote and to
direct the vote, and the sole power to dispose or direct the
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disposition, of the shares of Shells common stock held of record and/or
beneficially by such person or entity.
(c) Since L & L Foods' First Amended 13D Filing, L & L Foods has sold
100,000 shares of Shells common stock to Robert E. Deziel in exchange for
$600,000 in cash, pursuant to the Compromise and Settlement Agreement.
(d) Not applicable.
(e) L & L Foods ceased to be the beneficial owner of more than five
percent of Shells common stock on September 19, 1997.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF SHELLS.
Also pursuant to the Compromise and Settlement Agreement, L & L Foods
has granted to Robert Deziel two options to purchase L & L Foods' remaining
164,800 shares of Shells common stock; the first option is to purchase 100,000
shares at a price of $6.00 per share, and the second option is to purchase
64,800 shares at a price of $12.00 per share. Each option is exercisable at any
time prior to the close of business October 31, 1997. See Exhibit "1" attached
hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Compromise and Settlement Agreement dated September 19, 1997 between
Robert E. Deziel, L & L Foods, George Heaton, Linn Heaton and Lee Heaton,
attached hereto as Exhibit "1".
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.
L & L FOODS, INC.
By: /s/ Linn Heaton
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Linn Heaton, President
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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
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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").
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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
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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.
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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
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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.
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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
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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.
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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
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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.
/s/ Robert E. Deziel
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Robert E. Deziel
L & L FOODS, INC.
By: /s/ Linn Heaton
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Linn Heaton, Its President
/s/ George Heaton
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George Heaton
/s/ Lee Heaton
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Lee Heaton
/s/ Linn Heaton
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Linn Heaton
BUSH ROSS GARDNER WARREN &
RUDY, P.A., for the limited purposes
described in Sections 1, 2, 6 and 9
By: /s/ John N. Giordano
---------------------------------
John N. Giordano, Its Vice President
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