<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 [ ]
Check the appropriate box:
[ ] 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 ss.240.14a-11(c) or ss.240.14a-12
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:
________________________________________________________________________
<PAGE> 2
FRISCH'S RESTAURANTS, INC.
2800 GILBERT AVENUE
CINCINNATI, OHIO 45206
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 4, 1999
---------------
Dear Shareholders:
The annual meeting of the shareholders of Frisch's Restaurants, Inc.,
an Ohio corporation, will be held at the Clarion Hotel Riverview, 668 W. Fifth
Street, Covington, Kentucky 41011 on Monday, October 4, 1999 at 10:00 a.m.,
Eastern Daylight Savings Time, for the following purposes:
1. Election of five Directors.
2. Ratification of the appointment of Grant Thornton LLP as independent
auditors.
3. Vote upon shareholder proposal described in accompanying proxy
statement, if properly presented at the meeting.
4. Transaction of such other business as may properly come before the
meeting or any adjournments thereof.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON
PROPOSAL 1, A VOTE "FOR" ON PROPOSAL 2 AND A VOTE "AGAINST" ON PROPOSAL 3.
Shareholders of record at the close of business on September 2, 1999 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
September 10, 1999
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE VOTE BY SIGNING AND DATING
THE ENCLOSED PROXY AND RETURNING 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 OCTOBER 4, 1999
------------
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"), and at
any and all adjournments thereof. The Meeting will be held at the Clarion Hotel
Riverview, 668 W. Fifth Street, Covington, Kentucky 41011 on Monday, October 4,
1999 at 10:00 a.m., Eastern Daylight Savings Time. This Proxy Statement and the
enclosed form of proxy are first being sent to shareholders on or about
September 10, 1999.
THE PROXY
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. When you properly
execute and return your proxy, the shares it represents will be voted at the
meeting as specified on your proxy. If no specification is made, the shares
represented by your duly executed proxy will be voted (i) for the election as
Directors of each of the five nominees listed thereon; (ii) for the ratification
of Grant Thornton LLP as the independent auditors; and (iii) against the
shareholder proposal. The proxy will be voted at the discretion of the proxy
holders, in accordance with the recommendations of the Board, on any other
matter that may properly come before the meeting, including, in accordance with
the rules of the Securities and Exchange Commission, any matter which the
Company did not have notice of by July 26, 1999.
REVOCABILITY OF PROXIES
You may revoke your proxy at any time before it is exercised by (i)
submitting a duly executed proxy bearing a later date; (ii) filing a written
notice of revocation with the President of the Company; or (iii) by attending
and voting in person at the Meeting.
VOTING SECURITIES AND VOTING
RECORD DATE
The Board of Directors has fixed the close of business on September 2,
1999 as 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"). There were 5,827,244 shares of the Company's common stock
("Common Stock") issued and outstanding on the Record Date.
VOTING
You are entitled to one vote for each share of Common Stock you owned
of record on the Record Date on any matter submitted to a vote at the Meeting.
However, in connection with the election of directors, shares may be voted
cumulatively if written notice that cumulative voting for the election of
Directors is desired 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. The Chairman will announce the
giving of any such notice upon the convening of the Meeting and all shareholders
may then cumulate their votes for director nominees. Cumulative voting means
that you have the right to vote the number of shares you owned as of the Record
Date, multiplied by the number of Directors to be elected (five). You may cast
this total number of
<PAGE> 4
votes for one nominee or distribute the votes among some or all of the nominees
in any manner you desire. If cumulative voting is declared at the Meeting, votes
represented by proxies may be cumulated in the discretion of the proxy holders,
in accordance with the recommendations of the Board, and discretionary authority
to do so is included in the proxy.
QUORUM REQUIREMENT
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.
VOTE REQUIRED
At the Meeting, directors will be elected by a plurality of the votes
cast. Therefore, the five nominees receiving the greatest number of votes will
be elected as Directors. Each other matter presented at the Meeting will be
decided by a majority of the votes cast on that matter.
METHOD OF COUNTING VOTES
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. 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 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.
2
<PAGE> 5
PROPOSALS
PROPOSAL 1 - ELECTION 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 nine. The Code of
Regulations also requires that a majority of the Directors be independent.
At the Meeting, five Directors are to be elected for a two-year term,
to serve until the 2001 annual meeting of shareholders and until their
successors have been elected and qualified. Your Board of Directors has
unanimously nominated the five persons named below for election as Directors at
the Meeting. The principal occupations and certain other information about the
nominees are set forth below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" FOR ALL
DIRECTOR NOMINEES.
- --------------------------------------------------------------------------------
Positions with the Company,
Business Experience Director
Name: and Other Directorships Since
- ----- ----------------------- -----
Craig F. Maier President and Chief Executive Officer and 1984
(Age 49) a Director of the Company
Daniel W. Geeding Director of the Company; Professor of 1992
(Age 57) management and entrepreneurship (since
June, 1997) and Director of the Center for
International Business (since May, 1996),
and formerly Dean, College of Business
Administration (from April, 1988 to June,
1997), Xavier University; Director of
Zaring National, Inc. and Glenway
Financial Corporation
Malcolm M. Knapp Director of the Company; President of 1997
(Age 60) Malcolm M. Knapp, Inc. (restaurant
business consulting)
Blanche F. Maier Director of the Company; Chairman of the 1961
(Age 72) Board of Trustees, Cincinnati Ballet
Dale P. Brown Writer (since January, 1999); President N/A
(Age 52) and Chief Executive Officer, Sive/Young &
Rubicam (advertising agency) (July, 1990
until December, 1998); Board of Trustees,
University of Richmond; Director of Ohio
National Financial Services, Cincinnati
2012 Inc., Metropolitan Growth Alliance
and the Queen City Club; Recipient of Two
Silver Medals, American Advertising
Federation; Chair, Women's Initiative for
Deloitte & Touche
- --------------------------------------------------------------------------------
Votes represented by proxies will be cast by the proxy holders in such
a way as to effect the election of all five nominees, or as many thereof as
possible under the rules of cumulative voting in accordance with the
recommendation of the Board. All nominees have consented to serve as directors
if elected. However, in the event that any nominee shall become unable to serve
prior to the Meeting, it is intended that the proxies will be voted for the
balance of those nominees named and for such substitute nominee, if any, as
shall be designated by the Board.
3
<PAGE> 6
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and certain information
concerning the current Directors whose terms expire at the 2000 Annual
Shareholders Meeting and the executive officers of the Company:
- --------------------------------------------------------------------------------
DIRECTORS
Positions with the Company,
Business Experience Director
Name and Other Directorships Since
- ---- ----------------------- -----
Jack C. Maier Chairman of the Board of the Company 1961
(Age 74)
William A. Mauch Director of the Company; Administrator of 1992
(Age 78) the Cincinnati office of the law firm of
Thompson, Hine & Flory, L.L.P.
William J. Reik, Jr. Director of the Company, Managing 1998
(Age 61) Director, William D. Witter, Inc.
(investment counseling firm); Managing
Director, Mitchell Hutchins Asset
Management, Inc. (until February, 1991)
Lorrence T. Kellar Director of the Company, Vice President - 1998
(Age 62) Real Estate, Kmart Corporation (from
April, 1996); Group Vice President -
Finance and Real Estate, The Kroger Co.
(until April, 1996); Director of
Loehmann's, Inc.(1) and Multi-Color
Corporation; Trustee of Bartlett Capital
Trust (mutual fund group); Trustee,
Cincinnati Symphony Orchestra
EXECUTIVE OFFICERS
Positions with the Company,
Business Experience
Name and Other Directorships
- ---- -----------------------
Donald H. Walker Vice President-Finance, Chief Financial
(Age 53) Officer (since October, 1996) and
Treasurer (since June, 1982) of the
Company
Marvin G. Fields Senior Vice President, Chief Operations
(Age 64) Officer (until September, 1998), and
Director (from April, 1975 to October,
1996) of the Company
W. Gary King Counsel (since June, 1986) and Secretary
(Age 62) (since October, 1996); Assistant Secretary
from September, 1972 to October, 1996
Paul F. McFarland Vice President and Chief Operating Officer
(Age 53) of the Company (since September, 1998);
Executive Vice President of Operations and
Chief Operating Officer, Long John Silvers
(October, 1992 until March, 1997)(2)
- --------------------------------------------------------------------------------
(1) Loehmann's, Inc. filed a Voluntary Petition under Chapter 11
with a bankruptcy court in Delaware on May 18, 1999. The case is
still pending.
(2) Long John Silver's Restaurants, Inc. filed a Voluntary
Petition under Chapter 11 with a bankruptcy court in Delaware on
June 1, 1998. The case is still pending.
4
<PAGE> 7
PROPOSAL 2 - 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 May 31, 1999. 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.
PROPOSAL 3 - SHAREHOLDER PROPOSAL
- ---------------------------------
Two shareholders have jointly submitted the proposal set forth below
which they intend to present at the Meeting. The Company will promptly furnish
the names, addresses and stock ownership of the shareholders submitting the
proposal to any shareholder who requests such information. In accordance with
the rules of the Securities and Exchange Commission, we are reprinting below the
proposal and supporting statement as it was submitted to us; we take no
responsibility for the content or accuracy of the statements contained therein.
THE BOARD HAS UNANIMOUSLY CONCLUDED IT DOES NOT SUPPORT THIS PROPOSAL AND, FOR
THE REASONS SET FORTH BELOW, RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE
PROPOSAL.
PROPOSAL: RESOLVED, that the shareholders of Frisch's Restaurants, Inc.
recommend that the Board of Directors retain an independent
investment banking firm to explore all alternatives to enhance
shareholder value and the value of the Company including, but
not limited to, the sale of all or substantially all of the
Company's assets, a merger or other business combination or a
divestiture of a major division of the Company.
SUPPORTING STATEMENT:
We own 435,698 shares of Frisch's Common Stock which far exceeds the
number of shares owned by all of the directors and executive officers
of Frisch's except for members of the Maier family, as shown elsewhere
in the Proxy Statement. This statement was based on information
publicly available as of May 7, 1999. We were elected as directors for
Frisch's in opposition to management's slate at the 1996 Annual
Shareholders' Meeting. We did not seek reelection to the Board at the
1998 Annual Shareholders' Meeting because of the expense involved and
because we hoped that management's addition to the Board of new
directors, Lorrence T. Kellar and William J. Reik, Jr., would provide
impetus to the changes we had urged with the aim of increasing the
value of the Company's Common Stock.
Unfortunately, however, we have seen no evidence of any changes to
date. The stock continues to languish in the $10 area while the various
stock market indexes are making new highs. An investment of $100 in
Frisch's stock on May 28, 1993 declined to $85 at May 31, 1998 while
the Standard & Poors 500 Index at the same time increased from $100 to
$272. Based on a May 5, 1999 close of $10 - 1/16, that $100 investment
made on May 28, 1993 was worth only $68.53 on May 5, 1999.
During the past three years, the Maier family members, Jack and Craig,
have received $1,381,130 in compensation, which does not include fees
to Mrs. Maier and salaries of other Maier children who are employees
but not corporate officers, while we as shareholders have received
lackluster equity performance. We refer you to the "Summary
Compensation Table" and "Certain Relations and Related Transaction"
sections of this year's proxy statement for fiscal 1999 information.
Therefore, it is evident to us that there is little prospect for any
improvement in the Company's stock price or in the Company's business
under current management. We believe that the only way to achieve
shareholder value is to sell all or major portions of the Company and,
to that end, we are proposing this resolution.
We are not soliciting proxies but urge you to vote for our resolution.
5
<PAGE> 8
BOARD OF DIRECTORS' RECOMMENDATION:
In April, 1997, the Company retained Furman Selz LLC, a reputable,
independent New York investment banking firm, to assist the company in its
development and evaluation of strategic alternatives to enhance shareholder
value. The Board received the analysis and recommendations of Furman Selz in
May, 1997. As part of its financial advisory services, Furman Selz conducted an
extensive review and analysis of the Company and:
(a) evaluated the current operations of the Company from a financial
and strategic perspective;
(b) identified, evaluated and presented to the Board potential
strategic alternatives to enhance shareholder value;
(c) assessed the financial impact of each of the alternatives
identified by Furman Selz; and
(d) identified the impact on operations and management of the company
of each of the alternatives.
The Company paid Furman Selz a fee of $250,000 plus reimbursement
of $22,700 of their reasonable expenses for their financial advisory services.
The Board does not believe it is in the best interests of the Company
or its shareholders, at this time, to retain another investment banking firm.
The Board incorporated significant portions of the recommendations of Furman
Selz into its strategic plan for the Company and the Board and management have
been implementing the Company's strategic plan to enhance shareholder value. The
following are just some of the meaningful steps taken by the Board and
management to enhance shareholder value, certain of which were recommended by
Furman Selz:
- - In June, 1997, the Company closed 15 unprofitable restaurants outside of
the Cincinnati market to enhance the return on its core business. The
Company has sold 12 of those restaurants to date and proceeds of the sales
have been used to pay down debt and reduce interest payments, thereby
benefiting earnings. As of May 30, 1999, three of the closed units have
been franchised, which will provide a future revenue stream for the
Company.
- - In August, 1997, the Company repurchased 1,142,966 shares of its common
stock in a dutch auction that has been accretive to the Company's earnings
per share.
- - In December, 1997, the Company expanded its core restaurant business by
entering into a development agreement with Golden Corral Franchising
Systems, Inc. to own and operate 23 Golden Corral restaurants in the
Cincinnati, Dayton and Louisville markets. It is projected that these
restaurants will generate operating margins higher than those of an average
Big Boy restaurant, with sales running approximately twice those of a
typical Big Boy restaurant. The first Golden Corral restaurant that opened
in January, 1999, generated sales in excess of $1.5 million in its first
eighteen weeks of operation with a much higher volume than expected. The
Company expects to open four additional Golden Corral restaurants by
February, 2000.
- - In September, 1998, the Company sold its one-fifteenth limited partnership
interest in the Cincinnati Reds (A $1,600,000 investment in June, 1985,
which sold for $7,000,000).
- - In October, 1998, the Board authorized a program to repurchase up to
500,000 shares of its common stock in the open market over a two-year
period to reflect the Board's confidence in the Company's future earnings
capability.
- - In December, 1998, the Company formed STAR Services, L.L.C. with The Orion
Company to sell and market software products developed over the last three
years to reduce employee turnover at Frisch's Big Boy restaurants.
- - In February, 1999, the Company completed the installation of the
point-of-sale system in its Frisch's Big Boy restaurants. The new program
eliminates the cumbersome task of manual order entry and the errors
associated therewith. It provides cost savings and administrative
advantages to the Company through a streamlined automatic entry system
which allows management to accumulate and utilize data instantly for more
effective decision-making that will maximize the return on restaurant
operations.
- - In June, 1999, after completion of a five-year renovation program, the
Company entered into a franchise agreement with Choice Hotels International
to reflag the Quality Hotel Riverview in Covington, Kentucky to the Clarion
Hotel Riverview. This new image and repositioning as a Clarion will enable
the hotel to penetrate a more upscale market and increase its room rates.
- - The Company also implemented an extensive marketing campaign to increase
restaurant sales and Company earnings, along with a new incentive-based
compensation program for Big Boy restaurant managers designed to attract
and retain quality managers and provide incentive to the managers to
improve their operating results.
- - The Company engaged an investor relations consultant to develop a strategy
to enhance shareholder value by exposing the Company to potential new
investors.
6
<PAGE> 9
The implementation of the Company's strategic plan has been very successful.
Net earnings for the fiscal year ended May 30, 1999, which include an
extraordinary gain of $3,712,000 or $.62 per share from the sale of the
Company's limited partnership interest in The Cincinnati Reds professional
baseball team, rose to $8,130,000, or $1.36 per share, from $4,545,000 or $.73
per share in fiscal 1998 and $1,187,000 or $.17 per share in fiscal 1997.
Excluding the extraordinary gain and pre-tax impairment of assets charges of
$1,125,000, $375,000 and $4,600,000 taken in fiscal years 1999, 1998 and 1997
respectively, operating earnings per share would have been $.86 in fiscal 1999,
compared to $.77 in fiscal 1998 and $.59 in fiscal 1997. In addition, same store
sales have increased for seven consecutive quarters. The Company has recorded
positive net earnings for all 39 years that the Company has been public and has
paid 154 consecutive quarterly cash dividends to shareholders.
The Strategic Planning Committee of the Board and the entire Board
constantly review and revise the Company's strategic plan as necessary based
upon changing circumstances. The Board believes that the Company's current
strategic plan is appropriately focused and contains meaningful and practical
strategic steps to enhance shareholder value. Therefore, the Board does not
believe it is in the best interests of the Company or its shareholders for the
Company to incur the substantial expense at this time to engage another
investment banking firm.
FOR THE FOREGOING REASONS, YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE
AGAINST THIS SHAREHOLDER PROPOSAL.
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 30, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION
--------------------------------------
LONG-TERM
OTHER COMPEN- ALL
ANNUAL SATION OTHER
COMPEN- AWARDS COMPEN-
NAME AND TITLE YEAR SALARY BONUS(A) SATION OPTIONS SATION
-------------- ---- ------ -------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Craig F. Maier 1999 $ 140,592 $104,399 (b) 0 $ 1,218(d)
President and Chief 1998 139,482 0 $ 18,543(c) 0 1,218(d)
Executive Officer 1997 137,891 0 18,515(c) 0 1,218(d)
Jack C. Maier 1999 300,000 0 (b) 0 0
Chairman of the Board 1998 300,000 0 (b) 0 0
1997 300,000 0 (b) 0 0
Marvin G. Fields 1999 178,799 9,005 (b) 1,750(e) 4,130(g)
Senior Vice President 1998 173,719 6,524 (b) 5,250(f) 4,414(g)
1997 170,570 0 (b) 0 4,348(g)
Donald H. Walker 1999 116,934 7,037 (b) 1,750(e) 1,895(h)
Vice President and Chief 1998 112,357 6,767 (b) 5,250(f) 1,276(h)
Financial Officer 1997 102,600 0 (b) 0 2,310(h)
Paul F. McFarland 1999 107,689 6,595 43,367(i) 13,500(j) 606(k)
Vice President and Chief
Operating Officer
- --------------------------------------------------------------------------------------------------
</TABLE>
(a) Bonuses are paid 80% in cash and 20% in shares of the Company's Common
Stock.
(b) The value of perquisites and other personal benefits received by the
officer did not exceed an amount equal to the lesser of $50,000 or 10%
of the sum of such officer's salary and bonus for such year.
7
<PAGE> 10
(c) Represents $4,849 in 1998 and 1997 as an auto allowance; $5,544 in 1998
and $5,876 in 1997 in premiums for medical reimbursement insurance paid
by the Company; and $8,150 in 1998 and $7,790 in 1997 in premiums for
supplemental long term disability insurance paid by the Company.
(d) Represents the premium paid by the Company on split dollar life
insurance policies.
(e) Represents stock options for 1,750 shares which were earned by each of
Mr. Fields and Mr. Walker in the fiscal year ended May 30, 1999, but
were granted in July, 1999.
(f) Represents stock options for 3,500 shares which were issued to each of
Mr. Fields and Mr. Walker in May, 1998 to replace options that had
expired under the 1984 Stock Option Plan, and options for 1,750 shares
which were earned by each of Mr. Fields and Mr. Walker in the fiscal
year ended May 31, 1998, but were granted in July, 1998.
(g) Represents premiums paid by the Company on split dollar life insurance
policies of $2,277 in 1999, $2,242 in 1998 and $2,216 in 1997 and
Company matching contributions to the Frisch's Executive Savings Plan
of $1,853 in 1999, $2,172 in 1998 and $2,132 in 1997.
(h) Represents premiums paid by the Company on split dollar life insurance
policies of $1,276 in 1999, 1998 and 1997 and Company matching
contributions to the Frisch's Executive Savings Plan of $619 in 1999
and $1,034 in 1997.
(i) Represents reimbursement of relocation expenses.
(j) Represents stock options for 10,000 shares which were granted during
the fiscal year ended May 30, 1999, and options for 3,500 shares which
were earned in the fiscal year ended May 30, 1999, but were granted in
July, 1999.
(k) Represents Company matching contributions to the Frisch's Executive
Savings Plan.
The following table sets forth information regarding stock options
granted to the named executive officers of the Company during the fiscal year
ended May 30, 1999.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------------------------------
Potential realizable
value at assumed annual
rates of stock price
appreciation for
Individual Grants option term
-------------------------------------------------------- -----------------------
Number of Percent of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Per Expiration
Name Granted Fiscal Year Share Date 5% 10%
---- ------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Craig F. Maier 0 - - - - -
Jack C. Maier 0 - - - - -
Marvin G. Fields 1,750 5% $11.25 7/09/08 $10,413 $29,409
Donald H. Walker 1,750 5% 11.25 7/09/08 10,413 29,409
Paul F. McFarland 10,000 26% 11.25 9/14/08 59,500 168,050
- -------------------------------------------------------------------------------------------------------
</TABLE>
The foregoing options were granted under the 1993 Stock Option Plan,
which 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 recommended by the
Compensation Committee and approved by the Board. 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." In addition to the options listed in the
table above, on July 9, 1998, certain other key employees were granted options
to purchase an aggregate of 15,000 shares at $11.25 per share. All options
granted to employees vest in three equal annual installments.
8
<PAGE> 11
The following table sets forth information regarding the exercise of
stock options by each of the named executive officers during the fiscal year
ended May 30, 1999, and the value of all unexercised options at May 30, 1999.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
- ----------------------------------------------------------------------------------------------------
1993 PLAN
NUMBER OF 1984 PLAN
UNEXERCISED NUMBER OF VALUE OF
OPTIONS EXERCISABLE UNEXERCISED
EXERCISABLE/ UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED NET VALUE UNEXERCISABLE AT OPTIONS AT OPTIONS AT
NAME ON EXERCISE REALIZED 5/30/99 5/30/99 5/30/99(1)
- ---- ----------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Craig F. Maier 0 --- 0 96,913 0
Jack C. Maier 0 --- 0 0 0
Marvin G. Fields 0 --- 1,167 E/4,083 U 0 0
Donald H. Walker 0 --- 1,167 E/4,083 U 0 0
Paul F. McFarland 0 --- 10,000 U 0 0
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) As of May 30, 1999, the exercise price of all listed options exceeded the
market price of the Common Stock.
DEFINED BENEFIT PENSION PLAN AND EXECUTIVE RETIREMENT PLAN
The Pension Plan adopted by the Board of Directors, in which executive
officers of the Company participate through December 31, 1999, provides payments
of annual benefits upon the retirement of employees covered by the Plan.
Commencing in the year 2000, the executive officers of the Company will receive
comparable pension benefits through a nonqualified cash balance plan instead of
accruing additional benefits under the Pension 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 May 30, 1999.
Estimated annual retirement benefits under the Pension Plan and future
cash balance plan, assuming retirement at age 65 for Messrs. Craig F. Maier,
Marvin G. Fields, Donald H. Walker and Paul F. McFarland, would be,
respectively, $70,000, $77,000, $52,000 and $31,000.
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 $160,000. 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 a supplemental retirement benefit to qualified
employees equal to the reduction in their benefits under the qualified Pension
Plan that results
9
<PAGE> 12
when compensation exceeds the Internal Revenue Code limitation, or when elective
salary deferrals are made to the non-qualified Frisch's Executive Savings Plan.
Currently, Messrs. Craig F. Maier, Marvin G. Fields, Donald H. Walker and Paul
F. McFarland are eligible, at their normal retirement ages, to receive
supplemental annual benefits under the Executive Retirement Plan of $42,000,
$5,000, $2,000 and $4,000, respectively.
BOARD COMPENSATION AND COMMITTEES
The Board of Directors of the Company held six meetings during the fiscal
year ended May 30, 1999. Each Director, except Malcolm M. Knapp who attended
four out of six Board meetings, attended at least 75% of the aggregate number of
meetings of the Board held during the year or portion of the year during which
he or she was a Director and all committees of the Board on which the director
served (during the period he or she was a committee member during the year). The
Company pays non-employee Directors an annual fee of $20,000 plus $800 for each
Board meeting and Committee meeting attended. During the fiscal year ended May
30, 1999, each non-employee director was also granted options to purchase 1,000
shares of the Company's Common Stock at an exercise price of $8.31 per share.
Non-employee Directors consist of Mrs. Maier and Messrs. Geeding, Knapp, Mauch,
Hewett, Kellar and Reik.
The Board of Directors of the Company has an Audit Committee composed of
three independent directors, William A. Mauch (Chair), Daniel W. Geeding and
Lorrence T. Kellar. During the fiscal year ended May 30, 1999, the committee
held four 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 established a Nominating Committee in June, 1999,
comprised of Jack C. Maier (Chair), Lorrence T. Kellar and William A. Mauch. The
Nominating Committee's function is to search for and recommend qualified,
experienced candidates to the Board to be nominated for election as Directors at
annual shareholder meetings and to fill any vacancies on the Board. The
Nominating Committee will consider nominees recommended by shareholders. Any
recommendations should be mailed to Jack C. Maier as Chairman of the Nominating
Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee comprised of three
independent directors, Daniel W. Geeding (Chair), William A. Mauch and Malcolm
M. Knapp. During the fiscal year ended May 30, 1999, the committee held three
meetings. The Compensation Committee recommends policies for the Company with
respect to the compensation of executive officers and directors and determines
such compensation, and administers the Company's benefit and stock option plans
.
COMPENSATION COMMITTEE REPORT
The compensation of Jack C. Maier and Craig F. Maier for the fiscal year
ended May 30, 1999 was determined in accordance with the terms of employment
agreements approved by the Board of Directors. The Compensation Committee
believes that these agreements are consistent with the Company's executive
compensation policies. See Employment Contract and Changes-in-Control
Arrangements.
The compensation of all other executive officers for the fiscal year
ended May 30, 1999 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 other 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.
To determine the salaries of the Company's other 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
10
<PAGE> 13
all 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, other 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.
Bonuses were awarded under the incentive compensation program equal to a
percentage of salary, adjusted in accordance with a formula which took into
account the extent to which individual goals were met, the Company's pre-tax
earnings for the fiscal year as a percent of total revenue, and the salary range
maximum.
Daniel W. Geeding, Chair
William A. Mauch
Malcolm M. Knapp
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,
except that one Form 3 reporting his election as a executive officer of the
Company and the grant to him of options to purchase 10,000 shares of the Company
was filed late by Mr. McFarland, one Form 4 reporting the acquisition of 95,131
shares of the Company was filed late by Blanche F. Maier, one Form 5 reporting
the acquisition of 1,158 shares was filed late by W. Gary King and one Form 5
reporting the acquisition of 17 shares was filed late by Karen F. Maier.
EMPLOYMENT CONTRACTS AND CHANGE-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 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
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, as amended on November 24, 1998, 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 (a) 1.5% of the Company's pre-
11
<PAGE> 14
tax consolidated earnings if in such year pre-tax consolidated earnings equal or
exceed 4% but are less than 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, and (b)
3% of the Company's pre-tax consolidated earnings if in such year pre-tax
consolidated earnings equal or exceed 5% of the total revenue of the Company.
However, the incentive compensation shall be reduced to 1.5% of the Company's
pre-tax consolidated earnings to the extent that the payment of the incentive
compensation would reduce the Company's pre-tax consolidated earnings to below
5% of the Company's total revenue, and the incentive compensation shall be
further reduced if necessary so that the Company's pre-tax consolidated
earnings, after reduction for the incentive compensation, shall not be less than
4% of the Company's total revenue. 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 base salary and incentive compensation
was established based upon data provided by an independent consultant that was
derived from a survey of comparable restaurant companies and data obtained from
proxy statements of other 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 is designed to tie performance to
shareholder value by awarding no incentive compensation unless consolidated
pre-tax earnings reach at least 4% 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 only if consolidated pre-tax
earnings targets are achieved.
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 $561,000 and $559,000, respectively. The
discount rate used for determining the amount of such payments was 2.2%, in
accordance with provisions of the agreements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended May 30, 1999, 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 $497,255 and paid to the Company advertising fees of
$48,759, employee leasing fees of $705,132, payroll and accounting fees of
$28,940 and franchise fees of $73,139. 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 $626,054 and paid to the
Company advertising fees of $62,605, employee leasing fees of $881,426, payroll
and accounting fees of $32,701 and franchise fees of $93,907. During the fiscal
year ended May 30, 1999, a franchised restaurant owned by Craig F. Maier, an
officer and Director of the Company, made purchases from the Company's
commissary totaling $300,060 and paid to the Company advertising fees of
$29,679, employee leasing fees of $436,175, payroll and accounting fees of
$25,854 and franchise fees of $44,519. The above described transactions were
effected on substantially similar terms as transactions with persons having no
relationship with the Company.
Karen F. Maier, the Vice President - Marketing of the Company, is the
daughter of Jack C. Maier and Blanche F. Maier and the sister of Craig F. Maier.
During the fiscal year ended May 30, 1999, Ms. Maier received total compensation
of $88,396 from the Company and earned options to purchase 1,750 shares of
Common Stock at an exercise price of $10.25 per share.
Scott C. Maier, the Supervisor of Hotel Operations of the Company, is
the son of Jack C. Maier and Blanche F. Maier and the brother of Craig F. Maier.
During the fiscal year ended May 30, 1999, Mr. Scott Maier received total
compensation of $68,034 from the Company and earned options to purchase 250
shares of Common Stock at an exercise price of $10.25 per share.
Dale P. Brown, a director nominee, was the President, Chief Executive
Officer and a shareholder of Sive/Young & Rubicam, an advertising agency, until
December, 1998. The Company retained the advertising and marketing services of
12
<PAGE> 15
Sive/Young & Rubicam in August, 1997, and paid Sive/Young & Rubicam total
fees of $2,465,806 during the fiscal year ended May 30, 1999.
In September, 1998, the Company sold its one unit of limited
partnership interest in The Cincinnati Reds, an Ohio limited partnership, to
four of the other limited partners of the partnership for a total purchase price
of $7,000,000. William J. Reik, Jr., a director of the Company, was one of the
purchasing limited partners and he purchased an 18.18% interest in the unit from
the Company for $1,272,727.
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 30, 1999 with 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, 1994, and reinvestment of
all dividends.
[GRPAH]
FRISCH'S RESTAURANTS, INC.
COMPARISON OF FIVE-YEAR TOTAL RETURN TO THE
RUSSEL 2000 INDEX, THE S&P 500 INDEX
AND THE PEER GROUP
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
FRS $100 $ 68 $ 89 $119 $ 99 $ 87
S&P 500 INDEX $100 $120 $154 $200 $261 $316
PEER GROUP $100 $ 93 $ 97 $ 92 $111 $ 89
RUSSELL 2000 INDEX $100 $108 $145 $153 $183 $176
The Company is now using the Russell 2000 Index for comparison purposes
because the Company's financial profile more closely resembles the financial
profiles of the companies included in the Russell 2000 Index than the profiles
of the companies included in the S & P 500 Index. The Peer Group consists of the
following issuers: Bob Evans Farms, Consolidated Products, Inc., Cracker Barrel
Old Country Store Group, Inc., Denamerica Corp., Furrs/Bishops, Inc., IHOP
Corp., Ryan's Family Steak Houses, Inc., Shoney's, Inc. and VICORP Restaurants,
Inc.
13
<PAGE> 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of August 1, 1999
(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 1,749,448(1)(5) 29.9%
2800 Gilbert Avenue
Cincinnati, OH 45206
Jack C. Maier 1,006,901(2)(5) 17.2%
2800 Gilbert Avenue
Cincinnati, OH 45206
Craig F. Maier 1,003,923(3)(5) 16.9%
2800 Gilbert Avenue
Cincinnati, OH 45206
Karen F. Maier 836,232(4)(5) 14.3%
2800 Gilbert Avenue
Cincinnati, OH 45206
William D. Witter, Inc. 614,115(6) 10.2%
153 East 53rd Street
New York, NY 10022
Dimensional Fund Advisors, Inc. 420,947(7) 7.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Jerry L. Ruyan, 8730 Red Fox Lane, Cincinnati, OH 437,898(8) 7.4%
45243, and Barry S. Nussbaum, 2775 Via La Valle,
Suite 205, Del Mar, CA 92014 (Wolverine Partners)
</TABLE>
(1) Includes 741,592 shares over which Mrs. Maier has sole voting and
investment power, 89,170 shares over which she has sole voting but
shared investment power, 917,686 shares over which she has sole voting
power only and 1,000 shares which she has the right to acquire pursuant
to the exercise of stock options. The amounts shown above include
1,006,856 shares over which she has sole voting power as Voting Trustee
pursuant to a Voting Trust Agreement dated June 26, 1997, with the
following: Jack C. Maier and herself as Co-Trustees of the Trust
established 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 of the Trust established under the Will of David Frisch,
deceased as to 764,197 shares; and Jack C. Maier, as Trustee under the
Annette Frisch Amended and Restated Trust Agreement as to 153,489
shares. See footnotes (2), (3), (4) and (5). Not included in this
amount are 45 shares owned by Jack C. Maier as to which Mrs. Maier
disclaims beneficial ownership.
(2) Includes 45 shares over which Mr. Maier has sole voting and investment
power, 153,489 shares over which he has sole investment power only, and
853,367 shares over which he shares investment power. 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 of the Trust
established 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 of the Trust established under the Will of Shirley
Heinichen, deceased. See footnotes (1), (3), (4) and (5). Not included
in this amount are 40,404 shares owned by Blanche F. Maier as to which
Mr. Maier disclaims beneficial ownership.
(3) Includes 142,813 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 of the
Trust established under
14
<PAGE> 17
the will of David Frisch, deceased, and 96,913 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 65,035 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 of the
Trust established under the will of David Frisch, deceased, and 7,000
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 February 5, 1999, as reported in an
amended Schedule 13G filed with the Securities and Exchange Commission.
(7) The information given is as of February 11, 1999, as reported in an
amended Schedule 13G filed with the Securities and Exchange Commission.
Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 420,947 shares of
Frisch's Restaurants, Inc. stock as of December 31, 1998, all of which
shares are held in portfolios of DFA Investment Dimensions Group Inc.,
a registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group
Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
(8) The information given is as of May 13, 1999, 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.
15
<PAGE> 18
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of August 1, 1999, with
respect to the number of shares of Common Stock beneficially owned by (i) each
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 named executive officers of the Company as a
group.
<TABLE>
<CAPTION>
Amount Percent
Name Beneficially Owned of Class
---- ------------------ --------
<S> <C> <C>
Jack C. Maier 1,006,901(1) 17.2%
Daniel W. Geeding 4,257(2) *
Malcolm M. Knapp 5,000(3) *
Blanche F. Maier 1,749,448(1) 29.9%
Craig F. Maier 1,003,923(1) 16.9%
William A. Mauch 7,640(4) *
Christopher B. Hewett 2,000(5) *
Lorrence T. Kellar 6,000(6) *
William J. Reik, Jr. 192,860(7) 3.3%
Dale P. Brown 0 *
Marvin G. Fields 14,782(8) *
Paul F. McFarland 13,628(9) *
Donald H. Walker 9,934(10) *
All Directors and named executive
officers as a group (13 persons) 2,252,320 37.6%
</TABLE>
* Less than 1% of class.
(1) See footnotes (1), (2), (3) and (5) on the preceding page.
(2) Includes 3,257 shares over which he has sole voting and investment
power and 1,000 shares that he has the right to acquire pursuant to the
exercise of stock options.
(3) Includes 4,000 shares over which he has sole voting and investment
power and 1,000 shares that he has the right to acquire pursuant to the
exercise of stock options.
(4) Includes 6,640 shares over which he has sole voting and investment
power and 1,000 shares that he has the right to acquire pursuant to the
exercise of stock options.
(5) Includes 1,000 shares over which he has sole voting and investment
power and 1,000 shares that he has the right to acquire pursuant to the
exercise of stock options.
(6) Includes 5,000 shares over which he has sole voting and investment
power and 1,000 shares that he has the right to acquire pursuant to the
exercise of stock options.
(7) Includes 191,860 shares over which he has sole voting and investment
power and 1,000 shares that he has the right to acquire pursuant to the
exercise of stock options.
(8) Includes 7,782 shares over which he has sole voting and investment
power and 7,000 shares that he has the right to acquire pursuant to the
exercise of stock options.
16
<PAGE> 19
(9) Includes 128 shares over which he has sole voting and investment power
and 13,500 shares that he has the right to acquire pursuant to the
exercise of stock options.
(10) Includes 2,934 shares over which he has sole voting and investment
power and 7,000 shares that he has the right to acquire pursuant to the
exercise of stock options.
SHAREHOLDER PROPOSALS
Any shareholder who wishes a proposal to be considered for inclusion in
the Company's Proxy Statement for the 2000 Annual Meeting of Shareholders, which
is currently scheduled for October 2, 2000, must submit the proposal to the
Company on or before May 12, 2000. Proposals should be addressed to W. Gary
King, Secretary, Frisch's Restaurants, Inc., 2800 Gilbert Avenue, Cincinnati,
Ohio 45206. Any such proposal must satisfy the conditions for shareholder
proposals established by the Securities and Exchange Commission in Rule 14a-8
promulgated pursuant to the Securities and Exchange Act of 1934, as amended.
Any shareholder who intends to directly present a proposal at the 2000
Annual Shareholders Meeting (outside of the Rule 142-8 process) must notify the
Company of the proposal on or before July 26, 2000. If the Company is not
notified by such date, the Company will have the right to exercise discretionary
voting authority with respect to such proposal, if presented at the meeting,
without including information regarding such proposal in its proxy materials.
Notices of any intention to present a proposal at the 2000 Annual Shareholders
Meeting should be addressed to the Secretary of the Company at the address set
forth in the foregoing paragraph.
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 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.
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 discretion, in
accordance with the recommendations of the Board, and discretionary authority to
do so is included in the proxy.
BY ORDER OF THE BOARD OF DIRECTORS
W. GARY KING
Dated September 10, 1999 Secretary
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.
17
<PAGE> 20
PROXY
FRISCH'S RESTAURANTS, INC.
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 4, 1999
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 Clarion Hotel Riverview, 668 W. Fifth Street,
Covington, Kentucky 41011, on Monday, October 4, 1999 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. ELECTION OF FIVE DIRECTORS.
To elect the five persons below to serve as directors until
the 2001 Annual Shareholders Meeting and until their successors are elected and
qualified:
Dale P. Brown Daniel W. Geeding Malcolm M. Knapp Blanche F. Maier
Craig F. Maier
[ ] 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:
- --------------------------------------------------------------------------------
2. RATIFICATION OF APPOINTMENT OF GRANT THORNTON LLP AS INDEPENDENT
AUDITORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN AND DATE ON THE REVERSE SIDE
<PAGE> 21
3. SHAREHOLDER PROPOSAL - INVESTMENT BANKING FIRM.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON
PROPOSAL 1, "FOR" ON PROPOSAL 2, AND "AGAINST" 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 CAST IN SUCH A WAY AS TO EFFECT THE ELECTION OF ALL FIVE
NOMINEES, OR AS MANY THEREOF AS POSSIBLE, IN ACCORDANCE WITH THE RECOMMENDATIONS
OF THE BOARD OF DIRECTORS. ON 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:______________, 1999 __________________________________
(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.)
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 PRESIDENT OF THE COMPANY A
WRITTEN 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.
