<PAGE> 1
As Filed with the Securities and Exchange Commission on July 31, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
(INCLUDING A
FORM S-3 PROSPECTUS)
UNDER THE
SECURITIES ACT OF 1933
-----------------------
JERRY'S FAMOUS DELI, INC.
(Exact name of registrant as specified in its charter)
California 95-3302338
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
12711 Ventura Boulevard, Suite 400
Studio City, California 91604
(Address of Principal Executive Offices; Zip Code)
CONSULTING AGREEMENT
(Full Title of the Plans)
ISAAC STARKMAN
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
JERRY'S FAMOUS DELI, INC.
12711 Ventura Boulevard, Suite 400
Studio City, California 91604
(Name and address of agent for service)
(818) 766-8311
(Telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities Amount Proposed Proposed Amount of
to be to be Maximum Offering Maximum Registration
Registered Registered Price per share Aggregate Offering Price Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 200,000 $3.6875(1) $737,500 $223.48
no par value shares
</TABLE>
(1) Calculated pursuant to Rule 457(c) under the Securities Act of 1933.
<PAGE> 2
PROSPECTUS
200,000 SHARES
LOGO
COMMON STOCK
____________________
This Prospectus relates to the registration by Jerry's Famous Deli,
Inc. (the "Company"), at its expense, of up to a maximum of 200,000 shares (the
"Selling Security Holder Shares") of the common stock of the Company (the
"Common Stock"), for the account of Kenneth J. Abdalla (the "Selling Security
Stockholder"), the Interim President of the Company. The Selling Security
Holder Shares are not being underwritten and the Company will not receive any
proceeds from the sale of the Selling Security Holder Shares. See "Selling
Security Holder". Sales of the Selling Security Holder Shares may depress
the price of the Common Stock in the market for the Common Stock.
The Common Stock is traded on the Nasdaq National Market under the symbol
"DELI." On July 28, 1997, the last sale price of the
Company's Common Stock was $3 11/16.
THESE SECURITIES ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGES 4-7 HEREOF.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Selling Security Holder may sell the Selling Security Holder
Shares being offered by him from time to time in transactions in the
over-the-counter market, in negotiated transactions, or by a combination of
these methods, at fixed prices that may be changed, at market prices prevailing
at the time of the sale, at prices related to such market prices or at
negotiated prices. The Company will not receive any part of the proceeds from
sales of the Selling Security Holder Shares by the Selling Security Holder. See
"Use of Proceeds."
All expenses incurred in connection with the registration of the
Selling Security Holder Shares, which expenses are not expected to exceed
$5,000, are being borne by the Company.
THE DATE OF THIS PROSPECTUS IS JULY 31, 1997
<PAGE> 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), with the
Securities and Exchange Commission (the "Commission") are incorporated herein
by reference: the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996; the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997; the Company's Current Report on Form 8-K for
December 31, 1996 and the Company's Form 8-A filed on October 11, 1995.
All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the securities under
this Prospectus shall be deemed to be incorporated by reference herein and to
be a part thereof from the date of filing of such documents, except as to any
portion of any future Annual or Quarterly Report to Stockholders which is not
deemed to be filed under said provisions or any portion of a Proxy Statement
not deemed incorporated herein by reference. Any statement made in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that such statement is replaced
or modified by a statement contained in a subsequently dated document
incorporated by reference or contained in this Prospectus. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated in this Prospectus by reference, other than exhibits to
such documents. Written or oral requests for such copies should be directed to
Christina Sterling, Chief Financial Officer, 12711 Ventura Boulevard, Suite
400, Studio City, California 91604 (Telephone: (818) 766-8311).
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). These reports, proxy statements and other information can be
inspected and copied at prescribed rates at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: The Chicago Regional
Office, Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and the New York Regional Office, 7 World Trade Center, 12th
Floor, New York, New York 10048. Such reports, proxy statements and other
information filed by the Company can also be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006. Copies of such materials can also be obtained by mail at
prescribed rates upon written request addressed to the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the SEC's web site (http//:www.sec.gov.)
The Company has filed with the Commission a registration statement
under the Securities Act with respect to the shares of Common Stock registered
hereby. This Prospectus omits certain information contained in said
registration statement as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock, reference is made to the registration statement, including the exhibits
thereto. Statements contained herein concerning the contents of any contract or
any other document are not necessarily complete, and in each instance, reference
is made to such contract or other document filed with the Commission as an
exhibit to the registration statement, or otherwise, each such statement being
qualified in all respects by such reference. The registration statement,
including exhibits and schedules thereto, may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at the Chicago Regional
Office, Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and at the New York Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such materials can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates and at the SEC's web site.
-2-
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements and related notes thereto
appearing elsewhere in this Prospectus. Unless otherwise indicated, all
financial information, share and per share information in this Prospectus
assume (i) no exercise of options to purchase an aggregate of up to 150,000
shares granted to an investment bank in connection with the Company's initial
public offering; and (ii) no exercise of options to purchase an aggregate of
up to 2,000,000 shares granted or available to be granted to employees,
officers, directors and consultants pursuant to stock options.
The Company
Jerry's Famous Deli, Inc. (the "Company") was established in
1978 to develop the Jerry's Famous Deli restaurant in Studio City, California.
Three additional Jerry's Famous Deli restaurants were opened prior to 1995 in
Encino, California (1989), Marina del Rey, California (1991) and West
Hollywood, California (January, 1994). In 1996, two new Jerry's Famous Deli
restaurants were opened in Pasadena, California (February 1996) and
Westwood, California (June 1996). Also in July 1996, the Company purchased
two existing restaurants and a bakery adjoining one of the restaurants in
Sherman Oaks, California, which has continued to operate under the name
"Solley's", and Woodland Hills, California, which was closed for renovation
and reopened in December 1996 as a Jerry's Famous Deli. In September 1996,
the Company purchased the real property, building and restaurant business of
"Wolfie Cohen's Rascal House," a well known deli-style restaurant in Miami
Beach, Florida, which the Company has operated and intends to continue to
operate under the name "Wolfie Cohen's Rascal House." The Company has
substantially retained and expanded upon the menu and operating format of the
restaurant, the hours of operation of the restaurant have been expanded to
a 24-hour operation, and the restaurant has begun delivery service, taking
call-in orders for take out, and taking charge cards, all of which were not
previously done at Rascal House.
Jerry's Famous Deli restaurants have the look and high energy feel of a
theme restaurant, with Broadway as the theme and posters, pictures and colored
klieg lighting creating the setting. However, the true strength of the Jerry's
Famous Deli restaurants is in the execution of its extraordinary menu. The
Company believes no one else has delivered a menu of over 700 items with
consistency and quality in multiple locations. People come to Jerry's Famous
Deli restaurants for the food, and they expect their favorite item the same way
every time at every location. The Company depends heavily on repeat customers,
and it emphasizes consistency, quality and cleanliness in an atmosphere
acceptable to the whole family, and appealing to the very different
demographics in the clientele at different times of the day. With an extensive
menu, 24-hour operation and high energy ambiance, all of the nine Jerry's
Famous Deli restaurants in operation at December 31, 1996 had average
annualized sales of approximately $6.3 million per location for the year ended
December 31, 1996.
Management believes that the Company distinguishes itself in the
restaurant business by the way it merchandises its restaurants, offering a
broad menu of moderately priced food for in-store eating, take-out or on a
delivered basis, including catering services, 24 hours a day, seven days a
week. Each restaurant is designed with a "New York theatrical" theme featuring
colored klieg lights, spotlights, and theater show posters, thereby generating
a high energy yet casual ambiance which results in a unique dining experience.
The Company's current objectives are to expand operations in Southern
California and to other areas consistent with the Company's location strategy
and market niche. The Company is actively reviewing additional potential
locations in California, Nevada and the East Coast. Management may consider
additional public or private offerings of its common stock and preferred stock
as well as additional debt financing to fund its future expansion efforts.
There is no assurance that the Company's financial or growth objectives can be
achieved or that additional capital will be available to finance the Company's
business plan.
-3-
<PAGE> 5
The Company is organized under the laws of the State of California.
The Company's offices are located at 12711 Ventura Boulevard, Suite 400, Studio
City, California 91604. Its telephone number is (818) 766-8311.
The Offering
<TABLE>
<S> <C>
Common Stock offered by the Selling Security Holder: 200,000 shares
Common Stock outstanding as of March 31, 1997: 14,177,656 shares
Nasdaq National Market Symbol: "DELI"
</TABLE>
RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVES A
HIGH DEGREE OF RISK. IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THE
PROSPECTUS AND INFORMATION INCORPORATED HEREIN BY REFERENCE, PROSPECTIVE
INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE MAKING AN
INVESTMENT. THIS PROSPECTUS CONTAINS OR INCORPORATES INTO IT CERTAIN FORWARD
LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES, SUCH AS STATEMENTS OF
THE COMPANY'S PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS. THE CAUTIONARY
STATEMENTS MADE IN THIS PROSPECTUS AND INCORPORATED BY REFERENCE HEREIN SHOULD
BE READ AS BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING STATEMENTS WHEREVER
THEY APPEAR IN OR ARE INCORPORATED HEREIN BY REFERENCE INTO THIS PROSPECTUS.
THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HERE
OR INCORPORATED HEREIN BY REFERENCE. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO
SUCH DIFFERENCES INCLUDE THOSE DISCUSSED BELOW, AS WELL AS THOSE DISCUSSED
ELSEWHERE HEREIN.
LIMITED OPERATING HISTORY WITH MULTIPLE RESTAURANTS. The Company was
founded in 1978 with the opening of its Studio City restaurant. Three
additional restaurants were opened in 1989, 1991 and 1994, respectively, and
have each been in operation for over two years. Two additional restaurants were
opened in February and June 1996, respectively, two additional restaurants
(Solley's) were acquired as of July 1, 1996, and one additional restaurant
(Rascal House) was acquired September 9, 1996. Accordingly, the Company has a
limited operating history in its current size and configuration, and there is no
assurance that such restaurants, or the Company as a whole, will be profitable
in the future.
LACK OF DIVERSIFICATION. At the present time, the Company intends to
invest only in restaurants based on the Jerry's Famous Deli concept. As a
result, changes in consumer preferences, including a change in consumer
preferences for restaurants of the type to be operated by the Company, may have
a disproportionate and materially adverse impact on the Company's business and
its operating results.
POSSIBLE NEED FOR ADDITIONAL FINANCING. Management believes that the
proceeds of the October 1995 public offering and the August and November 1996
sales of the Preferred Shares, along with the funds anticipated to be
generated from the Company's operations will be sufficient to fund the
Company's cash requirements for at least the next 12 months. This estimate is
based on certain assumptions, including certain assumptions as to the Company's
revenues, net income and other factors, and there is no assurance that such
assumptions will prove to be accurate or that unbudgeted costs will not be
incurred. Future events, including the problems, delays, additional expenses
and difficulties frequently encountered by similarly situated companies, as
well as changes in economic, regulatory or competitive conditions, may lead to
cost increases that could make the Company's existing capital and the funds
anticipated to be generated from the Company's operations insufficient to fund
the Company's operations and expansion plans for the next 12 months.
Management may also determine that it is in the best interest of the Company to
expand more rapidly than currently intended. In any case, additional financing
may be required. There is no assurance that the Company will be able to obtain
such additional financing, or that such additional financing will be available
on terms acceptable to the Company and at the times required by the Company.
Failure to obtain such financing may adversely impact the growth, development
or general operations of the Company. If, on the other hand, such financing
can be obtained, it will most likely result in additional leverage or dilution
of existing shareholders.
UNCERTAIN ABILITY TO MANAGE GROWTH AND EXPANSION. In order to
achieve growth, Management believes that the Company must develop new
restaurants. The Company's expansion plan calls for the addition of several
new restaurants per year. Management does not have experience opening
restaurants at the current expansion plan rate. The Company's ability to
successfully expand will depend on a number of factors, including without
limitation, the selection and availability of suitable locations, the hiring
and training of sufficiently skilled management and personnel, the availability
of adequate financing, distributors and suppliers, the obtaining of necessary
governmental permits and authorizations, and contracting with appropriate
development and construction firms, some of which are beyond the control of the
Company. There is no assurance that the Company will be able to open any new
restaurants, or that any new restaurants will be opened at budgeted costs or in
a timely manner, or that such restaurants can be operated profitably.
-4-
<PAGE> 6
LIMITATIONS AND VULNERABILITY AS A RESULT OF GEOGRAPHIC CONCENTRATION.
Because all of the Company's current restaurants (other than the recently
acquired Rascal House in Florida) are located in Southern California, the
Company is vulnerable to the Southern California economy, which has experienced
adverse results in recent years. In addition, since the Company's operating
experience is limited to Southern California, there is no assurance that the
Jerry's Famous Deli concept will be successful in other geographic areas if or
as the Company expands its geographic reach. For example, the Company's
experience with construction and development outside the Los Angeles
metropolitan area is limited, which may increase associated risks of
development and construction as the Company expands outside this area.
Expansion to other geographic areas may require substantially more funds for
advertising and marketing since the Company will not initially have name
recognition or word of mouth advertising available to it in areas outside of
Southern California. The centralization of the Company's management in
Southern California may be a problem in terms of expansion to new geographic
areas, since the Company may suffer from lack of experience with local
distributors, suppliers and consumer factors and from other issues as a result
of the distance between the Company's main headquarters and its restaurant
sites. These factors could impede the growth of the Company.
SIGNIFICANT RESTAURANT INDUSTRY COMPETITION. The restaurant industry
is intensely competitive with respect to price, service, location, ambiance and
quality, both within the casual dining field and in general. As a result, the
rate of failure for restaurants is very high and the business of owning and
operating restaurants involves greater risks than for businesses generally.
There are many competitors of the Company in the casual dining segment that
have substantially greater financial and other resources than the Company and
may be better established in those markets where the Company has opened or
intends to open restaurants. There is no assurance that the Company will be
able to successfully meet its competition.
DEPENDENCE UPON CONSUMER TRENDS. The Company's restaurants are, by
their nature, dependent upon consumer trends with respect to the public's
tastes, eating habits (including increased awareness of nutrition), and
discretionary spending priorities, all of which can shift rapidly. In general,
such trends are significantly affected by many factors, including the national,
regional or local economy, changes in area demographics, increases in regional
competition, food, liquor and labor costs, traffic patterns, weather, natural
disasters, and the availability and relative cost of automobile fuel. Any
negative change in any of the above factors could negatively affect the Company
and its operations.
DEPENDENCE ON KEY PERSONNEL. The Company believes that the
development of its business has been, and will continue to be, highly dependent
on Isaac Starkman, the Chairman of the Board and Chief Executive Officer of the
Company. In addition, any outstanding balances under the Company's $2.5
million loan with Bank of America become immediately due and payable upon the
death of any principal officer or majority shareholder. Isaac Starkman is
currently 59 years old. Mr. Starkman has an employment agreement which
requires that he devote a substantial majority of his time to the Company;
however, he does have, and will continue to have, limited involvement with
certain concession and souvenir businesses in New York, and other business
ventures, each unrelated to the Company and its business. Guy and Jason
Starkman, Vice Presidents of the Company, are currently 26 and 23 years old,
respectively. The Company has obtained key man life insurance of $2,000,000
face amount on Isaac Starkman and $1,000,000 on Guy Starkman. However,
especially in light of Guy and Jason Starkman's relative youth, if Isaac
Starkman's services become unavailable for any reason, it could affect the
Company's business and operations adversely.
POSSIBLE HIGHER COSTS UNDER EXISTING RELATED PARTY LEASES. The
Company currently leases its Westwood restaurant building and eight adjacent
parking spaces, along with three parking lots and a 1,200 square foot building
adjacent to its West Hollywood restaurant, from The Starkman Family Partnership
("The Starkman Family Partnership"), an entity controlled by Isaac Starkman,
the controlling beneficial shareholder of the Company. There is no assurance
that the leases between The Starkman Family Partnership and the Company are as
favorable as the Company could have obtained from an unaffiliated third party.
These leases were not negotiated at arm's length and Isaac Starkman, the
controlling beneficial shareholder and the Chief Executive Officer of the
Company, had a conflict of interest in negotiating these transactions. In
addition, several of the leases are subject to renewal at their then fair
market value, which could involve substantial increases, depending upon the
real estate leasing market at the time of renewal of each of such leases. In
the future, the Company will not lease new restaurant sites or facilities or
renew existing leases from The Starkman Family Partnership or other affiliated
persons or entities unless the terms of the lease have been approved by the
Company's independent directors and deemed at least as favorable as would be
available from a non-affiliated third party by an independent national or
regional real estate evaluation firm or commercial leasing firm in a written
opinion.
CERTAIN DISCONTINUED RESTAURANT CONCEPTS HAVE BEEN UNSUCCESSFUL.
Certain other restaurant operations established by Isaac Starkman, the
controlling beneficial shareholder of the Company, have not met with success.
In November 1984, Isaac Starkman established a casual dining restaurant named
Starky's, which combined a deli operation with pizza parlor and arcade at the
top of the
-5-
<PAGE> 7
Beverly Center, a large shopping mall in Los Angeles, California. Starky's had
no street visibility, and due to its location in an enclosed mall, had
restricted hours of operation and problems with hygienic conditions at the mall
which were outside of Management's control. A lawsuit was filed by Starky's
primarily related to the landlord's property maintenance which resulted in a
settlement subject to a confidentiality agreement and the closing of the
restaurant in December 1992. In addition, Jerry's Famous Pizza, a 2,300 square
foot pizza restaurant in Sherman Oaks, California ("Jerry's Famous Pizza"),
operated by Pizza by the Pound, Inc., a wholly-owned subsidiary acquired by the
Company on January 12, 1995, was not profitable. Jerry's Famous Pizza had been
in operation since May 1989 and operated at a net loss. The Company
nonetheless acquired the operation based on the belief that the one existing
operation was not performing well due to its limited exposure and access unique
to its mall location. Management believed that this facet could be corrected
by developing additional Jerry's Famous Pizza operations in more favorable
locations. In addition, prior to the private placement of stock by the Company
in January of 1995, the Company was wholly-owned by The Starkman Family Trust.
Isaac Starkman was the Chief Executive Officer of the Company, a 50% owner of
Pizza by the Pound, Inc. and Co-Trustee of The Starkman Family Trust. Ami
Saffron was Director of Operations and Procurement of the Company and a 50%
owner of Pizza by the Pound, Inc. Mr. Starkman, Mr. Saffron and counsel to
the Company believed it would be inappropriate for the Company to sell shares
of the Company to non-affiliated persons who would become minority shareholders
of the Company while Mr. Starkman and Mr. Saffron owned and operated a
separate restaurant business outside the Company. Thus, on January 12, 1995,
the Company acquired all of the shares of Pizza by the Pound, Inc. Management
believed that Jerry's Famous Pizza represented a strong concept for profitable
expansion. However, as the Company decided to offer shares to the public, and
after evaluating advice of its professional advisers and the nature of the
market for public company restaurant stocks, Management determined that it was
in the interest of shareholder value that the Company focus on its core
business of high volume deli style restaurants rather than confuse the
financial markets' perception of the Company by developing comparatively low
volume restaurants in the fast food pizza segment. As a result, the Company
ceased operations of Jerry's Famous Pizza.
INCREASES IN FOOD COSTS. Among various other factors, the Company's
profitability is highly sensitive to changes in food costs, which sensitivity
requires Management to be able to anticipate and react to such changes.
Various factors beyond the Company's control, including adverse weather, labor
strikes and delays in any of the restaurants' frequent deliveries, may
negatively affect food costs, quality and availability. While in the past,
Management has been able to anticipate and react to increasing food costs
through, among other things, purchasing practices, menu changes and price
adjustments, there can be no assurance that it will be able to do so in the
future.
INCREASE IN MINIMUM WAGE. On August 20, 1996, President Clinton signed
legislation which increased the federal minimum wage from $4.25 an hour to $4.75
effective October 1, 1996, and will further increase the federal minimum wage to
$5.15 effective September 1, 1997. In addition, a California initiative adopted
in November 1996 will effect another two-step increase, making the state minimum
wage $5.75 an hour by early 1998. Approximately one-third of employees working
in restaurants operated by the Company receive salaries equal to the federal
minimum wage. Management of the Company intends to adopt changes in its pricing
in order to reflect the increase in labor costs, but there can be no assurance
that pricing changes will entirely offset the increase in labor costs.
SECURITY CONCERNS AND EXPENSES AT RESTAURANT SITES. In light of,
among other things, the 24-hour operation of the Company's restaurants,
security for patrons and workers at restaurant locations is an ongoing and
increasing concern and expense. The Company has previously had criminal
incidents at its restaurants, some of which have resulted in lawsuits. There
is no assurance that there will not be any additional problems at any of the
locations. The Company maintains its own security personnel at each location.
The Company also maintains general liability insurance.
POTENTIAL UNINSURED LOSSES. The Company has comprehensive insurance,
including general liability, fire and extended coverage, which the Company
considers adequate. However, there are certain types of losses which may be
uninsurable or not economically insurable. Such hazards may include
earthquake, hurricane and flood losses. While the Company currently maintains
limited earthquake coverage, it may not be economically feasible to do so in
the future. Since the Company's operations are currently concentrated in one
area of Southern California, the Company has had temporary interruptions in its
operations due to such hazards in the past. Punitive damage awards are
generally not covered by insurance; thus, any awards of punitive damages as to
which the Company may be liable could adversely affect the ability of the
Company to continue to conduct its business, to expand its operations or to
develop additional restaurants. If such a loss should occur, the Company
would, to the extent that it is not covered for such loss by insurance, suffer
a loss of the capital invested in, as well as anticipated profits and/or cash
flow from, such damaged or destroyed properties. There is no assurance that
any insurance coverage maintained by the Company will be adequate, that it can
continue to obtain and maintain such insurance at all or that the premium costs
will not rise to an extent that they adversely affect the Company or the
Company's ability to economically obtain or maintain such insurance.
POTENTIAL "DRAM SHOP" LIABILITY. Restaurants in California and most
other states are subject to "dram shop" laws, rules and regulations, which
impose liability on licensed alcoholic beverage servers for injuries or damages
caused by their negligent service of alcoholic beverages to a visibly
intoxicated person or to a minor, if such service is the proximate cause of the
injury or damage and such injury or damage is reasonably foreseeable. While
the Company has limited amounts of liquor liability insurance and intends to
maintain liquor liability insurance as part of its comprehensive general
liability insurance which it believes should be adequate to protect against
such liability, there is no assurance that it will not be subject to a judgment
in excess of such insurance coverage or that it will be able to obtain or
continue to maintain such insurance coverage at reasonable costs, or at all.
The imposition of a judgment substantially in excess of the Company's current
insurance coverage would have a materially adverse effect on the Company and
its operations. The failure or
-6-
<PAGE> 8
inability of the Company to maintain or increase insurance coverage could
materially and adversely affect the Company and its operations. In addition,
punitive damage awards are generally not covered by such insurance. Thus, any
awards of punitive damages as to which the Company may be liable could
adversely affect the ability of the Company to continue to conduct its
business, to expand its operations or to develop additional restaurants.
TRADEMARK AND SERVICE MARK RISKS. The Company has not had a
challenge to its use of the "Jerry's" service mark as of this time. However,
to date, the Company has used the service mark only in Southern California. In
addition, the Company has not secured clear rights to the use of the "Jerry's"
service mark or any other name, service mark or trademark used in the Company's
business operations, other than "JFD," in connection with restaurants. There
are other restaurants using the name "Jerry's" throughout the United States,
and use of the service mark or any other name, service mark or trademark in the
Company's business operations, other than "JFD," may be subject to challenge.
EFFECTS OF COMPLIANCE WITH GOVERNMENT REGULATION. The Company is
subject to various federal, state and local laws, rules and regulations
affecting its businesses and operations. Each of the Company's restaurants is
and shall be subject to licensing regulation and reporting requirements by
numerous governmental authorities which may include alcoholic beverage
control, building, land use, health and safety and fire agencies in the state
or municipality in which the restaurant is located. Difficulties in obtaining
or failures to obtain the necessary licenses or approvals could delay or
prevent the development or operation of a given restaurant or limit, as with
the inability to obtain a liquor or restaurant license, its products and
services available at a given restaurant. Any problems which the Company may
encounter in renewing such licenses in one jurisdiction may adversely affect
its licensing status on a federal, state or municipal level in other relevant
jurisdictions.
HIGHER COSTS ASSOCIATED WITH POTENTIAL HEALTH CARE REFORM. The
Company currently pays a portion of the health insurance coverage for its
managerial and certain non-managerial restaurant personnel and more extensive
health coverage for its corporate staff employees. Many proposals being
discussed at the state and federal level for universal or broadened health care
coverage could impose costly requirements to provide additional coverage, which
could adversely impact the Company. At the present time it is unclear what, if
any, reforms in health care coverage will be adopted at the federal or state
level.
LIMITED CONTROL AND INFLUENCE ON THE COMPANY. The current officers
and directors, including the controlling beneficial shareholders, of the Company
in the aggregate, directly or beneficially, currently own approximately 75% of
the total outstanding Common Stock. In addition, three out of six directors
are members of the Starkman family. Further, the Selling Security Holder is an
affiliate of certain principal shareholders of the Company. As a result, these
individuals are in a position to materially influence, if not control the
outcome of all matters requiring shareholder or board approval, including the
election of directors. Such influence and control is likely to continue for the
foreseeable future and significantly diminishes control and influence which
future shareholders may have on the Company.
LACK OF FULL PAYMENT FOR THE SELLING SECURITY HOLDER SHARES. The
Selling Security Holder Shares have been issued as partially paid shares and
full payment will result from the rendering of consulting services to the
Company under a Consulting Agreement with the Selling Security Holder dated
March 27, 1997. The consulting services are to be rendered from the date of the
Consulting Agreement through December 31, 1998. For each month of the
completion of such consulting services approximately 1/21st of the total
consideration for the Selling Security Holder Shares will be deemed to be paid
and 1/21st of the Selling Security Holder Shares shall become fully paid and
non-assessable. Therefore, the Selling Security Holder Shares will not be fully
paid until and will be subject to further call for the unpaid consideration
until December 31, 1998. Further, until December 31, 1998, if the Company did
declare a dividend, the Selling Security Holder Shares would be entitled to such
dividend only to the extent of the percentage of the total consideration
actually paid to the record date for such dividend for each Selling Security
Holder Share. Until fully paid, the Selling Security Holder Shares will bear a
legend to the effect that they are partially paid.
NO DIVIDENDS. It is the current policy of the Company that it will
retain earnings, if any, for expansion of its operations, remodeling of
existing restaurants and other corporate purposes and it will not pay any cash
dividends in respect of the Common Stock in the foreseeable future.
POSSIBLE ADVERSE IMPACT ON POTENTIAL BIDS TO ACQUIRE SHARES DUE TO
ISSUANCE OF PREFERRED OR COMMON STOCK. The Board of Directors of the Company
has authority to issue up to 5,000,000 shares of preferred stock of the Company
(the "Preferred Stock") and to fix the rights, preferences, privileges and
restrictions of such shares without any further vote or action by the
shareholders. In addition, the Company has authorized 60,000,000 shares of
Common Stock. As of March 31, 1997, 14,177,656 shares of Common Stock were
outstanding. The Company has no shares of Preferred Stock outstanding. The
potential issuance of authorized and unissued Preferred Shares or Common Stock
of the Company may result in special rights and privileges, including voting
rights, to individuals designated by the Company and have the effect of
delaying, deferring or preventing a change in control of the Company. As a
result, such potential issuance may adversely affect the marketability and
potential market price of the shares. The Company currently has no plans to
issue shares of Preferred Stock or additional shares of Common Stock. However,
if additional acquisition opportunities become available, Management may
determine to issue and sell additional Common Stock or Preferred Shares at any
time in the future.
-7-
<PAGE> 9
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares of
Common Stock offered by the Selling Security Holder.
SELLING SECURITY HOLDER
This Prospectus covers a total of 200,000 shares of Common Stock which
may be offered from time to time by the Selling Security Holder. The 200,000
shares are the only shares of the Company owned directly by the Selling Security
Holder. The Selling Security Holder is an affiliate of Yucaipa Waterton Deli
Investors, LLC, Jerry's Investors, LLC, and Waterton Management, LLC which in
the aggregate own 3,271,406 shares of Common Stock and currently exercisable
warrants to purchase 65,000 shares of Common Stock. On a combined basis, the
shares and warrants owned by the Selling Security Holder and his affiliates
represent approximately 28% of the total Common Stock.
The Selling Security Holder Shares have been issued as partially paid
shares and full payment will result from the rendering of consulting services to
the Company under a Consulting Agreement with the Selling Security Holder dated
march 27, 1997. The consulting services are to be rendered from the date of the
Consulting Agreement through December 31, 1998. For each month of the
completion of such consulting services approximately 1/21st of the total
consideration for the Selling Security Holder Shares will be deemed to be paid
and 1/21st of the Selling Security Holder Shares shall become fully paid and
non-assessable. Therefore, the Selling Security Holder Shares will not be fully
paid until and will be subject to further call for the unpaid consideration
until December 31, 1998. Further, until December 31, 1998, if the Company did
declare a dividend, the Selling Security Holder Shares would be entitled to such
dividend only to the extent of the percentage of the total consideration
actually paid to the record date for such dividend for each Selling Security
Holder Share. Until fully paid, the Selling Security Holder Shares will bear a
legend to the effect that they are partially paid.
PLAN OF DISTRIBUTION
The Selling Security Holder may sell all or a portion of the Selling
Security Holder Shares held by him from time to time while the registration
statement of which this Prospectus is a part remains effective. The aggregate
proceeds to the Selling Security Holder from the sale of the Selling Security
Holder Shares offered by the Selling Security Holder hereby will be the prices
at which such securities are sold, less any commissions. There is no assurance
that the Selling Security Holder will sell any or all of the Selling Security
Holder Shares offered hereby.
The Selling Security Holder Shares may be sold by the Selling Security
Holder in transactions on the NASDAQ National Market, in negotiated
transactions, or by a combination of these methods, at fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
such market prices or at negotiated prices or through the writing of options on
the Selling Security Holder Shares. The Selling Security Holder may elect to
engage a broker or dealer to effect sales in one or more of the following
transactions: (a) block trades in which the broker or dealer so engaged will
attempt to sell the Selling Security Holder Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction, (b)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus, and (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers. In
effecting sales, brokers and dealers engaged by the Selling Security Holder may
arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from the Selling Security Holder in amounts to
be negotiated (and, if such broker-dealer acts as agent for the purchaser of
such Selling Security Holder Shares, from such purchaser). Broker-dealers may
agree with the Selling Security Holder to sell a specified number of such
Selling Security Holder Shares at a stipulated price per Selling Security Holder
Share, and to the extent that such broker-dealer is unable to do so acting as
agent for the Selling Security Holder to purchase as principal any unsold
Selling Security Holder Shares at the price required to fulfill the
broker-dealer commitment to the Selling Security Holder. Broker-dealers who
acquire Selling Security Holder Shares as principal may thereafter resell such
Selling Security Holder Shares from time to time in transactions (which may
involve crosses and block transaction and sales to and through other
broker-dealers, including transaction of the nature described above) in the
over-the-counter market or otherwise at prices and on terms then prevailing at
the time of sale, at prices then related to the then-current market price or in
negotiated transactions and, in connection with such resales, may pay to or
receive from the purchasers of such Selling Security Holder Shares commissions
as described above.
The Selling Security Holder and any broker-dealers or agents that
participate with the Selling Security Holder in sales of the Selling Security
Holder Shares may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the Selling Security Holder Shares purchased by them may be deemed to
be underwriting commissions or discounts under the Securities Act of 1933.
The Company has agreed to indemnify the Selling Security Holder against
certain liabilities, including liabilities under the Securities Act of 1933.
The Company will pay all expenses incidental to this offering and sale
of the Selling Security Holder Shares to the public other than selling
commissions and fees. See "Selling Security Holder".
The Selling Security Holder has been advised that during the time he
is engaged in "distribution" (as defined under Regulation M under the
Securities Exchange Act of 1934, as amended) of the securities covered by this
Prospectus, he must comply with Regulation M under the Securities Exchange Act
of 1934, as amended, and pursuant thereto: (i) shall not engage in any
stabilization activity in connection with the Company's securities; and (ii)
shall not bid for or purchase any securities of the Company or attempt to
induce any person to purchase any of the Company's securities other than as
permitted under the Securities Exchange Act of 1934, as amended. Since the
Selling Security Holder is an "affiliated purchaser" of the Company as defined
in Regulation M, he has been further advised that he and his affiliates must
coordinate their sales under this Prospectus and otherwise with the Company
and any other "affiliated purchasers" of the Company for purposes of
Regulation M. The Selling Security Holder must also furnish each broker
through which Selling Security Holder Shares are sold copies of this
Prospectus.
-8-
<PAGE> 10
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby has
been passed upon for the Company by Jeffer, Mangels, Butler & Marmaro LLP, Los
Angeles, California. See "Selling Security Holder."
EXPERTS
The consolidated balance sheets of Jerry's Famous Deli, Inc. as of
December 31, 1996 and 1995 and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1996, as well as the balance sheet of Solley's
Inc. as of December 31, 1995 and the statements of operations, changes in
shareholders' deficit and cash flows for the year ended December 31, 1995, and
the balance sheets of One Hundred Seventy-Second Collins Corp. as of December
31, 1995 and 1994, and, the related statements of income, changes in
shareholders' equity, and cash flows for each of the two years in the period
ended December 31, 1995, incorporated by reference herein and in the
registration statement, have been included herein in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
-9-
<PAGE> 11
NO DEALER, SALES REPRESENTATIVE OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY THE COMMON STOCK
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
_______________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . 2
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SELLING SECURITY HOLDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
_______________
</TABLE>
200,000 Shares of
Common Stock
JERRY'S FAMOUS DELI, INC.
________________
PROSPECTUS
________________
July 31, 1997
-10-
<PAGE> 12
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Registrant hereby incorporates by reference in this registration
statement (the "Registration Statement") the following documents filed with the
Securities and Exchange Commission (the "Commission") by the Registrant pursuant
to the Securities Act of 1933, as amended:
(a) The Registrant's Form 10-K for the fiscal year ended
December 31, 1996;
(b) The Registrant's Form 10-Q for the quarter ended
March 31, 1997;
(c) The Registrant's Form 8-K for December 31, 1996; and
(d) The Registrant's Form 8-A filed on October 11, 1995.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein by the Registrant and to be a
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein by
the Registrant shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to provisions of the California General Corporation Law, the
Articles of Incorporation of the Registrant, as amended, include a provision
which eliminates the personal liability of its directors to the Registrant and
its shareholders for monetary damage to the fullest extent permissible under
California law. This limitation has no effect on a director's liability (i) for
acts or omissions that involve intentional misconduct or a knowing and culpable
violation of law, (ii) for acts or omissions that a director believes to be
contrary to the best interests of the Registrant or its shareholders or that
involve the absence of good faith on the part of the director, (iii) for any
transaction from which a director derived an improper personal benefit, (iv) for
acts or omissions that show a reckless disregard for the director's duty to the
Registrant or its shareholders in circumstances in which the director was aware,
or should have been aware, in the ordinary course of performing his or her
duties, of a risk of a serious injury to the Registrant or its shareholders, (v)
for acts or omissions that constitute an unexcused pattern of inattention that
amounts to an abdication of the director's duty to the Registrant or its
shareholders, (vi) under Section 310 of the California General Corporation Law
(concerning contracts or transactions between the Registrant and a director) or
(vii) under Section 316 of the California General Corporation Law (concerning
directors' liability for improper dividends, loans and guarantees). The
II-1
<PAGE> 13
provision does not eliminate or limit the liability of an officer for any act or
omission as an officer, notwithstanding that the officer is also a director or
that his actions, if negligent or improper, have been ratified by the Board of
Directors. Further, the provision has no effect on claims arising under federal
or state securities or blue sky laws and does not affect the availability of
injunctions and other equitable remedies available to the Registrant's
shareholders for any violation of a director's fiduciary duty to the Registrant
or its shareholders.
The Registrant's Articles of Incorporation authorize the Registrant to
indemnify its officers, directors and other agents to the fullest extent
permitted by California law. The Registrant's Articles of Incorporation also
authorize the Registrant to indemnify its officers, directors and agents for
breach of duty to the corporation and its shareholders through bylaw provisions,
agreements or both, in excess of the indemnification otherwise provided under
California law, subject to certain limitations. The Registrant has entered into
indemnification agreements with its non-employee directors whereby the
Registrant will indemnify each such person (an "indemnitee") against certain
claims arising out of certain past, present or future acts, omissions or
breaches of duty committed by an indemnitee while serving in his employment
capacity. Such indemnification does not apply to acts or omissions which are
knowingly fraudulent, deliberately dishonest or arise from willful misconduct.
Indemnification will only be provided to the extent that the indemnitee has not
already received payments in respect of a claim from the Registrant or from an
insurance company. Under certain circumstances, such indemnification (including
reimbursement of expenses incurred) will be allowed for liability arising under
the Securities Act.
The Registrant has purchased a directors' and officers' liability
insurance policy insuring directors and officers of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
5.1 Opinion as to legality of securities being registered
23.1 Consent of independent accountants (Coopers & Lybrand L.L.P.)
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission
II-2
<PAGE> 14
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons or the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Studio City, State of California, on the 30th day of July 1997.
Jerry's Famous Deli, Inc.
By /s/ ISAAC STARKMAN
------------------------------------
Isaac Starkman, Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Isaac Starkman his true and lawful attorney-in-fact and agent, acting alone,
with full powers of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, any
Amendments thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent, full powers and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all said attorney-in-fact
and agent, acting alone, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ ISAAC STARKMAN
- ------------------------ Director, Chief July 30, 1997
Isaac Starkman Executive Officer
and Chairman of the
Board
/s/ GUY STARKMAN
- ------------------------ Director July 30, 1997
Guy Starkman
/s/ JASON STARKMAN
- ------------------------ Director July 30, 1997
Jason Starkman
/s/ KENNETH J. ABDALLA
- ------------------------ Interim President July 30, 1997
Kenneth J. Abdalla and Director
/s/ CHRISTINA STERLING Chief Financial Officer July 30, 1997
- ------------------------ (Principal Financial and
Christina Sterling Accounting Officer)
</TABLE>
II-4
<PAGE> 16
<TABLE>
<S> <C> <C>
/s/ PAUL GRAY Director July 30, 1997
- -----------------------
Paul Gray
/s/ STANLEY SCHNEIDER Director July 30, 1997
- -----------------------
Stanley Schneider
</TABLE>
II-5
<PAGE> 17
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
5.1 Opinion as to legality of securities being registered
23.1 Consent of independent accountants (Coopers & Lybrand L.L.P.)
II-6
<PAGE> 1
[JEFFER, MANGELS, BUTLER & MARMARO LETTERHEAD]
July 31, 1997
Jerry's Famous, Deli, Inc.
12711 Ventura Boulevard, Suite 400
Studio City, California 91604
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on
Form S-8 (the "Registration Statement") (including a Form S-3 Prospectus)
which Jerry's Famous Deli, Inc., a California corporation (the "Company"),
proposes to file with the Securities and Exchange Commission (the
"Commission").
The Registration Statement covers 200,000 shares of Common Stock, no
par value (the "Shares"), issued to an executive officer and director of the
Company pursuant to a Consulting Agreement dated March 21, 1997 (the
"Agreement"). The Company has issued the Shares in consideration of services
performed and to be performed for the Company from March 27, 1997 to December
31, 1998.
In connection with rendering this opinion, we have examined
originals, or copies identified to our satisfaction as being true copies of
originals, of such corporate records of the Company and other documents which
we considered necessary for the purposes of this opinion.
In our review and examination of documents we have assumed (i) the
genuineness of all signatures; (ii) the authenticity of all documents submitted
to us as originals and the conformity to authentic original documents of all
documents submitted to us as certified, conformed or photostatic copies
thereof; (iii) all signatories have adequate power and authority to execute the
Agreement and (iv) each person signing a document is a competent adult person
not operating under any legal disability, duress or having been defrauded in the
execution of documents.
Based upon and subject to the foregoing, it is our opinion that the
Shares, which have been issued pursuant to the Agreement, are duly authorized
and legally issued as partially paid shares, subject to the receipt of full
payment, consisting of additional consulting services to be rendered from the
date hereof through December 31, 1998. In accordance with California
Corporations Code Section 409(d), the Shares bear a legend indicating the total
amount of the consideration to be paid therefor and the amount paid thereon.
Upon the completion of each calendar quarter of consulting services commencing
with the quarter ending June 30, 1997, one seventh of the total number of Shares
will become fully paid and nonassessable shares of the Common Stock of the
Company.
<PAGE> 2
JEFFER, MANGELS, BUTLER & MARMARO
Jerry's Famous Deli, Inc.
July 31, 1997
Page 2
We express no opinion as to compliance with the securities or "blue
sky" laws of any state in which the Shares are proposed to be offered and sold
or as to the effect, if any, which non-compliance with such laws might have on
the validity of issuance of the Shares.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the filing of this opinion in connection with such
filings of applications by the Company as may be necessary to register, qualify
or establish eligibility for an exemption from registration or qualification of
the Shares under the blue sky laws of any state or other jurisdiction. In
giving this consent, we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Commission promulgated thereunder.
Nothing herein shall be deemed to relate to or constitute an opinion
concerning any matters not specifically set forth above.
The opinion set forth herein is based upon the federal laws of the
United States of America and the laws of the State of California, all as now in
effect. We express no opinion as to whether the laws of any particular
jurisdiction apply, and no opinion to the extent that the laws of any
jurisdiction other than those identified above are applicable to the subject
matter hereof.
The information set forth herein is as of the date of this letter.
We disclaim any undertaking to advise you of changes which may be brought to
our attention after the effective date of the Registration Statement.
Very truly yours,
JEFFER, MANGELS, BUTLER & MARMARO LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated March 27, 1997 on our audits of the
consolidated financial statements of Jerry's Famous Deli, Inc. as of December
31, 1996 and 1995 and for each of the three years in the period ended December
31, 1996, which report is included in the Company's Annual Report on Form 10-K,
as well as our report dated May 17, 1996, except as to the information provided
in Note 7, for which the date is June 30, 1996 on our audit of the financial
statements of Solley's, Inc. as of December 31, 1995 and for the year in the
period ended December 31, 1995, which report is included the Company's Current
Report on Form 8-K for June 30, 1996 (as amended and filed on July 15, 1996),
and our report dated August 26, 1996, except for Note 7 as to which the date is
September 9, 1996 on our audits of the financial statements of One Hundred
Seventy-Second Collins Corp. as of December 31, 1995 and 1994 and for each of
the two years in the period ended December 31, 1995, which report is included in
the Company's Current Report on Form 8-K for June 30, 1996 (as amended and filed
on October 22, 1996).
COOPERS & LYBRAND L.L.P.
Los Angeles, California
July 22, 1997
