<PAGE> 1
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY RULE 14A-
6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
FRISCH'S RESTAURANTS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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<PAGE> 2
FRISCH'S RESTAURANTS, INC.
NOTICE OF ANNUAL MEETING
TO THE SHAREHOLDERS:
The annual meeting of the shareholders of Frisch's Restaurants, Inc., an
Ohio corporation, will be held at the QUALITY HOTEL RIVERVIEW, 666 FIFTH STREET,
COVINGTON, KY. 41011 on Monday, October 2, 1995 at 10 o'clock in the morning,
Eastern Daylight Savings Time, for the following purposes:
1. To elect four Directors to hold office for terms of two years;
2. To ratify and approve the appointment of Grant Thornton LLP as
independent auditors;
3. To act on a shareholder proposal to amend the Code of Regulations to
require that a majority of the Board of Directors be independent of
management.
4. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Shareholders of record at the close of business on August 1, 1995 are
entitled to vote at the annual meeting and any adjournment thereof.
ALFRED M. COHEN
Secretary
Cincinnati, Ohio
August 22, 1995
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
<PAGE> 3
FRISCH'S RESTAURANTS, INC.
2800 GILBERT AVENUE
CINCINNATI, OHIO 45206
The Proxy and Proxy Statement will first be sent to shareholders on or
about August 22, 1995.
PROXY STATEMENT
The enclosed Proxy is solicited by the Board of Directors of the Company.
The shares represented by each valid Proxy received in time will be voted at the
meeting as specified. If no specification is made, the shares represented by the
Proxy will be voted for the election as Directors of each of the nominees listed
thereon, in favor of the proposal to ratify and approve the auditors, against
the shareholder proposal to amend the Code of Regulations and at the discretion
of the holder of the Proxy on any other matter that properly may come before the
meeting. The Proxy may be revoked by a subsequently dated Proxy, by written
notice to the Company or in open meeting.
Holders of shares of Common Stock on the books of the Company at the close
of business on August 1, 1995 are entitled to notice of and to vote at the
annual meeting and any adjournment thereof. The Company then had outstanding
voting securities consisting of 6,618,952 shares of Common Stock, the holders of
which are entitled to one (1) vote per share, together with the right to
cumulate votes under the circumstances described below.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information, as of August 1,1995 (unless a
different date is specified in the notes to the table), with respect to (a) each
person known by the Board of Directors of the Company to be the beneficial owner
of more than 5% of the Company's outstanding Common Stock, (b) each Director of
the Company, (c) each executive officer of the Company named in the Summary
Compensation Table herein, and (d) all Directors and executive officers of the
Company as a group:
<TABLE>
<CAPTION>
Name and Address of Amount Percent
Beneficial Owner Beneficially Owned of Class
------------------------------------------------- -------------------- ------------
<S> <C> <C>
William D. Witter, Inc........................... 675,891(1) 10.6%
153 East 53rd Street
New York, New York 10022
</TABLE>
1
<PAGE> 4
<TABLE>
<CAPTION>
Amount Percent
Name Beneficially Owned of Class
------------------------------------------------- -------------------- ------------
<S> <C> <C>
Jack C. Maier.................................... 1,632,538(2)(3) 24.4%
Alfred M. Cohen.................................. 949 *
Marvin G. Fields................................. 21,388(5) *
Daniel W. Geeding................................ 628 *
Blanche F. Maier................................. 643,860(3)(4) 9.7%
Craig F. Maier................................... 915,341(6) 13.6%
Richard T. Mallon................................ 4,753(7) *
William A. Mauch................................. 1,977 *
Louis J. Ullman.................................. 17,676(8) *
All Directors and executive officers
as a group (11 persons).......................... 1,907,177 27.9%
<FN>
---------------
<FN>
* Less than 1% of class
(1) The information given is as of February 10, 1995, as reported in amended
Schedule 13G filed with the Securities and Exchange Commission.
(2) Includes 206,357 shares over which Mr. Maier holds sole voting and
investment power as trustee and 78,952 shares which he has the right to
acquire pursuant to the exercise of employee stock options. The amount shown
also includes 704,450 shares over which Mr. Maier shares voting and
investment power with Craig F. Maier and Karen F. Maier, 560,335 shares over
which he shares such power with Blanche F. Maier as general partners of the
Jack C. Maier and Blanche F. Maier Limited Partnership, and 82,444 shares
over which he shares such power with Blanche F. Maier as co-trustee. See
footnotes (4) and (6). Not included in this amount are 1,081 shares owned by
Mr. Maier's wife, Blanche F. Maier, as to which he disclaims beneficial
ownership.
(3) Blanche F. Maier is the wife of Jack C. Maier. Mr. and Mrs. Maier
beneficially own in the aggregate 1,633,619 shares, representing 24.4% of
the Company's outstanding Common Stock. Craig F. Maier is the son of Jack C.
Maier and Blanche F. Maier.
(4) Includes 1,081 shares over which Mrs. Maier holds sole voting and investment
power, 560,335 shares over which she shares voting and investment power with
Jack C. Maier as general partners of the Jack C. Maier and Blanche F. Maier
Limited Partnership and 82,444 shares over which she shares such power with
Jack C. Maier as co-trustee. Not included in this amount are 206,357 shares
owned by Mrs. Maier's husband, Jack C. Maier as trustee, as to which she
disclaims beneficial ownership.
2
<PAGE> 5
(5) Includes 8,232 shares over which Marvin G. Fields has sole voting and
investment power and 13,156 shares which he has the right to acquire
pursuant to the exercise of employee stock options.
(6) Includes 116,683 shares over which Craig F. Maier has sole voting and
investment power and 94,208 shares which he has the right to acquire
pursuant to the exercise of employee stock options. The amount shown also
includes 704,450 shares over which he shares voting and investment power
with Jack C. Maier and Karen F. Maier.
(7) Includes 150 shares over which Richard T. Mallon has sole voting and
investment power and 4,603 shares which he has the right to acquire pursuant
to the exercise of employee stock options.
(8) Includes 4,520 shares over which Louis J. Ullman has sole voting and
investment power and 13,156 shares which he has the right to acquire
pursuant to the exercise of employee stock options.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
At the annual meeting four Directors are to be elected to serve until the
annual meeting in 1997. All of the Directors to be elected at the annual meeting
will serve for two year terms and until their successors have been elected and
qualified. If nominations are made from the floor, it is intended that the
enclosed Proxy will be voted only for the persons nominated by the Board of
Directors. In case any nominee is unable or declines to serve, it is intended
that the enclosed Proxy will be voted for the balance of those named and for
such other person, if any, as shall be designated by the Board of Directors to
replace any such nominee. The Board of Directors has no knowledge or reason to
believe that any nominee will be unable or unwilling to serve.
The four nominees receiving the greatest number of votes will be elected as
Directors. Under applicable provisions of Ohio law and the Company's Articles of
Incorporation and Code of Regulations, Proxies which are marked "Withhold
Authority" or on which a broker has indicated a lack of discretionary authority
will be counted as present for the purpose of determining a quorum, but will not
be voted in the election of Directors.
3
<PAGE> 6
Shareholders have cumulative voting rights in the election of Directors. If
notice in writing is given by any shareholder to the President, a Vice President
or the Secretary of the Company, not less than forty-eight (48) hours before the
time fixed for holding the annual meeting, that cumulative voting for the
election of Directors is desired and if an announcement of the giving of such
notice is made upon convening of the meeting, each shareholder shall have the
right to cumulate votes in voting for the Directors. When cumulative voting is
in effect, ballots will be distributed to all shareholders present at the
meeting. The number of votes to which each shareholder is entitled shall be
equal to the number of shares held multiplied by the number of Directors to be
elected. Votes then may be cast for one nominee or distributed among the
nominees in any manner desired. The Board of Directors is not soliciting
discretionary authority to cumulate votes.
<TABLE>
<CAPTION>
Positions with the Company,
Business Experience Director
Directors and Other Directorships Since
------------------ --------------------------------------------------------- -----
<C> <S> <C>
The following Directors have been nominated for election at the 1995 annual
meeting to serve until the annual meeting in 1997 and until their successors are
elected and qualified:
Marvin G. Fields Senior Vice President and Chief Operations Officer of the 1975
(age 60) Company
Daniel W. Geeding Director of the Company; Dean, College of Business 1992
(age 53) Administration, Xavier University; Director of Zaring
Homes, Inc. and Glenway Financial Corporation
Blanche F. Maier Director of the Company 1961
(age 68)
Craig F. Maier President and Chief Executive Officer of the Company 1984
(age 45)
</TABLE>
4
<PAGE> 7
<TABLE>
The following Directors were elected at the 1994 annual meeting to serve
until the annual meeting in 1996 and until their successors are elected and
qualified.
<C> <S> <C>
Alfred M. Cohen Secretary of the Company; Attorney, Partner of firm of 1968
(age 66) Cohen, Todd, Kite & Stanford
Jack C. Maier Chairman of the Board of the Company 1961
(age 70)
William A. Mauch Director of the Company; Administrator of the Cincinnati 1992
(age 74) office of the law firm of Thompson, Hine and Flory;
Director of Blue Chip Savings Bank
Louis J. Ullman Senior Vice President and Chief Financial Officer of the 1965
(age 63) Company
</TABLE>
COMMITTEES
The Board of Directors of the Company held thirteen meetings during the
fiscal year ended May 28, 1995. All Directors attended at least 75% of the
meetings except Blanche F. Maier. She is not a member of any committee of the
Board. The Company paid directors who are not employees a fee of $600 for each
meeting of the Board attended. In addition, Messrs. Geeding and Mauch are each
paid a directors fee of $12,000 annually.
The Board of Directors of the Company has an audit committee and a
compensation committee, but has no nominating committee.
The audit committee is composed of Daniel W. Geeding and William A. Mauch.
During the fiscal year ended May 28, 1995, the committee held five meetings and
performed the following functions: review and assessment of internal audit,
financial planning, internal control, reporting processes, public reporting of
financial statements, recommendations to the Board of Directors for independent
certified public accountants to audit the books of the Company for the fiscal
year, evaluation of the performance and independence of the auditors and review
and approval of the scope of the audit and the audited financial statements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended May 28, 1995, the members of the Compensation
Committee were Jack C. Maier, Craig F. Maier, and Louis J. Ullman. The committee
held two meetings and performed the following functions during the year:
establishment of policies with respect to compensation of the Company's
executive officers, other than Craig F. Maier and Jack C. Maier, and
determination of such compensation.
5
<PAGE> 8
During the fiscal year ended May 28, 1995, a franchised restaurant owned by
children of Jack C. Maier, an officer and director of the Company, and Blanche
F. Maier, a director of the Company, made purchases from the Company's
commissary totaling $459,610 and paid to the Company advertising fees of
$43,008, employee leasing fees of $576,394, payroll and accounting fees of
$21,393 and franchise fees of $64,512. Other members of Mr. and Mrs. Maier's
family are the owners of a franchised restaurant which during such fiscal year
made purchases from the Company's commissary totaling $669,290 and paid to the
Company advertising fees of $63,263, employee leasing fees of $813,779, payroll
and accounting fees of $24,547 and franchise fees of $94,804.
During the fiscal year ended May 28, 1995, a franchised restaurant owned by
Craig F. Maier, an officer and director of the Company, made purchases from the
Company's commissary totaling $342,408 and paid to the Company advertising fees
of $31,642, employee leasing fees of $430,908, payroll and accounting fees of
$19,148 and franchise fees of $47,463.
The above described transactions were effected on terms no less favorable
to the Company and no more favorable to the other parties thereto than would
have been agreed upon in transactions with persons having no relationship with
the Company.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In addition to the transactions described under the heading "Compensation
Committee Interlocks and Insider Participation," Alfred M. Cohen, an officer and
director of the Company, is a partner of the law firm of Cohen, Todd, Kite &
Stanford, general counsel to the Company.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
(the "Act"), the Company's Directors, certain of its officers and persons owning
more than 10% of the outstanding shares of its Common Stock are required to file
reports of beneficial ownership and changes in beneficial ownership with the
Securities and Exchange Commission and the American Stock Exchange and to
furnish copies of such reports to the Company. The Company is required to set
forth in this Proxy Statement the number of late reports, transactions not
reported and any known failure to file a report. Based solely on a review of the
reports which were furnished to it and certain written representations of each
reporting person, the Company believes that the aforesaid filing requirements
were satisfied.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following information is furnished with respect to each of the five
most highly compensated executive officers of the Company, including the Chief
Executive Officer, for the fiscal year ended May 28, 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG-
--------------------------------- TERM
OTHER COMPEN- ALL
ANNUAL SATION OTHER
COMPEN- AWARDS COMPEN-
NAME AND TITLE YEAR SALARY BONUS SATION OPTIONS SATION
----------------------------- ---- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Craig F. Maier............... 1995 $133,780 $ 0 $16,039 (b) $ 1,218 (d)
President and Chief 1994 132,034 0 16,945 (b) 1,218 (d)
Executive Officer 1993 130,112 250,724 (a) 12,527(c) 1,218 (d)
Jack C. Maier................ 1995 428,095 0 (a) 85,000 (e)
Chairman of the Board 1994 422,507 0 (a) 85,000 (e)
1993 416,357 0 (a) 85,000 (e)
Marvin G. Fields............. 1995 170,570 0 (a) 4,384 (f)
Senior Vice President and 1994 170,188 0 (a) 3,260 (f)
Chief Operations Officer 1993 165,112 16,560 (a) 2,120 (f)
Louis J. Ullman.............. 1995 148,105 0 (a) 3,166 (g)
Senior Vice President and 1994 148,105 2,284 (a) 2,461 (g)
Chief Financial Officer 1993 148,105 13,309 (a) 1,663 (g)
Richard T. Mallon............ 1995 100,057 0 11,267 (b) 1,687 (h)
Vice President - Big Boy 1994 100,057 0 12,379 (b) 1.226 (h)
Division 1993 100,057 0 11,343 (b) 687 (h)
<FN>
---------------
</TABLE>
(a) Perquisites and other personal benefits for 1993, 1994 and 1995 received by
Messrs. Jack C. Maier, Fields, and Ullman, and for 1993 received by Craig F.
Maier did not, as to any of them, exceed the lesser of $50,000 or ten
percent of the sum of their respective salary and bonus for such year.
(b) Perquisites and other personal benefits received by Mr. Maier consisted of
$4,476 in 1995 and $4,849 in 1994 for auto allowance, $4,431 in 1995 and
$5,589 in 1994 for premiums for medical reimbursement insurance, and $7,132
in 1995 and $6,507 in 1994 for supplemental long term disability insurance
premiums. Perquisites and other personal benefits received by Mr. Mallon
include $4,849 auto allowance in all three years, and $4,431 in 1995, $5,589
in 1994 and $4,614 in 1993 for premiums for medical reimbursement insurance.
(c) Indicates the number of stock options earned as a part of incentive
compensation for the fiscal year shown.
7
<PAGE> 10
(d) Represents the premium paid on split dollar life insurance policies.
(e) Represents the premium paid on a life insurance policy which funds the
retirement compensation provided for in Mr. Maier's employment agreement.
(f) Represents premiums paid on split dollar life insurance policies of $2,252,
in 1995, $2,112 in 1994 and $2,120 in 1993, and Company matching
contributions to the Frisch's Executive Savings Plan of $2,132 in 1995 and
$1,148 in 1994.
(g) Represents premiums paid on split dollar life insurance policies of $1,663
in all three years and Company matching contributions to the Frisch's
Executive Savings Plan of $1,503 in 1995 and $798 in 1994.
(h) Represents premiums paid on split dollar life insurance policies of $687 in
all three years and Company matching contributions to the Frisch's Executive
Savings Plan of $1,000 in 1995 and $539 in 1994.
The 1993 Stock Option Plan was adopted by the Board of Directors and
approved by the shareholders. Pursuant to the Plan, options for shares of the
Common Stock of the Company are granted to officers and key management
personnel, as determined by a committee of the Board of Directors. Under the
1993 Plan, options with terms not in excess of ten years from the date of grant
and stock appreciation rights may be granted until May 8, 2004. See Employment
Contracts and Changes-in-Control Arrangements. No options or stock appreciation
rights were granted for the fiscal year ended May 28, 1995.
The following table sets forth information regarding the exercise of stock
options under the 1984 Stock Option Plan by each of the named executive officers
during fiscal year 1995 and the value of all remaining options (all of which are
exercisable) at May 28, 1995:
<TABLE>
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON NET VALUE OPTIONS AT OPTIONS AT
NAME EXERCISE REALIZED 5/28/95 5/28/95
---------------------------- ----------- --------- ----------- ------------
<S> <C> <C> <C> <C>
Craig F. Maier.............. 0 0 94,208 0
Jack C. Maier............... 0 0 78,952 0
Marvin G. Fields............ 0 0 13,156 0
Louis J. Ullman............. 0 0 13,156 0
Richard T. Mallon........... 0 0 4,603 0
</TABLE>
8
<PAGE> 11
DEFINED BENEFIT PENSION PLAN AND EXECUTIVE RETIREMENT PLAN
The Pension Plan adopted by the Board of Directors which includes the
participation of executive officers of the Company provides payments of annual
benefits to employees covered by the Plan upon retirement.
Under the qualified Pension Plan, an individual's monthly Pension Plan
benefit equals 51% of his or her average monthly compensation minus 50% of
monthly Social Security benefits. The benefit of an individual who has less than
28 years of service with the Company is reduced by 1/28 for each year less than
28.
Average monthly compensation is based upon the participant's five highest
compensation periods. The compensation periods need not be consecutive. For
years prior to 1982, the compensation period is the month of September. For
years 1982 through 1991, the compensation period is the month of July. For years
after 1991, the compensation period is the entire calendar year, therefore, the
monthly compensation for the period is 1/12 of the annual compensation.
Compensation that is taken into consideration for periods through 1991
consists of regular wages, excluding overtime, bonuses, commissions, special
pay, severance pay and expense reimbursements, but including elective
contributions to employee benefit plans. Compensation that is taken into
consideration for periods after 1991 includes all compensation reported on the
participant's W-2 and all other payments by the Company which are reported to
the IRS on Form 1099.
Amounts set aside under the Plan are computed on an actuarial basis using
an aggregate funding method and cannot be readily allocated to individual
employees. No contribution was made to the Plan during the fiscal year ended May
28, 1995.
Estimated annual retirement benefits at normal retirement age from the
Pension Plan for Messrs. Craig F. Maier, Marvin G. Fields, Louis J. Ullman, and
Richard T. Mallon would be, respectively, $84,000, $83,000, $71,000, and
$45,000. In 1995, Mr. Jack C. Maier, in accordance with the provisions of the
Plan, received a lump sum distribution of the future annual benefits to which he
was entitled under the Plan.
Under the Internal Revenue Code, there is an annual limitation on the
amount of compensation of each employee that may be taken into account, which is
currently set at $150,000. The annual limitation for some of the years prior to
1995 was substantially higher. The Company has adopted an unfunded Executive
Retirement Plan which provides to qualified employees whose compensation exceeds
the Internal Revenue Code limitation, a supplemental retirement benefit equal to
the reduction in their benefits under the Pension Plan. Currently, Messrs. Craig
F. Maier, Marvin G. Fields and Louis J. Ullman
9
<PAGE> 12
are eligible, at their normal retirement ages, to receive supplemental annual
benefits under the Executive Retirement Plan of $26,099, $3,708 and $2,960,
respectively.
EMPLOYMENT CONTRACTS AND CHANGES-IN-CONTROL ARRANGEMENTS
Pursuant to an employment agreement between the Company and Jack C. Maier,
effective May 29,1995, which was approved by the Board of Directors, Mr. Maier
is to be paid for the ensuing two fiscal years a base salary of $300,000 per
year. In addition, the agreement provides that upon its expiration or upon Mr.
Maier's retirement, disability or death, there shall be paid for each of the
next ten years a sum equal to 50% of the base salary payable at the end of his
preceding employment agreement, adjusted annually to reflect 50% of the annual
percentage change in the Consumer Price Index. Alternatively, the recipient may
elect at any time to receive in a lump sum the present value of all remaining
payments. In the fiscal year ended May 28, 1995, the Company paid a premium of
$85,000 on a whole life insurance policy on the life of Mr. Maier to fund this
obligation. The agreement also provides that upon cessation of employment, Mr.
Maier will provide consulting services to the Company, for which he shall be
paid a fee of $100,000 per year.
Pursuant to an employment agreement between the Company and Craig F.
Maier, effective May 29, 1995, which was approved by the Board of Directors,
Mr. Maier is to be paid for the ensuing five fiscal years a base salary of
$135,920 per year adjusted annually to reflect 50% of the annual change in the
Consumer Price Index. Further the agreement provides that upon Mr. Maier's
disability, there shall be paid each year while he is alive for up to ten years
a sum equal to 75% of his average compensation over the three preceding
calendar years, adjusted annually after the first year to reflect 75% of the
annual percentage change in the Consumer Price Index. In addition, the
agreement provides that Mr. Maier is to be paid for each of the five ensuing
fiscal years incentive compensation equal to 3% of the Company's pre-tax
consolidated earnings if in such year pre-tax consolidated earnings exceed 5%
of total revenue of the Company (adjusted to exclude certain revenue not
related to the Company's food service and lodging operations). 80% of incentive
compensation is to be paid in cash and 20% in the Company's Common Stock. The
agreement also provides that Mr. Maier will be granted stock options in any
year in which incentive compensation is earned. The number of options awarded
is calculated by dividing the dollar amount of Mr. Maier's incentive
compensation by the average of the highest and the lowest price of the
Company's Common Stock during the year for which the incentive compensation was
earned and multiplying the result by two. The exercise price of the options
shall be equal to the fair market value of the Common Stock on the date of
grant. Options may not be exercised until six months after the date granted or
such later time period as may be required by the Company's Stock Option
Committee, which period may not exceed five years.
10
<PAGE> 13
The provisions of the agreement with respect to compensation are identical
to those in his previous agreement except that the number of stock options which
can be earned has been doubled. The first year's base salary is the same as the
last year of his previous agreement increased by 50% of the annual percentage
change in the Consumer Price Index. The basis for the establishment of the base
salary and incentive compensation under the previous agreement was data provided
by an independent consultant that was derived from a survey of comparable
restaurant companies and data obtained from the proxy statements of publicly
held restaurant companies. The base salary was established in the bottom
quartile of the base salaries paid by such companies. The incentive compensation
formula was designed to tie performance to shareholder value by awarding no
incentive compensation unless consolidated pre-tax earnings reach at least 5% of
revenue and by permitting the aggregate of the base salary and incentive
compensation to reach the top quartile of total compensation paid by the
aforesaid companies if consolidated pre-tax earnings projections were achieved.
The number of options to be awarded was doubled to increase the equity component
of his compensation.
The Company has entered into agreements with Craig F. Maier, Marvin G.
Fields and Louis J. Ullman which provide that if there is a change in control of
the Company that has not been approved by existing management, the Company shall
either continue their employment for up to three years with compensation and
perquisites equal to that which they would have received had there not been such
a change or terminate their employment and make lump sum payments to them equal
to the present value of such compensation and continue such perquisites until
the end of the period for which their employment would have continued. The
maximum aggregate lump sum payments which would be payable to them under these
agreements if they were terminated on the date of mailing of this Proxy
Statement, would be approximately $1,900,000. The discount rate used for
determining the amount of such payments was 2.71%, in accordance with provisions
of the agreements.
COMPENSATION COMMITTEE REPORT
The compensation of Jack C. Maier and Craig F. Maier for the fiscal year
ended May 28, 1995 was determined in accordance with the terms of employment
agreements approved by the Board of Directors in 1990. The Compensation
Committee believes that these agreements are consistent with the Company's
executive compensation policies.
The compensation of all other executive officers for the fiscal year ended
May 28, 1995 was determined by the Compensation Committee in accordance with
salary merit increase guidelines and incentive compensation formulas established
prior to the commencement of the fiscal year.
The policies of the Compensation Committee with respect to the Company's
executive officers are: (1) to pay salaries generally in the middle of
11
<PAGE> 14
the range of salaries paid to executives of comparable levels of responsibility
by comparable restaurant companies; (2) to grant merit increases in salary,
within the salary range, based primarily on job performance as measured by
specific, pre-determined individual goals; and (3) to award bonuses based on
how well individual goals are achieved and how well the Company performs.
To determine the salaries of the Company's executive officers, the Company
establishes a series of salary ranges which correspond to levels of executive
responsibility. The basis for the establishment of the ranges is data provided
by an independent consultant that is derived from an annual survey of
approximately 60 comparable restaurant companies, including three of the five
companies comprising the S&P Restaurants Index used for the Performance Graph.
The Committee sets the Company's salary ranges to fall generally in the middle
of the competitive ranges. Individual salaries are set within the applicable
salary range and are reevaluated annually. Merit increases are granted within
the salary range based on job performance as measured against one or more
individual performance goals established annually for each executive.
Under the Company's incentive compensation program, executive officers are
entitled to earn annual bonuses of up to 22.5% of each officer's salary. Each
individual executive officer's bonus is determined by a formula that takes into
account (1) the extent to which individual performance goals established prior
to the beginning of the fiscal year are met and (2) the Company's pre-tax
consolidated earnings for the fiscal year, as a percentage of total revenue
(adjusted to exclude certain revenue not related to the Company's food service
and lodging operations). No incentive bonus is paid unless pre-tax consolidated
earnings of the Company are at least 4% of revenues. In order to receive the
maximum bonus, an executive must fully meet the individual performance goals and
pre-tax consolidated earnings of the Company must equal or exceed 6% of
revenues. Of the total bonus earned, 20% is paid in shares of the Company's
Common Stock and the remainder is paid in cash. All shares received by the
executive must be held for a period of two years. During fiscal 1995, no
incentive compensation was paid because the pre-tax consolidated earnings test
was not met.
Jack C. Maier
Craig F. Maier
Louis J. Ullman
CORPORATE PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its Common Stock with the Standard &
Poor's Restaurants Index and the Standard & Poor's 500 Stock Index over the five
year period ending May 31, 1995. The graph assumes an investment of $100 in the
Company's Common Stock and each index on May 31, 1990, and reinvestment of all
dividends.
12
<PAGE> 15
<TABLE>
FRISCH'S RESTAURANTS, INC.
COMPARISON OF FIVE-YEAR TOTAL RETURN TO THE
S&P RESTAURANTS INDEX AND THE S&P 500 INDEX
<CAPTION>
S&P RES-
MEASUREMENT PERIOD TAURANTS S&P 500 IN-
(FISCAL YEAR COVERED) FRS INDEX DEX
<S> <C> <C> <C>
1990 100 100 100
1991 56 106 112
1992 113 139 123
1993 100 150 137
1994 86 184 143
1995 58 218 172
</TABLE>
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has unanimously selected the firm of Grant Thornton
LLP as auditors to make an examination of the accounts of the Company for the
fiscal year commencing May 29, 1995. This firm of independent certified public
accountants has made the audits of the Company's accounts since 1952. Such
selection of auditors is submitted to the shareholders for ratification and
approval or rejection. If rejected, the Board of Directors will select other
auditors.
Representatives of Grant Thornton LLP are expected to be present at the
annual meeting of shareholders. They will be afforded an opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions from the shareholders.
Ratification of the selection of auditors requires the affirmative vote
of the holders of a majority of the outstanding shares of Common Stock of the
Company present in person or represented by proxy at the annual meeting and
entitled to vote thereat. Under applicable provisions of Ohio law and the
Company's Articles of Incorporation and Code of Regulations, Proxies which are
marked "Abstain" will be counted as present for the purpose of determining a
quorum and will have the effect of a vote against the proposal.
SHAREHOLDER PROPOSAL TO AMEND CODE OF REGULATIONS
The Company has been advised by H. Thompson Rice, 1301 48th Avenue, Myrtle
Beach, SC 29577, as custodian for James Lucas Rice, who is the owner of 232
shares of the Common Stock of the Company, that he or his duly
13
<PAGE> 16
appointed representative intends to present the following proposal (the
"Proposal") at the meeting.
Whereas, H. Thompson Rice is concerned about the long-term economic
performance of companies in which he invests, and
Whereas, the Board of Directors of a company is accountable to shareholders
for the performance of management and the company, and H. Thompson Rice believes
that a majority of directors should be independent of management, and
Whereas, the Board of Directors is meant to be an independent body elected
by shareholders and is charged by law and by the shareholders with the duty,
authority and responsibility to formulate and direct corporate policies, and
Whereas, the company's interest can best be served by having directors who
are independent of management and who represent a breadth of experience,
Now therefore, be it resolved that: The shareholders request that the Board
of Directors amend the By-Laws to provide that the Board of Directors consist of
a majority of independent directors. For those purposes, an independent director
is one who: (1) has not been employed by the company, or an affiliate, in an
executive capacity within the last five years; (2) is not, and has not been, a
member of a company that is one of this company's paid advisors or consultants;
(3) is not employed by a significant customer or supplier; (4) does not and did
not have a personal services contract with the company; (5) is not employed by a
tax-exempt organization that receives significant contributions from the
company; (6) is not a relative of the management of the company; (7) has not had
any business relationship that would be required to be disclosed under
Regulation S-K. We request that this by-law amendment be applied only to
nominees for directors at meetings subsequent to the 1995 annual meeting.
THE BOARD OF DIRECTORS HAS CONSIDERED THE FOREGOING PROPOSAL AND RECOMMENDS
THAT THE SHAREHOLDERS VOTE AGAINST IT.
The existing Board of Directors consists of a combination of senior
executives of the Company, outside counsel, members of the founding family of
the Company and two members who are not employees of the Company. The
composition of the Board already represents the constituencies which are vitally
concerned with the long-term economic performance of the Company. The Board
consists of individuals who provide an effective combination of knowledge of the
business and historical perspective. The founding family holds a significant
interest in the Company and plays an active role on the Board and in management.
The continuing long-term success of the Company is of paramount importance to
all shareholders including the family.
14
<PAGE> 17
Shareholder interests are better served by voting against the Proposal because
of the foregoing and the Board of Directors' belief that the Proposal's
definition of "independent director" is too narrow and could limit the
availability of talented individuals to serve on the Board.
Under applicable provisions of Ohio law and the Company's Articles of
Incorporation and Code of Regulations, Proxies which are marked "Abstain" or
Proxies on which a broker has indicated a lack of discretionary authority will
be counted as present for the purpose of determining a quorum, but will not be
voted on the Proposal.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1996 annual
meeting must be received at the Company's executive offices on or before April
24, 1996 in order to be considered for inclusion in the Proxy and Proxy
Statement issued by the Board of Directors with respect to that meeting.
COST OF SOLICITATION
The cost of preparing and mailing this Proxy Statement, the accompanying
Notice of Annual Meeting, Proxy and any additional material relating to the
meeting and the cost of soliciting Proxies will be borne by the Company. In
addition to solicitation by mail, certain officers and employees of the Company
may solicit Proxies in person or by telephone, for which they will not receive
any special compensation.
OTHER MATTERS
The Board of Directors knows of no other matters which are likely to be
brought before the meeting. If any matters not now known of properly come before
the meeting, the persons named in the enclosed Proxy or their substitutes will
vote the shares represented by the Proxy on such matters in accordance with
their judgment.
The above Notice of Annual Meeting and this Proxy Statement are sent by
order of the Board of Directors.
ALFRED M. COHEN
Secretary
Dated August 22, 1995
15
<PAGE> 18
Preliminary Copy
PROXY FRISCH'S RESTAURANTS, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Jack C. Maier and Louis J. Ullman, and each of them, are hereby appointed
attorneys-in-fact for the undersigned, with the powers which the undersigned
would possess if personally present, including the power of substitution, to
vote all shares of Common Stock of the undersigned at the annual meeting of
shareholders of Frisch's Restaurants, Inc. to be held at Quality Hotel
Riverview, 666 Fifth Street, Covington, Kentucky 41011 at 10:00 A.M. on the 2nd
day of October, 1995, and at any adjournments thereof, as hereinafter specified
and upon such other business as shall properly come before the meeting. IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF
THE NOMINEES LISTED BELOW, IN FAVOR OF THE PROPOSAL TO APPROVE THE APPOINTMENT
OF THE AUDITORS AND AGAINST THE PROPOSAL TO AMEND THE CODE OF REGULATIONS. AS TO
ANY OTHER MATTER OR IF ANY OF SAID NOMINEES IS NOT AVAILABLE FOR ELECTION, SAID
ATTORNEYS SHALL VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT.
<TABLE>
<S> <C>
(1) Election of Directors
/ / FOR all nominees listed / / WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees
listed
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME.)
MARVIN G. FIELDS, DANIEL W. GEEDING, BLANCHE F. MAIER, CRAIG F. MAIER.
(Continued and to be signed and dated on reverse side)
(Continued from other side)
(2) The proposal to ratify and 3. Proposal to amend the Code of
approve the appointment of Regulations to require that a
Grant Thornton LLP as majority of the Board of Direc-
independent auditors. tors be independent of
/ / FOR / / AGAINST / / ABSTAIN management.
/ / FOR / / AGAINST / /ABSTAIN
Dated: , 1995
----------------------------------
Signature
----------------------------------
Signature if held jointly.
(Please date, sign as name appears
at the left, and return promptly.
If the shares of Common Stock are
registered in the names of two or
more persons, each should sign.
When signing as Corporate Officer,
Partner, Executor, Administrator,
Trustee or Guardian, please give
full title. Please note any
changes in your address alongside
the address as it appears in the
proxy.)
