UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the fiscal year ended June 30, 1995
______________________________________________________
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from _______________________ to _____________________
Commission file Number 0-9037
________________________________________________________
Piccadilly Cafeterias, Inc.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Louisiana 72-0604977
__________________________________ ___________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3232 Sherwood Forest Blvd., Baton Rouge, Louisiana 70816
_______________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504) 293-9440
_____________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock New York Stock Exchange
________________________ ___________________________________________
Securities registered pursuant to Section 12(g) of the Act:
None
_______________________________________________________________________________
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant based on the closing price of such stock on September 22, 1995
was $62,675,500.
The number of shares outstanding of Common Stock, without par value, as
of September 22, 1995 was 10,333,450.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended
June 30, 1995 are incorporated by reference into Part II.
Portions of the definitive proxy statement for the 1995 annual meeting of
shareholders are incorporated by reference into Part III.
PART I
Item 1. Business
General Development of Business
Piccadilly Cafeterias, Inc. was incorporated under the laws of
Louisiana in 1965 and is the successor to various predecessor
corporations and partnerships which operated "Piccadilly" cafeterias
beginning with the acquisition of the first unit in 1944. Except
where the context otherwise indicates, the terms "Company",
"Piccadilly", and "Registrant" as used herein refer to Piccadilly
Cafeterias, Inc.
At June 30, 1995, the Company operated 132 cafeterias in 17
states. Of these, 60 were in suburban malls, 22 were in suburban
strip centers, and 50 were free-standing suburban locations. One new
cafeteria is expected to be opened during the year ending June 30,
1996. The following table sets forth certain information regarding
development of the Company's cafeteria chain during the five years
ended June 30, 1995:
_______________________________________________________________________________
Year Ended June 30 1995 1994 1993 1992 1991
_______________________________________________________________________________
Net sales per unit (in thousands)(A) $1,990 $1,916 $1,868 $1,880 $1,903
Units opened 5 3 1 3 2
Units closed 3 4 11 5 0
Units open at year-end 132 130 131 141 143
Total customer volume (in thousands) 48,274 48,098 50,564 54,298 56,441
__________________
(A) Excludes cafeterias opened or closed during period.
___________________________________
At June 30, 1995 the Company operated eight "Ralph and Kacoo's"
seafood restaurants in Louisiana, Alabama, Mississippi, and Texas.
No additional Ralph & Kacoo's seafood restaurants are expected to be
opened in the year ending June 30, 1996. The following table sets
forth certain information regarding the Company's "Ralph and Kacoo's"
seafood restaurant chain during the five years ended June 30, 1995:
_______________________________________________________________________________
Year Ended June 30 1995 1994 1993 1992 1991
_______________________________________________________________________________
Net sales per unit (in thousands)(A) $3,394 $3,343 $3,362 $3,151 $3,995
Units opened 1 0 0 1 3
Units closed 0 0 2 1 0
Units open at year-end 8 7 7 9 9
_________________
(A) Excludes restaurants opened or closed during period.
___________________________________
Although the Company's operations are primarily in the
southern, southwestern, and western regions of the United States, the
Company does not consider its growth to be limited to such areas.
During the year ended June 30, 1995, the Company opened its first
cafeterias in Louisville, Kentucky and Chicago, Illinois. Although,
as disclosed above, the Company has no immediate plans for additional
expansion in 1996, Piccadilly continues to evaluate numerous
potential expansion locations, focusing on demographic data such as
population densities, population profiles, income levels, traffic
counts, as well as the extent of competition.
Cafeteria and Restaurant Operations
The Company's cafeterias seat from 250 to 450 customers each.
Each cafeteria unit offers a wide variety of food, at reasonable
prices, and with the convenience of cafeteria service, to a diverse
luncheon and dinner clientele. Cafeteria personnel cook and prepare
from scratch substantially all food served. All items are prepared
from standardized recipes. Menus are varied at the discretion of unit
management in response to local and seasonal food preferences.
Like most industry participants, the Company purchases
foodstuffs in small quantities from local and regional suppliers in
order to better assure freshness. As a result, inventory is kept
relatively low; average per-cafeteria-inventory at June 30, 1995 was
$16,100. Foodstuffs are typically purchased on 30-day credit terms
and sold for cash within such 30-day period, thereby favorably
affecting cash flow.
Ralph & Kacoo's restaurants seat from 250 to 600 customers
each. These restaurants are full-service menu facilities. All of the
food served is cooked and prepared by the restaurant staff from
standardized recipes. Substantially all of the food, supplies, and
other materials required for the preparation of meals are supplied by
the Company-owned commissary.
The commissary, located in Baton Rouge, Louisiana, contains
approximately 26,500 square feet of restaurant food and supplies
storage. Seafood accounts for approximately 50% of inventory at the
commissary. In order to provide consistent quality, selection, and
price throughout the year, the commissary purchases in-season seafood
in quantities sufficient to supply the restaurants during periods
when such products would otherwise not be available at reasonable
prices in the marketplace. On the average, seafood inventory turns
approximately once every four months. Inventory maintained at the
commissary at June 30, 1995, was approximately $2,656,000 while the
average "Ralph and Kacoo's" restaurant inventory level at year-end
was approximately $48,000. The commissary is not dependent upon a
single supplier nor a small group of suppliers.
Each cafeteria and restaurant is operated as a separate unit
under the control of a manager and associate manager who have
responsibility for virtually all aspects of the unit's business,
including purchasing, food preparation, and employee matters.
Thirteen district managers, under the supervision of one general
manager, and the chief executive officer oversee and regularly
inspect cafeteria operations. Two district managers, under the
supervision of a region manager and the chief executive officer,
oversee restaurant operations. The Company employed approximately
7,600 persons at June 30, 1995, of whom all but 69 corporate
headquarters employees worked at Piccadilly's 140 cafeteria and
restaurant locations and its commissary.
The food service industry is highly competitive. Competitive
factors include food quality and variety, price, customer service,
location, the number and proximity of competitors, decor, and public
reputation. The Company considers its principal competitors to be
other cafeterias, casual dining venues, and fast-food operations.
Like other food service operations, the Company is attuned to changes
in both consumer preferences for food and habits in patronizing
eating establishments.
Customer volume at established cafeterias and sales volume at
established restaurants are generally higher in the Company's second
fiscal quarter and lower in the third quarter. These patterns
reflect the general seasonal fluctuations of the retail industry.
Cost of sales is affected by statutory minimum wage rates. The
Company's operations are subject to federal, state, and local laws
and regulations relating to environmental protection, including
regulation of discharges into the air and water, and relating to
safety and labor, including the Federal Occupational Safety and
Health Act and wage and hour laws. Additionally, the Company's
operations are regulated pursuant to state and local sanitation and
public health laws. Operating units utilize electricity and natural
gas, which are subject to various federal and state regulations
concerning the allocation of energy. The Company's operating costs
have been and will continue to be affected by increases in the cost
of energy.
Item 2. Properties
All but 24 of the cafeterias and restaurants operated by the
Company at June 30, 1995, were operated on premises held under long-
term leases with differing provisions and expiration dates. The 24
cafeterias and restaurants not operated on premises held under long-
term leases are owned. Leases provide for monthly rentals, typically
computed on the basis of a fixed amount plus a percentage of sales.
Most leases contain provisions permitting the Company to renew for
one or more specified terms. These leases are scheduled to expire,
exclusive of renewal provisions, as follows:
__________________________________________
Five-year
periods Units Units
ending June 30 Operating Closed
__________________________________________
2000 37 2
2005 37 2
2010 34 11
2015 8 2
===========================================
Total 116 17
___________________________________________
Reference is made to Note C of the Notes to Consolidated
Financial Statements for certain additional information regarding the
Company's leases.
All cafeterias and restaurants have been constructed or
remodeled since 1984 and all cafeteria equipment is maintained and
modernized as necessary to maintain appearance and utility. For a
discussion of the Company's current remodeling program see
Management's Discussion and Analysis of Financial Condition and
Results of Operations on pages four and five of the Annual
Shareholders Report for the year ended June 30, 1995. The list below
provides a general geographic review of the locations of the
Company's cafeterias and restaurants at June 30, 1995:
________________________________________
State Cafeterias Restaurants
________________________________________
Alabama 6 1
Arizona 4
California 1
Florida 22
Georgia 18
Illinois 1
Kansas 1
Kentucky 1
Louisiana 26 5
Mississippi 3 1
Missouri 3
North Carolina 5
Oklahoma 4
South Carolina 2
Tennessee 11
Texas 17 1
Virginia 7
__________________________
The Company utilizes generally standardized building
configurations for its new cafeterias and restaurants in terms of
seating, food display, preparation areas, and other factors and
attempts to build out floor space to maximize efficient use of
available space.
The Company continues to pursue strategies to increase the
capacity and utilization of its cafeterias. Although most of the
Company's cafeterias are single-line, 33 of the Company's cafeterias
are double-line which provide increased capacity at peak hours. The
Company does not currently intend to convert any of its single-line
cafeterias to double-line.
Piccadilly's corporate headquarters occupy approximately two-
thirds of a Company-owned 45,000 square foot office building
completed in 1974 and located on a Company-owned tract comprising
approximately five acres in Baton Rouge, Louisiana. The remainder of
the building is leased to commercial tenants.
Item 3. Legal Proceedings
The Company is not a party to and does not have any property
that is the subject of any legal proceedings pending or, to the
knowledge of management, threatened, other than ordinary routine
litigation incidental to its business and proceedings which are not
material or as to which management believes the Company has adequate
insurance.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 4(a). Executive Officers of the Registrant
Executive officers are elected annually by the Board of Directors and
hold office until a successor is duly elected. The names and
positions of executive officers of the Registrant, together with a
brief description of the business experience of each such person
during the past five years, is set forth below.
W. Scott Bozzell, Vice President and Assistant Controller, age 32,
has held such positions since May 1992. He joined the Company in
December 1988 as Assistant Controller.
Frederick E. Fuchs Jr., Executive Vice President and Director of Real
Estate, age 48, has held such positions since June 1986.
Jere W. Goldsmith Jr., Executive Vice President and Director of
Training, age 49, has held such positions since July 1995. Mr.
Goldsmith previously served in this capacity from May 1987 to
February 1992. From February 1992 to July 1995 he was Executive Vice
President and Region Manager.
Ronald A. LaBorde, age 39, President and Chief Executive Officer, has
held such positions since June 1995. From January 1992 to May 1995
he was Executive Vice President, Treasurer and Chief Financial
Officer. Prior to that he was Executive Vice President, Secretary,
and Controller.
D. Thomas Landry, Executive Vice President and Director of
Maintenance, Construction and Design, age 43, has held such positions
since May 1992. From July 1990 to May 1992 he was Vice President and
Director of Maintenance.
Robert P. Listen, Executive Vice President and Director of Technical
Services, age 47, has held such positions since December 1992. From
July 1987 to November 1992 he was Executive Vice President and
District Manager.
Mark L. Mestayer, Executive Vice President, Secretary, and
Controller, age 37, has held such positions since May 1992. From
January 1992 to May 1992, he was Vice President and Controller.
Prior to that, he was Vice President and Controller, Ralph & Kacoo's.
Joseph S. Polito, Executive Vice President and General Manager, age
53, has held such positions since July 1995. From October 1992 to
July 1995, he was Executive Vice President and Director of Training.
From 1987 to October 1992 he was Executive Vice President and
District Manager.
Patrick R. Prudhomme, Executive Vice President and Region Manager,
age 45, has held such positions since February 1992. From January
1989 to February 1992 he was Vice President and District Manager,
Ralph & Kacoo's.
C. Warriner Siddle, Executive Vice President and Director of
Development, age 44, has held such positions since July 1995. From
February 1992 to July 1995 he was Executive Vice President and Region
Manager. From October 1984 to February 1992 he was Executive Vice
President and District Manager.
Donovan B. Touchet, Executive Vice President and Director of Data
Processing, age 46, has held such positions since June 1988.
Brian G. Von Gruben, Executive Vice President and Director of
Administrative Services, age 47, has held such positions since May
1987.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Security Holder Matters
Information regarding Common Stock market prices and dividends, on
page one of the Annual Shareholders Report for the year ended June
30, 1995, is incorporated herein by reference.
Item 6. Selected Financial Data
"Selected Financial Data", on page one of the Annual Shareholders
Report for the year ended June 30, 1995, is incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Management's Discussion and Analysis of Financial Condition and
Results of Operations, on pages four and five of the Annual
Shareholders Report for the year ended June 30, 1995, is incorporated
herein by reference.
Item 8. Financial Statements and Supplementary Data
The following consolidated financial statements and supplementary
data, included on pages six through 14 of the Annual Shareholders
Report for the year ended June 30, 1995, are incorporated herein by
reference:
Consolidated balance sheets as of June 30, 1995 and 1994
Consolidated statements of income for the fiscal years ended
June 30, 1995, 1994 and 1993
Consolidated statements of changes in shareholders' equity for the
fiscal years ended June 30, 1995, 1994 and 1993
Consolidated statements of cash flows for the fiscal years
ended June 30, 1995, 1994 and 1993
Notes to consolidated financial statements for the fiscal years ended
June 30, 1995, 1994 and 1993
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
PART III
In accordance with General Instruction G (3) to Form 10-K, Items 10,
11, 12, and 13 have been omitted since the Company will file with the
Commission a definitive proxy statement complying with Regulation 14A
relating to its 1995 annual meeting and involving the election of
directors not later than 120 days after the close of its fiscal year.
The Company incorporates by reference the information in response to
such items set forth in its definitive proxy statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K
(a) (1) Financial Statements--The following are incorporated herein
by reference in this Annual Report on Form 10-K from the
indicated pages of the Registrant's Annual Shareholders Report
for the year ended June 30, 1995:
Annual
Shareholders
Description Report Page
___________ ___________
Consolidated balance sheets as of June 30, 1995
and 1994 6
Consolidated statements of income for the fiscal
years ended June 30, 1995, 1994 and 1993 7
Consolidated statements of changes in shareholders'
equity for the fiscal years ended June 30, 1995,
1994 and 1993 7
Consolidated statements of cash flows for the fiscal
years ended June 30, 1995, 1994 and 1993 8
Notes to consolidated financial statements for the
fiscal years ended June 30, 1995, 1994 and 1993 9 - 13
Report of independent auditors 14
(2) Schedules--The following consolidated schedules and
information are included in this annual report on Form
10-K on the pages indicated. All other schedules for
which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are
not required under the related instructions or are
inapplicable, and therefore have been omitted.
Annual Report
on Form 10-K
Description Page
___________ ____
Schedule VIII--Valuation and qualifying accounts 10
(3) Listing of Exhibits -- See sub-section (c) below.
(b) No reports on Form 8-K were filed during the last quarter of
the year covered by this report.
EXHIBITS
(3) (a) Articles of Incorporation of the Company <F1>, as amended
on September 14, 1987 <F2> as amended on September 27,
1988 <F3>, and as amended on September 28, 1989 <F4>.
(b) By-laws of the Company, as amended through June 19, 1995.
(4) (a) Piccadilly Cafeterias, Inc. Stockholder Rights Agreement <F5>.
(b) Note Agreement, dated as of January 31, 1989, relating to
$30 million principal amount of 10.15% Senior Notes due
January 31, 1999 <F6>.
(10) (a) Piccadilly Cafeteria, Inc. Pension Plan, as amended,
dated May 3, 1993 <F7>.
(b) Piccadilly Cafeterias, Inc. Employee Stock Purchase
Plan <F8>, as amended on September 27, 1991 <F9>.
(c) Piccadilly Cafeterias, Inc. 1988 Stock Option Plan <F10>,
as amended on August 2, 1993.
(d) Agreement between Piccadilly Cafeterias, Inc. and James
W. Bennett, effective September 28, 1994 <F11>.
(e) Form of Management Continuity Agreement, effective March
27, 1995, between Piccadilly Cafeterias, Inc. and each of
Messrs. LaBorde, Bozzell, Fuchs, Goldsmith, Landry,
Listen, Mestayer, Polito, Prudhomme, Siddle, Touchet, von
Dameck and Von Gruben.
(f) Form of Director Indemnity Agreement, effective April 27,
1995, between Piccadilly Cafeterias, Inc. and each of
Messrs. LaBorde, Durham, Murrill, Quick, Ross, Simmons,
Smith and Stein and Ms. Hamilton.
(g) Agreement between Piccadilly Cafeterias, Inc. and Ronald
A. LaBorde, effective June 26, 1995.
(h) Form of Agreement, effective August 1, 1995, between
Piccadilly Cafeterias, Inc. and each of Malcolm T. Stein,
Jr. and James E. Durham, Jr.
(13) The Registrant's Annual Report to Shareholders for the fiscal
year ended June 30, 1995.
(21) List of Subsidiaries of the Registrant
(23) Consent of Independent Auditors
(27) Financial Data Schedule
<F1> Incorporated by reference from the Registrant's Registration
Statement on Form S-1 (Registration No. 2-63249) filed with the
Commission on December 19, 1978.
<F2> Incorporated by reference from the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 30, 1987.
<F3> Incorporated by reference from the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 30, 1988.
<F4> Incorporated by reference from the Registrant's Annual Report
on Form 10-K, as amended, for the fiscal year ended June 30, 1989.
<F5> Incorporated by reference from the Company's Current Report on
Form 8-K filed with the Commission on August 22, 1988.
<F6> Incorporated by reference from the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended December 31, 1988.
<F7> Incorporated by reference from the Company's Annual Report on
Form 10-K, as amended, for the fiscal year ended June 30, 1993.
<F8> Incorporated by reference from the Registrant's Registration
Statement on Form S-8 (Registration No. 33-17737) filed with
the Commission on October 7, 1989.
<F9> Incorporated by reference from the Registrant's Annual Report
on Form 10-K, as amended, for the fiscal year ended June 30, 1991.
<F10>Incorporated by reference from the Registrant's Registration
Statement on Form S-8 (Registration No. 33-27793) filed with
the Commission on March 29, 1989.
<F11>Incorporated by reference from the Registrant's Annual Report
on Form 10-K, as amended, for the fiscal year ended June 30, 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Piccadilly Cafeterias, Inc.
_____________________________________
(Registrant)
By:/s/ Ronald A. LaBorde
_____________________________________
Ronald A. LaBorde
President & CEO
Date: 9/25/95
______________________
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ James E. Durham, Jr. 9/25/95 /s/ Dale E. Redman 9/25/95
__________________________ _______ ________________________ _______
James E. Durham, Jr., Date Dale E. Redman, Director Date
/s/ Norman D. Francis 9/25/95 /s/ William D. Ross, Jr. 9/25/95
___________________________ _______ ________________________ _______
Norman D. Francis, Director Date William D. Ross, Jr., Date
Director
/s/ Julia H. R. Hamilton 9/25/95 /s/ Edward M. Simmons, Sr. 9/25/95
___________________________ _______ ________________________ _______
Julia H. R. Hamilton, Date Edward M. Simmons, Sr., Date
Director Director
/s/ Ronald A. LaBorde 9/25/95 /s/ C. Ray Smith 9/25/95
___________________________ _______ ________________________ _______
Ronald A. LaBorde, President, Date C. Ray Smith, Director Date
Chief Executive Officer and
Director (Principal Financial Officer)
/s/ Paul W. Murrill 9/25/95 /s/ Malcolm T. Stein, Jr. 9/25/95
___________________________ _______ ________________________ _______
Paul W. Murrill, Chairman of Date Malcolm T. Stein, Jr., Date
the Board Director
/s/ O.Q. Quick, Director 9/25/95 /s/ Mark L. Mestayer 9/25/95
___________________________ _______ ________________________ _______
O.Q. Quick, Director Date Mark L. Mestayer, Secretary Date
and Controller
(Principal Accounting Officer)
<TABLE>
<CAPTION>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
COL. A COL. B COL. C COL. D COL. E
Additions
(1) (2)
Balance at Charged to Charged to
Beginning costs and Other Accounts- Deduction-- Balance at
Description of Period expenses Describe Describe End of Period
<S> <C> <C> <C>
Reserves for Unit Closings:
Year ended June 30, 1995:
Property, plant & equipment allowance $ 1,356,659 $ 555,863(A) $ 800,796
Current liability 350,482 96,143(A) 254,339
Long-term liability 6,502,486 1,493,189(A) 5,009,297
___________ ___________ __________
$ 8,209,627 $ 2,145,195 $ 6,064,432
=========== =========== ===========
Year ended June 30, 1994:
Property, plant & equipment allowance $ 1,832,143 $ 475,484(A) $ 1,356,659
Current liability 499,647 149,165(A) 350,482
Long-term liability 7,804,739 1,302,253(A) 6,502,486
___________ ___________ __________
$10,136,529 $ 1,926,902 $ 8,209,627
=========== =========== ===========
Year ended June 30, 1993:
Property, plant & equipment allowance $11,458,442 $ 9,626,299(A) $ 1,832,143
Current liability 2,028,664 1,529,017(A) 499,647
Long-term liability 12,945,382 5,140,643 7,804,739
___________ ___________ ___________
$26,432,488 $16,295,959 $10,136,529
=========== =========== ===========
</TABLE>
(A) Deductions are for the write-off of certain property, plant and equipment
relating to units closed and for the payment of other obligations (primarily
rent) for those units closed and for those units for which a provision for unit
closing was recorded during the year ended June 30, 1992 but were operating
during the year ended June 30, 1993.
EXHIBIT 3(b)
BYLAWS OF
PICCADILLY CAFETERIAS, INC.
(The "Company")
As amended through June 19, 1995
ARTICLE I
Offices
Section 1.1. Offices. The principal business office of the Company
shall be at Baton Rouge, Louisiana. The Company may have such other business
offices within or without the State of Louisiana as the board of directors may
from time to time establish.
ARTICLE II
Capital Stock
Section 2.1. Certificate Representing Shares. Shares of the capital
stock of the Company shall be represented by certificates in such form or
forms as the board of directors may approve, provided that such form or forms
shall comply with all applicable requirements of law or of the articles of
incorporation. Such certificates shall be signed by the chief executive
officer, or an executive vice president, and by the secretary or an assistant
secretary, of the Company and may be sealed with the seal of the Company or
imprinted or otherwise marked with a facsimile of such seal. In the case of
any certificate countersigned by any transfer agent or registrar, provided
such countersigner is not the Company itself or an employee thereof, the
signature of any or all of the foregoing officers of the Company may be
represented by a printed facsimile thereof. If any officer whose signature,
or a facsimile thereof, shall have been set upon any certificate shall cease,
prior to the issuance of such certificate, to occupy the position in right of
which his signature, or facsimile thereof, was so set upon such certificate,
the Company may nevertheless adopt and issue such certificate with the same
effect as if such officer occupied such position as of such date of issuance;
and issuance and delivery of such certificate by the Company shall constitute
adoption thereof by the Company. The certificates shall be consecutively
numbered, and as they are issued, a record of such issuance shall be entered
in the books of the Company.
Section 2.2. Stock Certificate Book and Shareholders of Record. In the
absence of a duly appointed transfer agent or registrar, the secretary of the
Company shall maintain, among other records, a stock certificate book, the
stubs in which shall set forth the names and addresses of the holders of all
issued shares of the Company, the number of shares held by each, the number of
certificates representing such shares, the date of issue of such certificates,
and whether or not such shares originate from original issue or from transfer.
The names and addresses of shareholders as they appear on the stock
certificate book shall be the official list of shareholders of record of the
Company for all purposes. The Board of Directors may appoint a transfer agent
or registrar to maintain the stock register and to record transfer of shares
thereon. The Company shall be entitled to treat the holder of record of any
shares as the owner thereof for all purposes, and shall not be bound to
recognize any equitable or other claim to, or interest in, such shares or any
rights deriving from such shares on the part of any other person, including,
but without limitation, a purchaser, assignee, or transferee, unless and until
such other person becomes the holder of record of such shares, whether or not
the Company shall have either actual or constructive notice of the interest of
such other person.
Section 2.3. Shareholder's Change of Name or Address. Each shareholder
shall promptly notify the secretary of the Company, at its principal business
office, by written notice sent by certified mail, return receipt requested, of
any change in name or address of the shareholder from that as it appears upon
the official list of shareholders of record of the Company. The secretary of
the Company shall then enter such changes into all affected Company records,
including, but not limited to, the official list of shareholders of record.
Section 2.4. Transfer of Stock. The shares represented by any
certificate of the Company are transferable only on the books of the Company
by the holder of record thereof or by his duly authorized attorney or legal
representative upon surrender of the certificate for such shares, properly
endorsed or assigned. The board of directors may make such rules and
regulations concerning the issue, transfer, registration and replacement of
certificates as they deem desirable or necessary.
Section 2.5. Transfer Agent and Registrar. The board of directors may
appoint one or more transfer agents or registrars of the shares, or both and
may require all share certificates to bear the signature of a transfer agent
or registrar, or both.
Section 2.6. Lost, Stolen or Destroyed Certificates. The Company may
issue a new certificate for shares of stock in the place of any certificate
theretofore issued and alleged to have been lost, stolen or destroyed, but the
board of directors may require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to furnish an affidavit as to such
loss, theft, or destruction and to give a bond in such form and substance, and
with such surety or sureties, with fixed or open penalty, as the board may
direct, in order to indemnify the Company and its transfer agents and
registrars, if any, against any claim that may be made on account of the
alleged loss, theft or destruction of such certificate.
Section 2.7. Fractional Shares. Only whole shares of the stock of the
Company shall be issued. In case of any transaction by reason of which a
fractional share might otherwise be issued, the directors, or the officers
in their exercise of powers delegated by the directors, shall take such
measures consistent with the law, the articles of incorporation and these
bylaws, including (for example, and not by way of limitation) the payment in
cash of an amount equal to the fair value of any fractional share, as they may
deem proper to avoid the issuance of any fractional share.
ARTICLE III
Shareholders Meetings
Section 3.1. Annual Meeting. Commencing in the calendar year 1979, the
annual meeting of the shareholders, for the election of directors and for the
transaction of such other business as may properly come before the meeting,
shall be held at the principal office of the Company, at 10:00 a.m. local
time, on the first Monday in November of each year unless such day is a legal
holiday, in which case such meeting shall be held at such hour on the first
day thereafter which is not a legal holiday; or at such other place and time
as may be designated by the board of directors. Failure to hold any annual
meeting or meetings shall not work a forfeiture or dissolution of the Company.
Section 3.2. Special Meeting. Special meetings of shareholders may be
called at any time by the chief executive officer or the board of directors.
At any time, upon written request of any shareholder or shareholders holding
in the aggregate one-tenth of the total voting power, the secretary shall call
a special meeting of shareholders to be held at the registered office at such
time as the secretary may fix, not less than fifteen nor more than sixty days
after the receipt of said request, and if the secretary shall neglect or
refuse to fix such time or to give notice of the meeting, the shareholder or
shareholders making the request may do so.
ARTICLE IV
The Board of Directors
Section 4.1. Number, Qualifications and Term. The business and affairs
of the Company shall be managed and controlled by the board of directors; and,
subject to any restrictions imposed by law, by the articles of incorporation,
or by these bylaws, the board of directors may exercise all the powers of the
Company. The board of directors shall consist of that number of members fixed
in a resolution of the board of directors. Directors need not be residents of
Louisiana or shareholders of the Company absent provision to the contrary in
the articles of incorporation or laws of the State of Louisiana. The term of
office of directors and the method of removing directors and appointing
persons to fill vacancies on the board of directors, shall be as set forth in
the articles of incorporation.
Section 4.2. Regular Meetings. Regular meetings of the board of
directors shall be held immediately following each annual meeting of
shareholders, at the place of such meeting, and at such other times and places
as the board of directors shall determine. No notice of any kind of such
regular meetings needs to be given to either old or new members of the board
of directors.
Section 4.3. Special Meetings. Special meetings of the board of
directors shall be held at any time by call of the chief executive officer,
president, the secretary or by a majority of the directors. The secretary
shall give notice of each special meeting to each director at his usual
business or residence address by mail at least three days before the meeting
or by telegraph or telephone at least one day before such meeting. Except as
otherwise provided by law, by the articles of incorporation, or by these
bylaws, such notice need not specify the business to be transacted at, or the
purpose of, such meeting. No notice shall be necessary for any adjournment of
any meeting. The signing of a written waiver of notice, of any special
meeting by the person or persons entitled to such notice, whether before or
after the time stated therein, shall be equivalent to the receiving of such
notice. Attendance of a director at a meeting shall also constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
express and announced purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened.
Section 4.4. Quorum. A majority of the number of directors fixed by
these bylaws shall constitute a quorum for the transaction of business and act
of not less than a majority of such quorum of the directors shall be required
in order to constitute the act of the board of directors, unless the act of a
greater number shall be required by law, by the articles of incorporation or
by these bylaws.
Section 4.5. Procedure at Meetings. The board of directors, at each
regular meeting held immediately following the annual meeting of shareholders,
shall appoint one of their number as chairman of the board of directors. The
chairman of the board shall preside at meetings of the board. In his absence
at any meeting, any officer authorized by these bylaws or any member of the
board selected by the members present shall preside. The secretary of the
Company shall act as secretary at all meetings of the board. In his absence,
the presiding officer of the meeting may designate any person to act as
secretary. At meetings of the board of directors, the business shall be
transacted in such order as the board may from time to time determine.
Section 4.6. Presumption of Assent. Any director of the Company who is
present at a meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the secretary of the Company
immediately after adjournment of the meeting. Such right to dissent shall not
apply to a director who voted in favor of such action.
Section 4.7. Action Without a Meeting. Any action required by statute to
be taken at a meeting of the directors of the Company, or which may be taken
at such meeting, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by each director entitled
to vote at such meeting, and such consent shall have the same force and effect
as a unanimous vote of the directors. Such signed consent, or a signed copy
thereof, shall be placed in the minute book of the Company.
Section 4.8. Compensation. Directors, by resolution of the board of
directors, shall receive such compensation and reimbursement for expense as
the board of directors may establish. Nothing herein shall preclude any
director from serving the Company in any other capacity or receiving
compensation therefor.
Section 4.9. Executive Committee. The board of directors, by resolution
adopted by a authority of the number of directors fixed by these bylaws, may
designate an executive committee, which committee shall consist of two or more
of the directors of the Company. Such executive committee may exercise such
majority of the board of directors in the business and affairs of the Company
as the board of directors may by resolution duly delegate to it except as
prohibited by law. The designation of such committee and the delegation
thereto of authority shall not operate to relieve the board of directors, or
any member thereof, of any responsibility imposed upon it or him by law. Any
member of the executive committee may be removed by the board of directors by
the affirmative vote of a majority of the number of directors fixed by the
bylaws whenever in the judgment of the board the best interests of the Company
will be served thereby.
The executive committee shall keep regular minutes of its proceedings
and report the same to the board of directors when required. The minutes of
the proceedings of the executive committee shall be placed in the minute book
of the Company.
Section 4.10. Advisory Board. The board of directors may for its
convenience, and at its discretion, appoint an advisory board. Members of the
advisory board will be appointed from time to time and will serve at the
pleasure of the board of directors. The duty of such members will be to meet
annually and to consult with the board of directors, at the request of the
board of directors. No minutes of the proceedings of any such board shall be
kept. Each member of any such board shall receive such compensation for such
membership and such reimbursement of expenses actually incurred as the board
of directors may determine.
ARTICLE V
Officers
Section 5.1. Number. The officers of the Company shall consist of a
chairman of the board of directors, a chief executive officer, a president,
one or more senior executive vice presidents, executive vice presidents, and
vice presidents, a secretary and a treasurer; and, in addition, such other
officers and assistant officers and agents as may be deemed necessary or
desirable. Officers shall be elected or appointed by the board of directors.
Any two or more offices may be held by the same person except that the
president and secretary shall not be the same person. In its discretion, the
board of directors may leave unfilled any office except those of chief
executive officer, president, treasurer and secretary.
Section 5.2. Election; Term; Qualification. Officers shall be chosen by
the board of directors annually at the meeting of the board of directors
following the annual shareholders' meeting. Each officer shall hold office
until his successor has been chosen and qualified, or until his death,
resignation, or removal.
Section 5.3. Removal. Any officer or agent elected or appointed by the
board of directors may be removed by the board of directors whenever in its
judgment the best interests of the Company will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent shall not
of itself create any contract rights.
Section 5.4. Vacancies. Any vacancy in any office for any cause may be
filled by the board of directors at any meeting.
Section 5.5. Duties. The officers of the Company shall have such powers
and duties, except as modified by the board of directors, as generally pertain
to their offices, respectively, as well as such powers and duties as from time
to time shall be conferred by the board of directors and by these bylaws.
Section 5.6A. The Chairman of the Board. The directors may elect from
their number a Chairman of the Board who shall be an officer of the Company
and who shall preside at all meetings of the Board of Directors. He shall
perform such duties as the Board of Directors may prescribe.
Section 5.6B. The Chief Executive Officer. The Chief Executive Officer
of the Company shall have general direction of the operations of the Company
and general supervision over its officers, subject, however, to the control of
the board of directors. He shall at each annual meeting, and from time to
time, report to the shareholders and to the board of directors all matters
within his knowledge which, in his opinion, the interest of the Company may
require to be brought to the notice of such persons. He may sign, with the
secretary, any or all certificates of stock of the Company. Without in any
way limiting powers otherwise granted to him or to any other officer, he shall
be authorized to sign and execute in the name of the Company all contracts or
other instruments in the usual and regular course of business, pursuant to
section 6.2 hereof, and to execute leases, sales, easements, servitudes,
restrictive covenants, mortgages and other encumbrances on behalf of the
corporation containing such terms and conditions as he may deem appropriate
and in the best interest of the corporation. The chief executive officer in
general shall perform all duties incident to the office of the chief executive
officer and such other duties from time to time may be assigned to him by the
board of directors or as are prescribed by these bylaws.
Section 5.6C. The President. At the request of the chief executive
officer, or in his absence or disability, the president shall perform the
duties of the chief executive officer, and, when so acting, shall have all the
powers of, and be subject to all restrictions upon, the chief executive
officer. Any action taken by the president in the performance of the duties
of the chief executive officer shall be conclusive evidence of the absence or
inability to act of the chief executive officer at the time such action was
taken. The president shall perform such other duties as may, from time to
time, be assigned him by the board of directors, the chairman of the board or
the chief executive officer. The president may sign, with the secretary,
certificates of stock of the Company.
Section 5.7A. The Senior Executive Vice Presidents. At the request of
the chief executive officer, or in his and the president's absence or
disability, the senior executive vice presidents, in the order of their
election, shall perform the duties of the chief executive officer, or, if so
requested by the chief executive officer, the duties of the president, and,
when so acting, shall have all the powers of, and be subject to all
restrictions upon, such office. Any action taken by a senior executive vice
president in the performance of the duties of the chief executive officer or
president shall be conclusive evidence of the absence or inability to act of
the chief executive officer or president at the time such action was taken.
The senior executive vice presidents shall perform such other duties as may,
from time to time, be assigned to them by the board of directors, the chairman
of the board of directors or the president. A senior executive vice president
may sign, with the secretary, certificates of stock of the Company.
Section 5.7B. Executive Vice Presidents. The executive vice presidents
shall perform such duties and have such powers as the board of directors may
prescribe and as the chief executive officer, president or a senior executive
vice president may assign or authorize by delegation, subject to the general
supervision of such delegating officer.
Section 5.7C. Vice Presidents. The vice presidents shall perform such
duties and have such powers as the board of directors may prescribe and as the
chief executive officer, president, a senior executive vice president or an
executive vice president may assign or authorize by delegation, subject to the
general supervision of such delegating officer.
Section 5.8. Secretary. The secretary shall keep the minutes of all
meetings of the shareholders, of the board of directors, and of the executive
committee, if any, of the board of directors, in one or more books provided
for such purpose and shall see that all notices are duly given in accordance
with the provisions of these bylaws or as required by law. He shall be
custodian of the corporate records and of the seal of the Company and see that
the seal of the Company is affixed to all documents the execution of which on
behalf of the Company under its seal is duly authorized; shall have general
charge of the stock certificate books, transfer books and stock ledgers, and
such other books and papers of the Company as the board of directors may
direct, all of which shall, at all reasonable times, be open to the
examination of any director, upon application at the office of the Company
during business hours; and in general shall perform all duties and exercise
all powers incident to the office of the secretary and such other duties and
powers as the board of directors, the chief executive officer or the president
from time to time may assign to or confer on him.
Section 5.9. Treasurer. The treasurer shall keep complete and accurate
records of account, showing at all times the financial condition of the
Company. He shall be the legal custodian of all money, notes, securities and
other valuables which may from time to time come into the possession of the
Company. He shall furnish at meetings of the board of directors, or whenever
requested, a statement of the financial condition of the Company, and shall
perform such other duties as these bylaws may require or the board of
directors may prescribe.
Section 5.10. Assistant Officers. Any assistant secretary or assistant
treasurer appointed by the board of directors shall have power to perform, and
shall perform, all duties incumbent upon the secretary or treasurer of the
Company, respectively, subject to the general direction of such respective
officers, and shall perform such other duties as these bylaws may require or
the board of directors may prescribe.
Section 5.11. Salaries. The salaries or other compensation of the
officers shall be fixed from time to time by the board of directors. No
officer shall be prevented from receiving such salary or other compensation by
reason of the fact that he is also a director of the Company.
Section 5.12. Bonds of Officers. The board of directors may secure the
fidelity of any officer of the Company by bond or otherwise, on such terms and
with such surety or sureties, conditions, penalties or securities as shall be
deemed proper by the board of directors.
Section 5.13. Delegation. The board of directors may delegate
temporarily the powers and duties of any officer of the Company, in case of
his absence or for any other reason, to any other officer, and may authorize
the delegation by any officer of the Company of any of his powers and duties
to any agent or employee, subject to the general supervision of such officer.
ARTICLE VI
Miscellaneous
Section 6.1. Dividends. Dividends on the outstanding shares of the
Company, subject to the provisions of the articles of incorporation, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid by the Company in cash, in property, or in the
Company's own shares, but only out of the unreserved and unrestricted earned
surplus of the Company, except as otherwise allowed by law.
Subject to limitations upon the authority of the board of directors
imposed by law or by the articles of incorporation, the declaration of and
provision for payment of dividends shall be at the discretion of the board of
directors.
Section 6.2. Contracts. The chief executive officer shall have the power
and authority to execute, on behalf of the Company, contracts or instruments
in the usual and regular course of business, and in addition the board of
directors, chairman or the chief executive officer may authorize any officer
or officers, agent or agents, of the Company to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
Company, and such authority may be general or confined to specific instances.
Unless so authorized by the board of directors or the chief executive officer,
or by these bylaws, no officer, agent or employee shall have any power or
authority to bind the Company by any contract or engagement, or to pledge its
credit or to render it pecuniarily liable for any purpose or in any amount.
Section 6.3. Checks, Drafts, etc. All checks, drafts, or other orders
for the payment of money, notes, or other evidences of indebtedness issued in
the name of the Company shall be signed by such officers or employees of the
Company as shall from time to time be authorized pursuant to these bylaws or
by resolution of the board of directors.
Section 6.4. Depositories. All funds of the Company shall be deposited
from time to time to the credit of the Company in such banks or other
depositories as the board of directors may from time to time designate, and
upon such terms and conditions as shall be fixed by the board of directors.
The board of directors may from time to time authorize the opening and
maintaining within any such depository as it may designate, of general and
special accounts, and may make such special rules and regulations with respect
thereto as it may deem expedient.
Section 6.5. Endorsement of Stock Certificates. Subject to the specific
directions of the board of directors, any share or shares of stock issued by
any corporation and owned by the Company, including required shares of the
Company's own stock, may for sale or transfer, be endorsed in the name of the
Company by the chief executive officer, president or any senior executive vice
president; and such endorsement may be attested or witnessed by the secretary
or any assistant secretary either with or without the affixing thereto of the
corporate seal.
Section 6.6. Corporate Seal. The corporate seal shall be in such form as
the board of directors shall approve, and such seal, or a facsimile thereof,
may be impressed on, affixed to, or in any manner reproduced upon, instruments
of any nature required to be executed by officers of the Company.
Section 6.7. Fiscal Year. The fiscal year of the Company shall begin and
end on such dates as the board of directors at any time shall determine.
Section 6.8. Books and Records. The Company shall keep correct and
complete books and records of account and shall keep minutes of the
proceedings of its shareholders and board of directors, and shall keep at its
registered office or principal place of business, or at the office of its
transfer agent or registrar, a record of its shareholders, giving the names
and addresses of all shareholders and the number and class of the shares held
by each.
Section 6.9. Resignations. Any director or officer may resign at any
time. Such resignations shall be made in writing and shall take effect at the
time specified therein, or, if no time is specified, at the time of its
receipt by the chief executive officer or secretary. The acceptance of a
resignation shall not be necessary to make it effective, unless expressly so
provided in the resignation.
Section 6.10. Indemnification of Officers and Directors. The Company
shall indemnify any person who was or is a party or is threatened to be made a
party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (including any action by or in the right of
the Company), by reason of the fact that he is or was a director or officer of
the Company against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful;
however, in case of action by or in the right of the Company, the indemnity
shall be limited to expenses (including attorneys' fees and amounts paid in
settlement not exceeding, in the judgment of the board of directors, the
estimated expense of litigating the action to conclusion) actually and
reasonably incurred in connection with the defense or settlement of such
action and no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be
liable for willful or intentional misconduct in the performance of his duty to
the Company unless and only to the extent that the court shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, he is fairly and reasonably entitled to indemnity
for such expenses which the court shall deem proper. The indemnification
provided by or granted pursuant to this Section 6.10 shall not be deemed
exclusive of any other rights to which the person indemnified is entitled
under any law, statute, by-law, agreement, authorization of shareholders or
directors, regardless of whether directors authorizing such indemnification
are beneficiaries thereof, or otherwise, and shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of his heirs and legal representatives. If any indemnification which
would otherwise be granted by this section 6.10 shall be disallowed by any
competent court or administrative body as illegal or against public policy,
then any director or officer with respect to whom such adjudication was made,
and any other officer or director, shall be indemnified to the fullest extent
permitted by law and public policy, it being the express intent of the Company
to indemnify its officers and directors to the fullest extent possible in
conformity with these bylaws, all applicable laws, and public policy.
Section 6.11. Meetings by Telephone. Subject to the provisions required
or permitted by these bylaws or the laws of the State of Louisiana for notice
of meetings, shareholders, members of the board of directors, or members of
any committee designated by the board of directors may participate in and hold
any meeting required or permitted under these bylaws by telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this
section shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE VII
Amendments
Section 7.1. Amendments. These bylaws may be altered, amended, or
repealed, or new bylaws may be adopted, by a majority of the board of
directors at any duly held meeting of directors or by the holders of a
majority of the shares represented at any duly held meeting of shareholders;
provided that notice of such proposed action shall have been contained in the
notice any such meeting.
__________________________
Exhibit 10(e)
MANAGEMENT CONTINUITY AGREEMENT
THIS AGREEMENT made as of the 27th day of March, 1995, by and between the
"Company" (as hereinafter defined) and Ronald A. LaBorde (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change in Control (as hereinafter defined) exists
and that the possibility of a Change in Control can result in significant
distractions of its key management personnel because of the uncertainties
inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its shareholders to retain the services of the
Executive in the event of a threat or occurrence of a Change in Control and to
ensure his continued dedication and efforts in such event without undue
concern for his personal financial and employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Company, particularly in the event of a threat or the occurrence of a Change
in Control, the Company desires to enter into this Agreement with the
Executive to provide the Executive with certain benefits in the event his
employment is terminated as a result of, or in connection with, a Change in
Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. Term of Agreement. This Agreement shall commence as of the date
of this Agreement and shall continue in effect until the first anniversary of
this Agreement; provided, however, that commencing on such first anniversary
and on each anniversary thereafter, the term of this Agreement shall
automatically be extended for one (1) year unless either the Company or the
Executive shall have given written notice to the other at least ninety (90)
days prior thereto that the term of this Agreement shall not be so extended;
and provided, further, however, that notwithstanding any such notice by the
Company not to extend, the term of this Agreement shall not expire prior to
the expiration of 36 months after the occurrence of a Change in Control.
2. Definitions.
2.1. Accrued Compensation. For purposes of this Agreement,
"Accrued Compensation" shall mean an amount which shall include all amounts
earned or accrued through the "Termination Date" (as hereinafter defined) but
not paid as of the Termination Date including (i) base salary, (ii)
reimbursement for reasonable and necessary expenses incurred by the Executive
on behalf of the Company during the period ending on the Termination Date,
(iii) vacation pay, and (iv) bonuses and incentive compensation, if any.
2.2. Auditors. For purposes of this Agreement, "Auditors" shall
mean the Company's regular independent auditors as of the date of the Change
of Control.
2.3. Base Salary. For purposes of this Agreement, "Base Salary"
shall mean the Executive's annual base salary at the highest rate in effect at
any time beginning 90 days prior to the Change in Control and ending on the
Termination Date and shall include all amounts of his base salary that are
deferred under the qualified and non-qualified employee benefit plans of the
Company or any other agreement or arrangement.
2.4. Cause. For purposes of this Agreement, "Cause" shall mean
conviction of a felony, habitual intoxication, abuse of or addiction to a
controlled dangerous substance, excessive absenteeism, or the willful and
continued failure by Executive to substantially perform his duties hereunder
(other than any such failure resulting from Executive's incapacity due to
physical or mental illness) after demand for substantial performance is
delivered by the Company that specifically identifies the manner in which the
Company believes the Executive has not substantially performed his duties. For
purposes of this paragraph, no act or failure to act on Executive's part shall
be considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the
best interest of the Company. Notwithstanding the foregoing, Executive shall
not be deemed to have been terminated for Cause without (i) reasonable notice
to Executive setting forth the reasons for the Company's intention to
terminate for Cause, (ii) an opportunity for Executive, together with his
counsel, to be heard before the Board of Directors of the Company, and (iii)
delivery to Executive of notice from the Board of Directors of the Company
finding that, in the good faith opinion of the Board, Executive has been
guilty of conduct set forth above in the preceding sentence, and specifying
the particulars thereof in detail.
2.5. Change in Control. For purposes of this Agreement, a "Change
in Control" shall mean any of the following events:
(a) An acquisition (other than directly from the Company)
of any voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) immediately
after which such Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of twenty-five percent (25%) or more of
the combined voting power of the Company's then outstanding Voting Securities;
provided, however, that in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition that would cause
a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by
(1) an employee benefit plan (or a trust forming a part thereof) maintained by
(x) the Company or (y) any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned directly
or indirectly by the Company (a "Subsidiary"), (2) the Company or any
Subsidiary, or (3) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined).
(b) The individuals who, as of the date this Agreement is
approved by the Board, are members of the Board (the "Incumbent Board"), cease
for any reason to constitute at least two-thirds of the Board; provided,
however, that if the election, or nomination for election by the Company's
shareholders, of any new director was approved by a vote of at least two-
thirds of the Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board; provided,
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 1 4a-
11 promulgated under the 1934 Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) Approval by shareholders of the Company of:
(1) A merger, consolidation or reorgaization
involving the Company, unless
(i) the shareholders of the Company,
immediately before such merger, consolidation or reorganization, own, directly
or indirectly immediately following such merger, consolidation or
reorganization, at least seventy percent (70%) of the combined voting power of
the outstanding voting securities of the corporation resulting from such
merger or consolidation or reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization, and
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for such merger, consolidation or reorganization constitute at least two-
thirds of the members of the board of directors of the Surviving Corporation,
(a transaction described in clauses (i) and (ii) hereof shall herein be
referred to as a "Non-Control Transaction");
(2) A complete liquidation or dissolution of the
Company; or
(3) An agreement for the sale or other disposition
of all or substantially all of the assets of the Company to any Person (other
than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person,
provided that if a Change in Control would occur (but for the operation of
this sentence) as a result of the acquisition of Voting Securities by the
Company, and after such share acquisition by the Company, the Subject Person
becomes the Beneficial Owner of any additional Voting Securities which
increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall
occur.
(d) Notwithstanding anything contained in this Agreement
to the contrary, if the Executive's employment is terminated prior to a Change
in Control and the Executive reasonably demonstrates that such termination (i)
was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control and who effectuates
a Change in Control (a "Third Party") or (ii) otherwise occurred in connection
with, or in anticipation of, a Change in Control which actually occurs, then
for all purposes of this Agreement, the date of a Change in Control with
respect to the Executive shall mean the date immediately prior to the date of
such termination of the Executive's employment.
2.6. Company. For purposes of this Agreement, the "Company" shall
mean Piccadilly Cafeterias, Inc. and shall include its successors and assigns.
2.7. Disability. For purposes of this Agreement, "Disability"
shall mean a physical or mental infirmity which impairs the Executive's
ability to substantially perform his duties with the Company for a period of
one hundred eighty (180) consecutive days and the Executive has not returned
to his full time employment prior to the Termination Date as stated in the
"Notice of Termination" (as hereinafter defined).
2.8. Good Reason.
(a) For purposes of this Agreement, "Good Reason" shall mean
the occurrence after a Change in Control of any of the events or conditions
described in subsections (1) through (8) hereof:
(1) a change in the Executive's status, title,
position or responsibilities (including reporting responsibilities) which, in
the Executive's reasonable judgment, represents an adverse change from or
diminution of his status, title position or responsibilities as in effect at
any time within ninety (90) days preceding the date of a Change in Control or
at any time thereafter; the assignment to the Executive of any duties or
responsibilities which, in the Executive's reasonable judgment, are
inconsistent with his status, title, position or responsibilities as in effect
at any time within ninety (90) days preceding the date of a Change in Control
or at any time thereafter; or any removal of the Executive from or failure to
reappoint or reelect him to any of such offices or positions, except in
connection with the termination of his employment for Disability, Cause, as a
result of his death or by the Executive other than for Good Reason;
(2) a reduction in the Executive's base salary or
any failure to pay the Executive any compensation or benefits to which he is
entitled within five (5) days of the date due;
(3) the Company's requiring the Executive to be
based at any place outside a 30-mile radius from Baton Rouge, Louisiana except
for reasonably required travel on the Company's business which is not
materially greater than such travel requirements prior to the Change in
Control;
(4) the failure by the Company to (A) continue in
effect (without reduction in benefit level, and/or reward opportunities) any
material compensation or employee benefit plan in which the Executive was
participating at any time within ninety (90) days preceding the date of a
Change in Control or at any time thereafter, including, but not limited to,
the plans listed on Appendix A, unless such plan is replaced with a plan that
provides substantially equivalent compensation or benefits to the Executive or
(B) provide the Executive with compensation and benefits, in the aggregate, at
least equal (in terms of benefit levels and/or reward opportunities) to those
provided for under each other employee benefit plan, program and practice in
which the Executive was participating at any time within ninety (90) days
preceding the date of a Change in Control or at any time thereafter;
(5) the insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy of the Company, which
petition is not dismissed within sixty (60) days;
(6) any material breach by the Company of any
provision of this Agreement;
(7) any purported termination of the Executive's
employment for Cause by the Company which does not comply with the terms of
Section 2.4; or
(8) the failure of the Company to obtain an
agreement, satisfactory to the Executive, from any successors and assigns to
assume and agree to perform this Agreement, as contemplated in Section 6
hereof.
(b) Any event or condition described in this Section
2.8(a)(l) through (8) that occurs prior to a Change in Control but which the
Executive reasonably demonstrates (1) was at the request of a Third Party, or
(2) otherwise arose in connection with, or in anticipation of, a Change in
Control which actually occurs, shall constitute Good Reason for purposes of
this Agreement notwithstanding that it occurred prior to the Change in
Control.
(c) The Executive's right to terminate his employment
pursuant to this Section 2.8 shall not be affected by his incapacity due to
physical or mental illness.
2.9. Notice of Termination. For purposes of this Agreement,
following a Change in Control, "Notice of Termination" shall mean a written
notice of termination from the Company of the Executive's employment that
indicates the specific termination provision in this Agreement relied upon and
that sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
2.10. Termination Date. For purposes of this Agreement,
"Termination Date" shall mean in the case of the Executive's death, his date
of death, in the case of Good Reason, the last day of his employment, and in
all other cases, the date specified in the Notice of Termination; provided,
however, that if the Executive's employment is terminated by the Company for
Cause or due to Disability, the date specified in the Notice of Termination
shall be at least 30 days from the date the Notice of Termination is given to
the Executive, provided that in the case of Disability the Executive shall not
have returned to the full-time performance of his duties during such period of
at least 30 days.
3. Termination of Employment.
3.1. If, during the term of this Agreement, the Executive's
employment with the Company shall be terminated within thirty-six (36) months
following a Change in Control, the Executive shall be entitled to the
following compensation and benefits:
(a) If the Executive's employment with the Company shall
be terminated (1) by the Company for Cause or Disability, (2) by reason of the
Executive's death, or (3) by the Executive other than for Good Reason, the
Company shall pay to the Executive the Accrued Compensation.
(b) If the Executive's employment with the Company shall
be terminated for any reason other than as specified in Section 3.1(a), the
Executive shall be entitled to the following:
(i) the Company shall pay the Executive all Accrued
Compensation;
(ii) the Company shall pay the Executive as severance
pay and in lieu of any further compensation for periods subsequent to the
Termination Date, in a single payment an amount in cash equal to one and one-
half (1-1/2) times Base Salary; and
(iii) (A) in accordance with the terms of the
Piccadilly Cafeterias, Inc. 1993 Incentive Compensation Plan (the "Plan") or
any other applicable incentive plan or arrangement, the restrictions on any
outstanding incentive awards ( including restricted stock and granted
performance shares or units) granted to the Executive under the Plan or under
any other incentive plan or arrangement shall lapse and such incentive
award shall become 100% vested, all stock options and stock appreciation
rights granted to the Executive shall become immediately exercisable and
shall become 100% vested, and all performance units granted to the Executive
shall become 100% vested.
(c) The amounts provided for in Sections 3.1(a) and 3.1
(b)(i) and (ii) shall be paid in a single lump sum cash payment within five
(5) days after the Executive's Termination Date (or earlier, if required by
applicable law).
(d) The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment or otherwise and no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to the Executive in any
subsequent employment.
3.2. (a) The severance pay and benefits provided for in this
Section 3 shall be in lieu of any other severance or termination pay to which
the Executive may be entitled under any Company severance or termination
plan, program, practice or arrangement.
(b) The Executive's entitlement to any other compensation or
benefits shall be determined in accordance with the Company's employee
benefit plans (including, the plans listed on Appendix A) and other applicable
programs, policies and practices then in effect.
4. Notice of Termination. Following a Change in Control, any
purported termination of the Executive's employment by the Company and/or the
Employer shall be communicated by Notice of Termination to the Executive. For
purposes of this Agreement, no such purported termination shall be effective
without such Notice of Termination.
5. Reduction in Certain Cases. In the event of a termination of the
Executive's employment, as described in Section 3.1(b) hereof, following a
Change in Control, the Auditors shall make a determination of (a) Executive's
"Base Amount" within the meaning of Section 280G of the Internal Revenue Code
of 1986 ("Section 280G") and the regulations promulgated thereunder (the "Base
Amount") and (b) the amount of any "Parachute Payment," to which the Executive
may be entitled hereunder (assuming payment in full of the severance payment
provided in Section 3.1 hereof), within the meaning of Section 280G (the
"Parachute Payment"). If the Auditors determine that the Parachute Payment
equals or exceeds three times the Base Amount, then, notwithstanding any other
provision hereof, Executive's severance benefits under Section 3.1 hereof
shall be automatically reduced such that Executive shall be entitled to
receive, in cash, a payment equal to three times the Base Amount minus one
dollar ($1.00) and minus the value of any other Parachute Payment to which be
may be otherwise entitled.
6. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure
to the benefit of the Company, its successors and assigns and the Company
shall require any successors and assigns to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment
had taken place.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, his
beneficiaries or legal representatives, except by will or by the laws of
descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
7. Fees and Expenses. The Company shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel)
incurred by the Executive as they become due as a result of (a) the
Executive's termination of employment (including all such fees and expenses,
if any, incurred in contesting or disputing any such termination of
employment), (b) the Executive seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company under which the Executive is or may be entitled to
receive benefits, and (c) the Executive's hearing before the Board as
contemplated in Section 2.4 of this Agreement; provided, however, that the
circumstances set forth in clauses (a) and (b) (other than as a result of the
Executive's termination of employment under circumstances described in Section
2.5(d)) occurred on or after a Change in Control.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each
party to the other, provided that all notices to the Company shall be directed
to the attention of the Board with a copy to the Secretary of the Company. All
notices and communications shall be deemed to have been received on the date
of delivery thereof or on the third business day after the mailing thereof,
except that notice of change of address shall be effective only upon receipt.
9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company (except for
any severance or termination policies, plans, programs or practices) and for
which the Executive may qualify, nor shall anything herein limit or reduce
such rights as the Executive may have under any other agreements with the
Company (except for any severance or termination agreement). Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company shall be payable in accordance with
such plan or program, except as explicitly modified by this Agreement.
10. Settlement of Claims. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others.
11. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar of dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party that are
not expressly set forth in this Agreement.
12. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Louisiana without
giving effect to the conflict of laws principles thereof. Any action brought
by any party to this Agreement shall be brought and maintained in a court of
competent jurisdiction in East Baton Rouge Parish in the State of Louisiana.
13. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer and the Executive has executed this Agreement
as of the date and year first above written.
ATTEST: PICCADILLY CAFETERIAS, INC.
By: \s\ Paul W. Murrill
\s\ Mark L. Mestayer Name: Paul W. Murrill
Secretary Title:Chairman
By: \s\ Ronald A. LaBorde
Name of
Executive: Ronald A. LaBorde
Appendix A
Car - Oldsmobile 98 Regency Elite or Equivalent
Payment of Federal Income Taxes and FICA taxes based on imputed
personal income for personal use.
Pension Plan
1% per year of service
Annual Vacation Policy Years of Service Weeks
1 1
2 - 4 2
> 5 3
Hospitalization - 50% contributory (as elected)
$5,000 LIFE
$5,000 AD&D
Long Term Disability
60% salary
Max $6,000/month
Supplemental Term. Life - $ 75,000
Travel Accident Coverage - $ 500,000
______________________
Exhibit 10(f)
INDEMNITY AGREEMENT
This INDEMNITY AGREEMENT is made as of April 27, 1995, by and between
Piccadilly Cafeterias, Inc., a Louisiana corporation (the "Corporation"), and
Ronald A. LaBorde ("Indemnitee").
In consideration of Indemnitee's continued service after the date
hereof, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Indemnitee shall serve or continue to serve as
an officer and director of the Corporation, and any other corporation,
subsidiary, partnership, joint venture, trust or other enterprise of which he
is serving at the request of the Corporation, and agrees to serve in such
capacities for so long as he is duly elected or appointed and qualified or
until such earlier time as he tenders his resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term "Claim" shall mean any threatened, pending or
completed claim, action, suit or proceeding, including appeals, whether civil,
criminal, administrative or investigative and whether made judicially or
extra-judicially, including any action by or in the right of the Corporation,
or any separate issue or matter therein, as the context requires.
(b) The term "Determining Body" shall mean (i) those members
of the Board of Directors who are not named as parties to the Claim for which
indemnification is being sought (Impartial Directors"), if there are at least
three Impartial Directors, or (ii) a committee of at least three Impartial
Directors appointed by the Board or a duly authorized committee thereof
(regardless whether the directors voting on such appointment are Impartial
Directors) or (iii) if there are fewer than three Impartial Directors or if
the Board of Directors or the committee appointed pursuant to clause (ii) of
this paragraph so directs (regardless whether the directors voting on such
appointment are Impartial Directors), independent legal counsel, which may be
the regular outside counsel of the Corporation, as designated by the Impartial
Directors or, if no such directors exist, the full Board of Directors.
(c) The term "Disbursing Officer" shall mean the Chairman of
the Board of the Corporation or, if the Chairman of the Board has a direct or
indirect interest in the Claim for which indemnification is being sought, any
officer who does not have such an interest and who is designated by the
Chairman of the Board to be the Disbursing Officer with respect to
indemnification requests related to the Claim, which designation shall be made
promptly after receipt of the initial request for indemnification with respect
to such Claim.
(d) The term "Expenses" shall mean any expenses or costs
including, without limitation, attorney's fees, judgments, punitive or
exemplary damages, fines, excise taxes or amounts paid in settlement.
(e) The term "Insurance Policy" shall mean the Declarations
Executive Liability and Indemnification Policy, Policy No. 8127 63 23-B that
the Corporation has obtained fromFederal Insurance Company of the Chubb Group
of Insurance Companies on behalf of its directors and officers for the policy
period commencing October 12, 1994 and ending October 12, 1995.
3. Limitation of Liability. To the fullest extent permitted by Article
XIV of the Articles of Incorporation of the Corporation (as in effect on the
date hereof), Indemnitee shall not be liable for any breach of his fiduciary
duty. If and to the extent such provisions are amended to permit further
limitations of liability, Indemnitee shall not be liable for any breach of his
fiduciary duty to the fullest extent permitted after any such amendment.
4. Maintenance of Insurance.
(a) The Corporation represents and warrants that it presently
maintains in force and effect the Insurance Policy, and Indemnitee represents
and warrants that he has been furnished with a copy thereof. Subject only to
the provisions of Section 4(b) hereof, the Corporation hereby agrees that, so
long as Indemnitee shall continue to serve as a director or in any other
capacity referred to in Section 5(a) hereof and thereafter so long as
Indemnitee shall be subject to any possible Claim, the Corporation shall use
its commercially reasonable best efforts to purchase and maintain in effect
for the benefit of Indemnitee one or more valid and enforceable policies of
directors and officers liability insurance providing, in all respects,
coverage at least comparable to that currently provided pursuant to the
Insurance Policy.
(b) The Corporation shall not be required to purchase and
maintain the Insurance Policy or any comparable policy if directors and
officers liability insurance is not reasonably available or if, in the
reasonable business judgment of the then directors of the Corporation, there
is insufficient benefit to the Corporation from such insurance.
5. Additional Indemnity.
(a) To the extent any Expenses incurred by Indemnitee are in
excess of the amounts reimbursed or indemnified pursuant to the provisions of
Section 4 hereof, the Corporation shall indemnify and hold harmless Indemnitee
against any Expenses actually and reasonably incurred by Indemnitee (as they
are incurred) in connection with any Claim against Indemnitee, or involving
Indemnitee solely as a witness or person required to give evidence, by reason
of Indemnitee's position as a (i) director or officer of the Corporation, (ii)
director or officer of any subsidiary of the Corporation or as a fiduciary
with respect to any employee benefit plan of the Corporation, or (iii)
director, officer, partner, employee or agent of another corporation,
partnership, joint venture, trust or other for-profit or not-for-profit entity
or enterprise, if such position is or was held at the request of the
Corporation, whether relating to service in such position before or after the
effective date of this Agreement, if (A) Indemnitee is successful in his
defense of the Claim on the merits or otherwise or (B) Indemnitee has been
found by the Determining Body to have met the Standard of Conduct (as
hereinafter defined); provided that (1) the amount of Expenses for which the
Corporation shall indemnify Indemnitee may be reduced by the Determining Body
to such amount as it deems proper if it determines that the Claim involved the
receipt of personal benefit by Indemnitee, and (2) no indemnification shall be
made in respect of any Claim as to which Indemnitee shall have been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable for willful or intentional misconduct in the
performance of his duty to the Corporation or to have obtained an improper
personal benefit, unless, and only to the extent that, a court shall determine
upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such Expenses which the court shall deem proper.
(b) For purposes of this Agreement, the "Standard of Conduct"
is met when conduct by Indemnitee with respect to which a Claim is asserted was
conduct performed in good faith which he reasonably believed to be in, or not
opposed to, the best interest of the Corporation, and, in the case of a Claim
which is a criminal action or proceeding, conduct that Indemnitee had no
reasonable cause to believe was unlawful. The termination of any Claim by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that Indemnitee did
not meet the Standard of Conduct.
(c) Promptly upon becoming aware of the existence of any Claim
as to which Indemnitee may be indemnified for Expenses and as to which
Indemnitee desires to obtain indemnification, Indemnitee shall notify the
Chairman of the Board of the Corporation, but the failure to promptly notify
the Chairman of the Board shall not relieve the Corporation from any
obligation hereunder, except and to the extent that such failure has
materially and irrevocably harmed the Corporation's ability to defend against
such Claim pursuant to Section 5(f) hereof. Upon receipt of such request, the
Chairman of the Board shall promptly advise the members of the Board of
Directors of the request and that the establishment of a Determining Body with
respect thereto will be a matter to be considered at the next regularly
scheduled meeting of the Board. If a meeting of the Board of Directors is not
regularly scheduled within 120 calendar days of the date the Chairman of the
Board receives notice of the Claim, the Chairman of the Board shall cause a
special meeting of the Board of Directors to be called within such period in
accordance with the provisions of the Corporation's By-laws. After the
Determining Body has been established, the Chairman of the Board shall inform
Indemnitee of the constitution of the Determining Body and Indemnitee shall
provide the Determining Body with all facts relevant to the Claim known to
him, and deliver to the Determining Body all documents relevant to the Claim
in his possession. Before the 60th day (the "Determination Date") after its
receipt from Indemnitee of such information, together with such additional
information as the Determining Body may reasonably request of Indemnitee prior
to such date (the receipt of which shall not begin a new 60-day period), the
Determining Body shall determine whether or not Indemnitee has met the
Standard of Conduct and shall advise Indemnitee of its determination. If
Indemnitee shall have supplied the Determining Body with all relevant
information, including all additional information reasonably requested by the
Determining Body, any failure of the Determining Body to make a determination
by or on the Determination Date as to whether the Standard of Conduct was met
shall be deemed to be a determination that the Standard of Conduct was met by
Indemnitee.
(d) If at any time during the 60-day period ending on the
Determination Date, Indemnitee becomes aware of any relevant facts or
documents not theretofore provided by him to the Determining Body, Indemnitee
shall promptly inform the Determining Body of such facts or documents, unless
the Determining Body has obtained such facts or documents from another source.
The provision of such facts to the Determining Body shall not begin a new 60-
day period.
(e) The Determining Body shall have no power to revoke a
determination that Indemnitee met the Standard of Conduct unless Indemnitee
(i) submits fraudulent information to the Determining Body at any time during
the 60 days prior to the Determination Date or (ii) fails to comply with the
provisions of Sections 5(c) or 5(d) hereof, including without limitation
Indemnitee's obligation to submit information or documents relevant to the
Claim reasonably requested by the Determining Body prior to the Determination
Date.
(f) In the case of any Claim not involving any proposed,
threatened or pending criminal proceeding,
(i) if Indemnitee has, in the judgment of the
Determining Body, met the Standard of Conduct, the Corporation may, except as
otherwise provided below, individually or jointly with any other indemnifying
party similarly notified, assume the defense thereof with counsel reasonably
satisfactory to Indemnitee. If the Corporation assumes the defense of the
Claim, it shall keep Indemnitee informed as to the progress of such defense
so that Indemnitee may make an informed decision as to the need for separate
counsel. After notice from the Corporation that it is assuming the defense
of the Claim, it will not be liable to Indemnitee under this Agreement for any
legal or other expenses subsequently incurred by Indemnitee in connection with
the defense other than reasonable costs of investigation or as otherwise
provided below. Indemnitee shall have the right to employ its own counsel
in such action, suit or proceeding but the fees and expenses of such counsel
incurred after such notice from the Corporation of its assumption of the
defense shall be at the expense of Indemnitee unless (A) the employment of
counsel by Indemnitee has been authorized by the Determining Body, (B)
Indemnitee shall have concluded reasonably that there may be a conflict of
interest between the Corporation and Indemnitee in the conduct of the defense
of such action or (C) the Corporation shall not in fact have employed counsel
to assume the defense of such action, in each of which cases the fees and
expenses of counsel shall be at the expense of the Corporation. The Corporation
shall not be entitled to assume the defense of any action, suit or proceeding
brought by or in the right of the Corporation or as to which Indemnitee shall
have made the conclusion provided for in (B) above; and
(ii) the Corporation shall fairly consider any
proposals by Indemnitee for settlement of the Claim. If the Corporation
proposes a settlement of the Claim and such settlement is acceptable to the
person asserting the Claim, or the Corporation believes a settlement proposed
by the person asserting the Claim should be accepted, it shall inform
Indemnitee of the terms of such proposed settlement and shall fix a reasonable
date by which Indemnitee shall respond. If Indemnitee agrees to such terms, he
shall execute such documents as shall be necessary to make final the
settlement. If Indemnitee does not agree with such terms, Indemnitee may
proceed with the defense of the Claim in any manner he chooses, provided that
if Indemnitee is not successful on the merits or otherwise, the Corporation's
obligation to indemnify such Indemnitee as to any Expenses incurred
following his disagreement with the Corporation shall be limited to the
lesser of (A) the total Expenses incurred by Indemnitee following his decision
not to agree to such proposed settlement or (B) the amount that the Corporation
would have paid pursuant to the terms of the proposed settlement. If,
however, the proposed settlement would impose upon Indemnitee any requirement
to act or refrain from acting that would materially interfere with the conduct
of Indemnitee' s affairs, Indemnitee may refuse such settlement and continue
his defense of the Claim, if he so desires, at the Corporation's expense
in accordance with the terms and conditions of this Agreement without regard to
the limitations imposed by the immediately preceding sentence. In any event,
the Corporation shall not be obligated to indemnify Indemnitee for any amount
paid in a settlement that the Corporation has not approved.
(g) In the case of any Claim involving a proposed, threatened
or pending criminal proceeding, Indemnitee shall be entitled to conduct the
defense of the Claim with counsel of his choice and to make all decisions with
respect thereto, provided, however, that the Corporation shall not be obliged
to indemnify Indemnitee for any amount paid in settlement of such a Claim
unless the Corporation has approved such settlement
(h) After notifying the Corporation of the existence of a
Claim, Indemnitee may from time to time request the Corporation to pay the
Expenses (other than judgments, fines, penalties or amounts paid in settlement)
that he incurs in pursuing a defense of the Claim prior to the time that
the Determining Body determines whether the Standard of Conduct has been met.
The Disbursing Officer shall pay to Indemnitee the amount requested (regardless
of Indemnitee's apparent ability to repay such amount) upon receipt of an
undertaking by or on behalf of Indemnitee to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation under the circumstances, provided, however, that if the Disbursing
Officer does not believe such amount to be reasonable, he shall advance the
amount deemed by him to be reasonable and Indemnitee may apply directly to the
Determining Body for the remainder of the amount requested.
(i) After the Determining Body has determined that the
Standard of Conduct has been met, for so long as and to the extent that the
Corporation is required to indemnify Indemnitee under this Agreement, the
provisions of Section 5(h) hereof shall continue to apply with respect to
Expenses incurred after such time except that (i) no undertaking shall be
required of Indemnitee and (ii) the Disbursing Officer shall pay to Indemnitee
the amount of any fines, penalties or judgments against him which have become
final and for which he is entitled to indemnification hereunder, and any
amount of indemnification ordered to be paid to him by a court.
(j) Any determination by the Corporation with respect to
settlement of a Claim shall be made by the Determining Body.
(k) All determinations and judgments made by the Determining
Body hereunder shall be made in good faith.
6. Enforcement.
(a) The rights provided by this Agreement shall be enforceable
by Indemnitee in any court of competent jurisdiction.
(b) If Indemnitee seeks a judicial adjudication of his rights
under, or to recover damages for breach of, this Agreement, Indemnitee shall
be entitled to recover from the Corporation, and shall be indemnified by the
Corporation against, any and all expenses actually and reasonably incurred by
him in connection with such proceeding, but only if he prevails therein. If
it shall be determined that Indemnitee is entitled to receive part but not all
of the relief sought, then Indemnitee shall be entitled to be reimbursed for
all expenses incurred by him in connection with such judicial adjudication if
the amount to which he is determined to be entitled exceeds 50% of the amount
of his claim. Otherwise, the expenses incurred by Indemnitee in connection
with such judicial adjudication shall be appropriately prorated.
(c) In any judicial proceeding described in this Section 6,
the Corporation shall bear the burden of proving that Indemnitee is not
entitled to the relief sought.
7. Saving Clause. If any provision of this Agreement is determined by
a court having jurisdiction over the matter to violate or conflict with
applicable law, the court shall be empowered to modify or reform such
provision so that, as modified or reformed, such provision provides the
maximum indemnification permitted by law and such provision, as so modified or
reformed, and the balance of this Agreement, shall be applied in accordance
with their terms. Without limiting the generality of the foregoing, if any
portion of this Agreement shall be invalidated on any ground, the Corporation
shall nevertheless indemnify Indemnitee to the full extent permitted by any
applicable portion of this Agreement that shall not have been invalidated and
to the full extent permitted by law with respect to that portion that has been
invalidated.
8. Non-Exclusivity.
(a) The indemnification and advancement of Expenses provided
by or granted pursuant to this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee is or may become entitled under any statute,
articles of incorporation, by-law, authorization of stockholders or directors,
agreement, or otherwise.
(b) It is the intent of the Corporation by this Agreement to
indemnify and hold harmless Indemnitee to the fullest extent permitted by law,
so that if applicable law would permit the Corporation to provide broader
indemnification rights than are currently permitted, the Corporation shall
indemnify and hold harmless Indemnitee to the fullest extent permitted by
applicable law notwithstanding that the other terms of this Agreement would
provide for lesser indemnification.
9. Confidentiality. The Corporation and Indemnitee shall keep
confidential to the extent permitted by law and their fiduciary obligations
all information and determinations provided pursuant to or arising out of the
operations of this Agreement and the Corporation and Indemnitee shall instruct
its or his agents and employees to do likewise.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original but all of which
taken together shall be deemed to constitute a single instrument.
11. Applicable Law. This Agreement shall be governed by and construed
in accordance with the substantive laws of the State of Louisiana.
12. Successors and Assigns. This Agreement shall be binding upon
Indemnitee and upon the Corporation, its successors and assigns, and shall
inure to the benefit of Indemnitee's heirs, personal representatives, and
assigns and to the benefit of the Corporation, its successors and assigns.
13. Amendment. No amendment, modification, termination or cancellation
of this Agreement shall be effective unless made in writing signed by the
Corporation and Indemnitee. Notwithstanding any amendment, modification,
termination or cancellation of this Agreement or any portion hereof,
Indemnitee shall be entitled to indemnification in accordance with the
provisions hereof with respect to any acts or omissions of Indemnitee which
occur prior to such amendment, modification, termination or cancellation.
14. Gender. All pronouns and variations thereof used in this Agreement
shall be deemed to refer to the masculine, feminine or neuter gender, singular
or plural, as the identity of the person, persons, entity or entities referred
to may require.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the date and year first above written.
PICCADILLY CAFETERIAS, INC.
By:\s\ Paul W. Murrill
Paul W. Murrill
Chairman of the Board
Indemnitee:\s\ Ronald A. LaBorde
_________________________
Exhibit 10(g)
June 26, 1995
Mr. Ronnie LaBorde
Chief Executive Officer
Piccadilly Cafeterias, Inc.
3232 S. Sherwood Forest Blvd.
Baton Rouge, LA 70821
Dear Ronnie:
In connection with the Board of Director's election of you as Chief
Executive Officer for Piccadilly Cafeterias, Inc., on June 9, 1995, this
letter is written to confirm the Board of Director's decisions concerning your
compensation.
1. The annual salary is set at $275,000.
2. The Board establishes an Annual Incentive Compensation Plan for
you. For the fiscal year from July 1, 1995, to June 30, 1996,
the amount of Plan payment to be made will be based on 5% of
the increase in cash flow, defined below, from the July 1, 1994,
to June 30, 1995, fiscal year.
For purposes of this plan, cash flow will be equal to the Net
Cash Provided by Operating Activities, as determined in
accordance with GAAP and presented in the Company's public
financial statements, less the net aggregate change in
operating assets and liabilities.
The cash flow for each of these two fiscal years may have plus
or minus adjustments because of non-recurring or special events,
but any such adjustments must have the approval of the
Compensation Committee of the Board of Directors.
3. The Board establishes a Long Term Incentive Compensation Plan for
you for the four year period from June 9, 1995, until June 8,
1999. The amount of payment to be made for this four year
period is equivalent to the increase in price of 200,000 shares
of common stock during this four year period.
Piccadilly common stock closed at 9 5/8 on June 9, 1995. The
amount of this Long Term Incentive Plan payment to you will be
calculated as 200,000 times the difference in closing price
of Piccadilly common stock on June 8, 1999, (or the first trading
day thereafter) as quoted in the Wall Street Journal, and 9 5/8.
If, and only if, you do not continue to serve Piccadilly as CEO
and vacate the position in good-standing with the Board of
Directors, this 200,000 share equivalency, calculated through the
final date you served as CEO, will vest to you in four (4) equal
increments on June 8, 1996; June 8, 1997; June 8, 1998; and June
8, 1999.
If there is a "Change of Control" of Piccadilly as defined in
your signed Management Continuity Agreement, vesting will be
immediate.
4. The Board approved an option grant to you of 50,000 shares,
priced as of June 9, 1995, and under the terms of our Stock
Option Plan.
5. The Board has earlier approved a 30 month Management Continuity
Agreement for you and it is already in effect.
6. All retirement, health insurance, vacations, and all other
benefits will be in accordance with existing Piccadilly plans.
Respectfully,
\s\ Paul W. Murrill
Paul W. Murrill, Chairman
Board of Directors
___________________________
Exhibit 10(h)
AGREEMENT
This Agreement is entered between Piccadilly Cafeterias, Inc.
("Piccadilly") and Malcolm T. Stein, Jr. ("Stein") effective August 1, 1995.
Piccadilly and Stein agree:
1. The purpose of this Agreement is to conclude amicably the
employment relationship that has existed between Piccadilly and Stein.
2. Stein retires from employment by Piccadilly effective August 1,
1995, and Piccadilly accepts this retirement with appreciation for Stein's
years of service to Piccadilly.
3. Piccadilly will pay Stein, as supplemental pay, an amount equal to
his base salary for twelve months, or a total of $228,540. This amount will
be paid in accordance with terms to be determined by Stein no later than
January 5, 1996.
4. Stein is entitled to continue participation in Piccadilly's group
health insurance plan. Premiums may be paid at the employee rate until Stein
is age 65. Stein will cease participation in Piccadilly's long-term
disability plan, supplemental life plan and accidental death and dismemberment
plan.
5. To the extent allowed by law, the unexercised and unexpired stock
options granted to Stein in the Stock Option Agreements dated August 14, 1990
and May 18, 1992 shall remain available to him in accordance with the terms of
such Stock Option Agreements notwithstanding his resignation from employment.
6. Stein will complete his term as a member of the Piccadilly board
of directors. Stein will continue as a member of the Advisory Board. Stein
resigns from the boards of directors and any offices held with the following:
Piccadilly Restaurants, Inc.
Cajun Bayou Distributors & Management, Inc.
7. Piccadilly will promptly transfer to Stein title to the Cadillac
automobile that has been heretofore furnished by Piccadilly for Stein's use.
8. For the consideration described above, Stein releases, acquits
and discharges Piccadilly, its directors, officers, employees, agents and
insurers, and all other persons, firms and corporations, of and from any and
all claims he may have against them arising out of his employment by
Piccadilly and the termination of that employment, including any claims
arising under contract or under federal or state law or regulation. This
waiver and release includes, among other things, any rights or claims Stein
may have that arose prior to the date this Agreement was executed for age
discrimination under the federal Age Discrimination in Employment Act, 29
U.S.C. Section 621 et seq., the Louisiana Age Discrimination in Employment
Act, , La R.S. 23:971 et seq., and is given by Stein in exchange for the
agreements of Piccadilly set forth in this Agreement.
9. Stein will cooperate with Piccadilly in effecting an orderly
transition, and will assist Piccadilly for a reasonable period of time and
without additional compensation in connection with matters related to the
period in which he served as an officer of the corporation and in which his
knowledge is useful to the corporation.
10. Both Piccadilly and Stein will keep the terms of the Agreement
confidential, and will not disclose such terms to any person except their
accountants, attorneys, taxing authorities, or as may be required by federal
or state law or regulation.
11. Stein acknowledges that no promise, inducement or agreement not
herein expressed has been made, that this Agreement contains the entire
agreement between the parties, and that the terms of this document are
contractual and not a mere recital.
12. Stein acknowledges that Piccadilly has advised Stein to consult
with an attorney prior to executing this Agreement, and that Piccadilly has
given Stein a period of at least twenty-one (21) days within which to consider
this Agreement.
13. For a period of seven (7) days following execution of this
Agreement, Stein may revoke it. This agreement shall become effective upon
expiration of this revocation period.
Piccadilly Cafeterias, Inc.
By:\s\ Ronald A. LaBorde
Ronald A. LaBorde (Date)
Chief Executive Officer
\s\ Malcolm T. Stein, Jr.
Malcolm T. Stein, Jr. (Date)
_______________________
EXHIBIT 13(a)
Selected Financial Data
Piccadilly Cafeterias, Inc.
<TABLE>
<CAPTION>
(Amounts in thousands--except per share data)
Year Ended June 30 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net sales $287,848 $276,223 $271,460 $295,114 $302,742
Cost of sales 163,830 155,411 158,777 166,900 173,579
Other operating expense 97,213 92,250 88,676 99,892 96,921
Net income (loss) 4,051 7,047 4,825 (24,586)(A) 8,694
Per share data:
Net income (loss) .40 .70 .49 (2.51)(A) .90
Cash dividends .48 .48 .48 .48 .48
Total assets 165,121 154,773 152,618 152,906 184,534
Cash and cash equivalents --- --- 14,094 9,438 4,936
Long-term debt 18,000 24,000 36,000 39,000 45,430
Shareholders' equity 76,445 75,874 72,192 71,018 99,385
</TABLE>
(A) Includes $30,904,000 ($3.14 per share) for the after-tax effect of the
write-off of intangible assets related to the Ralph & Kacoo's acquisition on
December 2, 1988 and estimated disposition costs of 15 cafeteria and
restaurant operating units.
______________________________
EXHIBIT 13(b)
Stock Information
Piccadilly Cafeterias, Inc.
The Company's Common Stock is traded on the New York Stock Exchange under the
symbol "PIC." The following table sets forth the high and low sales prices
for each quarter within the last two fiscal years. As of August 7, 1995 there
were approximately 2,923 record holders of the Company's Common Stock.
<TABLE>
<CAPTION>
__________________________________________________________________________________________________________________
Per Per
Share Share
Quarter High Low Cash Quarter High Low Cash
Dividends Dividends
__________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fiscal year ended 1st $10.25 $ 7.75 $ .12 Fiscal year ended 1st $10.88 $ 8.38 $ .12
June 30, 1995 2nd 8.50 7.50 .12 June 30, 1994 2nd 12.63 10.50 .12
3rd 9.38 7.63 .12 3rd 15.50 11.63 .12
4th 9.63 8.50 .12 4th 13.63 9.63 .12
</TABLE>
_______________________________________
EXHIBIT 13(c)
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Piccadilly Cafeterias, Inc.
Liquidity and Capital Resources
The following table presents comparable balances of cash equivalents and
working capital:
(Amounts in thousands)
_______________________________________________________________________________
Balances at June 30 1995 1994 1993
_______________________________________________________________________________
Cash and cash equivalents -- -- $14,094
Working capital surplus (deficit) $(45,771) $(26,063) $ 2,043
______________________________
Cash generated from operations of $20,823,000 combined with cash from
available lines of credit were primarily used to fund $43,080,000 of fiscal
year 1995 capital expenditures, debt maturities and dividends. Working
capital decreased $19,708,000 during fiscal year 1995 as expenditures
exceeding cash generated from operations were financed with short-term
borrowings from banks. The Company maintains two unsecured, short-term lines
of credit totaling $30,000,000. As of August 1, 1995, $9,283,000 of these
facilities was available. Management anticipates that these facilities will
be renewed or restructured during fiscal year 1996.
For fiscal year 1996, total capital expenditures are expected to
approximate $9,000,000 and will include purchase of one site of land,
construction of one new cafeteria unit, and minor remodels to over 50 existing
cafeterias and restaurants. Also during fiscal year 1996, $6,000,000 of the
10.15% senior notes will become due. Management anticipates that cash
generated from operations will be sufficient to fund both capital expenditures
and maturing debt for fiscal 1996.
The following table presents a summary of capital expenditures for the
years ended June 30, 1995, 1994 and 1993:
(Amounts in thousands--except number of units)
_______________________________________________________________________________
Year Ended June 30 1995 1994 1993
_______________________________________________________________________________
Amounts Units Amounts Units Amounts Units
_______________________________________________________________________________
New units opened $14,680 6 $ 5,612 3 $1,536 1
Remodels completed--major 10,983 12 10,368 17 373 1
Remodels completed--minor 1,630 1,074 821
Net increase (decrease) in
construction-in-progress (5,819) 7,228 1,207
Land purchases 2,459 4,455 2,070
Other 3,009 3,158 3,910
______________________________________ _________ ________
Total capital expenditures $26,942 $31,895 $9,917
====================================== ========= ========
______________________________
Historically, the Company has leased land for the majority of its
freestanding cafeteria units. Beginning in fiscal year 1993, the Company
began to purchase land for the majority of its new units. The total
investment required for a freestanding unit is higher than for strip-center
or shopping mall locations. All of the units opened in fiscal years 1995,
1994 and 1993 are freestanding units. The one new unit to be opened during
1996 is freestanding. The Company is currently reviewing its future expansion
strategies.
During fiscal year 1995, the Company canceled its five-year major
remodel plans. Major unit remodels generally include a substantial redesign
of the unit. Capital expenditures for these units include replacement of
decor, carpet, furniture and fixtures, and exterior signage. Minor unit
remodels are generally limited to replacement of carpeting, minor decor
upgrades, additions of take-out stands, and/or in some cases, replacement of
exterior signage. All 1996 remodels will be minor.
Results of Operations
FISCAL YEAR 1995 COMPARED TO FISCAL YEAR 1994. The following table summarizes
comparable cafeteria customer traffic for the fiscal years ended June 30,
1995 and 1994:
(Customers in thousands)
_______________________________________________________________________________
Year Ended June 30 1995 1994 Customer
____________________________________________________________________
Customers Units Customers Units Change
_______________________________________________________________________________
Units open 12 months in 45,624 124 46,107 124 -1.0%
both periods
Units opened 2,389 8(A) 702 3
Units closed 261 3 1,289 6(B)
_____________________________________ _________
Total 48,274 48,098 .4%
===================================== =========
(A) Includes cafeterias opened after June 30, 1993.
(B) Includes cafeterias closed after June 30, 1993.
________________________________
Cafeteria sales for fiscal year 1995 increased $9,807,000, or 3.9%, from
fiscal year 1994. The customer check average increased 3.3% from $5.22 for
fiscal year 1994 to $5.39 for fiscal year 1995 primarily due to price
increases.
Ralph & Kacoo's restaurant sales increased $1,818,000, or 7.8%,
resulting primarily from the opening of one restaurant during the fourth
quarter of fiscal year 1995. Same store sales increased 1.5%.
During fiscal year 1995, operating profits (net sales less cost of
sales and other operating expenses) deteriorated from 10.3% of net sales to
9.3% of net sales. Food costs and labor costs as a percentage of sales
increased 0.2% and 0.4%, respectively. Other operating expenses increased
from 33.4% of net sales for fiscal year 1994 to 33.8% of net sales for fiscal
year 1995.
Three cafeteria units closed in fiscal year 1995. All of these units
had substantially reached the end of their respective lease terms.
Other expense for 1995 increased $916,000 compared to fiscal year 1994.
During fiscal year 1995, non-cash write-offs related to the Company's deluxe
remodeling program totaled $1,393,000. These write-offs include $733,000 for
12 major remodels completed in fiscal year 1995. The remaining $660,000
relates primarily to engineering and design fees on numerous projects that
were ultimately canceled and yield no further utility toward future projects
or plans.
Interest expense increased $1,935,000 from $3,089,000 in fiscal year
1994 to $5,024,000 in fiscal year 1995. The increase is partially
attributable to increased short-term borrowings arising from the Company's
level of capital expenditures. Additionally, the Company recorded a
$1,200,000 charge to establish a reserve for interest associated with the
anticipated outcomes of open examinations of the Company's tax returns for
1987 through 1992 by the Internal Revenue Service. This reserve relates
primarily to deferrals in the timing of certain deductions taken by the
Company including amortization of the intangible assets acquired in the
purchase of Ralph & Kacoo's in fiscal year 1989. During fiscal year 1995 the
Internal Revenue Service extended an offer to the Company to settle the
intangible asset issue using the guidelines of the Global Settlement
Initiative program of the Service. The Company has not accepted the
settlement offer and is continuing to contest the proposed adjustments;
however, the Company has determined that some adjustment to the timing of
deductions will be required.
During fiscal year 1992 the Company closed 15 units that had not
performed well and appeared to have limited potential for improvement in the
future. As of June 30, 1995, the Company had eight properties for which it
has continuing rent obligations not offset by sublease arrangements. Several
of these properties are under varying stages of sublease negotiation.
Management will continue to pursue disposition of those properties at terms
favorable to the Company.
FISCAL YEAR 1994 COMPARED TO FISCAL YEAR 1993. The following table summarizes
comparable cafeteria customer traffic for the fiscal years ended June 30,
1994 and 1993:
(Customers in thousands)
_______________________________________________________________________________
Year Ended June 30 1994 1993 Customer
_________________________________________________________________
Customers Units Customers Units Change
_______________________________________________________________________________
Units open 12 months in 46,412 126 47,993 126 -3.3%
both periods
Units opened 1,183 3(A) 427 1
Units closed 503 4 2,144 11(B)
_____________________________________ _________
Total 48,098 50,564 -4.9%
===================================== =========
(A) Includes cafeterias opened after June 30, 1992.
(B) Includes cafeterias closed after June 30, 1992.
_________________________________________
Cafeteria sales for fiscal year 1994 increased $5,307,000, or 2.1%, from
fiscal year 1993. Price increases effective November 1993 and May 1994 were
sufficient to offset the overall customer decline of 4.9%. The overall check
average increased 5.2% from $5.00 for fiscal year 1993 to $5.26 for fiscal
year 1994.
Ralph & Kacoo's restaurant sales decreased $544,000, or 2.3%. No Ralph
& Kacoo's restaurants were opened or closed during fiscal year 1994.
During fiscal year 1994, operating profits (net sales less cost of sales
and other operating expenses) improved from 8.8% of net sales to 10.3% of net
sales. Food costs and labor costs as a percentage of sales decreased 1.5% and
0.7%, respectively. These improvements were somewhat offset by other
operating expense which increased from 32.7% of net sales for fiscal year 1993
to 33.4% of net sales for fiscal year 1994.
Four units closed in fiscal year 1994. All of these units had
substantially reached the end of their respective lease terms. Other operating
expense includes a provision of $100,000 relating to losses associated with
the closing of these units.
Other expense for 1994 increased $876,000 compared to fiscal year 1993.
This increase is largely attributable to non-cash write-offs related to
remodeled units amounting to $996,000.
The Revenue Reconciliation Act of 1993 was enacted into law on August
10, 1993. This Act, combined with an increase in the Company's effective state
income tax rate, resulted in an increase of the Company's current effective
income tax rate from 37% to 39% for fiscal year 1994.
KNOWN TRENDS OR UNCERTAINTIES. Generally, the Company has experienced sales
growth primarily from selling price increases and net increases in the number
of operating units. The Company believes that same-store declines in customer
traffic result primarily from the increased number of eating establishments in
the markets where the Company operates. The Company believes that its
programs to enhance product quality and service are essential to increase
customer traffic and ensure long-term profitability.
Most of the Company's operating costs are subject to inflationary
pressures. Historically, the Company has generally been able to maintain its
operating margins through increases in selling prices.
In the first quarter of fiscal year 1996 the Company announced the
elimination of approximately 100 jobs. Related severance costs of $1,300,000
will be recorded in that quarter.
The Company is not aware of other material trends that may be expected
to cause reported financial information not to be indicative of future operating
results or of future financial condition.
EXHIBIT 13(d)
Consolidated Balance Sheets
Piccadilly Cafeterias, Inc.
(Amounts in thousands)
_______________________________________________________________________________
Balances at June 30 1995 1994
_______________________________________________________________________________
Assets
CURRENT ASSETS
Accounts and notes receivable $ 482 $ 579
Inventories 10,584 10,108
Income taxes recoverable --- 1,320
Deferred income taxes 1,416 1,494
Other current assets 627 1,400
_______________________________________________________________________________
TOTAL CURRENT ASSETS 13,109 14,901
PROPERTY, PLANT & EQUIPMENT
Land 20 ,429 17,970
Buildings and leasehold improvements 114,832 99,829
Furniture and fixtures 95,538 87,444
Machinery and equipment 14,607 15,031
Construction in progress 3,098 8,917
_______________________________________________________________________________
248,504 229,191
Less allowances for depreciation 102,444 94,461
Less allowances for unit closings 801 1,357
_______________________________________________________________________________
NET PROPERTY, PLANT AND EQUIPMENT 145,259 133,373
OTHER ASSETS 6,753 6,499
_______________________________________________________________________________
TOTAL ASSETS $165,121 $154,773
===============================================================================
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Short-term debt due to banks $ 20,577 $ ---
Current portion of long-term debt 6,000 11,250
Accounts payable 17,998 18,004
Income taxes payable 1,038 ---
Accrued salaries 5,158 4,252
Accrued taxes, other than income 3,398 2,929
Accrued rent 4,457 4,179
Reserve for unit closings 254 350
_______________________________________________________________________________
TOTAL CURRENT LIABILITIES 58,880 40,964
Long-term Debt, less current portion 18,000 24,000
Deferred Income Taxes 6,787 7,433
Reserve for Unit Closings, less current portion 5,009 6,502
Shareholders' Equity
Preferred Stock, no par value; authorized 50,000,000 shares;
issued and outstanding: none --- ---
Common Stock, no par value, stated value $1.82 per share;
authorized 100,000,000 shares; issued and outstanding:
10,316,946 shares at June 30, 1995, and 10,131,784
shares at June 30, 1994 18,758 18,421
Additional paid-in capital 17,416 16,324
Retained earnings 40,271 41,129
_______________________________________________________________________________
TOTAL SHAREHOLDERS' EQUITY 76,445 75,874
_______________________________________________________________________________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $165,121 $154,773
===============================================================================
See Notes to Consolidated Financial Statements
Consolidated Statements of Income
Piccadilly Cafeterias, Inc.
_______________________________________________________________________________
(Amounts in thousands -- except per share data)
_______________________________________________________________________________
Year Ended June 30 1995 1994 1993
_______________________________________________________________________________
Net sales $287,848 $276,223 $271,460
Costs and expenses:
Cost of sales 163,830 155,411 158,777
Other operating expense 97,213 92,250 88,676
General and administrative expense 13,845 13,541 13,324
Interest expense 5,024 3,089 3,521
Other expense (income) 1,295 379 (497)
_______________________________________________________________________________
281,207 264,670 263,801
_______________________________________________________________________________
INCOME BEFORE INCOME TAXES 6,641 11,553 7,659
Provision for income taxes 2,590 4,506 2,834
_______________________________________________________________________________
NET INCOME $ 4,051 $ 7,047 $ 4,825
===============================================================================
Weighted average number of shares outstanding 10,228 10,061 9,918
===============================================================================
Net income per share $ 0.40 $ 0.70 $ 0.49
===============================================================================
See Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Shareholders' Equity
Piccadilly Cafeterias, Inc.
<TABLE>
<CAPTION>
_________________________________________________________________________________________
(Amounts in thousands)
___________________________________________________________________________________________
Additional
Common Stock Paid-In Retained
Shares Amount Capital Earnings
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
BALANCES AT JUNE 30, 1992 9,844 $ 17,898 $ 14,271 $ 38,849
Net income 4,825
Cash dividends declared (4,761)
Sales under employee stock purchase plan 124 226 669
Sales under dividend reinvestment plan 20 36 179
___________________________________________________________________________________________
BALANCES AT JUNE 30, 1993 9,988 18,160 15,119 38,913
Net income 7,047
Cash dividends declared (4,831)
Sales under employee stock purchase plan 103 188 843
Sales under dividend reinvestment plan 27 48 242
Sales under employee stock option plan 14 25 120
___________________________________________________________________________________________
BALANCES AT JUNE 30, 1994 10,132 18,421 16,324 41,129
Net income 4,051
Cash dividends declared (4,909)
Sales under employee stock purchase plan 133 242 755
Sales under dividend reinvestment plan 52 95 337
___________________________________________________________________________________________
BALANCES AT JUNE 30, 1995 10,317 $ 18,758 $ 17,416 $ 40,271
==========================================================================================
See Notes to Consolidated Financial Statements
Consolidated Statements of Cash Flows
Piccadilly Cafeterias, Inc.
</TABLE>
<TABLE>
<CAPTION>
___________________________________________________________________________________________
(Amounts in thousands)
___________________________________________________________________________________________
Year Ended June 30 1995 1994 1993
___________________________________________________________________________________________
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,051 $ 7,047 $ 4,825
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 12,880 11,720 11,841
Costs associated with reserved units (1,165) (1,587) (2,309)
Provision for deferred income taxes (benefit) (568) 878 4,183
Loss on disposition of assets 1,880 1,336 126
Pension contributions in excess of pension expense (313) (1,157) (1,289)
Changes in operating assets and liabilities:
Accounts and notes receivable 97 258 228
Inventories (476) 1,904 229
Income taxes recoverable 1,320 610 (1,662)
Other current assets 773 (483) 99
Other assets 59 (56) 832
Accounts payable (6) 2,632 339
Income taxes payable 1,038 -- --
Accrued expenses and unit closing reserve 1,253 324 (660)
___________________________________________________________________________________________
NET CASH PROVIDED BY OPERATING ACTIVITIES 20,823 23,426 16,782
INVESTING ACTIVITIES
Purchases of property, plant and equipment (26,942) (31,895) (9,917)
Proceeds from sale of property, plant and equipment 251 1,472 1,370
Proceeds from sales of marketable securities -- -- 1,671
___________________________________________________________________________________________
NET CASH USED BY INVESTING ACTIVITIES (26,691) (30,423) (6,876)
FINANCING ACTIVITIES
Proceeds from short-term debt due to banks - net 20,577 -- --
Payments on long-term debt (11,250) (3,750) --
Proceeds from sales of Common Stock 1,429 1,466 1,110
Dividends paid (4,888) (4,813) (4,761)
___________________________________________________________________________________________
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 5,868 (7,097) (3,651)
___________________________________________________________________________________________
Increase (decrease) in cash and cash equivalents -- (14,094) 6,255
Cash and cash equivalents at beginning of year -- 14,094 7,839
___________________________________________________________________________________________
Cash and cash equivalents at end of year $ -- $ -- $ 14,094
===========================================================================================
SUPPLEMENTARY CASH FLOW DISCLOSURES
Income taxes paid (net of refunds received) $ 641 $ 2,708 $ 414
===========================================================================================
Interest paid $ 4,288 $ 3,433 $ 3,313
===========================================================================================
See Notes to Consolidated Financial Statements
</TABLE>
Notes To Consolidated Financial Statements
Piccadilly Cafeterias, Inc.
Note A - Significant Accounting Policies
PRINCIPLES OF CONSOLIDATION. The accompanying consolidated financial
statements include the accounts of Piccadilly Cafeterias, Inc. and its
subsidiaries (hereinafter referred to as the Company). All significant
intercompany balances and transactions have been eliminated in consolidation.
INDUSTRY. The Company's principal industry is the operation of Company-owned
cafeterias and seafood restaurants.
CASH EQUIVALENTS. Cash equivalents include those temporary investments that
are readily convertible to known amounts of cash, have original maturities of
three months or less, and have insignificant risk of changes in value due to
changes in interest rates.
INVENTORIES. Inventories consist primarily of food and supplies and are stated
at the lower of cost (first-in, first-out method) or market.
PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment is stated at
cost. Depreciation is provided using the straight-line method for financial
reporting purposes on the following estimated useful lives:
Buildings and component equipment 10-30 years
Furniture and fixtures 10 years
Machinery and equipment 4 years
Leasehold improvements are amortized over the life of the original lease term,
including renewal periods if applicable. The cost of leasehold improvements
has been reduced by the amount of construction allowances received from
developers and landlords. Repairs and maintenance are charged to operations as
incurred. Renewals and betterments which increase the value or extend the
lives of assets are capitalized and depreciated over their estimated useful
lives. When assets are retired, or are otherwise disposed of, cost and the
related accumulated depreciation are eliminated from the accounts and any
resulting gain or loss is included in the determination of income.
INCOME TAXES. The Company accounts for income taxes using the liability
method. Under this method, deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets and
liabilities for financial reporting and the amounts used for income tax.
UNIT OPENING EXPENSES. Salaries and wages, training costs and other expenses
of opening new units are charged to expense during the first month of the new
unit's operation.
EARNINGS PER SHARE. Earnings per share of Common Stock are based on the
weighted average number of shares outstanding.
Note B - Income Taxes
Significant components of the Company's deferred tax liabilities and assets are
as follows:
(Amounts in thousands)
_______________________________________________________________________________
June 30 1995 1994
_______________________________________________________________________________
Deferred tax liabilities:
Property, plant and equipment $ 9,760 $11,932
Inventories 839 840
_______________________________________________________________________________
10,599 12,772
_______________________________________________________________________________
Deferred tax assets:
Unit closing reserves 2,232 2,704
Intangible assets 2,517 2,524
Accrued expenses--net 92 450
Jobs tax credit carryforward -- 452
Minimum tax credit carryforward 154 378
NOL carryforward 233 325
_______________________________________________________________________________
5,228 6,833
_______________________________________________________________________________
Net deferred tax liabilities $ 5,371 $ 5,939
===============================================================================
The components of the provision for income taxes are summarized as follows:
(Amounts in thousands)
_______________________________________________________________________________
Year Ended June 30 1995 1994 1993
_______________________________________________________________________________
Current:
Federal $ 2,896 $ 3,079 $(1,034)
State 262 549 (315)
_______________________________________________________________________________
3,158 3,628 (1,349)
_______________________________________________________________________________
Deferred:
Federal (703) 1,168 3,298
State 135 (290) 885
_______________________________________________________________________________
(568) 878 4,183
_______________________________________________________________________________
Total provision for income taxes $ 2,590 $ 4,506 $ 2,834
===============================================================================
Differences between the provision for income taxes and the amount computed by
applying the federal statutory income tax rate to income before income taxes
are as follows:
(Amounts in thousands)
_______________________________________________________________________________
Year Ended June 30 1995 1994 1993
_______________________________________________________________________________
Income tax at statutory rate $ 2,258 $ 3,944 $ 2,604
Add state income taxes, net of federal taxes 398 259 570
_______________________________________________________________________________
2,656 4,203 3,174
Tax credits (125) (244) --
Other items 59 547 (340)
_______________________________________________________________________________
Total provision for income taxes $ 2,590 $ 4,506 $ 2,834
===============================================================================
The Company's tax returns are currently under examination by the Internal
Revenue Service (IRS) for the fiscal years ended June 30, 1987 through 1992.
The IRS has proposed adjustments to the Company's tax returns primarily
related to the amortization of intangible assets and the timing of certain
other deductions. At June 30, 1995 the Company had recorded reserves of
$1,467,000, primarily for the estimated interest expense exposure related to
the proposed adjustments.
Note C - Commitments
The Company rents most of its cafeteria and restaurant facilities under long-
term leases with varying provisions and with original lease terms generally
being 20 to 30 years. The Company has the option to renew the leases for
specified periods subsequent to their original terms. Minimum future lease
commitments, including $17,623,000 for units closed, as if June 30, 1995, are
as follows:
(Amounts in thousands)
_______________________________________________________________________________
Year Ending June 30
_______________________________________________________________________________
1996 $ 9,042
1997 8,914
1998 8,627
1999 8,475
2000 8,174
Subsequent 53,607
_______________________________________________________________________________
96,839
Less sublease income 9,669
_______________________________________________________________________________
Net minimum lease commitments $87,170
===============================================================================
The leases generally provide for percentage rentals based on sales. Certain
leases also provide for payments of executory costs such as real estate taxes,
insurance, maintenance and other miscellaneous charges. Rent expense for the
periods shown below does not include these executory costs.
(Amounts in thousands)
_______________________________________________________________________________
Year Ended June 30 1995 1994 1993
_______________________________________________________________________________
Minimum rentals $ 8,209 $ 7,894 $ 7,627
Contingent rentals 2,576 2,813 3,032
_______________________________________________________________________________
Total $ 10,785 $ 10,707 $ 10,659
===============================================================================
Note D - Long-Term Debt and Lines of Credit
(Amounts in thousands)
_______________________________________________________________________________
June 30 1995 1994
_______________________________________________________________________________
10.15% senior notes, due in equal, annual installments
of $6,000,000 beginning January 31, 1995, and ending
January 31, 1999 (Fair value at June 30, 1995 --
$26,171,000; June 30, 1994 - $33,336,000) $24,000 $30,000
Note payable to bank, due in equal, quarterly instalments
of $750,000 beginning July 1, 1993, and a balloon
payment of $4,500,000 due January 1, 1995 (Fair value
at June 30, 1994 - $5,250,000) --- 5,250
_______________________________________________________________________________
Total $24,000 $35,250
===============================================================================
The fair value of the Company's long-term borrowing is estimated using
discounted cash flow analyses, based on the Company's current incremental
borrowing rates for similar types of borrowing arrangements.
In January 1989, the Company issued unsecured senior notes in the principal
amount of $30,000,000 at an interest rate of 10.15%. The maturities for the
remaining years following June 30, 1995, are as follows: 1996-$6,000,000,
1997-$6,000,000, 1998-$6,000,000, 1999-$6,000,000. The Company has a
prepayment option, subject to a premium, which can be exercised at any time
during the term of the senior notes. This facility contains covenants which
include provisions for the maintenance of net worth and limitations on the
level of liabilities. At June 30, 1995, the Company was in compliance with
all such covenants.
The Company has two line-of-credit arrangements with two banks under which up
to $30,000,000 can be borrowed. At June 30, 1995, $9,460,000 was available
under these agreements. The weighted average interest rate on short-term
borrowings at June 30, 1995 is 8.30%
The Company capitalized interest costs of $339,000 in 1995 and $300,000 in
1994 with respect to qualifying construction. Total interest cost incurred
was $5,363,000 in 1995 (see Note B), $3,389,000 in 1994 and $3,521,000 in 1993.
Note E - Pension and Bonus Plan
The Company has a pension plan covering substantially all employees who meet
certain age and length-of-service requirements. Retirement benefits are based
upon an employee's years of credited service and final average compensation.
Annual contributions are made in amounts sufficient to fund normal costs as
accrued and to amortize prior service costs over a 40-year period. Assets of
the plan are invested principally in obligations of the United States
Government and other marketable debt and equity securities including 367,662
shares of the Company's Common Stock held at June 30, 1995 and June 30, 1994.
The following tables set forth the plan's funded status and amounts recognized
in the Company's financial statements.
(Amounts in thousands)
_______________________________________________________________________________
June 30 1995 1994
_______________________________________________________________________________
Accumulated benefit obligations, including vested
benefits of $37,167,000 in 1995 and $30,456,000 in
1994. $39,027 $33,885
===============================================================================
Fair value of plan assets $42,502 $39,655
Projected benefit obligation 45,664 39,477
_______________________________________________________________________________
Plan assets over(under) projected benefit obligation (3,162) 178
Unrecognized transition amount (698) (1,525)
Unrecognized prior service cost (45) (50)
Unrecognized net loss 9,893 7,071
_______________________________________________________________________________
Prepaid pension cost included in other non-current assets $ 5,988 $ 5,674
===============================================================================
(Amounts in thousands)
_______________________________________________________________________________
Year Ended June 30 1995 1994 1993
_______________________________________________________________________________
Net pension expense:
Service cost $ 1,733 $ 1,673 $ 1,653
Interest cost on projected benefit obligation 3,093 2,912 2,680
Actual return on plan assets (3,305) (1,401) (2,541)
Net amortization and deferral (788) (2,749) (1,346)
_______________________________________________________________________________
$ 733 $ 435 $ 446
===============================================================================
_______________________________________________________________________________
June 30 1995 1994 1993
_______________________________________________________________________________
Actuarial assumptions:
Discount rate 8.0% 8.25% 8.25%
Compensation increases 4.0% 4.0% 4.0%
Long-term rate of return 9.0% 9.0% 9.0%
The Company also provides bonus compensation to cafeteria and restaurant
managers based on unit profitability. Charges to expense for such compensation
amounted to $10,088,000, $9,982,000, and $9,305,000 during 1995, 1994 and
1993, respectively.
Note F - Common Stock
On August 3, 1987, the Board of Directors adopted the Piccadilly Cafeterias,
Inc. Dividend Reinvestment and Stock Purchase Plan. Shareholders of record may
reinvest quarterly dividends and/or up to $5,000 per quarter in the Company's
Common Stock. Stock obtained through reinvested dividends is issued at a 5%
discount. The Company has reserved 500,000 shares for issuance under the plan.
Common Shares issued under the plan were 52,212 and 26,366 for the years ended
June 30, 1995 and 1994, respectively. At June 30, 1995, there were 355,457
unissued Common Shares reserved under the plan.
On November 2, 1987, the Company's stockholders adopted the Piccadilly
Cafeterias, Inc. Employee Stock Purchase Plan. Under the plan, eligible
employees may be granted options to purchase up to 1,500 shares of Common
Stock annually. Options are exercisable at 85% of the applicable market value
provided that this value is greater than book value per share. If 85% of the
applicable market value is less than book value per share, options are
exercisable at book value per share. Options are exercisable at the applicable
market value if the applicable market value is less than book value per share.
The applicable market value is the lower of the beginning of the plan year and
the end of the plan year market price. Book value per share is determined as
of the most recent audited balance sheet date. The Company has reserved
1,000,000 shares of stock for issuance under the plan. Common Shares issued
under the plan were 132,950 and 103,230 for the years ended June 30, 1995 and
1994, respectively. At June 30, 1995, there were 293,515 unissued shares
reserved under the plan.
On August 8, 1988, the Board of Directors adopted a stockholder rights plan
and declared a dividend distribution of one right on each Common Share
outstanding. Upon the occurrence of certain events, the holders of rights are
entitled to purchase additional shares of the Company's Common Stock from the
Company at an exercise price of $60 per share. Additionally, the holders of
rights may be entitled to purchase either the Company's Common Stock or
securities of an acquiring entity at half of market value.
On November 1, 1993, the Company's stockholders approved the Piccadilly
Cafeterias, Inc. 1993 Incentive Compensation Plan (the 1993 Plan). Under the
terms of the plan, which amends and restates the Piccadilly Cafeterias, Inc.
1988 Stock Option Plan (the 1988 Plan), incentive stock options and non-
qualified stock options, stock appreciation rights, stock awards, restricted
stock, performance shares and cash awards may be granted to officers or key
employees. Options to purchase shares of the Company's Common Stock may be
issued at no less than 100% of the fair market value on the date of grant.
The Company has reserved 1,000,000 shares, in total, for issuance under the
1988 and 1993 Plans. Transactions under the restated Plan for the last three
fiscal years are summarized as follows:
(Dollars in thousands -- except per share data)
_______________________________________________________________________________
Common Option Price
Stock Per Share
Shares Average Total
_______________________________________________________________________________
OUTSTANDING AT JUNE 30, 1992 1,000,000 $11,079
Canceled (34,000) $ 14.09 (480)
Granted 14,000 12.75 179
_________________________________________________________ ________
OUTSTANDING AT JUNE 30, 1993 980,000 10,778
Canceled (60,500) 14.00 (847)
Exercised (14,000) 10.38 (145)
Granted 67,500 10.61 716
_________________________________________________________ ________
OUTSTANDING AT JUNE 30, 1994 973,000 10,502
Canceled --- --- ---
Granted --- --- ---
_________________________________________________________ ________
OUTSTANDING AT JUNE 30, 1995 973,000 $10,502
========================================================= ========
Note G - Quarterly Results of Operations (Unaudited)
The following is a tabulation of the unaudited quarterly results of operations
for the two years ended June 30, 1995.
<TABLE>
<CAPTION>
(Amounts in thousands -- except per share data)
_____________________________________________________________________________________________________________
Year Ended June 30, 1995 Year Ended June 30, 1994
_____________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
9/30 12/31 3/31 6/30 9/30 12/31 3/31 6/30
Net sales $70,779 $73,411 $69,066 $74,592 $69,064 $71,175 $66,733 $69,251
Cost of sales and other
operating expense 64,564 65,925 62,419 68,135 61,922 63,109 59,730 62,900
Net income 877 1,834 1,203 137 1,950 2,333 1,687 1,077
Net income per share $ .09 .18 .12 .01 .20 .23 .17 .11
</TABLE>
During the quarter ended June 30, 1995, the Company recorded reserves of
$1,467,000 ($895,000 after-tax or $0.09 per share) to establish a reserve for
interest and taxes associated with examinations of the Company's tax returns
for 1987 through 1992. See Note B for further discussion. Also included in
the quarter ended June 30, 1995 is a $660,000 ($403,000 after-tax or $0.04 per
share) charge for the write-off of costs related to the Company's deluxe
remodeling program which was canceled during the year ended June 30, 1995.
EXHIBIT 13(e)
Auditors' Report
Piccadilly Cafeterias, Inc.
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Piccadilly Cafeterias, Inc.
Baton Rouge, Louisiana
We have audited the accompanying consolidated balance sheets of Piccadilly
Cafeterias, Inc. as of June 30, 1995 and 1994, and the related consolidated
statements of income, changes in shareholders' equity, and cash flows for each
of the three years in the period ended June 30, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Piccadilly
Cafeterias, Inc. at June 30, 1995 and 1994, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended June 30, 1995 in conformity with generally accepted accounting
principles.
\s\ Ernst & Young LLP
New Orleans, Louisiana
July 31, 1995
EXHIBIT 21
List of Subsidiaries
Piccadilly Cafeterias, Inc.
(1) Piccadilly Restaurants, Inc.
Louisiana Corporation
100% owned
(2) Cajun Bayou Distributors and Management, Inc.
Louisiana Corporation
100% owned
(3) Liquor PR, Inc.
Texas Corporation
49% owned
EXHIBIT 23
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Piccadilly Cafeterias, Inc. of our report dated July 31, 1995, included in
the 1995 Annual Report to Shareholders of Piccadilly Cafeterias, Inc.
Our audits also included the financial statement schedule of Piccadilly
Cafeterias, Inc. listed in Item 14(a). This schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, present fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in the Registration
Statements (Form S-8 No. 33-17737; Form S-3 No. 33-17131; and Form S-8 No. 33-
27793) and in the related Prospectuses of our report dated July 31, 1995, with
respect to the consolidated financial statements incorporated herein by
reference, and our report included in the preceding paragraph with respect to
the financial statement schedule included in this Annual Report (Form 10-K) of
Piccadilly Cafeterias, Inc.
/s/ Ernst & Young LLP
New Orleans, Louisiana
September 25, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The following Financial Data Schedule contains summary financial information
extracted from the Company's Annual Shareholders Report for the year ended
June 30, 1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 482
<ALLOWANCES> 0
<INVENTORY> 10,584
<CURRENT-ASSETS> 13,109
<PP&E> 248,504
<DEPRECIATION> 102,444
<TOTAL-ASSETS> 165,121
<CURRENT-LIABILITIES> 58,880
<BONDS> 0
0
0
<COMMON> 18,758
<OTHER-SE> 57,687
<TOTAL-LIABILITY-AND-EQUITY> 165,121
<SALES> 287,848
<TOTAL-REVENUES> 287,848
<CGS> 163,830
<TOTAL-COSTS> 267,362
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,024
<INCOME-PRETAX> 6,641
<INCOME-TAX> 2,590
<INCOME-CONTINUING> 4,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,051
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0.40
