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 FOR THE FISCAL YEAR ENDED DECEMBER 30, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM____ TO____
Commission File Number 0-10943
RYAN'S FAMILY STEAK HOUSES, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-0657895
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
405 Lancaster Avenue, Greer, South Carolina 29650
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (864) 879-1000
Securities registered pursuant to Section 12(b) of the Act:
None None
(Title of class) (Name of each exchange
on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 Par Value
(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 is not contained herein, and will not be
contained, to the best of the 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. [ X ]
The aggregate market value of the voting stock held by non-affiliates
(shareholders holding less than 5% of the outstanding common stock,
excluding directors and officers), computed by reference to the average
high and low prices of such stock, as of March 3, 1999, was $474,321,000.
The number of shares outstanding of the registrant's Common Stock,
$1.00 Par Value, was 39,320,326 at March 3, 1999.
DOCUMENTS INCORPORATED BY REFERENCE
Incorporated Document Location in Form 10-K
Portions of 1998 Annual Report of Shareholders Parts I and II
Portions of Proxy Statement dated March 30, 1999 Part III
PART I
ITEM 1. BUSINESS.
General
Ryan's Family Steak Houses, Inc., the Registrant (together with its
subsidiaries referred to hereafter as the "Company"), is a South
Carolina corporation that operates a chain of restaurants located
principally in the southern and midwestern United States. At March 3,
1999, 280 Company-owned and 24 franchised Ryan's Family Steakhouse
restaurants (restaurants using the Ryan's Family Steakhouse format are
referred to hereafter as "Ryan's" or "Ryan's restaurant") were in
operation. System-wide sales, which include sales by franchised
restaurants, were approximately $675 million and $636 million in 1998
and 1997, respectively. Sales by Company-owned restaurants amounted
to approximately $637 million in 1998 and $599 million in 1997. The
Company, headquartered in Greer, South Carolina, was organized in
1977, opened its first restaurant in 1978 and completed its initial
public offering in 1982.
The following table indicates the number of Company-owned
restaurants opened each year, net of closings, and the total number of
Company-owned restaurants open at each year-end during the 5-year
period ending December 30, 1998:
Restaurant Total Open
Year Openings, Net at Year-End
1994 18 212
1995 19 231
1996 30 261
1997 9 270
1998 10 280
Restaurant Operations
General. A Ryan's restaurant is a family-oriented restaurant
serving a wide variety of foods from its Mega Barr as well as
traditional grilled entrees, such as charbroiled USDA Choice steaks,
hamburgers, chicken and seafood. The Mega Barr includes fresh and pre-
made salad items, soups, cheeses, a variety of hot meats and
vegetables, and hot yeast rolls prepared and baked daily on site. All
entree purchases include a trip to a bakery bar. Bakery bars feature
hot and fresh-from-the-oven cookies, brownies and other bakery
products as well as various dessert selections, such as ice cream,
frozen yogurt, fresh fruit, cakes, cobblers and several dessert
toppings. All Ryan's also offer a variety of non-alcoholic beverages.
All restaurants have their Mega Barsr in a scatter bar format. This
format breaks the Mega Barr into five island bars for easier customer
access and more food variety.
Most Ryan's are open seven days a week. Some new restaurants are
closed on Mondays for their first two to three months of operation.
Typical hours of operation are 11:00 a.m. to 9:30 p.m. Sunday through
Thursday and 11:00 a.m. to 10:30 p.m. Friday and Saturday. The
average customer count per restaurant during 1998 was approximately
7,000 per week, and the average meal price (per person) was $6.44
(including beverage). Management believes that the average table
turns over every 30 to 45 minutes.
Each Company-owned Ryan's is located in a free-standing masonry
building that may range in size from approximately 10,000 to 11,500
square feet. The interior of most restaurants contains two or three
dining rooms, seating approximately 300 to 500 persons in total, an
area where customers both order and pay for their meals and a kitchen.
The focal points of the main dining room are the centrally located
scatter bars (referred to in the restaurants as the Mega Barr) and
bakery bar. The parking lots at the restaurants can vary in size,
with available parking ranging from 125 to 200 cars.
Restaurant Management and Supervision. The Company emphasizes
standardized operating and control systems together with comprehensive
recruiting and training programs in order to maintain food and service
quality. In each Ryan's restaurant, the management team typically
consists of a general manager or operating partner (see third
succeeding paragraph); a manager; an assistant manager; and an
associate manager. Management personnel begin employment at the
manager trainee level and complete a formal five-week training program
at the Company's management training center in Greer, South Carolina,
prior to being placed in assistant manager positions.
Each restaurant management team reports to an area supervisor.
Area supervisors normally oversee the operations of four to eight
restaurants and report to one of eight regional directors, a position
that may be at the Vice President level and, in any case, reports to
the Vice President-Operations. Communication and support from all
corporate office departments are designed to assist the area
supervisors and regional directors to respond promptly to local
concerns.
All regional directors, area supervisors, general managers,
operating partners and managers participate in incentive bonus
programs. Bonuses paid to general managers and managers are based on
the monthly sales volume of their individual restaurant with
deductions for excess spending in key expense items, such as food
cost, payroll and cash shortages. The bonus program for area
supervisors and regional directors is based principally upon same-
store sales, profitability, "hidden shopper" (service feedback) scores
and certain qualitative factors.
In 1997, an Operating Partner Program was initiated in order to
provide general managers with an additional career path and an
opportunity to share in the profitability of their stores. After
being selected and upon a $10,000 investment in Ryan's common stock, a
general manager is promoted to Operating Partner and then shares in
both the profit improvement and overall profitability of the
restaurant. At December 30, 1998, Operating Partners were managing
102 restaurants. The Company's goal is to have approximately 150
Operating Partners in place by December 1999.
Advertising. The Company has not relied extensively on
advertising, expending less than one percent of restaurant sales
during each of the years 1998, 1997, and 1996. In 1998, the Company
ran advertising campaigns, consisting of both television and radio, in
13 markets covering 92 Ryan's. Newspaper ads and billboards were used
in certain other markets. Management believes that the restaurant
industry has become increasingly competitive over the past several
years and that advertising will become an important factor in the
development and retention of market share. Based on current budgets,
media campaigns are planned in 1999 for markets covering approximately
50% of all Company-owned Ryan's. Local store marketing will be used
in certain smaller markets
Expansion of Company-Owned Restaurants
General. At March 3, 1999, the Company owned and operated 280
Ryan's restaurants. During the remainder of 1999, 9 additional Ryan's
are scheduled to open, resulting in 10 new Company-owned Ryan's in
1999. Target sites for these new restaurants are spread throughout
the Company's current 22-state operating area. The Company also plans
to relocate 6 restaurants during 1999. Management defines a
relocation as a restaurant opened within 18 months after closing
another restaurant in the same marketing area. A relocation
represents a redeployment of assets within a market. The following
table summarizes the Company's openings, closings and relocations
during 1998, 1997 and 1996:
1998 1997 1996
Beginning of year 270 261 231
New restaurants 11 15 30
Relocations - opened 4 1 -
Closings - (6) -
Relocations - closed (5) (1) -
End of year 280 270 261
Site Selection. The Company employs a real estate manager and uses
independent real estate brokers to locate potential new sites and to
perform all preliminary site investigative work. Final approval is
made by the Company's executive management. Important factors in site
selection include population, demographics, proximity to both business
and residential areas, traffic count and site accessibility. In
addition, site selection for a Ryan's restaurant is also influenced by
the general proximity to other Ryan's in order to improve the
efficiency of the Company's area supervisors, advertising programs and
distribution network.
Construction. The Company presently acts as the general contractor
in the construction of substantially all of its restaurants.
Occasionally when determined to be cost beneficial, the Company
engages non-affiliated general contractors to construct restaurants on
a lump-sum contract basis. The Company requires performance and
payment bonds on certain building and site work contracts, depending
on the size and reputation of, as well as Company history with, the
contractor. The Company closely supervises and monitors the progress
of all construction projects. New restaurants are generally completed
approximately three to four months from the commencement of
construction. The average cost of a new Ryan's (land, building and
equipment) constructed in 1998 was approximately $2.3 million.
Restaurant Opening. When a new Ryan's is opened, all restaurant
management positions are staffed with personnel who have had prior
management experience in another of the Company's restaurants. Prior
to opening, all staff personnel at the new location undergo one week
of intensive training conducted by a new store opening team.
Franchising. While the Company has granted Ryan's franchises in
the past, management has not actively pursued new franchisees in
recent years in order to concentrate on the operation and development
of Company-owned restaurants. New franchises may be awarded to the
existing franchisee or to new franchisees proposing to operate in
regions significantly outside of the Company's existing or
contemplated operating areas.
The following table indicates the number of franchised restaurants
opened each year, net of closings, and the total number of franchised
restaurants open at each year-end during the 5-year period ending
December 30, 1998:
Net
Restaurants Total Open
Year Opened (Closed) at Year-End
1994 (4) 30
1995 (4) 26
1996 (1) 25
1997 - 25
1998 1 26
At December 30, 1998, the Company's sole franchise agreement was
with Family Steak Houses of Florida, Inc. ("Family") which, at that
date, operated 26 Ryan's in central and northern Florida. The present
franchise agreement expires in 2010 with a 10-year renewal option.
The agreement provides that the Company will furnish Family all the
necessary information to construct, equip, manage and operate a
restaurant under the Ryan's Family Steakhouse name or derivative
thereof. The agreement generally provides for the construction and
operation of one restaurant with exclusive territorial protection
within a one to five mile radius. The franchise agreement with Family
provides for exclusive territorial protection in certain Florida
counties as long as Family operates a specified number of Ryan's
restaurants. At December 30, 1998, Family was required to have 26
restaurants in operation and was therefore in compliance at that date.
Under the current agreement, the number of Ryan's required to be
operated by Family increases to 27 by year-end 1999 and then increases
by one restaurant per year thereafter.
At March 3, 1999, Family operated 24 Ryan's, having closed two
restaurants after December 30, 1998. The Company has been holding
discussions with Family regarding Family's plans for 1999 and onward.
Such discussions may lead to a change in the number of Ryan's required
to be operated by Family.
Sources and Availability of Raw Materials
The Company has a centralized purchasing program which is designed
to ensure uniform product quality in all restaurants as well as
reduced food, beverage and supply costs. The Company's management
establishes contracts for approximately 90% of its food and other
products from a variety of major suppliers under competitive terms.
Purchases under these contracts are delivered to one of three
warehouses operated by the Company's principal distributor and then
delivered to the restaurants by the distributor. The remaining 10% of
the Company's products (principally fresh produce) are purchased
locally by restaurant management. The beef used by the Company is
obtained from four western suppliers based on price and availability
of product. To ensure against interruption in the flow of beef
supplies due to unforeseen or catastrophic events and to take
advantage of favorable purchasing opportunities, the Company
stockpiles four to eight weeks supply of sirloin at the distributor.
The Company believes that satisfactory sources of supply are generally
available for all the items regularly used.
Working Capital Requirements
Working capital requirements for continuing operations are not
significant. The Company's restaurant sales are primarily derived
from cash sales, and inventories are purchased on credit and are
rapidly converted to cash. Therefore, the Company does not maintain
significant receivables or inventories.
Trademarks and Service Marks
The Company has registered various trademarks and service marks,
including "Ryan's Family Steak Houser" and "Mega Barr", and their
related designs with the United States Patent and Trademark Office.
All trademarks and service marks have stated expiration dates ranging
from December 2001 to October 2008. However, they are renewable for
an unlimited number of additional 10-year terms at the option of the
Company.
Competition
The food service business is highly competitive and is often
impacted by changes in the taste and eating habits of the public,
economic conditions affecting spending habits, population and traffic
patterns. The principal bases of competition in the industry are the
quality and price of the food products offered. Location, speed of
service and attractiveness of facilities are also important factors.
Ryan's restaurants are in competition with many units operated or
franchised by national, regional and local restaurant companies that
offer steak or buffet-style meals. Although the Company believes that
its price/value to its customers places it in an excellent competitive
posture, it should be noted that during the last few years many
operators have upgraded their restaurants to more closely match the
Ryan's format and particularly the Mega Barr. The Company is also in
competition with many specialty food outlets and other food vendors.
Seasonality
The Company's operations are subject to some seasonal fluctuations.
Average sales per restaurant run approximately 5% less than the
company-wide annual per restaurant average during the first and fourth
quarters and 5% more than the company-wide annual average during the
second and third quarters.
Research
The Company maintains ongoing research programs relating to the
development of new products and evaluation of marketing activities.
The Company's management staff includes a Director of Research and
Development, whose responsibilities include enhancing and updating the
Mega Barr and entree selections. While research and development
activities are important to the Company, past expenditures have not
been and future expenditures are not expected to be material to the
Company's financial results.
Customers
No material part of the Company's business is dependent upon a
single customer or a specific group of customers.
Regulation
The Company is subject to licensing and regulation by health,
sanitation, safety and fire agencies in the state and/or
municipalities in which its restaurants are located. The Company's
restaurants are constructed to meet local and state building code
requirements and are operated in material accordance with state and
local regulations relating to the preparation and service of food.
The Company has not encountered any difficulties or failures in
obtaining the required licenses or approvals that would significantly
delay or prevent the opening of new restaurants. More stringent and
varied requirements of local and state governmental bodies could delay
or prevent development of new restaurants in particular locations.
The Company is subject to the Fair Labor Standards Act which
regulates matters such as minimum wage requirements, overtime and
other working conditions, along with the Americans with Disabilities
Act and various family leave mandates. A significant number of the
Company's restaurant team members are paid at the Federal minimum
wage, and, accordingly, legislated changes to the minimum wage affect
the Company's payroll costs. The most recent change in the Federal
minimum wage occurred on September 1, 1997 when the wage rate
increased from $4.75 per hour to $5.15. The $2.13 rate for servers
was not affected. Although no additional increases have been
legislated, the possibility is mentioned frequently in various
political discussions. The Company has in the past typically been
able to increase menu prices to cover most of the payroll rate
increases.
Environmental Matters
While the Company is not aware of any federal, state or local
environmental regulations which will materially affect its operations
or competitive position or result in material capital expenditures, it
cannot predict the impact of possible future legislation or regulation
on its operations.
Employees
At March 3, 1999, the Company employed approximately 18,000
persons, of whom approximately 17,700 were restaurant personnel. The
Company strives to maintain low turnover by offering all full-time
employees a very competitive benefit package, which includes life and
health insurance, vacation pay and a defined contribution retirement
plan. Part-time employees who work at least 25 hours per week are
eligible to participate in the Company's life and health insurance
plans and also receive vacation pay.
None of the Company's employees are represented by a union. The
Company has experienced no work stoppages attributable to labor
disputes and considers its employee relations to be good.
Information as to Classes of Similar Products or Services
The Company operates in only one industry segment. All significant
revenues and pre-tax earnings relate to retail sales of food to the
general public through either Company-operated or franchised
restaurants. At March 3, 1999, the Company had no operations outside
the continental United States.
Information regarding the Company's restaurant sales and assets is
included in the Company's financial statements, which are incorporated
by reference into Part II, Item 8 of this Form 10-K.
ITEM 2. PROPERTIES.
The Company owns substantially all of its restaurant properties,
each of which is a free-standing masonry building that covers
approximately 10,000 to 11,500 square feet, with seating for
approximately 300 to 500 persons and parking for approximately 125 to
200 cars on sites of approximately 75,000 to 130,000 square feet. At
March 3, 1999, all restaurant sites, except 13 properties under land
leases, were owned by the Company.
A listing of the number of Ryan's restaurant locations by state as
of December 30, 1998 appears on page 5 of the Company's 1998 Annual
Report to Shareholders and is incorporated herein by reference. A
detailed listing of Ryan's restaurant locations may be obtained
without charge by writing to the Company's principal executive
offices, Attention: Corporate Secretary.
The Company's corporate offices consist of two office buildings
(30,000 square feet and 16,000 square feet) and a 10,000 square foot
warehouse facility, all of which are located in Greer, SC. The office
buildings (land and building) are owned by the Company. The warehouse
facility is leased with an initial term ending in October 2000 and
annual renewal terms ending in October 2005.
From time to time, the Company offers for sale excess land that was
acquired in connection with its restaurant properties. Also, at March
3, 1999, five closed restaurant properties were offered for sale. The
Company believes that the eventual disposition or non-disposition of
all such properties will not materially affect its business or
financial condition, taken as a whole.
ITEM 3. LEGAL PROCEEDINGS.
From time to time, the Company is a defendant in legal actions
arising in the normal course of its business. Based on those legal
actions currently known to its management, the Company believes that,
as a result of its legal defenses and insurance arrangements, none of
these actions, if decided adversely, would have a material effect on
its business or financial condition, taken as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The information regarding trading of the Company's common stock,
quarterly market prices and dividends appears under "Common Stock
Data" and "Market Price of Common Stock" on page 27 of the Company's
1998 Annual Report to Shareholders and is incorporated herein by
reference.
At March 3, 1999, the Company's common stock was held by
approximately 13,000 stockholders of record through nominee or street
name accounts with brokers.
The Company is party to a long-term credit agreement, expiring in
June 2003, with a group of banks that contains, among other
provisions, requirements for the Company to maintain a minimum net
worth level and certain financial ratios. While not specifically
prohibiting the payment of dividends, the aforementioned provisions
represent a limitation on the Company's ability to do so. At December
30, 1998, the Company exceeded the most restrictive minimum net worth
covenant by approximately $25.4 million.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the last five years is included in the
"Five-Year Financial Summary" on page 15 of the Company's 1998 Annual
Report to Shareholders and 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" is included on pages 8 through 14 of the
Company's 1998 Annual Report to Shareholders and is incorporated
herein by reference.
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company's exposure to market risk relates primarily to changes
in interest rates. Foreign currencies are not used in the Company's
operations, and commodities used in the preparation of food at the
Company's restaurants are not under purchase contract for more than
one year in advance. All of the Company's outstanding long-term debt
is variable rate debt. The Company uses an interest rate swap
agreement to reduce its exposure to interest rate fluctuations. The
swap agreement, which effectively converts $25 million of the variable
rate debt to a fixed-rate obligation, runs through October 2000 and
can be terminated by the issuing counterparty, a major regional bank,
at any time. The Company does not enter into financial instrument
agreements for trading or speculative purposes.
The following table presents information regarding the Company's
outstanding long-debt and interest rate swap agreement as of December
30, 1998. For the long-term debt, the table presents the
contractually required principal repayments and their related average
interest rate by maturity date. Average interest rate is based on the
three-month London Interbank Offered Rate ("LIBOR") as of December 30,
1988 plus the contractual margin. For the interest rate swap
agreement, the table presents the notional amount, the contractual
average pay rate and the average receive rate, which is based on three-
month LIBOR as of December 30, 1998. At December 30, 1998, the fair
value of the agreement was $302,000 unfavorable to the Company as
determined by the issuing counterparty using its internal valuation
models and assumptions and available market data.
As of December 30, 1998
Expected Maturity Date
There- Fair
<TABLE>
<C> <C> <C> <C> <C> <C> <C> <C>
1999 2000 2001 2002 2003 after Total Value
Liabilities
(in millions)
Long-term debt -
Variable rate $11.6 23.3 23.3 23.3 11.5 - 93.0 93.0
Average interest
rate 5.7% 5.8% 5.8% 5.8% 5.8% - 5.8%
Interest Rate
Derivatives
(in millions)
Interest rate swap
- variable to fixed
Notional amount $25.0 25.0 - - - - 25.0 (0.3)
Average pay rate 5.5% 5.5% - - - - 5.5%
Average receive
rate 5.1% 5.1% - - - - 5.1%
</TABLE>
The Company is exposed to credit loss in the event of
nonperformance by the issuing counterparty to the interest rate swap
agreement. However, as noted above, the counterparty is a major
regional bank and, accordingly, the Company has not required any
collateralization and does not anticipate any nonperformance issues
during the term of the agreement.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company's financial statements, unaudited quarterly financial
information and the independent auditors' report are included on pages
16 through 25 of the Company's 1998 Annual Report to Shareholders and
are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required under this item is incorporated herein by
reference to the Ryan's Family Steak Houses, Inc. Proxy Statement for
the Annual Meeting of Shareholders to be held May 5, 1999 under the
headings "Election of Directors", "Executive Officers" and "Section
16(a) Beneficial Ownership Reporting Compliance."
ITEM 11.EXECUTIVE COMPENSATION.
The information required under this item is incorporated herein by
reference to the Ryan's Family Steak Houses, Inc. Proxy Statement for
the Annual Meeting of Shareholders to be held May 5, 1999 under the
headings "Election of Directors - Compensation of Directors",
"Compensation Committee Interlocks, Insider Participation and Related
Party Transactions", "Executive Compensation and Other Information",
"Report of the Compensation Committee" and "Performance Graph."
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The information required under this item is incorporated herein by
reference to the Ryan's Family Steak Houses, Inc. Proxy Statement for
the Annual Meeting of Shareholders to be held May 5, 1999 under the
headings "Election of Directors", "Certain Beneficial Owners of Common
Stock" and "Executive Officers."
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required under this item is incorporated herein by
reference to the Ryan's Family Steak Houses, Inc. Proxy Statement for
the Annual Meeting of Shareholders to be held May 5, 1999 under the
headings "Compensation Committee Interlocks, Insider Participation and
Related Party Transactions" and "Executive Compensation and Other
Information - Deferred Compensation - Salary Continuation Agreement."
PART IV
ITEM 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-
K.
(a)1-2Financial statements filed as part of this Form 10-K are
listed in the "Index to Financial Statements", at page 16.
(a)3 Exhibits (numbered in accordance with Item 601 of Regulation
S-K):
Exhibit # Description
3.1 Articles of Incorporation of the Company,
as amended through April 24, 1986: Incorporated by
reference to Exhibit 4(a) to the Registration
Statement of the Company filed with the SEC on Form S-
3 (Commission file no. 33-7245) (the "Form S-3").
3.1.1 Articles of Amendment to the Articles of
Incorporation, dated April 22, 1987: Incorporated by
reference to Exhibit 3.2 to the Annual Report on Form
10-K for the period ended January 1, 1992 (Commission
file no. 0-10943) (the "1991 10-K").
3.1.2 Articles of Amendment to the Articles of
Incorporation, dated May 25, 1989: Incorporated by
reference to Exhibit 4.3 to the Registration
Statement of the Company filed with the SEC on Form S-
8 (Commission file no. 33-53834).
3.2 Bylaws of the Company: Incorporated by
reference to Exhibit 4(b) to the Form S-3.
3.2.1 Amendment to By-Laws of the Company, dated
October 25, 1990: Incorporated by reference to
Exhibit 3.3 to the 1991 10-K.
3.2.2 Amendment to By-Laws of the Company, dated
January 28, 1999.
4.1 Specimen of Company common stock
certificate: Incorporated by reference to Exhibit
4.1 to the 1991 10-K.
4.2 See Exhibits 3.1, 3.1.1, 3.1.2, 3.2, 3.2.1
and 3.2.2.
4.3 See Exhibit 10.24.
*10.1 Ryan's Family Steak Houses, Inc. Incentive
Stock Option Plan: Incorporated by reference to the
Registration Statement of the Company filed with the
SEC on Form S-8 (Commission file no. 2-83987).
*10.2 Ryan's Family Steak Houses, Inc. 1987
Stock Option Plan: Incorporated by reference to
Exhibit 4 to the Registration Statement of the
Company filed with the SEC on Form S-8 (Commission
file no. 33-15924).
*10.3 Ryan's Family Steak Houses, Inc. 1991
Stock Option Plan: Incorporated by reference to
Exhibit 4.4 to the Registration Statement of the
Company filed with the SEC on Form S-8 (Commission
file no. 33-53834).
*10.4 Ryan's Family Steak Houses, Inc. 1998
Stock Option Plan: Incorporated by reference to
Exhibit 99.1 to the Registration Statement of the
Company filed with the SEC on Form S-8 (Commission
file no. 333-67165).
*10.5 Ryan's Employee Retirement Savings Plan,
dated March 1, 1992: Incorporated by reference to
Exhibit 10.4 to the 1991 10-K.
*10.6 Salary Continuation Agreement, dated April
22, 1987, between the Company and Alvin A. McCall,
Jr.; as amended on October 26, 1989: Incorporated by
reference to Exhibit 10.5 to the 1991 10-K.
*10.7 Deferred Compensation - Salary
Continuation Agreement, dated April 22, 1987, between
the Company and Charles D. Way: Incorporated by
reference to Exhibit 10.6 to the 1991 10-K.
*10.8 Agreement and Plan of Restructuring:
Incorporated by reference to Exhibit A to the Proxy
Statement of the Company, dated March 25, 1993, filed
with respect to the Annual Meeting of Shareholders to
be held on April 28, 1993 (Commission file no. 0-
10943).
*10.9 Split Dollar Agreement by and between the
Company and Charles D. Way dated September 1, 1993:
Incorporated by reference to Exhibit 10.8 to the
Annual Report on Form 10-K for the period ended
December 29, 1993 (Commission file no. 0-10943) (the
"1993 10-K").
*10.10 Split Dollar Agreement by and between the
Company and G. Edwin McCranie dated November 12,
1993: Incorporated by reference to Exhibit 10.9 to
the 1993 10-K.
*10.11 Split Dollar Agreement by and between the
Company and John C. Jamison dated November 12, 1993:
Incorporated by reference to Exhibit 10.10 to the
1993 10-K.
*10.12 Split Dollar Agreement by and between the
Company and James R. Hart dated August 8, 1993:
Incorporated by reference to Exhibit 10.11 to the
1993 10-K.
*10.13 Split Dollar Agreement by and between the
Company and Fred T. Grant, Jr. dated November 12,
1993: Incorporated by reference to Exhibit 10.12 to
the 1993 10-K.
*10.14 Split Dollar Agreement by and between the
Company and Alan E. Shaw dated November 12, 1993:
Incorporated by reference to Exhibit 10.13 to the
1993 10-K.
*10.15 Split Dollar Agreement by and between the
Company and Morgan A. Graham dated November 12, 1993:
Incorporated by reference to Exhibit 10.15 to the
Annual Report on Form 10-K for the period ended
December 31, 1997 (Commission file no. 0-10943) (the
"1997 10-K").
*10.16 Split Dollar Agreement by and between the
Company and Janet J. Gleitz dated November 12, 1993:
Incorporated by reference to Exhibit 10.16 to the
1997 10-K.
*10.17 Split Dollar Agreement by and between the
Company and Ilene T. Turbow dated November 12, 1995:
Incorporated by reference to Exhibit 10.17 to the
1997 10-K.
*10.18 Deferred Compensation Plan by and between
the Company and Morgan A. Graham dated November 1,
1997: Incorporated by reference to Exhibit 10.18 to
the 1997 10-K.
*10.19 Deferred Compensation Plan by and between
the Company and Janet J. Gleitz dated November 1,
1997: Incorporated by reference to Exhibit 10.19 to
the 1997 10-K.
*10.20 Deferred Compensation Plan by and between
the Company and Ilene T. Turbow dated November 1,
1997: Incorporated by reference to Exhibit 10.20 to
the 1997 10-K.
*10.21 Executive Bonus Plan, commencing in fiscal
year 1997: Incorporated by reference to Exhibit
10.15 to the Annual Report on Form 10-K for the
period ended January 1, 1997 (Commission file no. 0-
10943) (the "1996 10-K").
*10.22 Executive Bonus Plan, commencing in fiscal
year 1998: Incorporated by reference to Exhibit
10.23 to the 1997 10-K.
10.23 Agreement between Ryan's Properties, Inc.
and Family Steak Houses of Florida, Inc. dated July
11, 1994 and as amended on October 17, 1994:
Incorporated by reference to Exhibit 10.15 to the
Annual Report on Form 10-K for the period ended
December 28, 1994 (Commission file no. 0-10943).
10.24 Ryan's Family Steak Houses, Inc. and
Wachovia Bank of North Carolina, N.A., as Rights
Agent, Shareholder Rights Agreement dated as of
January 26, 1995: Incorporated by reference to
Exhibit 2 to the report on Form 8-K filed with the
Commission on February 9, 1995 (Commission file no. 0-
10943).
10.25 Credit Agreement dated as of June 5, 1996
among Ryan's Family Steak Houses, Inc., Wachovia Bank
of Georgia, N.A., as Agent, and certain other banks
signatory thereto: Incorporated by reference to
Exhibit 10.18 to the 1996 10-K.
10.251 First Amendment to the Credit Agreement
referred to at Exhibit 10.25, dated as of October 9,
1998.
13.1 Ryan's Family Steak Houses, Inc. 1998
Report to Shareholders (except for those portions
that are expressly incorporated by reference in this
Report on Form 10-K, this exhibit is furnished for
the information of the Commission and is not deemed
to be filed as a part hereof).
21.1 Subsidiaries of the Company.
23.1 Consent of Independent Auditors.
27 Financial Data Schedule (electronic filing
only).
99.1 Ryan's Family Steak Houses, Inc. Proxy
Statement for the Annual Meeting of Shareholders,
dated March 30, 1999.
* This is a management contract or
compensatory plan or arrangement.
(b) On October 5, 1998, November 9, 1998, December 8, 1998,
January 4, 1999, February 8, 1999 and March 8, 1999, the
Company filed reports on Form 8-K regarding sales information
for September 1998, October 1998, November 1998, December
1998, January 1999, and February 1999, respectively.
(c) The response to this portion of Item 14 is submitted as a
separate section of this report.
(d) The response to this portion of Item 14 is submitted as a
separate section of this report.
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.
RYAN'S FAMILY STEAK HOUSES, INC.
March 30, 1999
By:/s/Fred T. Grant, Jr.
Fred T. Grant, Jr.
Vice President - Finance,
Treasurer and Assistant
Secretary (Principal
Financial and Accounting
Officer)
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.
Signature Title Date
/s/Charles D. Way Chairman, President and March 30, 1999
Charles D. Way Chief Executive Officer
/s/G. Edwin McCranie Director and Executive March 30, 1999
G. Edwin McCranie Vice President
/s/James D. Cockman Director March 30, 1999
James D. Cockman
/s/Barry L. Edwards Director March 30, 1999
Barry L. Edwards
/s/Brian S. MacKenzie Director March 30, 1999
Brian S. MacKenzie
/s/Harold K. Roberts, Jr. Director March 30, 1999
Harold K. Roberts, Jr.
/s/James M. Shoemaker, Jr. Director March 30, 1999
James M. Shoemaker, Jr.
/s/Fred T. Grant, Jr. Vice President - Finance, March 30, 1999
Fred T. Grant, Jr. Treasurer and Assistant
Secretary (Principal Financial
and Accounting Officer)
RYAN'S FAMILY STEAK HOUSES, INC.
INDEX TO FINANCIAL STATEMENTS
The following financial statements of the Registrant included in
the Annual Report to Shareholders for the year ended December 30,
1998, are incorporated herein by reference. With the exception of the
pages listed below and other information incorporated in this report
on Form 10-K, the 1998 Annual Report to Shareholders is not deemed
"filed" as part of this report.
Page Reference
in Annual Report
Independent Auditors' Report 25
Consolidated Statements of Earnings 16
Consolidated Balance Sheets 17
Consolidated Statements of Cash Flows 18
Notes to Financial Statements 19-25
All financial statement schedules have been omitted since the
required information is not applicable or the information required is
included in the consolidated financial statements or the notes
thereto.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1998
<PERIOD-END> DEC-30-1998
<CASH> 1,502
<SECURITIES> 0
<RECEIVABLES> 2,908
<ALLOWANCES> 233
<INVENTORY> 4,327
<CURRENT-ASSETS> 13,361
<PP&E> 654,872
<DEPRECIATION> 162,018
<TOTAL-ASSETS> 509,393
<CURRENT-LIABILITIES> 125,027
<BONDS> 81,374
0
0
<COMMON> 39,158
<OTHER-SE> 241,214
<TOTAL-LIABILITY-AND-EQUITY> 509,393
<SALES> 637,003
<TOTAL-REVENUES> 640,084
<CGS> 435,468
<TOTAL-COSTS> 570,293
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,802
<INCOME-PRETAX> 62,989
<INCOME-TAX> 22,669
<INCOME-CONTINUING> 40,320
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,320
<EPS-PRIMARY> 0.95
<EPS-DILUTED> 0.94
</TABLE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Ryan's Family Steak Houses, Inc.:
We consent to incorporation by reference in the Registration
Statement (No. 0-10943) on Form S-8 of Ryan's Family Steak
Houses, Inc. and subsidiaries of our report dated January 20,
1999, relating to the consolidated balance sheets of Ryan's
Family Steak Houses, Inc. as of December 30, 1998 and December
31, 1997, and the related consolidated statements of earnings and
cash flows for each of the years in the three-year period ended
December 30, 1998, which report is incorporated by reference in
the 1998 annual report on Form 10-K of Ryan's Family Steak
Houses, Inc.
/s/KPMG Peat Marwick LLP
Greenville, South Carolina
March 30, 1999
Exhibit 21.1
RYAN'S FAMILY STEAK HOUSES, INC.
SUBSIDIARIES OF THE COMPANY
AS OF MARCH 30, 1999
Jurisdiction of % of Stock
Name of Subsidiary Incorporation Owned by Parent Status
1.Big R Procurement
Company, Inc. DE 100% Active
2.Ryan's Family Steak
Houses East, Inc. DE 100% Active
3.Ryan's Properties, Inc. DE 100% Active
4.Ryan's Capital Holding
Corporation DE 100% Inactive
Exhibit 10.251
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this
"Amendment") is made as of the 9th day of October, 1998, by and
among RYAN'S FAMILY STEAK HOUSES, INC., a South Carolina
corporation (the "Borrower"), WACHOVIA BANK, N.A. (formerly known
as Wachovia Bank of Georgia, N.A.), as Agent, SUNTRUST BANK,
ATLANTA, THE BANK OF TOKYO-MITSUBISHI, LTD., ATLANTA AGENCY and
WACHOVIA BANK, N.A. (formerly known as Wachovia Bank of South
Carolina, N.A.), as a Bank (collectively referred to herein as
the "Banks").
R E C I T A L S:
The Borrower, the Agent, and the Banks have entered
into a certain Credit Agreement dated June 5, 1996 (the "Credit
Agreement"). Capitalized terms used in this Amendment which are
not otherwise defined in this Amendment shall have the respective
meanings assigned to them in the Credit Agreement.
The Borrower has requested the Agent and the Banks to
amend the Credit Agreement upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the Recitals and
the mutual promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower, the Agent and the Banks,
intending to be legally bound hereby, agree as follows:
SECTION 1. Recitals. The Recitals are incorporated
herein by reference and shall be deemed to be a part of this
Amendment.
SECTION 2. Amendments. The Credit Agreement is hereby
amended as set forth in this Section 2.
SECTION 2.1. Amendment to Section 1.01. The following
definitions are hereby added to Section 1.01 of the Credit
Agreement:
"Y2K Plan" has the meaning set forth in Section
4.19.
"Year 2000 Compliant and Ready" as used herein
means that: (A) the Borrower's and its Subsidiaries'
hardware and software systems with respect to the
operation of its business and its general business plan
will: (i) handle date information involving any and all
dates before, during and/or after January 1, 2000,
including accepting input, providing output and
performing date calculations in whole or in part; (ii)
operate, accurately without interruption on and in
respect of any and all dates before, during and/or
after January 1, 2000 and without any change in
performance, and (iii) store and provide date input
information without creating any ambiguity as to the
century; and (B) the Borrower has developed alternative
plans to ensure business continuity in the event of the
failure of any or all of items (i) through (iii) above.
2.02 Addition of Section 4.19. A new section, Section
4.19, is hereby added to the Credit Agreement to read in its
entirety as follows:
The Borrower has developed and has delivered to the
Agent and Banks a comprehensive plan (the "Y2K Plan"
which term includes any and all existing and future
amendments) for insuring that the Borrower's and its
Subsidiaries' software and hardware systems which
impact or affect in any way the business operations of
the Borrower and its Subsidiaries will be Year 2000
Compliant and Ready. The Borrower and its Subsidiaries
has met the Y2K Plan milestones such that all hardware
and software systems will be Year 2000 Compliant and
Ready (including all internal and external testing) in
accordance with the Y2K Plan.
2.03 Amendment to Section 5.01(j) and Addition of
Sections 5.01(k), (l) and (m). Section 5.01 of the Credit
Agreement is hereby amended to amend and restate subsection (j)
and add new subsections (k), (l) and (m) to read as follows:
(j) simultaneously with the delivery of each set
of annual and quarterly financial statements referred to in
paragraphs (a) and (b) above, a statement of its Chief Executive
Officer or Chief Financial Officer to the effect that nothing has
come to their attention to cause them to believe that the Y2K
Plan milestones have not been met in a manner such that the
Borrower's and its Subsidiaries' hardware and software systems
will not be Year 2000 Compliant and Ready in accordance with the
Y2K Plan;
(k) within 5 Domestic Business Days after the
Borrower becomes aware of any deviations from the Y2K Plan which
would cause compliance with the Y2K Plan to be delayed beyond or
not achieved on or before September 30, 1999, a statement of its
Chief Executive Officer or Chief Financial Officer setting forth
the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(l) promptly upon the receipt thereof, a copy of
any third party assessments of the Borrower's Y2K Plan together
with any recommendations made by such third party with respect to
Year 2000 compliance; and
(m) from time to time such additional information
regarding the financial position or business of the Borrower and
its Subsidiaries as the Agent, at the request of any Bank, may
reasonably request.
2.04 Addition of Section 5.22. A new section, Section
5.22, is hereby added to the Credit Agreement to read in its
entirety as follows:
"SECTION 5.22. Y2K Plan. The Borrower will
meet the milestones contained in the Y2K Plan in all
material respects and will have all hardware and
software systems Year 2000 Compliant and Ready
(including all internal and external testing) on or
before September 30, 1999."
2.05 Amendment and Restatement of Section 5.03.
Section 5.03 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"SECTION 5.03. Ratio of Consolidated Funded
Debt to Total Consolidated Capitalization. The ratio
of Consolidated Funded Debt to Total Consolidated
Capitalization will at all times be less than 0.45 to
1.00."
2.06 Amendment and Restatement of Section 5.04.
Section 5.04 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"SECTION 5.04. Minimum Consolidated Net
Worth. Consolidated Net Worth will at no time be less
than $255,000,000."
2.07 Amendment and Restatement of Section 2.05(a).
Section 2.05(a) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"SECTION 2.05. Interest Rates. (a)
"Applicable Margin" means: (1) prior to June 30, 1999,
(i) for any Base Rate Loan, 0%; and (ii) for any Euro-
Dollar Loan, 0.50%; and (2) on June 30, 1999 and at all
times thereafter, (i) for any Base Rate Loan, 0.25%;
and (ii) for any Euro-Dollar Loan, 0.75%.
SECTION 3. Conditions to Effectiveness. The
effectiveness of this Amendment and the obligations of the Banks
hereunder are subject to the following conditions, unless the
Required Banks waive such conditions:
(a) receipt by the Agent from each of the parties
hereto of a duly executed counterpart of this Amendment
signed by such party; and
(b) the fact that the representations and
warranties of the Borrower contained in Section 5 of this
Amendment shall be true on and as of the date hereof.
SECTION 4. No Other Amendment. Except for the
amendments set forth above, the text of the Credit Agreement
shall remain unchanged and in full force and effect. This
Amendment is not intended to effect, nor shall it be construed
as, a novation. The Credit Agreement and this Amendment shall be
construed together as a single agreement. Nothing herein
contained shall waive, annul, vary or affect any provision,
condition, covenant or agreement contained in the Credit
Agreement, except as herein amended, nor affect nor impair any
rights, powers or remedies under the Credit Agreement as hereby
amended. The Banks and the Agent do hereby reserve all of their
rights and remedies against all parties who may be or may
hereafter become secondarily liable for the repayment of the
Notes. The Borrower promises and agrees to perform all of the
requirements, conditions, agreements and obligations under the
terms of the Credit Agreement, as heretofore and hereby amended,
the Credit Agreement, as amended, being hereby ratified and
affirmed. The Borrower hereby expressly agrees that the Credit
Agreement, as amended, is in full force and effect.
SECTION 5. Representations and Warranties. The
Borrower hereby represents and warrants to each of the Banks as
follows:
(a) No Default or Event of Default, nor any act,
event, condition or circumstance which with the passage of time
or the giving of notice, or both, would constitute an Event of
Default, under the Credit Agreement or any other Loan Document
has occurred and is continuing unwaived by the Banks on the date
hereof.
(b) The Borrower has the power and authority to enter
into this Amendment and to do all acts and things as are required
or contemplated hereunder, or thereunder, to be done, observed
and performed by it.
(c) This Amendment has been duly authorized, validly
executed and delivered by one or more authorized officers of the
Borrower and constitute legal, valid and binding obligations of
the Borrower enforceable against it in accordance with their
terms, provided that such enforceability is subject to general
principles of equity.
(d) The execution and delivery of this Amendment and
the Borrower's performance hereunder and thereunder do not and
will not require the consent or approval of any regulatory
authority or governmental authority or agency having jurisdiction
over the Borrower, nor be in contravention of or in conflict with
the articles of incorporation or bylaws of the Borrower, or the
provision of any statute, or any judgment, order or indenture,
instrument, agreement or undertaking, to which the Borrower is
party or by which the Borrower's assets or properties are or may
become bound.
SECTION 6. Counterparts. This Amendment may be
executed in multiple counterparts, each of which shall be deemed
to be an original and all of which, taken together, shall
constitute one and the same agreement.
SECTION 7. Governing Law. This Amendment shall be
considered in accordance with and governed by the laws of the
State of Georgia.
SECTION 8. Up-front Fee. On the date of this
Amendment, the Borrower shall pay to the Agent for the ratable
account of each Bank an up-front fee equal to the product of: (i)
such Bank's Commitment on the date of this Amendment, times (ii)
0.03%.
IN WITNESS WHEREOF, the parties hereto have executed
and delivered, or have caused their respective duly authorized
officers or representatives to execute and deliver, this
Amendment as of the day and year first above written.
BORROWER:
RYAN'S FAMILY STEAK HOUSES, INC.
By:________________________________________
Title:______________________________________
WACHOVIA BANK, N.A. (formerly known as Wachovia Bank of Georgia, N.A.),
as Agent
By:________________________________________
Title:_____________________________________
WACHOVIA BANK, N.A. (formerly known as Wachovia Bank of South Carolina,
N.A.), as a Bank
By:________________________________________
Title:______________________________________
SUNTRUST BANK, ATLANTA
By:________________________________________
Title:_______________________________________
By:________________________________________
Title:_______________________________________
THE BANK OF TOKYO-MITSUBISHI, LTD., ATLANTA AGENCY
By:________________________________________
Title:______________________________________
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this
"Amendment") is made as of the 9th day of October, 1998, by and
among RYAN'S FAMILY STEAK HOUSES, INC., a South Carolina
corporation (the "Borrower"), WACHOVIA BANK, N.A. (formerly known
as Wachovia Bank of Georgia, N.A.), as Agent, SUNTRUST BANK,
ATLANTA, THE BANK OF TOKYO-MITSUBISHI, LTD., ATLANTA AGENCY and
WACHOVIA BANK, N.A. (formerly known as Wachovia Bank of South
Carolina, N.A.), as a Bank (collectively referred to herein as
the "Banks").
R E C I T A L S:
The Borrower, the Agent, and the Banks have entered
into a certain Credit Agreement dated June 5, 1996 (the "Credit
Agreement"). Capitalized terms used in this Amendment which are
not otherwise defined in this Amendment shall have the respective
meanings assigned to them in the Credit Agreement.
The Borrower has requested the Agent and the Banks to
amend the Credit Agreement upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the Recitals and
the mutual promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower, the Agent and the Banks,
intending to be legally bound hereby, agree as follows:
SECTION 1. Recitals. The Recitals are incorporated
herein by reference and shall be deemed to be a part of this
Amendment.
SECTION 2. Amendments. The Credit Agreement is hereby
amended as set forth in this Section 2.
SECTION 2.1. Amendment to Section 1.01. The following
definitions are hereby added to Section 1.01 of the Credit
Agreement:
"Y2K Plan" has the meaning set forth in Section
4.19.
"Year 2000 Compliant and Ready" as used herein
means that: (A) the Borrower's and its Subsidiaries'
hardware and software systems with respect to the
operation of its business and its general business plan
will: (i) handle date information involving any and all
dates before, during and/or after January 1, 2000,
including accepting input, providing output and
performing date calculations in whole or in part; (ii)
operate, accurately without interruption on and in
respect of any and all dates before, during and/or
after January 1, 2000 and without any change in
performance, and (iii) store and provide date input
information without creating any ambiguity as to the
century; and (B) the Borrower has developed alternative
plans to ensure business continuity in the event of the
failure of any or all of items (i) through (iii) above.
2.02 Addition of Section 4.19. A new section, Section
4.19, is hereby added to the Credit Agreement to read in its
entirety as follows:
The Borrower has developed and has delivered to the
Agent and Banks a comprehensive plan (the "Y2K Plan"
which term includes any and all existing and future
amendments) for insuring that the Borrower's and its
Subsidiaries' software and hardware systems which
impact or affect in any way the business operations of
the Borrower and its Subsidiaries will be Year 2000
Compliant and Ready. The Borrower and its Subsidiaries
has met the Y2K Plan milestones such that all hardware
and software systems will be Year 2000 Compliant and
Ready (including all internal and external testing) in
accordance with the Y2K Plan.
2.03 Amendment to Section 5.01(j) and Addition of
Sections 5.01(k), (l) and (m). Section 5.01 of the Credit
Agreement is hereby amended to amend and restate subsection (j)
and add new subsections (k), (l) and (m) to read as follows:
(j) simultaneously with the delivery of each set
of annual and quarterly financial statements referred to in
paragraphs (a) and (b) above, a statement of its Chief Executive
Officer or Chief Financial Officer to the effect that nothing has
come to their attention to cause them to believe that the Y2K
Plan milestones have not been met in a manner such that the
Borrower's and its Subsidiaries' hardware and software systems
will not be Year 2000 Compliant and Ready in accordance with the
Y2K Plan;
(k) within 5 Domestic Business Days after the
Borrower becomes aware of any deviations from the Y2K Plan which
would cause compliance with the Y2K Plan to be delayed beyond or
not achieved on or before September 30, 1999, a statement of its
Chief Executive Officer or Chief Financial Officer setting forth
the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(l) promptly upon the receipt thereof, a copy of
any third party assessments of the Borrower's Y2K Plan together
with any recommendations made by such third party with respect to
Year 2000 compliance; and
(m) from time to time such additional information
regarding the financial position or business of the Borrower and
its Subsidiaries as the Agent, at the request of any Bank, may
reasonably request.
2.04 Addition of Section 5.22. A new section, Section
5.22, is hereby added to the Credit Agreement to read in its
entirety as follows:
"SECTION 5.22. Y2K Plan. The Borrower will
meet the milestones contained in the Y2K Plan in all
material respects and will have all hardware and
software systems Year 2000 Compliant and Ready
(including all internal and external testing) on or
before September 30, 1999."
2.05 Amendment and Restatement of Section 5.03.
Section 5.03 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"SECTION 5.03. Ratio of Consolidated Funded
Debt to Total Consolidated Capitalization. The ratio
of Consolidated Funded Debt to Total Consolidated
Capitalization will at all times be less than 0.45 to
1.00."
2.06 Amendment and Restatement of Section 5.04.
Section 5.04 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"SECTION 5.04. Minimum Consolidated Net
Worth. Consolidated Net Worth will at no time be less
than $255,000,000."
2.07 Amendment and Restatement of Section 2.05(a).
Section 2.05(a) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"SECTION 2.05. Interest Rates. (a)
"Applicable Margin" means: (1) prior to June 30, 1999,
(i) for any Base Rate Loan, 0%; and (ii) for any Euro-
Dollar Loan, 0.50%; and (2) on June 30, 1999 and at all
times thereafter, (i) for any Base Rate Loan, 0.25%;
and (ii) for any Euro-Dollar Loan, 0.75%.
SECTION 3. Conditions to Effectiveness. The
effectiveness of this Amendment and the obligations of the Banks
hereunder are subject to the following conditions, unless the
Required Banks waive such conditions:
(a) receipt by the Agent from each of the parties
hereto of a duly executed counterpart of this Amendment
signed by such party; and
(b) the fact that the representations and
warranties of the Borrower contained in Section 5 of this
Amendment shall be true on and as of the date hereof.
SECTION 4. No Other Amendment. Except for the
amendments set forth above, the text of the Credit Agreement
shall remain unchanged and in full force and effect. This
Amendment is not intended to effect, nor shall it be construed
as, a novation. The Credit Agreement and this Amendment shall be
construed together as a single agreement. Nothing herein
contained shall waive, annul, vary or affect any provision,
condition, covenant or agreement contained in the Credit
Agreement, except as herein amended, nor affect nor impair any
rights, powers or remedies under the Credit Agreement as hereby
amended. The Banks and the Agent do hereby reserve all of their
rights and remedies against all parties who may be or may
hereafter become secondarily liable for the repayment of the
Notes. The Borrower promises and agrees to perform all of the
requirements, conditions, agreements and obligations under the
terms of the Credit Agreement, as heretofore and hereby amended,
the Credit Agreement, as amended, being hereby ratified and
affirmed. The Borrower hereby expressly agrees that the Credit
Agreement, as amended, is in full force and effect.
SECTION 5. Representations and Warranties. The
Borrower hereby represents and warrants to each of the Banks as
follows:
(a) No Default or Event of Default, nor any act,
event, condition or circumstance which with the passage of time
or the giving of notice, or both, would constitute an Event of
Default, under the Credit Agreement or any other Loan Document
has occurred and is continuing unwaived by the Banks on the date
hereof.
(b) The Borrower has the power and authority to enter
into this Amendment and to do all acts and things as are required
or contemplated hereunder, or thereunder, to be done, observed
and performed by it.
(c) This Amendment has been duly authorized, validly
executed and delivered by one or more authorized officers of the
Borrower and constitute legal, valid and binding obligations of
the Borrower enforceable against it in accordance with their
terms, provided that such enforceability is subject to general
principles of equity.
(d) The execution and delivery of this Amendment and
the Borrower's performance hereunder and thereunder do not and
will not require the consent or approval of any regulatory
authority or governmental authority or agency having jurisdiction
over the Borrower, nor be in contravention of or in conflict with
the articles of incorporation or bylaws of the Borrower, or the
provision of any statute, or any judgment, order or indenture,
instrument, agreement or undertaking, to which the Borrower is
party or by which the Borrower's assets or properties are or may
become bound.
SECTION 6. Counterparts. This Amendment may be
executed in multiple counterparts, each of which shall be deemed
to be an original and all of which, taken together, shall
constitute one and the same agreement.
SECTION 7. Governing Law. This Amendment shall be
considered in accordance with and governed by the laws of the
State of Georgia.
SECTION 8. Up-front Fee. On the date of this
Amendment, the Borrower shall pay to the Agent for the ratable
account of each Bank an up-front fee equal to the product of: (i)
such Bank's Commitment on the date of this Amendment, times (ii)
0.03%.
IN WITNESS WHEREOF, the parties hereto have executed
and delivered, or have caused their respective duly authorized
officers or representatives to execute and deliver, this
Amendment as of the day and year first above written.
BORROWER: RYAN'S FAMILY STEAK HOUSES, INC.
By:________________________________________
Title:______________________________________
WACHOVIA BANK, N.A. (formerly known as Wachovia Bank of Georgia, N.A.),
as Agent
By:________________________________________
Title:_____________________________________
WACHOVIA BANK, N.A. (formerly known as Wachovia Bank of South Carolina,
N.A.), as a Bank
By:________________________________________
Title:______________________________________
SUNTRUST BANK, ATLANTA
By:________________________________________
Title:_______________________________________
By:________________________________________
Title:_______________________________________
THE BANK OF TOKYO-MITSUBISHI, LTD.,
ATLANTA AGENCY
By:________________________________________
Title:______________________________________
Exhibit 3.2.2
AMENDMENT TO BY-LAWS
OF
RYAN'S FAMILY STEAK HOUSES, INC.
ADOPTED JANUARY 28, 1999
Article II. Shareholders is hereby amended by adding
the following new Section 2.4(e):
2.4(e) Notice of Shareholder Proposals. Any
shareholder desiring to submit a proposal to an
annual or special meeting of shareholders shall
submit information regarding the proposal,
together with the proposal, to the corporation at
least 45 days prior to the shareholders meeting at
which such proposal is to be presented.
