<PAGE> 1
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 [ ]
<TABLE>
<CAPTION>
Check the appropriate box:
<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 Section 240.14a-11(c) or Section 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] No fee required.
[ ] 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.
2800 GILBERT AVENUE
CINCINNATI, OHIO 45206
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 24, 1997
Dear Shareholders:
The annual meeting of the shareholders of Frisch's Restaurants, Inc.,
an Ohio corporation, will be held at the Quality Hotel Riverview, 668 W. Fifth
Street, Covington, Kentucky 41011 on Monday, November 24, 1997 at 10:00 a.m.,
Eastern Standard Time, for the following purposes:
1. To increase the number of Directors on the Board of Directors
to nine;
2. To elect five Directors (or four Directors if Item No. 1 above
is not approved) to hold office for two-year terms;
3. To ratify and approve the appointment of Grant Thornton LLP as
independent auditors;
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 October 29, 1997 are
entitled to notice of, and to vote at, the annual meeting and any adjournment(s)
or postponement(s) thereof.
By Order of the Board of Directors
W. GARY KING
Secretary
Cincinnati, Ohio
October 30, 1997
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE, WHETHER OR NOT YOU EXPECT
TO BE PRESENT AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
FRISCH'S RESTAURANTS, INC.
2800 GILBERT AVENUE
CINCINNATI, OHIO 45206
------------
PROXY STATEMENT
------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 24, 1997
------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Frisch's Restaurants, Inc. (the
"Company") for use at the Annual Meeting of Shareholders (the "Meeting") to be
held at the Quality Hotel Riverview, 668 W. Fifth Street, Covington, Kentucky
41011 on Monday, November 24, 1997 at 10:00 a.m., Eastern Standard Time, and at
any and all adjournments thereof. This Proxy Statement and the enclosed form of
proxy are first being sent to shareholders on or about October 30, 1997.
THE PROXY
The Board of Directors solicits proxies so that each shareholder has
the opportunity to vote on the proposals to be considered at the Meeting. A form
of proxy for voting your shares at the Meeting is enclosed. 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 a duly
executed Proxy will be voted (i) for increasing the number of Directors on the
Board of Directors to nine; (ii) for the election as Directors of each of the
nominees listed thereon (or if the number of directors is not increased to nine,
or if cumulative voting is in effect, the shares shall be voted as described in
the section entitled "Election of Directors" below); (iii) for the proposal to
ratify and approve the auditors; and (iv) at the discretion of the holders of
the Proxy on any other matter that may come before the meeting. Any shareholder
may revoke a proxy at any time before it is exercised by a subsequently dated
proxy card that is duly executed and delivered, by written notice to the
President of the Company revoking the proxy or by attending and voting in person
at the Meeting.
VOTING SECURITIES AND VOTING
There were 6,005,368 shares of the Company's common stock ("Common
Stock") issued and outstanding at the close of business on October 29, 1997, the
record date for the purpose of determining the shareholders entitled to notice
of and to vote at the Meeting and any adjournment(s) thereof (the "Record
Date"). Only shareholders of record on the Record Date are entitled to vote at
the Meeting.
Each holder of Common Stock is entitled to one (1) vote per share of
Common Stock held of record on the Record Date on any matter submitted to a vote
at the Meeting, except that in connection with the election of directors, the
shares may be voted cumulatively 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
Meeting, that cumulative voting for the election of Directors is desired. If any
shareholder gives such notice, an announcement of the giving of such notice will
be made by the Chairman upon the convening of the Meeting and all shareholders
may then cumulate their votes for nominees. Cumulative voting means that the
number of votes that each shareholder is entitled to cast for the election of
Directors shall be equal to the number of shares of Common Stock held by the
shareholder multiplied by the number of Directors to be elected. That total
number of votes may be cast for one nominee or distributed among some or all of
the nominees in any manner desired. If the size of the Board is not increased to
nine, or if cumulative voting is properly declared, the votes conferred by
shares represented by Proxies will be voted as described in the section entitled
"Election of Directors" below, and discretionary authority to do so is included
in the proxy.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of outstanding shares of Common Stock is necessary
to constitute a quorum at the Meeting. At the Meeting, directors will be elected
by a plurality of the votes cast. Therefore, the five nominees (or four nominees
if the shareholders do not increase the number of directors to nine) receiving
the greatest number of votes will be elected as Directors. Shares represented by
proxies which are marked "Withhold Authority" or on which a broker has indicated
the absence of discretionary authority to vote the shares will be counted as
present for the purpose of determining a quorum, but will not be voted in the
election of Directors. Each other matter proposed by the Board for consideration
at the Meeting will be decided by a majority of the votes cast on that matter.
Shares voted on one proposal but not all proposals on the proxies returned by
brokers will be counted for the purpose of determining the number of shares
represented at the meeting, but will not be considered as a vote for or against
any matter not
<PAGE> 4
voted on. Abstentions will also be counted for the purpose of determining the
number of shares represented at the meeting, but will not be considered as a
vote for or against any matter as to which the abstention is effective.
For additional information concerning the election of directors, please
see the section entitled "ELECTION OF DIRECTORS" below.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of October 29, 1997
(unless a different date is specified in the notes to the table), with respect
to each person (including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended) known by the Company to be
the beneficial owner of more than 5% of the Company's outstanding Common Stock.
<TABLE>
<CAPTION>
Name and Address of Amount Percent
Beneficial Owner Beneficially Owned of Class
---------------- ------------------ --------
<S> <C> <C>
Blanche F. Maier 1,690,937(1)(5) 28.2%
2800 Gilbert Avenue
Cincinnati, OH 45206
Jack C. Maier 1,202,543(2)(5) 19.7%
2800 Gilbert Avenue
Cincinnati, OH 45206
Craig F. Maier 1,000,711(3)(5) 16.4%
2800 Gilbert Avenue
Cincinnati, OH 45206
Karen F. Maier 830,337(4)(5) 13.8%
2800 Gilbert Avenue
Cincinnati, OH 45206
William D. Witter, Inc. 674,692(6) 11.2%
153 East 53rd Street
New York, NY 10022
Jerry L. Ruyan, 8730 Red Fox Lane, Cincinnati, OH 435,698(7) 7.3%
45243, and Barry S. Nussbaum, 2775 Via La Valle,
Suite 205, Del Mar, CA 92014 (Wolverine Partners)
Dimensional Fund Advisors, Inc. 407,347(8) 6.8%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
<FN>
(1) Includes 614,375 shares over which Mrs. Maier has sole voting and investment power, 89,170 shares over
which she has sole voting but shared investment power, and 987,392 shares over which she has sole voting
power only. The amounts shown above include 1,076,562 shares over which she has sole voting power as
voting trustee pursuant to a Voting Trust Agreement dated June 25, 1997, with the following: Jack C.
Maier and herself as Co-Trustees under the Will of Shirley Heinichen, deceased as to 89,170 shares; Jack
C. Maier, Craig F. Maier and Karen F. Maier, as Co-Trustees under the Will of David Frisch, deceased as
to 764,197 shares; and Jack C. Maier, as Trustee under agreement with Annette Frisch as to 223,195
shares. See footnotes (2), (3), (4) and (5). Not included in this amount are 40,587 shares owned by Jack
C. Maier as to which she disclaims beneficial ownership.
(2) Includes 40,587 shares over which Mr. Maier has sole voting and investment power, 223,195 shares over
which he has sole investment power only, 853,367 shares over which he shares investment power only and
85,394 shares which he has the right to acquire pursuant to the exercise of employee stock options. The
amount shown above includes 764,197 shares over which Mr. Maier, Craig F. Maier and Karen F. Maier share
investment power only as Co-Trustees under the will of David Frisch, deceased, and 89,170 shares over
which Mr. Maier and Blanche F. Maier share investment power only as Co-Trustees under the Will of Shirley
Heinichen, deceased. See footnotes (1), (3), (4) and (5). Not included in this amount are 8,318 shares
owned by Blanche F. Maier as to which he disclaims beneficial ownership.
</TABLE>
- 2 -
<PAGE> 5
(3) Includes 134,623 shares over which Mr. Maier has sole voting and
investment power, 764,197 shares over which Mr. Maier, Jack C. Maier
and Karen F. Maier share investment power only as Co-Trustees under the
will of David Frisch, deceased, and 101,891 shares which he has the
right to acquire pursuant to the exercise of employee stock options.
See footnotes (1), (2), (4) and (5).
(4) Includes 61,162 shares over which Ms. Maier has sole voting and
investment power, 764,197 shares over which Ms. Maier, Jack C. Maier
and Craig F. Maier share investment power only as Co-Trustees under the
will of David Frisch, deceased, and 4,978 shares which she has the
right to acquire pursuant to the exercise of employee stock options.
See footnotes (1), (2), (3) and (5).
(5) Blanche F. Maier is the wife of Jack C. Maier. Craig F. Maier is the
son of Jack C. Maier and Blanche F. Maier and the brother of Karen F.
Maier. Karen F. Maier is the daughter of Jack C. Maier and Blanche F.
Maier and the sister of Craig F. Maier.
(6) The information given is as of August 29, 1997, as reported in an
amended Schedule 13G filed with the Securities and Exchange Commission.
The percent of class has been adjusted to reflect the reduction in the
number of outstanding shares which resulted from the Company's purchase
of shares pursuant to a self-tender offer completed August 8, 1997.
(7) The information given is as of August 18, 1997, as reported in an
amended Schedule 13D filed with the Securities and Exchange Commission,
in which each of the individuals indicates that he is acting together
with the other as a group.
(8) The information given is as of February 7, 1997, as reported in an
amended Schedule 13G filed with the Securities and Exchange Commission.
The percent of class has been adjusted to reflect the reduction in the
number of outstanding shares which resulted from the Company's purchase
of shares pursuant to a self-tender offer completed August 8, 1997.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of October 29, 1997,
with respect to the number of shares of Common Stock beneficially owned by (i)
each current Director, including each nominee for election as a Director, of the
Company, (ii) each executive officer of the Company named in the Summary
Compensation Table, and (iii) all Directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Amount Percent
Name Beneficially Owned of Class
---- ------------------ --------
<S> <C> <C>
Jack C. Maier 1,202,543(1) 19.7%
Daniel W. Geeding 1,057 *
Malcolm M. Knapp 0 *
Blanche F. Maier 1,690,937(1) 28.2%
Craig F. Maier 1,000,711(1) 16.4%
William A. Mauch 3,740 *
Barry S. Nussbaum 435,698(2) 7.3%
Jerry L. Ruyan 435,698(2) 7.3%
Christopher B. Hewett 1,000 *
Marvin G. Fields 21,727(3) *
Donald H. Walker 9,441(4) *
All Directors and executive officers as
a group (11 persons) 2,532,207 40.7%
<FN>
* Less than 1% of class.
(1) See footnotes (1), (2), (3) and (5) above.
</TABLE>
- 3 -
<PAGE> 6
(2) See footnote (7) above.
(3) Includes 7,498 shares over which Mr. Fields has sole voting and
investment power and 14,229 shares which he has the right to acquire
pursuant to the exercise of employee stock options.
(4) Includes 2,329 shares over which Mr. Walker has sole voting and
investment power and 7,112 shares which he has the right to acquire
pursuant to the exercise of employee stock options.
NUMBER OF DIRECTORS
Article II, Section 1 of the Company's Code of Regulations provides
that the business of the Company shall be managed and conducted by a Board of
Directors consisting of not less than five nor more than nine members. The
shareholders previously set the number of directors at eight.
The Board is asking shareholders to increase the number of Board
members to nine. This will give the shareholders an opportunity to add
experienced and qualified candidates to the Board. Additionally, the increase in
the number of Board members to an odd number will prevent a deadlock from
occurring on the Board. At the last annual shareholders meeting, the
shareholders voted to have the Code of Regulations require that a majority of
the Directors be independent by adding the following provision to Article II,
Section 1 of the Code: "A majority of the Directors and of each committee of the
Directors of the Corporation shall be persons who are not, and have not been
within three years of the date of their selection, an officer or employee of the
Corporation or a relative of any such person or a person having a material
relationship with the Corporation as an advisor or consultant." Ohio law
provides that the number of directors may be fixed or changed by the affirmative
vote of the holders of a majority of the shares which are represented at the
Meeting and entitled to vote on the proposal. All of the current Board members
and executive officers intend to vote all their shares in favor of the increase
in the number of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
ELECTION OF DIRECTORS
The following Directors have been nominated for election at the Meeting
to serve for two-year terms and until their successors are elected and
qualified.
<TABLE>
<CAPTION>
Positions with the Company,
Business Experience Director
Name and Other Directorships Since
- ---- ----------------------- -----
<S> <C> <C>
Craig F. Maier President and Chief Executive Officer of the Company 1984
(Age 48)
Daniel W. Geeding Director of the Company; Professor of management and 1992
(Age 55) entrepreneurship (since June, 1997) and Director of the Center
for International Business (since May, 1996), and formerly Dean
(from April, 1988 to June, 1997), Xavier University; Director of
Zaring National, Inc., Glenway Financial Corporation and
ChoiceCare Corporation
Malcolm M. Knapp Director of the Company; President of Malcolm M. Knapp, Inc. 1997
(Age 58) (restaurant business consulting)
Blanche F. Maier Director of the Company 1961
(Age 70)
Christopher B. Hewett Director, President and Chief Executive Officer, Meritage N/A
(Age 38) Hospitality Group, Inc. (since January, 1996); President of
Meritage Capital Corp. (private holding Company) (since
November, 1993); former President and Chief Executive Officer,
Key Largo Group Inc. f/k/a Ocean Reef Club, Inc. (from
September, 1991 to January, 1997)
</TABLE>
- 4 -
<PAGE> 7
At the Meeting, if the shareholders vote to increase the number of
directors to nine, five Directors are to be elected to serve until the 1999
annual meeting of shareholders and until their successors have been elected and
qualified. If cumulative voting is properly declared, the votes represented by
Proxies will be distributed among the nominees to elect Mr. Hewett and other
nominees, as determined by the proxy holders. All of the current Board members
and executive officers intend to vote their shares for the election of the
nominees set forth herein, or if cumulative voting is declared, for the election
of Mr. Hewett and other nominees determined by the proxy holders. 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 such nominee. The
Board of Directors has no knowledge or reason to believe that any nominee will
be unable or unwilling to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and certain information
concerning the Directors who were elected at the 1996 annual meeting to serve
until the 1998 annual shareholders meeting and until their successors are
elected and qualified, and the executive officers of the Company:
<TABLE>
<CAPTION>
Positions with the Company,
Business Experience Director
Name and Other Directorships Since
- ---- ----------------------- -----
<S> <C> <C>
Directors
- ---------
Jack C. Maier Chairman of the Board of the Company 1961
(Age 72)
William A. Mauch Director of the Company; Administrator of the Cincinnati office 1992
(Age 76) of the law firm of Thompson, Hine & Flory, L.L.P.
Barry S. Nussbaum Director of the Company; President and Chief Executive Officer of 1996
(Age 42) Barry S. Nussbaum Company; Director and Chief Financial Officer
of PR Nutrition, Inc.
Jerry L. Ruyan Director of the Company; Partner of Redwood Venture Group, Ltd. 1996
(Age 51) (since August, 1995); Director of Meridian Diagnostics, Inc. and
Meritage Hospitality Group, Inc.; former Chief Executive Officer
of Meridian Diagnostics, Inc. (from March, 1977 to August, 1995)
Executive Officers
- ------------------
Donald H. Walker Vice President-Finance, Chief Financial Officer (since October, N/A
(Age 51) 1996) and Treasurer (since June, 1982) of the Company
Marvin G. Fields Senior Vice President-Operations and Chief Operations Officer of N/A
(Age 62) the Company since June, 1973; Director of the Company from April,
1975 to October, 1996
W. Gary King Counsel (since June, 1986) and Secretary (since October, 1996); N/A
(Age 60) Assistant Secretary from September, 1972 to October, 1996
</TABLE>
BOARD COMMITTEES
The Board of Directors of the Company held fourteen meetings during the
fiscal year ended June 1, 1997. Each Director attended at least 75% of the
aggregate of the meetings of the Board and the Committees of which he or she is
a member that were held during the year or portion of the year during which he
or she was a Director or served as a Committee member. Directors who are not
employees were paid a fee of $600 for each meeting of the Board attended. In
addition, Messrs. Geeding, Knapp, Mauch, Nussbaum, and Ruyan were each paid an
annual fee of $12,000, and a fee of $600 for each committee meeting attended.
- 5 -
<PAGE> 8
The Board of Directors of the Company has an audit committee and a
compensation committee, but no standing nominating committee.
The Audit Committee of the Board of Directors is composed of three
outside directors, Daniel W. Geeding, William A. Mauch and Jerry L. Ruyan.
During the fiscal year ended June 1, 1997, the committee held five meetings. The
Audit Committee performs 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. The committee also met separately without management
present with the independent auditors to discuss the audit.
The Board of Directors had a Director Search Committee during the last
fiscal year to search for and recommend qualified candidates to the Board to
fill the vacant director seat created when Marvin G. Fields resigned from the
Board. The committee was composed of Daniel W. Geeding, Jack C. Maier and
William A. Mauch, and the committee met one time during the fiscal year ended
June 1, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of three outside directors,
Daniel W. Geeding, William A. Mauch and Barry S. Nussbaum. During the fiscal
year ended June 1, 1997, the committee held four meetings. The Compensation
Committee establishes policies of the Company with respect to the compensation
of executive officers and determines such compensation.
During the fiscal year ended June 1, 1997, 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 $494,343 and paid to the Company advertising fees of
$46,911, employee leasing fees of $582,488, payroll and accounting fees of
$20,324 and franchise fees of $70,367. Other members of Mr. and Mrs. Maier's
family are the owners of another franchised restaurant which during such fiscal
year made purchases from the Company's commissary totaling $636,170 and paid to
the Company advertising fees of $62,552, employee leasing fees of $796,289,
payroll and accounting fees of $23,585 and franchise fees of $93,828. During the
fiscal year ended June 1, 1997, a franchised restaurant owned by Craig F. Maier,
an officer and Director of the Company, made purchases from the Company's
commissary totaling $307,857 and paid to the Company advertising fees of
$29,800, employee leasing fees of $416,663, payroll and accounting fees of
$17,865 and franchise fees of $44,700. 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Act"), the Directors, certain of the Company's officers and persons owning
more than 10% of the outstanding shares of the Company's 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, to the Company's knowledge, the
aforesaid filing requirements were satisfied by the persons subject thereto.
- 6 -
<PAGE> 9
EXECUTIVE COMPENSATION
The following information is furnished with respect to each of the four
most highly compensated executive officers of the Company, including the Chief
Executive Officer, for the fiscal year ended June 1, 1997. These four
individuals are the only executive officers whose combined salary and bonus for
the fiscal year exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-------------------
LONG-TERM
COMPEN-
SATION
OTHER ------ ALL
ANNUAL AWARDS OTHER
COMPEN ------ COMPEN-
NAME AND TITLE YEAR SALARY BONUS SATION OPTIONS SATION
-------------- ---- ------ ----- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Craig F. Maier 1997 $ 137,891 $ 0 $ 18,515(b) 0 $ 1,218(c)
President and Chief 1996 138,534 0 17,973(b) 0 1,986(c)
Executive Officer 1995 133,780 0 16,039(b) 0 1,218(c)
Jack C. Maier 1997 $ 300,000 $ 0 (a) 0 $ 0
Chairman of the Board 1996 305,770 0 (a) 0 0
1995 428,005 0 (a) 0 85,000(d)
Marvin G. Fields 1997 $ 170,570 $ 0 (a) 0 $ 4,348(e)
Senior Vice President and Chief 1996 173,851 0 (a) 0 4,372(e)
Operations Officer 1995 170,570 0 (a) 0 4,384(e)
Donald H. Walker 1997 $ 102,600 $ 0 (a) 0 $ 2,310(f)
Vice President and Chief Financial
Officer
<FN>
(a) In 1995, 1996, and 1997, the value of perquisites and other personal benefits received by each of Messrs. Maier
and Fields, and in 1997 by Mr. Walker, did not exceed an amount equal to the lesser of $50,000 or ten percent of
the sum of the applicable officer's salary and bonus for such year.
(b) Perquisites and other personal benefits received by Mr. Maier consisted of $4,849 in 1997, $5,315 in 1996 and
$4,476 in 1995 as an auto allowance; $5,876 in 1997, $5,208 in 1996, and $4,431 in 1995 in premiums for medical
reimbursement insurance paid by the Company; and $7,790 in 1997, $7,450 in 1996, and $7,132 in 1995 in premiums
for supplemental long term disability insurance paid by the Company.
(c) Represents the premium paid by the Company on split dollar life insurance policies.
(d) Represents the premium paid by the Company on a life insurance policy which funds the retirement compensation
provided for in Mr. Maier's employment agreement.
(e) Represents premiums paid by the Company on split dollar life insurance policies of $2,216 in 1997, $2,199 in 1996
and $2,252 in 1995, and Company matching contributions to the Frisch's Executive Savings Plan of $2,132 in 1997,
$2,173 in 1996, and $2,132 in 1995.
(f) Represents premiums paid by the Company on split dollar life insurance policies of $1,276 in 1997 and Company
matching contributions to the Frisch's Executive Savings Plan of $1,034 in 1997.
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 the Compensation Committee. 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 during the fiscal year ended June 1, 1997.
The following table sets forth information regarding the exercise of stock options by each of the named executive
officers during the fiscal year ended June 1, 1997 and the value of all remaining options (all of which are exercisable) at
June 1, 1997 (all such options were granted under the 1984 Stock Option Plan, the predecessor to the 1993 Stock Option
Plan):
</TABLE>
- 7 -
<PAGE> 10
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED NET VALUE OPTIONS AT OPTIONS AT
NAME ON EXERCISE REALIZED 6/1/97 6/1/97(1)
- ---- ----------- -------- ------ ---------
<S> <C> <C> <C> <C>
Craig F. Maier 0 --- 101,891 $3,452
Jack C. Maier 0 --- 85,394 0
Marvin G. Fields 0 --- 14,229 0
Donald H. Walker 0 --- 7,112 0
<FN>
(1) As of June 1, 1997, options on 14,090 shares held by Craig F. Maier were in-the-money. The exercise price
of all the other listed options exceeded the market price of the Common Stock.
</TABLE>
DEFINED BENEFIT PENSION PLAN AND EXECUTIVE RETIREMENT PLAN
The Pension Plan adopted by the Board of Directors, in which each of
the executive officers of the Company participates, provides payments of annual
benefits upon the retirement of employees covered by the Plan.
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 consecutive compensation periods. 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 elective contributions to a Section 125 or 401(k)
plan.
Amounts set aside under the Plan are computed on an actuarial basis
using an aggregate funding method. No contribution was made to the Plan during
the fiscal year ended June 1, 1997.
Estimated annual retirement benefits under the Pension Plan, assuming
retirement at age 65 for Messrs. Craig F. Maier, Marvin G. Fields and Donald H.
Walker, would be, respectively, $70,000, $77,000 and $40,000.
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
1997 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 and Marvin G. Fields are eligible, at their normal retirement ages, to
receive supplemental annual benefits under the Executive Retirement Plan of
$42,530 and $4,704, respectively.
EMPLOYMENT CONTRACTS AND CHANGES-IN-CONTROL ARRANGEMENTS
Pursuant to an employment agreement between the Company and Jack C.
Maier, effective June 2, 1997, which was recommended for approval by a majority
of the Compensation Committee and 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 to Mr. Maier or to
his survivors for each of the next ten years the sum of $214,050, 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
- 8 -
<PAGE> 11
payments. The agreement also provides that upon cessation of employment, Mr.
Maier will, if not prevented by disability, provide consulting services to the
Company, for which he shall be paid a fee of $100,000 per year for a maximum of
seven years.
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 (including incentive compensation) over the
three preceding calendar years (reduced by any disability benefits received
under any disability income plan maintained by the Company), 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) after giving effect to such incentive compensation payment.
Incentive compensation is to be paid 80% 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. The options will have a ten year term.
The provisions of the agreement between the Company and Craig F. Maier
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 and Marvin
G. Fields 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 Messrs. Maier and Fields
under these agreements if they were terminated on the date of filing of this
Proxy Statement, would be approximately $693,000 and $548,000, respectively. The
discount rate used for determining the amount of such payments was 2.3%, 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 June 1, 1997 was determined in accordance with the terms of
employment agreements approved by the Board of Directors in 1995. 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 June 1, 1997 was determined in accordance with salary merit increase
guidelines and incentive compensation formulas established prior to the
commencement of the fiscal year.
The policies with respect to the Company's executive officers are: (1)
to pay salaries generally in the middle of 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.
- 9 -
<PAGE> 12
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 68 comparable restaurant companies, including five of the six
companies comprising the S&P Restaurants Index and all ten members of the peer
group used for the Corporate 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 1997, no
incentive compensation was paid because the pre-tax consolidated earnings test
was not met.
Daniel W. Geeding
William A. Mauch
Barry L. Nussbaum
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<PAGE> 13
CORPORATE PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
Company's cumulative total stockholder return on its Common Stock over the five
year period ending May 31, 1997 with the Standard & Poor's Restaurants Index,
the Standard & Poor's 500 Stock Index and a group of the Company's peer issuers,
selected by the Company in good faith. The graph assumes an investment of $100
in the Company's Common Stock, in each index and in the common stock of the peer
group on May 31, 1992, and reinvestment of all dividends.
<TABLE>
<CAPTION>
FRISCH'S RESTAURANTS, INC.
COMPARISON OF FIVE-YEAR TOTAL RETURN TO THE
S&P RESTAURANTS INDEX, THE S&P 500 INDEX
AND THE PEER GROUP
Company Name/Index Base Period
May 92 May 93 May 94 May 95 May 96 May 97
<S> <C> <C> <C> <C> <C> <C>
Frisch's
Restaurants,
Inc. 100.00 88.66 76.29 51.57 68.25 90.84
S&P 500
Index 100.00 111.61 116.36 139.86 179.63 232.47
Restaurant
Index 100.00 107.77 132.27 156.88 196.14 204.00
Peer Group 100.00 122.78 106.51 97.93 102.19 98.31
</TABLE>
The Peer Group consists of the following issuers: Bob Evans Farms,
Consolidated Products, Inc., Cracker Barrel Old Country Store, Denamerica Corp.,
Furrs Bishops, IHOP Corp., Perkins Family Restaurants LP; Ryan's Family Steak
Houses, Inc., Shoney's, Inc. and VICORP Restaurants.
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
and serve as the Company's independent public accountants for the fiscal year
commencing June 2,1997. This firm of independent certified public accountants
has made the audits of the Company's accounts since 1952.
Shareholder ratification of the selection of auditors is not required
by law, however, the Board nevertheless decided to ascertain the views of the
shareholders in this regard. If the selection of Grant Thornton LLP is not
ratified at the Meeting, the Board of Directors will consider the selection of
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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
SELECTION OF GRANT THORNTON LLP AS AUDITORS.
SHAREHOLDER PROPOSALS
It is anticipated that the 1998 annual meeting of shareholders will be
held on Monday, October 5, 1998. Proposals of shareholders intended to be
presented at the 1998 annual meeting must be received at the Company's executive
offices on or before May 18, 1998 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 and 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, the Company will request banks,
brokers and other custodial nominees and fiduciaries to supply proxy
- 11 -
<PAGE> 14
material to the beneficial owners of the Common Stock of whom they have
knowledge, and will reimburse them for their expenses in so doing. Certain
officers and employees of the Company may solicit Proxies in person or by
telephone, facsimile transmission or mail, for which they will not receive any
special compensation. The Company has retained the firm of McCormick & Pryor,
for a fee of approximately $5,000 plus expenses, to assist in soliciting
proxies, including those from shareholders who own Company shares through banks,
brokerage houses and other custodians or nominees.
OTHER MATTERS
The Company's Board of Directors knows of no other matters to be
presented at the Meeting other than those set forth above. However, if any other
matters come before the meeting, the holders of the Proxy will vote the shares
represented by the Proxy on such matters in accordance with their judgment and
discretionary authority to do so in included in the Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
W. GARY KING
Secretary
Dated October 30, 1997
MANAGEMENT OF THE COMPANY WILL SUPPLY WITHOUT COST, UPON WRITTEN REQUEST, A COPY
OF THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES. SUCH REQUEST SHOULD BE DIRECTED TO MR. DONALD H.
WALKER, CHIEF FINANCIAL OFFICER, FRISCH'S RESTAURANTS, INC., 2800 GILBERT
AVENUE, CINCINNATI, OHIO 45206.
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<PAGE> 15
PROXY
FRISCH'S RESTAURANTS, INC.
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 24, 1997
The undersigned shareholder of Frisch's Restaurants, Inc. (the
"Company") hereby nominates, constitutes and appoints Jack C. Maier and Craig F.
Maier, and each of them, the attorney, agent and proxy of the undersigned, with
full powers of substitution, to vote all the stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company to be held at the Quality Hotel Riverview, 668 W. Fifth Street,
Covington, Kentucky 41011, on Monday, November 24, 1997 at 10:00 a.m. and at any
and all adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present as follows:
1. NUMBER OF DIRECTORS
To increase the number of directors on the Board to nine:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF DIRECTORS
To elect the five persons below (or four of the persons listed
below, including Mr. Hewett, if the size of the Board is not increased to nine
as set forth in No. 1 above) to serve as directors until the 1999 Annual Meeting
of Shareholders and until their successors are elected and have qualified:
Craig F. Maier
Daniel W. Geeding
Malcolm M. Knapp
Blanche F. Maier
Christopher B. Hewett
[ ] AUTHORITY GIVEN [ ] AUTHORITY WITHHELD
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME BUT NOT ALL OF THE
NOMINEES NAMED ABOVE, YOU SHOULD CHECK THE BOX MARKED "AUTHORITY GIVEN" AND YOU
SHOULD ENTER THE NAME(S) OF THE NOMINEE(S) WITH RESPECT TO WHOM YOU WISH TO
WITHHOLD AUTHORITY TO VOTE IN THE SPACE PROVIDED BELOW:
- --------------------------------------------------------------------------------
PLEASE SIGN AND DATE ON THE REVERSE SIDE
<PAGE> 16
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
Ratifying the appointment of Grant Thornton LLP as independent
public accountants of the Company for the fiscal year commencing June 2, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" ON PROPOSAL 1,
"AUTHORITY GIVEN" ON PROPOSAL 2, AND "FOR" ON PROPOSAL 3. THE PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS UNLESS A
CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN
ACCORDANCE WITH SUCH INSTRUCTIONS. IF CUMULATIVE VOTING IS PROPERLY DECLARED,
THE VOTES WILL BE DISTRIBUTED AMONG THE FIVE NOMINEES TO ELECT MR. HEWETT AND
OTHER NOMINEES DETERMINED BY THE PROXY HOLDERS. IF THE SIZE OF THE BOARD IS NOT
INCREASED TO NINE, THE VOTES REPRESENTED BY THIS PROXY FOR ELECTION OF DIRECTORS
WILL BE VOTED AS DETERMINED BY THE PROXY HOLDERS. IN ALL OTHER MATTERS, IF ANY,
PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF THE
PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS,
IF ANY.
DATED: , 1997
- ---------------- --------------
(Number of Shares)
<TABLE>
<CAPTION>
<S> <C>
----------------------------------------------------
(Please Print Your Name)
----------------------------------------------------
(Signature of Shareholder)
----------------------------------------------------
(Please Print Your Name)
----------------------------------------------------
(Signature of Shareholder)
(Please date this proxy and sign your name as it
appears on the stock certificates. Executors,
administrators, trustees, etc. should give their
full titles. All joint owners should sign.)
</TABLE>
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS, AND MAY
BE REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
