<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
MORGAN'S FOODS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:________
(2) Aggregate number of securities to which transaction applies:___________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):_____________
(4) Proposed maximum aggregate value of transaction:_______________________
(5) Total fee paid:________________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:________________________________________________
(2) Form, Schedule or Registration Statement No.:__________________________
(3) Filing Party:__________________________________________________________
(4) Date Filed:____________________________________________________________
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<PAGE> 2
MORGAN'S FOODS, INC.
Suite 126
24200 Chagrin Boulevard
Beachwood, Ohio 44122
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 28, 1996
------------------
TO THE SHAREHOLDERS:
You are hereby notified that the Annual Meeting of Shareholders of Morgan's
Foods, Inc., an Ohio corporation (the "Company"), will be held at the Cleveland
Marriott East, 3663 Park East Dr., Beachwood, Ohio, on Friday, June 28, 1996, at
10:00 a.m., Eastern Daylight Time, for the following purposes:
1. To elect the Board of Directors of the Company.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on May 15, 1996 will
be entitled to notice of and to vote at the meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
KENNETH L. HIGNETT
Secretary
June 5, 1996
- --------------------------------------------------------------------------------
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE TO ENSURE THAT THEIR SHARES ARE REPRESENTED AT THE MEETING
OR ANY ADJOURNMENT THEREOF.
<PAGE> 3
MORGAN'S FOODS, INC.
24200 Chagrin Blvd., Suite 126
Beachwood, Ohio 44122
------------------------
PROXY STATEMENT
------------------------
This proxy statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Morgan's Foods, Inc., an
Ohio corporation (the "Company"), for use at the Annual Meeting of Shareholders
of the Company (the "Meeting") to be held at the Cleveland Marriott East, 3663
Park East Dr., Beachwood, Ohio, on Friday, June 28, 1996 at 10:00 a.m., Eastern
Daylight Time, and at any adjournment thereof.
This proxy statement and accompanying notice and form of proxy are being
mailed to shareholders on or about June 5, 1996. A copy of the Company's Annual
Report to Shareholders, including financial statements, for the fiscal year
ended March 3, 1996 (the "1996 fiscal year") is enclosed with this proxy
statement.
The presence of any shareholder at the Meeting will not operate to revoke
his proxy. Any proxy may be revoked, at any time before it is exercised, in open
meeting, or by giving notice to the Company in writing, or by filing a duly
executed proxy bearing a later date.
If the enclosed proxy is executed and returned to the Company, the persons
named therein will vote the shares represented by it at the Meeting. The proxy
permits specification of a vote for the election of directors, or the
withholding of authority to vote in the election of directors, or the
withholding of authority to vote for one or more specified nominees.
Where a choice is specified in the proxy, the shares represented thereby
will be voted in accordance with such specification. If no specification is
made, such shares will be voted at the Meeting FOR the election as directors of
the nominees set forth herein under "Election of Directors".
Under Ohio law and the Company's Articles of Incorporation, broker
non-votes and abstaining votes will not be counted in favor of or against
election of any nominee.
The close of business on May 15, 1996, has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
Meeting. As of May 8, 1996, the Company's outstanding voting securities
consisted of 17,816,430 Common Shares, without par value, each of which is
entitled to one vote on all matters to be presented to the shareholders at the
Meeting.
ELECTION OF DIRECTORS
At the Meeting, shares represented by proxies will be voted, unless
otherwise specified in such proxies, for the election of the seven nominees for
directors named in this proxy statement and the enclosed proxy. These nominees
will, if elected, serve as directors of the Company until the next annual
meeting of the shareholders and until their successors are elected and shall
qualify. All of the nominees are currently members of the Board of Directors and
have consented to be nominated and to serve if elected. If, for any reason, any
one or more nominees becomes unavailable for election, it is expected that
proxies will be voted for the election of such substitute nominees as may be
designated by the Board of Directors.
If notice in writing is given by any shareholder to the President or the
Secretary of the Company, not less than 48 hours before the time fixed for
holding the Meeting, that such
1
<PAGE> 4
shareholder desires that the voting for the election of directors shall be
cumulative, and if an announcement of the giving of such notice is made upon the
convening of the Meeting by the President or Secretary or by or on behalf of the
shareholder giving such notice, each shareholder shall have the right to
cumulate such voting power as he possesses at such election and to give one
candidate an amount of votes equal to the number of directors to be elected
multiplied by the number of his shares, or to distribute his votes on the same
principle among two or more candidates, as he sees fit.
If voting for the election of directors is cumulative, the persons named in
the enclosed proxy will vote the shares represented by proxies given to them in
such fashion as to elect as many of the nominees as possible.
The table below sets forth, as of May 8, 1996, certain information about
each of the nominees for directors.
<TABLE>
<CAPTION>
DIRECTOR
OF THE
PRINCIPAL OCCUPATION COMPANY
NAME AGE FOR THE PAST FIVE YEARS SINCE
- ------------------------- --- --------------------------------------------- -------
<S> <C> <C> <C>
Richard A. Arons 58 Attorney 1985
Lawrence S. Dolin 52 President of Joy Entertainment, Inc. 1981
(consultant in entertainment industry) (July
1993 to present); President of The Front Row
Theatre, Inc. (entertainment facility) (July
1974 to December 1994)
Kenneth L. Hignett 49 Senior Vice President, Chief Financial 1993
Officer and Secretary of the Company (March
1992 to present); Vice President, Secretary
and Treasurer of the Company (January 1991 to
March 1992); Vice President and Treasurer of
the Company (June 1989 to January 1991); and
Vice President, Controller of TRW Real Estate
Loan Services (1984 to June 1989)
Steven S. Kaufman 46 Co-CEO and a founding shareholder, Kaufman & 1989
Cumberland Co. L.P.A. (law firm)
Bernard Lerner 69 President of Automated Packaging Systems, 1989
Inc. (manufacturer of packaging materials and
machinery)
James J. Liguori 47 President and Chief Operating Officer of the 1984
Company (July 1988 to present); Executive
Vice President of the Company (August 1987 to
July 1988); Vice President of the Company
(June 1979 to August 1987)
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTOR
OF THE
PRINCIPAL OCCUPATION COMPANY
NAME AGE FOR THE PAST FIVE YEARS SINCE
- ------------------------- --- --------------------------------------------- -------
<S> <C> <C> <C>
Leonard R. Stein-Sapir 57 Chairman of the Board and Chief Executive 1981
Officer of the Company (April 1989 to
present); Consultant to TRW, Inc.
(information services division) (January 1988
to December 1988); Chairman of the Board of
Record Data TRW, Inc. (information services
company) January 1985 to December 1987)
</TABLE>
The Company has an Executive Committee, an Audit Committee, and a Stock
Option Plan Committee, the members of each of which are appointed by the Board
of Directors. The Company does not have a nominating committee.
The Executive Committee consists of James J. Liguori, Lawrence S. Dolin,
Richard A. Arons and Leonard R. Stein-Sapir. This committee has the authority,
between meetings of the Board of Directors, to exercise substantially all of the
powers of the Board in the management of the business of the Company.
The Audit Committee consists of Lawrence S. Dolin, Steven S. Kaufman and
Bernard Lerner. This committee considers and recommends to the Board of
Directors the appointment of independent accountants for the Company. It reviews
with such accountants the arrangements for and the scope of the audit to be
conducted by them. It also reviews the results of audits and various other
financial and accounting matters affecting the Company.
The members of the Stock Option Plan Committee are Bernard Lerner, Steven
S. Kaufman, and Lawrence S. Dolin. This committee administers the Company's
stock option plans.
The Board of Directors met four times, the Audit Committee once and the
Executive and Stock Option Plan Committees did not meet, during the 1996 fiscal
year. Each director currently serving on the Board attended 75% or more of the
meetings held during such year by the Board and the committee(s) on which he
served.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The following table sets
forth certain information with respect to all persons known to the Company to be
the beneficial owners of more than 5% of the Company's outstanding Common Shares
as of May 8, 1996.
<TABLE>
<CAPTION>
NAME AND ADDRESS PERCENT OF
OF BENEFICIAL OWNER NUMBER OF SHARES CLASS
- ------------------------------------- ---------------- ----------
<S> <C> <C>
Leonard R. Stein-Sapir (1)
24200 Chagrin Blvd., Suite 126
Beachwood, Ohio 44122 3,125,350 17.1%
Richard A. Arons
24200 Chagrin Blvd., Suite 126
Beachwood, Ohio 44122 2,525,000 14.2%
Cramer Rosenthal McGlynn, Inc. (2)
707 Westchester Avenue
White Plains, NY 10604 1,191,000 6.7%
</TABLE>
3
<PAGE> 6
- ---------------
(1) Includes 500,000 shares subject to exercisable options and 350 shares owned
by Mr. Stein-Sapir's children and 5,000 shares owned by his wife. Mr.
Stein-Sapir disclaims any beneficial interest in the shares owned by his
wife and children.
(2) According to a report on Schedule 13G dated April 12, 1996, filed with the
Securities and Exchange Commission, Cramer Rosenthal McGlynn, Inc., an
investment advisory firm ("CRM"), beneficially owned 1,191,000 or 6.7% of
the outstanding Common Shares as of such date. CRM disclosed in such
Schedule 13G that it shares the power to dispose of and vote such shares.
SECURITY OWNERSHIP OF MANAGEMENT. The following table sets forth
information as of May 8, 1996, with respect to Common Shares beneficially owned
by all directors and nominees for election as directors of the Company and by
all officers and directors of the Company as a group. Each person owns
beneficially and of record the shares indicated and has sole voting and
investment power with respect thereto, except as otherwise set forth in the
footnotes to the table.
<TABLE>
<CAPTION>
PERCENT OF
NAME NUMBER OF SHARES CLASS
- ------------------------------------- ---------------- ----------
<S> <C> <C>
Richard A. Arons..................... 2,525,000 14.2%
Lawrence S. Dolin (1)................ 789,005 4.4
James J. Liguori (2)................. 643,729 3.5
Steven S. Kaufman (3)................ 27,370 *
Leonard R. Stein-Sapir (4)........... 3,125,350 17.1
Bernard Lerner....................... 421,000 2.4
Kenneth L. Hignett (5)............... 92,000 *
All officers and directors as a group
(10 persons) (6)................... 7,700,542 40.6%
- ---------------
<FN>
* Less than one percent of the outstanding common shares of the Company.
(1) Includes 398,000 shares owned by partnerships of which Mr. Dolin is a general partner,
3,750 shares owned by Mr. Dolin's wife and 12,255 shares owned by Mr. Dolin's children.
Mr. Dolin disclaims any beneficial interest in the shares owned by his wife and
children.
(2) Includes 500,000 shares subject to exercisable options and 1,000 shares owned by Mr.
Liguori's children and 500 shares owned by his wife. Mr. Liguori disclaims any
beneficial interest in the shares owned by his wife and children.
(3) Includes 6,045 shares owned by Mr. Kaufman's wife, as to which he disclaims any
beneficial interest.
(4) Includes 500,000 shares subject to exercisable options and 350 shares owned by Mr.
Stein-Sapir's children and 5,000 shares owned by his wife. Mr. Stein-Sapir disclaims
any beneficial interest in the shares owned by his wife and children.
(5) Includes 75,000 shares subject to exercisable options.
(6) Includes 1,148,000 shares subject to exercisable options.
</TABLE>
EXECUTIVE COMPENSATION
REPORT OF THE BOARD OF DIRECTORS ON COMPENSATION
Introduction. The disclosure rules of the Securities and Exchange
Commission require the Company to provide certain information concerning the
compensation of the Chief Executive Officer and the other executive officers of
the Company. The Company does not have a Compensation Committee of the Board of
Directors. Decisions on the compensation of the Company's Chief Executive
Officer are made by the Board and salaries of other executive officers are set
in relation to the Chief Executive Officer.
4
<PAGE> 7
Structure. Compensation of the Company's executive officers consists
primarily of salary and stock option grants. The Company also provides a
matching contribution to deferred compensation under a 401(k) Plan described in
a separate section of this proxy statement. Stock options have been used by the
Company to reward executives for actions which increase shareholder value. The
granting of stock options also aids in the retention of high quality executives
by providing long term incentives. The Company has no bonus plan for executives
nor does it provide retirement benefits. The Company believes that the Company's
compensation policy is fair to the Company's employees and shareholders and that
its total compensation package is competitive within the restaurant industry.
Base Salary. In the past, the Company has relied primarily on its own
informal surveys of compensation levels to gauge the reasonableness of the
compensation of Leonard Stein-Sapir, the Company's Chief Executive Officer.
Compensation of other executives is set in relation to the Chief Executive based
on each other executive's level of responsibility and experience and the
particular challenges facing the executive during the coming year. During fiscal
1993, the Company engaged a compensation consultant to compile comparative data
on chief executive officer compensation at similar size companies and recommend
a range of base salary for the Chief Executive Officer for fiscal 1994. The
Board of Directors has not considered it necessary to utilize a compensation
consultant since fiscal 1993. Due to the Company's significant dependence on the
efforts of the Chief Executive Officer, his services are subject to a three year
employment agreement covering the fiscal years 1994 -- 1996 and providing for a
base salary of $250,000 for the 1996 fiscal year which Mr. Stein-Sapir voluntary
reduced to $225,000 for such year. Under the terms of the agreement, the Chief
Executive Officer's compensation may be reviewed annually and Mr. Stein-Sapir is
eligible to participate in any bonus plan offered to other executive officers of
the Company.
All executive officer salaries are reviewed on an annual basis. In deciding
on changes in the annual base salary of the Chief Executive Officer the Board
considers several performance factors. Among these are operating and
administrative efficiency. The Board also evaluates the Chief Executive
Officer's performance in the area of finding and evaluating new business
opportunities to establish the most productive strategic direction for the
Company. Salary changes for other executives are based primarily on their
performance in supporting the strategic initiatives of the Chief Executive
Officer, meeting individual goals and objectives, and improving the operating
efficiency of the Company. Also, where applicable, changes in the duties and
responsibilities of each other executive officer may be considered in deciding
on changes in annual salary. Based on a recommendation of the Chief Executive
Officer, fiscal 1996 salary evaluations for all officers were deferred
indefinitely.
Stock Options. Stock options have been administered by the Stock Option
Committee of the Board of Directors. The Incentive Stock Option Plan expired
during fiscal 1995 and the Board of Directors has determined not to implement a
new plan at this time. Options granted under the Incentive Plan remain
outstanding until their individual expiration dates.
THE BOARD OF DIRECTORS
<TABLE>
<S> <C>
Richard A. Arons Leonard R. Stein-Sapir
Lawrence S. Dolin Bernard Lerner
James J. Liguori Kenneth L. Hignett
Steven S. Kaufman
</TABLE>
5
<PAGE> 8
SUMMARY COMPENSATION TABLE
The following table sets forth for each of the Company's last three fiscal
years the compensation earned by or awarded or paid to the Company's Chief
Executive Officer and each of the Company's other most highly compensated
executive officers earning more than $100,000 during one or more of such years.
<TABLE>
<CAPTION>
NAME AND FISCAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY COMPENSATION(1)
- ---------------------------- ------ -------- ---------------
<S> <C> <C> <C>
Leonard R. Stein-Sapir, 1996 $228,610 $ 4,237
Chairman of the Board 1995 239,432 3,845
and Chief Executive 1994 248,646 2,738
Officer
James J. Liguori, 1996 $165,950 $ 2,025
President and 1995 169,038 2,432
Chief Operating Officer 1994 175,541 1,779
Kenneth L. Hignett, 1996 $105,105 $ 2,560
Senior Vice President, 1995 102,502 2,312
Chief Financial Officer 1994 101,941 1,629
and Secretary
</TABLE>
- ---------------
(1) Represents the value of insurance premiums paid by the Company with respect
to term life insurance for the benefit of the named executives and the
matching contribution made by the Company to the 401(k) Plan.
OPTION EXERCISES IN FISCAL 1996 AND
FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information about the number of
options exercised during the 1996 fiscal year and the number and value of
unexercised incentive and nonqualified stock options held as of March 3, 1996 by
each executive named in the Summary Compensation Table.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AS OF OPTIONS AS OF
SHARES MARCH 3, 1996 MARCH 3, 1996
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ----------------------- ------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
Leonard R. Stein-Sapir 0 0 500,000/0 $0/0
James J. Liguori 0 0 500,000/0 $0/0
Kenneth L. Hignett 0 0 75,000/0 $0/0
</TABLE>
RETIREMENT AND SAVINGS PLAN -- 401(K)
On October 1, 1993 the Company adopted a Retirement and Savings Plan under
IRS Code Section 401(k) ("the 401(k) Plan"). The 401(k) Plan allows eligible
employees to defer a portion of their compensation before Federal Income Tax to
a qualified trust. All employees who are at least 21 years of age, have one year
of service with the Company and have worked at least 1,000 hours in the past
year are eligible to participate in the 401(k) Plan. The participants may choose
from five investment options including common shares of the Company for the
investment of their deferred compensation. In addition, the Company matches 15%
of each participant's salary deferral, for the first 6% of their salary, with
common stock of the
6
<PAGE> 9
Company. For the fiscal year ended March 3, 1996 the Company contributed $19,792
to the 401(k) Plan and paid or accrued $16,675 in administrative fees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board of Directors performs the functions of a compensation
committee. The Company's Board includes three members who are executive officers
of the Company: James J. Liguori, Kenneth L. Hignett and Leonard R. Stein-Sapir.
During the fiscal year ended March 3, 1996, Mr. Liguori was President and Chief
Operating Officer of the Company, positions he has held since July 1988. From
August 1987 to July 1988, he was Executive Vice President of the Company, and
from June 1978 to August 1987 he was Vice President of the Company. During the
fiscal year ended March 3, 1996, Mr. Hignett was Senior Vice President, Chief
Financial Officer and Secretary of the Company, positions which he has held
since March 1992. From January 1991 to March 1992, he was Vice President,
Secretary and Treasurer of the Company, and from June 1989 to January 1991 he
was Vice President and Treasurer of the Company. During the fiscal year ended
March 3, 1996, Mr. Stein-Sapir was Chairman of the Board and Chief Executive
Officer of the Company, positions he has held since April 1989.
DIRECTOR COMPENSATION
Annual Fee. Messrs. Arons, Dolin, Kaufman and Lerner each received $12,000
for serving on the Board of Directors during the fiscal year ended March 3,
1996. Directors who are also Officers of the Company do not receive additional
compensation as Directors. No additional compensation is paid to Directors for
serving on Committees of the Board.
7
<PAGE> 10
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total return on
the Company's Common Shares, assuming a $100 investment as of February 26, 1991
and based on the market prices at the end of each fiscal year, with the
cumulative total return of the Standard & Poor's Midcap 400 Stock Index and a
peer group index composed of seven restaurant companies that have a market
capitalization comparable to that of the Company.
<TABLE>
<CAPTION>
Measurement Period Morgan's S&P Midcap Restaurant
(Fiscal Year Covered) Foods 400 Index
<S> <C> <C> <C>
1991 100 100 100
1992 89 132 129
1993 189 144 132
1994 200 163 146
1995 128 166 168
1996 56 214 145
</TABLE>
The companies in the restaurant peer group index are Consolidated Products,
Inc., Ground Round Restaurants, Summit Family Restaurants, Inc. (formerly JB's
Restaurants, Inc.), Daka International Inc., Uno Restaurant Corp., Vi De France
Corp., and Wall Street Deli, Inc. The index is weighted based on market
capitalization. The companies included in the peer group were approved by the
Board of Directors.
SELECTION OF INDEPENDENT AUDITORS
Deloitte & Touche LLP serves as the Company's independent auditors. The
Board of Directors of the Company has not selected independent auditors for the
Company and its subsidiaries for the fiscal year ending March 2, 1997.
Representatives of Deloitte & Touche LLP are expected to be present at the
Meeting with the opportunity to make a statement and to respond to appropriate
questions.
SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal for inclusion in the
proxy statement and form of proxy relating to the 1997 Annual Meeting of
Shareholders is advised that the proposal must be received by the Company at its
principal executive offices not later that January 31, 1997. The Company is not
required to include in its proxy statement or form of proxy a shareholder
proposal which is received after that date or which otherwise fails to meet
8
<PAGE> 11
requirements for shareholder proposals established by regulations of the
Securities and Exchange Commission.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and owners of more than ten percent of the
Company's Class A Common Stock ("10% stockholders"), to file with the Securities
and Exchange Commission (the "SEC") and the American Stock Exchange initial
reports of ownership and reports of changes in ownership of Common Shares of the
Company. Executive officers, directors and 10% stockholders are required by SEC
regulations to furnish the Company with copies of all forms they file pursuant
to Section 16(a).
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 3, 1996, all Section
16(a) filing requirements applicable to its executive officers, directors and
10% stockholders were complied with.
EXPENSES OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by regular employees
of the Company, either personally or by telephone or telegraph. The Company does
not expect to pay any compensation for the solicitation of proxies, but it may
reimburse brokers and other persons holding shares in their names or in the
names of nominees for their expenses in sending proxy materials to beneficial
owners and obtaining proxies from such owners.
OTHER MATTERS
The Board of Directors is not aware of any matters to be presented for
action at the Meeting other than those shown in this document. Should any other
matters be properly presented for action at the Meeting, the enclosed proxy
confers upon the proxy holders named therein the authority to vote on such
matters in accordance with their judgment.
BY ORDER OF THE BOARD OF DIRECTORS
KENNETH L. HIGNETT
Secretary
Beachwood, Ohio
June 5, 1996
9
<PAGE> 12
P R O X Y P R O X Y
MORGAN'S FOODS, INC.
The undersigned hereby appoints Lawrence S. Dolin, Leonard R.
Stein-Sapir and James J. Liguori, and each of them, attorneys and
proxies of the undersigned with full power of substitution to attend
the Annual Meeting of Shareholders of Morgan's Foods, Inc. (the
"Company") at Cleveland Marriott East, 3663 Park East Drive,
Beachwood, Ohio, on Friday, June 28, 1996 at 10:00 a.m., Eastern
Daylight Time, or any adjournment thereof, and to vote the number of
shares of the Company which the undersigned would be entitled to
vote and with all the power the undersigned would possess, if
personally present, as follows:
1. / / FOR, or / / WITHHOLD AUTHORITY to vote for the
following nominees for election as directors: Leonard R.
Stein-Sapir, Richard A. Arons, Lawrence S. Dolin, James J.
Liguori, Steven S. Kaufman, Bernard Lerner and Kenneth L.
Hignett.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the line
provided below.)
----------------------------------------------------------------
2. On such other business as may properly come before the
meeting or any adjournment thereof.
(continued, and to be signed, on the other side)
(Continued from other side)
THE PROXIES WILL VOTE AS SPECIFIED ABOVE OR IF A CHOICE IS NOT
SPECIFIED THEY WILL VOTE FOR THE NOMINEES LISTED IN ITEM 1.
Receipt of Notice of Annual
Meeting of Shareholders and
Proxy Statement dated June
5, 1996, is hereby
acknowledged.
Dated............... , 1996
...........................
...........................
...........................
Signature(s)
(Please sign exactly as
your name or names appear
hereon, indicating, where
proper, official position
or representative
capacity.)
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
Proxy Card
