SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
X Preliminary Proxy Statement
[REVISED]
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Morrison Restaurants Inc.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2) [PREVIOUSLY PAID]
$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
PROXY RULES
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:*
4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing fee is calculated and
state how it was determined.
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, of 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:
[MORRISON LOGO]
August __, 1994
Dear Stockholders:
We are holding your 1994 Annual Meeting on Wednesday, September 28,
1994, at 10:30 a.m., local time, at the Stouffer Concourse Hotel, 1
Hartsfield Center Parkway, Atlanta, Georgia 30354. I sincerely hope that
you will be able to attend the meeting, and I look forward to seeing you.
Matters on which action will be taken at the meeting are explained in detail
in the Notice and Proxy Statement following this letter.
We hope that you will be able to attend the meeting in person. Whether
or not you expect to be present, please complete, date, sign and mail the
enclosed proxy in the envelope provided. If you attend the meeting, you may
withdraw your proxy and vote your own shares.
Sincerely,
MORRISON RESTAURANTS INC.
Samuel E. Beall, III
President and Chief Executive Officer
M O R R I S O N R E S T A U R A N T S I N C.
P.O. Box 160266 4721 Morrison Drive Mobile, Alabama 36625-0001
(205) 344-3000 Telefax (205) 344-3066
MORRISON RESTAURANTS INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
SEPTEMBER 28, 1994
The Annual Meeting of Stockholders of Morrison Restaurants Inc. will be
held at the Stouffer Concourse Hotel, 1 Hartsfield Center Parkway, Atlanta,
Georgia 30354 on Wednesday, September 28, 1994, at 10:30 a.m., local time,
for the following purposes:
1. To elect three Class III directors to the Board of
Directors for a term of three years.
2. To consider and act upon a proposal to amend the
Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 50,000,000
to 100,000,000.
3. To consider and act upon a proposal to approve the
amended and restated Stock Incentive and Deferred
Compensation Plan for Directors.
4. To consider and act upon a proposal to approve the
Incentive Bonus Plan for the Chief Executive Officer.
5. To transact such other business as may properly come
before the meeting or any adjournment or
adjournments thereof.
Only stockholders of record at the close of business on August 5, 1994,
are entitled to vote at the meeting.
The mailing address of the Company's principal executive office is Post
Office Box 160266, Mobile, Alabama 36625.
We hope you will be able to attend the meeting in person. Whether or
not you expect to be present, please complete, date, sign, and mail the
enclosed proxy in the envelope provided. If you attend the meeting, you may
withdraw your proxy and vote your own shares.
Pfilip G. Hunt
Senior Vice President,
General Counsel
and Secretary
August __, 1994
Mobile, Alabama
MORRISON RESTAURANTS INC.
4721 Morrison Drive
Post Office Box 160266
Mobile, Alabama 36625
PROXY STATEMENT FOR 1994 ANNUAL MEETING OF STOCKHOLDERS
The following statement and the accompanying proxy card, first mailed
to stockholders on or about August __, 1994, are furnished in connection
with the solicitation by the Board of Directors of Morrison Restaurants Inc.
(the "Company") of proxies to be used in voting at the Annual Meeting of
Stockholders of the Company to be held on September 28, 1994, at the
Stouffer Concourse Hotel, 1 Hartsfield Center Parkway, Atlanta, Georgia
30354 and at any adjournment(s) thereof (the "Meeting").
Any stockholder returning a proxy has the power to revoke it prior to
the Meeting by giving the Secretary of the Company written notice of
revocation, by returning a later dated proxy or by expressing a desire to
vote in person at the Meeting. All shares of the Company's common stock,
$.01 par value ("Common Stock"), represented by valid proxies received
pursuant to this solicitation and not revoked before they are exercised will
be voted in the manner specified therein. If no specification is made, the
proxy will be voted in favor of the election of the three nominees for
directors named in this Proxy Statement (Proposal 1), for approval of an
amendment to the Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 50,000,000 to 100,000,000 shares
(Proposal 2), for approval of the amended and restated Stock Incentive and
Deferred Compensation Plan for Directors (Proposal 3), for approval of the
Incentive Bonus Plan for the Chief Executive Officer (Proposal 4), and in
accordance with the best judgment of the proxy holders on any other matter
that may properly come before the Meeting.
The entire cost of soliciting these proxies will be borne by the
Company. In following up the original solicitation of the proxies by mail,
the Company will request brokers and others to send proxy forms and other
proxy material to the beneficial owners of the Common Stock and will
reimburse them for the expenses in so doing. If necessary, the Company also
may use some of its employees to solicit proxies from the stockholders
personally or by telephone.
The number of shares of outstanding stock entitled to vote at the
Meeting is 35,310,937 shares of Common Stock, each of which is entitled to
one vote. August 5, 1994 has been fixed as the record date for
determination of stockholders entitled to notice of and to vote at the
Meeting and, accordingly, only holders of Common Stock of record at the
close of business on that date will be entitled to notice of and to vote at
the Meeting.
____________________
All share and per share data in this Proxy Statement have been adjusted to
reflect stock splits effected as stock dividends through August 5, 1994.
VOTE REQUIRED FOR ADOPTION OF PROPOSALS
Election of each of the Director Nominees named in Proposal 1 requires
the approval of a plurality of the votes cast in the election. If authority
to vote for one or more Director Nominees is withheld on a proxy card, no
vote will be cast with respect to the shares indicated on that card and the
outcome of the election will not be affected. Approval of Proposal 2 requires
the affirmative vote of the holders of a majority of the shares of Common
Stock outstanding and entitled to vote thereon. Therefore, abstentions and
broker non-votes with respect to Proposal 2 will have the effect of negative
votes. Approval of each of Proposal 3 and Proposal 4 requires the affirmative
vote of the holders of a majority of the shares of Common Stock represented
by proxy or present at the Meeting and entitled to vote. Abstentions with
respect to each of Proposal 3 and Proposal 4 will have the effect of negative
votes, whereas broker non-votes will have no effect on the results of the
voting. Shares as to which authority to vote is withheld, abstentions and
broker non-votes are counted in determining whether a quorum exists.
The Board of Directors Recommends a Vote FOR
all of the Director Nominees identified in Proposal 1,
FOR Proposal 2, FOR Proposal 3 and FOR Proposal 4
set forth herein.
PROPOSAL 1.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for three classes
of directors with staggered, three-year terms of office and provides that
upon the expiration of the term of office for a class of directors, the
nominees for that class will be elected for a term of three years to serve
until the election and qualification of their successors or until their
earlier resignation, death or removal from office. At the Meeting, the
three nominees are for the Class III directors. The Class II and Class I
directors have one year and two years, respectively, remaining on their
terms of office. The Company's Bylaws provide that the Board of Directors
shall consist of not less than nine nor more than 12 directors and
authorizes the exact number to be fixed from time to time by the Board of
Directors. The Board of Directors has fixed at nine the exact number of
members of the Board of Directors to serve following the Meeting and has
nominated Samuel E. Beall, III, Donald Ratajczak and Claire L. Arnold to
serve in Class III of the Board of Directors for a term of three years. All
such nominees are currently serving as directors of the Company. Mr.
Robert J. Theis, Sr., who is currently serving as a Class III director,
attained age 70 this year and, in accordance with the Company's Bylaws, will
not stand for re-election at the Meeting.
It is intended that persons named in the accompanying form of proxy
will vote for the three nominees listed below unless authority to so vote is
withheld. Although the Board of Directors does not expect that any of the
nominees identified herein will be unavailable for election, in the event a
vacancy in the slate of nominees occurs, the shares represented by proxies
in the accompanying form may be voted for the election of a substitute
nominee selected by the persons named in the proxy.
Director and Director Nominee Information
Nominees for Directors
CLASS III -- TERM EXPIRING 1997
SAMUEL E. BEALL, III
Director of the Company since 1982 Age: 44
Mr. Beall has been President and Chief Executive Officer of the Company
since June 1992, and President and Chief Operating Officer of the Company
from September 1986 to June 1992. Mr. Beall also is a director of First
American Corporation.
DR. DONALD RATAJCZAK
Director of the Company since 1981 Age: 51
Dr. Ratajczak is Professor and Director, Economic Forecasting Center,
Georgia State University. Dr. Ratajczak also is a director of Morgan Keegan
Inc. and CIM High Yield Securities Fund.
CLAIRE L. ARNOLD
Director of the Company since 1994 Age: 47
Ms. Arnold has been President and Chief Executive Officer of Nicotiana
Enterprises, Inc., a family holding company holding stock in NCC L.P. since
August 1979. Ms. Arnold was Chief Executive Officer of NCC L.P., a major
distributor of grocery, tobacco, candy, health and beauty, and allied
products to retail stores from November 1992 to April 1994. Prior thereto,
she was Chairman and Chief Executive Officer of NCC L.P. from August 1979 to
November 1992.
Members of the Board of Directors Continuing in Office
CLASS I -- TERM EXPIRING 1996
E. EUGENE BISHOP
Director of the Company since 1963 Age: 64
Mr. Bishop is Chairman of the Board of the Company. From June 1986 to June
1992, he was Chairman of the Board and Chief Executive Officer of the
Company. Mr. Bishop also is a director of SouthTrust Bank, Delchamps, Inc.
and Dravo, Inc.
ARTHUR R. OUTLAW
Director of the Company since 1959 Age: 67
Mr. Outlaw has been Vice Chairman of the Board of the Company since December
1984. From October 1985 to October 1989, he was Mayor, City of Mobile,
Alabama. Mr. Outlaw also is a director of AmSouth Bank, N.A. and AmSouth
Bancorporation.
DR. BENJAMIN F. PAYTON
Director of the Company since 1993 Age: 61
Dr. Payton has been the President of Tuskegee University since 1981.
Dr. Payton also is a director of AmSouth Bank, N.A., AmSouth Bancorporation,
The ITT Corporation, The Liberty Corporation, Sonat, Inc. and Praxair, Inc.
CLASS II -- TERM EXPIRING 1995
WALLACE R. BUNN
Director of the Company since 1985 Age: 71
Prior to his retirement in April 1984, Mr. Bunn was Chairman of the Board of
BellSouth Corp.
JOHN B. MCKINNON
Director of the Company since 1989 Age: 59
Mr. McKinnon has been Dean, Babcock Graduate School of Management, Wake
Forest University, since July 1989. Prior thereto, he was President, Sara
Lee Food Service from July 1988 through June 1989, and President, Sara Lee
Corporation from July 1986 through June 1988. Mr. McKinnon also is a
director of Premark International, Integon Corporation and Caraustar
Corporation.
DOLPH W. VON ARX
Director of the Company since 1992 Age: 59
Prior to his retirement in 1991, Mr. von Arx was Chairman of the Board,
President and Chief Executive Officer of Planters LifeSavers Company, an
affiliate of RJR Nabisco, Inc. Mr. von Arx also is a director of Cree
Research, Inc.
Beneficial Ownership of Common Stock
The following table sets forth certain information as of August 5, 1994
(except as otherwise noted) regarding the amount of Common Stock
beneficially owned by all persons known to the Company who beneficially own
more than five percent of the outstanding Common Stock, each director and
director nominee of the Company, each named executive (as defined below),
and all directors and executive officers of the Company as a group. An
asterisk indicates beneficial ownership of less than one percent of the
outstanding Common Stock.
<TABLE>
<CAPTION>
Number of Shares Percent
Name or Group Beneficially Owned(1) of Class(2)
<S> <C> <C>
Shawmut National
Corporation(3) 2,582,963(3) 7.2
C. L. Arnold 100 *
S. E. Beall, III 958,201 2.6
E. E. Bishop 1,411,146(4) 3.9
W. R. Bunn 20,407 *
J. B. McKinnon 7,407(5) *
A. R. Outlaw(6) 4,351,864(7) 12.3
B. F. Payton 150 *
D. Ratajczak 12,985 *
R. J. Theis, Sr. 17,157 *
D. W. von Arx 6,657 *
R. D. McClenagan 95,877 *
A. R. Johnson 2,013 *
J. B. Byrum 122,546 *
R. L. Tatum 39,027 *
All directors and
executive officers as a group
(18 persons) 7,163,613 19.1
____________________
(1) Includes shares subject to options or rights exercisable within 60 days
after August 5, 1994 held by the named persons and group as follows:
Mr. Beall, 886,250; Mr. Bishop, 1,061,250; Mr. Bunn, 2,907; Mr.
McKinnon, 2,907; Dr. Ratajczak, 2,907; Mr. Theis, 2,907; Mr. von Arx,
2,907; Mr. McClenagan, 91,340; Mr. Byrum, 89,940; Mr. Tatum, 28,345; and
all directors and executive officers as a group, 2,251,754.
(2) "Percent of Class" has been calculated by taking into account all shares
as to which the indicated person has sole or shared voting or investment
power (including shares subject to options or rights exercisable within
60 days after August 5, 1994), without regard to any disclaimers of
beneficial ownership by the person indicated.
(3) The holder's address is 777 Main Street, Hartford, Connecticut 06115.
The information presented is based on the holder's Schedule 13G dated
January 31, 1994 which reports beneficial ownership with respect to the
indicated shares as follows: (i) sole voting power, 2,369,263 shares;
(ii) shared voting power, 28,500 shares; (iii) sole dispositive power,
2,240,710 shares; (iv) shared dispositive power, 320,045 shares; and
(v) aggregate amount beneficially owned, 2,582,963 shares.
(4) Includes 6,610 shares owned by Mr. Bishop's spouse.
(5) Includes 2,250 shares owned by Mr. McKinnon and his spouse as tenants in
common.
(6) Mr. Outlaw's address is 4721 Morrison Drive, Mobile, Alabama 36625.
(7) Includes (i) 2,963,104 shares held by Mr. Outlaw as executor or trustee
of various estates and trusts for the benefit of relatives, and
(ii) 49,711 shares owned by Mr. Outlaw's spouse.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and greater than 10% shareholders
("Reporting Persons") to file certain reports ("Section 16 Reports") with
respect to beneficial ownership of the Company's equity securities. Based
solely on its review of the Section 16 Reports furnished to the Company by
its Reporting Persons and, where applicable, any written representation by
any of them that no Form 5 was required, all Section 16(a) filing
requirements applicable to the Reporting Persons during and with respect to
Fiscal 1994 have been complied with on a timely basis.
Directors' Fees and Attendance
The Board of Directors held seven meetings during Fiscal 1994.
Directors who are employees of the Company, other than Mr. Outlaw, receive
no directors' fees. All non-management directors currently receive a
$20,000 annual retainer (the "Retainer") and $1,000 per Board meeting
attended. Mr. Outlaw, who serves as Vice Chairman of the Board and is an
employee of the Company, receives fees of $250 per Board meeting attended.
Mr. Outlaw, however, does not receive a Retainer. Each of the directors
attended at least 75 percent of the meetings of the directors and committees
of which such director was a member.
The Morrison Restaurants Inc. Stock Incentive and Deferred Compensation
Plan for Directors permits each non-management director to purchase Options
to purchase shares of Common Stock (the "Options") for all or a portion of
his or her Retainer (in 25 percent increments). Options under this plan are
issued once each year on the date of the Annual Meeting of Stockholders to
the extent that a director has elected to use that year's Retainer to
purchase Options. The Options become exercisable one year after their grant
or earlier if the director ceases to serve as a director due to death,
disability or after attaining age 70 or if a change of control occurs. The
per share exercise price of Options granted under this plan is equal to one-
half of the closing sale price per share of Common Stock on the trading day
preceding the date of grant and the number of shares subject to an Option is
equal to the amount of the Retainer used to purchase an Option divided by
the per share exercise price. During Fiscal 1994, each non-management
director, other than Dr. Payton, elected to use his Retainer to purchase
Options for the balance of Fiscal 1994 from the date of grant at the 1993
Annual Meeting of Stockholders and received Options to purchase 1,683 shares
of Common Stock, exercisable at $11.875 per share. The Board of Directors
has approved an amendment and restatement of this plan subject to
stockholder approval at the Meeting. See "Proposal 3. Morrison Restaurants
Inc. Stock Incentive and Deferred Compensation Plan for Directors" below.
Non-management directors serving on the Audit Committee, the Executive
Committee, the Compensation and Stock Option Committee or the Nominating
Committee (other than the Chairmen of such committees) receive a fee of $500
for each committee meeting attended in conjunction with a meeting of the
Board of Directors or $1,000 for each committee meeting attended that is not
held in conjunction with a meeting of the Board of Directors. Mr. Outlaw
receives the same fees as non-management directors for attending meetings of
the committees on which he serves. Committee Chairmen receive a fee of
$2,000 for each committee meeting attended. Non-management directors
serving on any committee are compensated at a rate of $200 an hour for
services performed on special assignments. In addition, in recognition of
the extensive time expended to attend a special meeting with the Company's
independent compensation consultant for the purpose of reviewing the
Company's executive compensation program, Mr. Bunn, the Chairman of the
Compensation and Stock Option Committee, received a special fee of $2,000
during Fiscal 1994.
Committees of the Board
The Board of Directors is responsible for the overall affairs of the
Company. To assist the Board of Directors in carrying out this
responsibility, the Board has delegated certain authority to several
committees. Information concerning these committees follows.
Executive Committee. The Executive Committee makes recommendations to
the Board of Directors and has and may exercise all of the powers of the
Board of Directors to the extent permitted by applicable law. The Executive
Committee met two times during Fiscal 1994. The current members of the
Executive Committee are John B. McKinnon (Chairman), Samuel E. Beall, III,
Wallace R. Bunn and Donald Ratajczak.
Audit Committee. The Audit Committee is comprised solely of non-
management directors. The Audit Committee maintains communications with the
Company's auditors as to the nature of the auditors' services, fees and such
other matters as the auditors believe may require the attention of the
Board. The Audit Committee reviews the Company's internal control
procedures and makes recommendations to the Board with respect thereto. The
Audit Committee met three times during Fiscal 1994. The current members of
the Audit Committee are John B. McKinnon (Chairman), Donald Ratajczak,
Wallace R. Bunn, Robert J. Theis, Sr., Benjamin F. Payton, Dolph W. von Arx
and Claire L. Arnold.
Compensation and Stock Option Committee. The Compensation and Stock
Option Committee is comprised solely of non-management directors. The
Compensation and Stock Option Committee makes recommendations to the Board
of Directors with respect to compensation of officers and with respect to
the granting of stock options. The Compensation and Stock Option Committee
met one time during Fiscal 1994. The current members of the Compensation
and Stock Option Committee are Wallace R. Bunn (Chairman), Donald Ratajczak,
Robert J. Theis, Sr., John B. McKinnon, Benjamin F. Payton, Dolph W. von Arx
and Claire L. Arnold.
Nominating Committee. The Nominating Committee recommends individuals
to the Board of Directors for consideration as nominees for directors of the
Company. The Nominating Committee met three times during Fiscal 1994. The
current members of the Nominating Committee are Donald Ratajczak (Chairman),
Wallace R. Bunn, E. Eugene Bishop, Samuel E. Beall, III, Arthur R. Outlaw,
Benjamin F. Payton, Robert J. Theis, Sr., John B. McKinnon, Dolph W. von Arx
and Claire L. Arnold. Alternatively, notice of nominations to be made by
any stockholder at a meeting must be submitted in the manner and within the
time periods prescribed in the Company's Certificate of Incorporation. Any
such notice should be directed to the Secretary of the Company at the
following address: Morrison Restaurants Inc., Post Office Box 160266,
Mobile, Alabama 36625.
EXECUTIVE COMPENSATION
This section of the proxy statement discloses Fiscal 1994 compensation
awarded, paid to, or earned by the Company's Chief Executive Officer, each
of the four other executive officers of the Company who were most highly
compensated in Fiscal 1994 and one former executive officer who would have
been included in the group of four most highly compensated executive
officers in Fiscal 1994 had he been an executive officer at the end of
Fiscal 1994 (together, these six persons are sometimes referred to as the
"named executives").
<TABLE>
TABLE I - SUMMARY COMPENSATION TABLE
<CAPTION>
All Other
Annual Compensation Long Term Compensation Compensation
Awards Payouts
Options/ LTIP (1994 and
Salary Bonus SARs Payouts 1993 only)
Name and Position Year ($) ($) (#) ($) ($)(1)
<S> <C> <C> <C> <C> <C> <C> <C>
S. E. Beall, III 1994 525,000 630,000 -0- 360,000 (2) 7,296
President and Chief 1993 400,000 214,240 30,000 -0- 8,939
Executive Officer 1992 347,565 151,800 -0- -0-
E. E. Bishop 1994 466,400 -0- -0- -0- 9,425
Chairman of the 1993 440,000 -0- -0- -0- 8,817
Board (3) 1992 430,577 187,680 -0- -0-
R. D. McClenagan 1994 236,400 295,500 46,950 -0- 8,970
President, Ruby 1993 200,000 85,900 12,300 -0- 6,836
Tuesday Division 1992 188,589 163,780 11,250 -0-
A. R. Johnson 1994 200,045 178,800 32,712 -0- -0-
President, Specialty 1993 NA NA NA NA NA
Division (4) 1992 NA NA NA NA
J. B. Byrum 1994 184,500 186,750 38,874 -0- 7,731
President, Hospitality 1993 175,000 110,611 9,300 -0- 8,043
Division 1992 166,836 115,039 14,763 -0-
R. L. Tatum 1994 170,100 217,125 38,394 -0- 6,633
President, Family 1993 120,000 180,000 4,700 -0- 7,151
Dining Division 1992 114,070 75,696 13,263 -0-
____________________
(1) The amounts in this column include the following: (a) Company contributions to the Deferred
Compensation Plan for 1994 and 1993, respectively: S. E. Beall, III, $1,567 and $3,821; E. E.
Bishop, $3,696 and $3,699; R. D. McClenagan, $3,699 and $3,613; J. B. Byrum, $3,536 and
$4,419; and R. L. Tatum $3,696 and $4,621; and (b) executive group life and accidental death
and dismemberment insurance plan premiums paid for 1994 and 1993: S. E. Beall, III, $5,729
and $5,118; E. E. Bishop, $5,729 and $5,118; R. D. McClenagan, $5,271 and $3,223; J. B.
Byrum $4,195 and $3,624; and R. L. Tatum $2,937 and $2,530.
(2) Represents the value of 15,000 shares of Common Stock earned by Mr. Beall in Fiscal 1994
pursuant to the performance stock rights awarded to him by the Company in July 1993 and
approved by the stockholders at the 1993 Annual Meeting of Stockholders. See "Table IV -
Long-Term Incentive Awards in Fiscal 1994" below. The value of such shares has been
calculated based on the market price of the Common Stock on the date of issuance of the shares.
(3) Mr. Bishop retired as an executive officer on May 5, 1994.
(4) Mr. Johnson was elected as an executive officer of the Company effective June 6, 1993.<PAGE>
</TABLE>
<TABLE>
TABLE II - OPTIONS
GRANTS IN FISCAL 1994
This table presents information regarding Fiscal 1994 grants of
options to purchase Common Stock. The company has no outstanding SARs and
granted no SARs during Fiscal 1994.
<CAPTION>
Potential Realizable Value(3) at Assumed Annual
Rates of Stock Price Appreciation for Option Term
5% 10%
Individual Grants ($) ($)
% of
Total Market Market
Options Price Price
Granted Market Required Required
to Price on Exercise to Realize to Realize
Options Employees Date of or Base Dollar Dollar Dollar Dollar
Granted in Fiscal Grant Price Expiration Gains Gains Gains Gains
Name # (1) Year (2) ($/Sh) ($/Sh) Date $ ($/Sh) $ ($/Sh)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
S. E. Beall, III 0 N/A N/A N/A N/A 0 N/A 0 N/A
E. E. Bishop 0 N/A N/A N/A N/A 0 N/A 0 N/A
R. D. McClenagan 46,950 6.59% 19.8333 19.8333 01-Jul-98 257,266 25.31 568,491 31.94
A. R. Johnson 31,500 4.42% 19.8333 19.8333 01-Jul-98 172,607 25.31 381,415 31.94
1,212 0.17% 22.7500 22.7500 04-Dec-98 7,618 29.04 16,834 36.64
J. B. Byrum 36,600 5.14% 19.8333 19.8333 01-Jul-98 200,552 25.31 443,168 31.94
2,274 0.32% 22.7500 22.7500 04-Dec-98 14,293 29.04 31,584 36.64
R. L. Tatum 33,750 4.74% 19.8333 19.8333 01-Jul-98 184,936 25.31 408,659 31.94
2,370 0.33% 21.8333 21.8333 04-Sep-98 14,296 27.87 31,591 35.16
2,274 0.32% 22.7500 22.7500 04-Dec-98 14,293 29.04 31,584 36.64
____________________
(1) The indicated options have a term of 5 years and were granted
pursuant to the Company's Stock Incentive Plan (formerly, the 1989
Non-Qualified Stock Option Plan). Those options with an exercise
price of $19.8333 on the date of the grant become exercisable after
three years. The vesting of these options may be accelerated up
to one year if predetermined goals for Fiscal 1994 and 1995 are
achieved. All other options listed in the table above become
exercisable after two years. In the event of a change in control
of the Company, the Committee administering the plan may accelerate
vesting, otherwise adjust the options or cash out the options.
Option holders also have certain rights with respect to these
options pursuant to their Change of Control Agreements. See
"Contracts with Executives."
(2) Based on an aggregate of 712,021 options granted in Fiscal 1994.
(3) The Potential Realizable Values are calculated as follows:
[[Market Price at Grant x (1 + Stock Price Appreciation Rate)]
Exercise Price] x Number of Underlying Shares. Because these
Potential Realizable Values are based on annualized compound rates
of increase over a 5-year term, the total potential appreciation
on annual appreciation rates of 5% and 10% is 27.6% and 61.1%,
respectively.
</TABLE>
<TABLE>
TABLE III - AGGREGATED OPTION EXERCISES IN
FISCAL 1994 AND FISCAL YEAR END VALUES
This table presents information regarding options exercised for shares of the Company's Common
Stock during Fiscal 1994 and the value of unexercised options held at June 4, 1994. There were no
SARs outstanding during Fiscal 1994.
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired FY-End (#) FY-End ($)(2)
on Value
Exercise Realized Exercisable/ Exercisable
Name # ($) (1) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
S. E. Beall, III 144,864 $2,595,654 886,250/45,000 $10,654,506/$418,127
E. E. Bishop -0- N/A 1,061,250/-0- $13,457,131/$0
R. D. McClenagan -0- N/A 79,414/99,828 $1,120,038/$753,051
A. R. Johnson -0- N/A -0-/40,212 $-0-/$177,062
J. B. Byrum -0- N/A 80,207/112,403 $1,151,839/$947,785
R. L. Tatum -0- N/A 28,345/81,851 $377,112/$611,361
____________________
(1) Value Realized is calculated as follows: [(Per Share Closing Price on
date of exercise) - (Per Share Exercise Price)] x Number of Shares for
which the Option was Exercised.
(2) Value of Unexercised, In-the-Money Options at June 4, 1994 is
calculated as follows: [(Per Share Closing Sale Price on June 4,
1994) - (Per Share Exercise Price)] x Number of Shares Subject to
Unexercised Options. The per share closing sale price on June 3,
1994, the last trading day of Fiscal 1994, was $23.625.
</TABLE>
<TABLE>
TABLE IV LONG TERM INCENTIVE AWARDS IN FISCAL 1994
This table presents information regarding the only award of
performance stock rights made by the Company in Fiscal 1994.
<CAPTION>
Performance
Performance Stock Period Until
Rights Payout
Name (# of Shares) (# of Years)
<S> <C> <C>
S. E. Beall, III 75,000 5 (1)
____________________
(1) Payouts of 15,000 shares each are made over a five-year period
ending in 1998 if the Company's Common Stock reaches a pre-
established per share price for a period of 22 consecutive
trading days during a period ending May 31 of each year in the
five-year period. Such pre-established per share prices are as
follows: $23.00 in 1994, $26.45 in 1995, $30.42 in 1996, $34.98
in 1997 and $40.23 in 1998. Shares not earned in any given year
may be earned in a subsequent year if the stated price level for
the subsequent year is attained. Shares issued under the
performance stock rights may not be transferred for a period of
five years except (i) by will or the laws of descent and
distribution or (ii) to a trust of which the executive is the
grantor, initial trustee and primary income beneficiary. A
portion of the unearned performance shares may be issued to the
executive upon the occurrence of certain events such as a
merger, consolidation, sale of assets or termination of
employment following a merger or consolidation based on the
appreciation of the market price of the Common Stock prior to
such event. Restrictions on transfer with respect to issued
shares lapse upon the occurrence of certain events such as a
merger, consolidation, sale of assets or termination of the
executive's employment by the Company other than for cause.
</TABLE>
Retirement Plan
The Morrison Restaurants Inc. Retirement Plan (the "Retirement Plan")
was frozen as of December 31, 1987, so that no additional benefits have
accrued, and no new participants have been permitted since that date. The
Retirement Plan is a tax-qualified, funded, defined benefit plan, which
covers employees of the Company who had attained age 21 and had completed at
least one year of full-time service by December 31, 1987. A participant's
accrued annual benefit is determined generally by adding A and B below, as
applicable:
(A) 1/4 percent of pay up to that year's Social Security
Wage Base, plus 1-1/4 percent of pay over the Social
Security Wage Base for each credited year of service
(as defined in the Retirement Plan) commencing on or
after January 1, 1986; and
(B) 1/4 percent of average pay for the highest consecutive
five years from 1976 through 1985 up to $14,400,
plus 1-1/4 percent of such pay in excess of $14,400,
multiplied by the number of credited years of
service up to January 1, 1986.
Normal retirement for purposes of the Retirement Plan is age 65,
although a participant with at least five years of service may retire with a
reduced benefit as early as age 55. Generally, benefits are paid in the
form of a single life annuity if the participant is unmarried or a joint and
survivor annuity if the participant is married, unless an alternative form
of benefit payment is selected by the participant from among a range of
options made available under the Retirement Plan. A participant's accrued
benefit becomes vested upon completion of five years of service after age
18.
Benefits payable under the Retirement Plan reduce the amount of benefit
payable to a participant in the Supplemental Plan or the Management Plan,
described below.
Executive Supplemental Pension Plan
The Morrison Restaurants Inc. Executive Supplemental Pension Plan (the
"Supplemental Plan") is a nonqualified, unfunded, defined benefit
retirement plan for selected employees who have at least three years of
service and satisfy certain other criteria. Effective January 1, 1994, the
Company revised the eligibility criteria so that, as a condition of entry,
future participants must complete five years of consecutive service in one
or more qualifying job positions and must have achieved a minimum salary
threshold, as described in the Supplemental Plan. A participant's accrued
benefit in the Supplemental Plan equals 2.5 percent of the participant's
highest five-year average base salary multiplied by the participant's years
and fractional years of continuous service (as defined in the Supplemental
Plan) not in excess of 20 years; plus 1 percent of the participant's
highest five-year average base salary multiplied by the participant's years
and fractional years of continuous service in excess of 20 years, but not
in excess of 30 years of such service. Base salary includes commissions
but excludes bonuses and other forms of remuneration other than salary.
Benefits are paid to a participant in the same manner as benefits paid to
the participant under the Retirement Plan. Normal retirement for purposes
of the Supplemental Plan is age 65, although a participant with at least
five years of service may retire with a reduced benefit as early as age 55.
A participant's accrued benefit under the Supplemental Plan becomes vested
if the participant has completed ten years of service.
Estimated annual benefits payable upon retirement to persons in
specified remuneration and years of continuous service classifications are
shown in the following table. All amounts shown are for a single life
annuity and assume that active participation in the Supplemental Plan
continues until age 65. In accordance with the Supplemental Plan, the
amounts shown are subject to reduction for Social Security benefits and
benefits received under the Retirement Plan.
<TABLE>
Supplemental Plan
Estimated Annual Benefits for Representative Years of Service to Age 65
<CAPTION>
Annual Average 30 or
Base Salary 10 15 20 25 More
<C> <C> <C> <C> <C> <C>
$150,000 $37,500 $56,250 $75,000 $82,500 $90,000
175,000 43,750 65,625 87,500 96,250 105,000
200,000 50,000 75,000 100,000 110,000 120,000
225,000 56,250 84,375 112,500 123,750 135,000
250,000 62,500 93,750 125,000 137,500 150,000
275,000 68,750 103,125 137,500 151,250 165,000
300,000 75,000 112,500 150,000 165,000 180,000
325,000 81,250 121,875 162,500 178,750 195,000
350,000 87,500 131,250 175,000 192,500 210,000
375,000 93,750 140,625 187,500 206,250 225,000
400,000 100,000 150,000 200,000 220,000 240,000
425,000 106,250 159,375 212,500 233,750 255,000
450,000 112,500 168,750 225,000 247,500 270,000
475,000 118,750 178,125 237,500 261,250 285,000
500,000 125,000 187,500 250,000 275,000 300,000
525,000 131,250 196,875 262,500 288,750 315,000
</TABLE>
Years of continuous service, to the nearest year, and current
remuneration covered by the Supplemental Plan (base salary) for the named
executives are Mr. Beall, 22 years, $525,000; Mr. Bishop, over 30 years,
$466,400; Mr. McClenagan, 22 years, $236,400; Mr. Byrum, 29 years, $184,500;
and Mr. Tatum, over 30 years, $170,100.
Management Retirement Plan
The Morrison Restaurants Inc. Management Retirement Plan (the "Management
Plan") is a nonqualified, unfunded, defined benefit retirement plan for
employees with 15 or more years of credited service (as defined in the
Management Plan) and whose average compensation over a three-year period
equals or exceeds $40,000, which amount may be adjusted by the Company from
time to time. A participant's accrued benefit in the Management Plan equals
1.5 percent of the participant's average compensation determined over the
five-year period immediately preceding retirement or death multiplied by the
participant's years of credited service not in excess of 20 years; plus 2
percent of the participant's average compensation determined over the five-
year period immediately preceding his retirement or death multiplied by the
participant's years of credited service in excess of 20 years, but not in
excess of 30 years. For purposes of determining a participant's accrued
benefit, a year's compensation includes commissions and bonuses, but generally
no form of remuneration is counted in excess of $100,000, which amount may be
adjusted by the Company from time to time.
Normal retirement for purposes of the Management Plan is age 65, although
a participant with at least 15 years of credited service may retire with a
benefit as early as age 55. Generally, benefits are paid in the form of a
single life annuity if the participant is unmarried or a joint and survivor
annuity if the participant is married. If the participant is also entitled
to benefits under the Retirement Plan, benefits payable under the Management
Plan must be in the same form as those payable under the Retirement Plan. A
participant's accrued benefit under the Management Plan is forfeited if the
participant terminates employment before he is eligible for early retirement
under the Management Plan.
Estimated annual benefits payable upon retirement to persons in specified
remuneration and years of credited service classifications are shown in the
following table. All amounts shown are for a single life annuity and assume
that active participation continues in the Management Plan until age 65. In
accordance with the Management Plan, the amounts shown are subject to
reduction for Social Security benefits, benefits received under the Retirement
Plan and benefits received under the Supplemental Plan. A participant is
ineligible for benefits under the Management Plan while receiving any long-
term disability benefits.
<TABLE>
Management Plan
Estimated Annual Benefits for Representative Years of Service to Age 65
<CAPTION>
Final Average 30 or
Salary 15 20 25 More
<C> <C> <C> <C> <C>
$ 40,000 $9,000 $12,000 $16,000 $20,000
60,000 13,500 18,000 24,000 30,000
80,000 18,000 24,000 32,000 40,000
100,000 22,500 30,000 40,000 50,000
</TABLE>
Years of credited service and salary covered by the Management Plan for
the named executives are: Mr. Beall, 22 years, $100,000; Mr. Bishop, over
30 years, $100,000; Mr. McClenagan, 22 years, $100,000; Mr. Byrum, 29 years,
$100,000; and Mr. Tatum, over 30 years, $100,000.
Contracts with Executives
On December 18, 1989, the Board of Directors of the Company approved the
adoption of a Change of Control Agreement (the "Agreement") which was
recommended by the Compensation Committee to be entered into severally with
executives in specified positions with the Company (currently 20 executives),
including the persons named in the Summary Compensation Table). The Agreement
is designed to diminish the distraction of executives by virtue of the
personal uncertainties and risks created by a threatened or pending Change of
Control (as defined in the Agreement) and to encourage their full attention
and dedication to the Company currently and in the event of any pending or
threatened Change of Control.
Under the Agreement, a "Change of Control" is defined as either (i)
certain changes in the composition of more than 20 percent of the Board of
Directors, or (ii) with certain exceptions, any "Business Combination" (as
defined in the Agreement) that has not been approved by the holders of 80
percent or more of the Company's outstanding voting stock. Exceptions that
do not constitute a Change in Control include (a) any Business Combination
approved by at least 80 percent of the Continuing Directors (as defined in the
Agreement), (b) any Business Combination transaction that satisfies certain
price and procedural requirements specified in the Company's Certificate of
Incorporation, and (c) any acquisition by the Company, any of its
subsidiaries, or any employee benefit plan of the Company or any of its
subsidiaries.
Under the Agreement, the "Effective Date" means the first date on which
a Change of Control occurs. Prior to the Effective Date, each covered
executive remains an at-will employee, except as may be provided in any other
agreement, and any termination of his employment will terminate his rights
under the Agreement. If and when the Effective Date occurs, the Company has
agreed to continue the employment of the executive, and the executive has
agreed to remain in the employ of the Company, for a three-year period (the
"Employment Period") commencing on the Effective Date. During the Employment
Period, the executive (a) shall receive an annual base salary no less than
that received prior to the Effective Date and an annual bonus no less than the
average of the last three annual bonuses received prior to the Effective Date,
and (b) generally shall be entitled to continuation of retirement, savings and
welfare benefit plan participation and practices, expense reimbursements and
other fringe benefits on a basis at least comparable to that obtaining prior
to the Effective Date.
If during the Employment Period the Company terminates the executive's
employment other than for cause, death or disability, or if the executive
terminates his employment for "good reason" (as defined in the Agreement), or
if the executive terminates his employment for any reason during the 30-day
period immediately following the first anniversary of the Effective Date, the
executive becomes entitled to receive (i) any unpaid portion of his accrued
annual base salary plus a pro rata portion of his highest annual bonus paid
or payable for the three fiscal years immediately preceding his date of
termination, (ii) an amount equal to either three, two or one times the sum
of his annual base salary and his highest annual bonus, depending upon the
particular multiplier stipulated in his Agreement, (iii) any other accrued
obligations, (iv) rights with respect to any outstanding stock options granted
to him prior to his date of termination or a cash amount equal to the
difference between the option price and the then value of Company stock for
which any such option was granted, and (v) certain employee benefits
consisting of retirement, savings and various health and welfare insurance
benefits. The multiplier referred to in clause (ii) of the preceding sentence
is three for each of the persons named in the Summary Compensation Table. If
this package of compensation and benefits constitutes "excess parachute
payments" as defined under the Internal Revenue Code, the Company will pay an
additional amount sufficient to reimburse the executive for all taxes payable
by the executive with respect to the parachute payments. The Company
estimates that the obligations to the named executives as of the date of this
Proxy Statement if the employment termination provisions of the Agreement were
to take effect immediately upon a Change of Control would be approximately as
follows: Mr. Beall, $7,406,000; Mr. McClenagan, $3,528,000; Mr. Johnson,
$2,378,000; Mr. Byrum, $2,594,000; and Mr. Tatum, $2,474,000. Other
executives may be made subject to an Agreement by the Board of Directors.
In May 1994, the Company entered into a salary continuation agreement
with J. B. Byrum, President of the Company's Hospitality Division, pursuant
to which the Company agreed that in the event Mr. Byrum's status as a
management employee is terminated by the Company within 12 months of the date
of the agreement, the Company will continue to pay Mr. Byrum for a period of
12 months a salary equal to the then current base salary and a pro rata
portion of the bonus earned by Mr. Byrum prior to the date of termination of
his status as a management employee. In addition, the Company agreed to
employ Mr. Byrum following the termination of his status as a management
employee until Mr. Byrum reaches the age of 55 with an annual salary equal to
the annual retirement payment amount that Mr. Byrum would be entitled on
retirement at age 55. The annual retirement payment amount will be based on
the Supplemental Plan formula and will be determined by his base salary in
effect at the time of termination of his status as a management employee.
In
addition, under the agreement, if Mr. Byrum remains in the employ of the
Company he will be entitled to a commission on the sale by the Company of
certain assets based upon the net pre-tax sales price of such assets adjusted
for related expenses and certain other charges. Mr. Byrum may earn a
commission of between $100,000 and $500,000 under this provision. Pursuant
to the agreement, Mr. Byrum agreed not to compete with certain aspects of the
Company's business for a period of three years following the date of the
agreement.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors of the Company,
which is composed solely of non-employee directors of the Company, has
furnished the following report on executive compensation.
Overall Compensation Philosophy
During the past fiscal year, the Company has reaffirmed its long-standing
emphasis on the performance-based elements of executive compensation. These
programs closely align performance measures with current business strategy and
are designed to motivate executive behavior. In general, the Company will
control base salaries and will compensate outstanding performance through more
highly leveraged annual and longer-term incentive programs. As a result, the
following principles will apply to executive compensation:
* Base salaries will be competitive with the Company's
peer group of public companies in the food service
industry, but will represent a smaller proportion of
total executive compensation opportunities than in
the past;
* A very significant portion of executive compensation
will be tied to the Company's success in meeting pre-
determined annual and long-term performance goals,
including the Company's profitability and
appreciation in the Company's stock price; and
* Executives will be required to own specified amounts
of stock in the Company, resulting in direct linkage
between executive and stockholder interests.
The overall objectives of this strategy are to attract and retain the
best possible executive talent and to motivate the Company's executives to
achieve the goals inherent in the Company's business strategy.
The key components of the Company's executive compensation packages are
base salary, annual incentive opportunities, and equity devices. The
Compensation Committee's policies with respect to each of these elements,
including the basis for the compensation awarded to Mr. S. E. Beall, III, the
Company's Chief Executive Officer, are discussed below.
Base Salaries
The Company's general approach for base compensation is to establish
salary ranges with midpoints which are at the 50th percentile of the
competitive market in the food service industry. Each salary range provides
a lower and upper limit on the value of jobs assigned to that range. However,
for its top 28 executives, including the Chief Executive Officer and the other
executives named in the Summary Compensation Table, the Company has capped
base salaries at the midpoint of the salary range effective beginning Fiscal
1994. This reflects the previously mentioned objective of controlling base
salary costs and emphasizing incentive compensation. Future adjustments to
base salaries and salary ranges will reflect average movement in the
competitive market.
With respect to Fiscal 1994, the Compensation Committee utilized the
services of an independent consulting firm to obtain competitive base salary
information in the food service industry from published surveys of selected
peer companies. Executive officer salaries were reviewed and recommendations
for adjustments were made to the Board based on survey midpoints.
Annual Incentive Compensation
The Company's annual incentive plan directly links annual incentive
payments to the accomplishment of predetermined and Board-approved financial
and operating goals. Corporate and individual performance objectives are
established at the beginning of each fiscal year.
Each executive's potential incentive was tied to growth in earnings per
share or growth in pretax net income effective beginning with Fiscal 1994, as
well as certain qualitative measures. Depending upon an executive's
organizational level and responsibilities, as well as competitive market
practices, annual incentive compensation targets range from 30 percent to 50
percent of base salary if 100 percent of predetermined corporate goals are
achieved and maximums range from 60 percent to 125 percent of base salary
effective beginning with Fiscal 1994. Performance with respect to the
measures named in the annual incentive plan for Fiscal 1994 resulted in
average annual incentive compensation of 70 percent of base salaries for the
five executives (other than Mr. Beall) named in the Summary Compensation Table.
Such awards represented approximately 94 percent of the total incentive awards
that could have been earned by the five executive officers. Occasionally the
Company may establish a special incentive award for an individual officer or
other employee aimed at achieving a specified performance goal.
Executive Stock Ownership
Believing that equity ownership plays a key role in aligning the
interests of Company personnel with Company stockholders, the Company
encourages all employees to make a personal investment in Company stock. The
Company's goal is that 10 percent of Common Stock will be owned by employees
by the year 2000 and that 80 percent of employees with more than two years of
experience with the Company will own Common Stock.
In addition, ownership requirements have been developed for the Company's
top management group. The following requirements apply to various
organization levels: Chief Executive Officer - a minimum of four times base
salary; Division Presidents - a minimum of three times base salary; Corporate
and Division Senior Vice Presidents and Vice Presidents - a minimum of two
times base salary; and Division Management - a minimum of one times base
salary. These objectives will be phased in over a period of five years that
commenced with Fiscal 1994 with the minimum to be fully achieved at the end
of that period, and may be accomplished through the exercise of stock options,
other stock incentives or open market purchases. Members of the management
group must achieve target ownership levels to be eligible to receive future
awards under stock-based plans.
Long-Term Incentive Compensation
Awards under the Company's stock-based compensation plans directly link
potential participant rewards to increases in stockholder value. The Company
maintains stock incentive plans for executive officers and other employees.
These plans provide for grants of a variety of stock incentives, including
stock options, restricted stock, stock appreciation rights, stock purchase
rights and performance shares or units. The programs described below have
been established under one or more of these plans.
Executive Stock Option Program
During Fiscal 1994, the Company established an Executive Stock Option
Program which provides for option grants of 3,000 to 54,000 shares to its top
28 executives. The options are issued at fair market value, have a five-year
term and vest over three years, with a performance-based vesting acceleration
if annual incentive plan maximums are achieved. During Fiscal 1994, option
grants ranging from 4,500 to 46,950 shares were made. In order for executives
to receive future option grants under this program, certain minimum Common
Stock ownership requirements must be attained as early as July 1, 1995.
Management Stock Option Program
During Fiscal 1994, the Company established a Management Stock Option
Program for all employees at the General Manager level and higher except the
Chief Executive Officer. Based on organization level, eligible employees may
purchase shares of Company stock up to established annual limits. For each
share purchased, 1.15 shares will be issued and the participant will receive
a five-year option to purchase three times the number of shares of Company
stock obtained at a per share exercise price equal to the fair market value
of a share on the date of grant. The right to purchase Common Stock under
this program is conditioned on the achievement of Corporate, Division, Region,
District or Unit goals, as the case may be. There will be a two-year
restriction on the sale of shares acquired through this program other than
through the exercise of stock options.
Restricted Stock
The Company may occasionally grant restricted stock or performance stock
rights to insure retention of key executives or as part of the compensation
provided to a new executive hired from outside the Company. At the 1993
Annual Meeting of Shareholders, an award of performance stock rights made to
Mr. Beall and described below was approved by the stockholders.
Chief Executive Officer Compensation
At the May 25, 1993 Compensation Committee meeting, Mr. Beall's base
salary was reviewed. Based on his performance and competitive market data, the
Committee recommended, and the Board of Directors subsequently approved, an
annual base salary of $525,000 for Fiscal 1994. Mr. Beall's base salary was
capped at the midpoint of the competitive salary range as is the case with
other executive officers of the Company. Mr. Beall's target incentive award
for Fiscal 1994 was equal to 50 percent of his base salary, with a maximum
award of 125 percent, based on the increase in the Company's earnings per
share, as prescribed by the Company's profit sharing plan. For Fiscal 1994,
Mr. Beall earned an incentive award of $630,000 which was 120 percent of his
base salary.
At the 1993 Annual Meeting, the stockholders of the Company approved an
award made by the Compensation Committee during Fiscal 1994 of performance
stock rights providing for the issuance of up to 75,000 shares of Common Stock
to Mr. Beall. If the Company's stock reaches pre-established price levels,
Mr. Beall will receive shares of Common Stock over a five-year period
according to the following schedule:
<TABLE>
<CAPTION>
Period Ending May 31, Average Price Level Shares Issuable
<C> <C> <C>
1994 $23.00 15,000
1995 $26.45 30,000, minus shares previously issued
1996 $30.42 45,000, minus shares previously issued
1997 $34.98 60,000, minus shares previously issued
1998 $40.23 75,000, minus shares previously issued
</TABLE>
Stock will be issued to Mr. Beall according to the table above if the
Common Stock averages the stated price level for a period of 22 consecutive
trading days. The price is defined as the average of the high and low sale
prices of a share of Common Stock on each day during the period. Shares not
issued in a given year may be earned in a subsequent year if the stated price
level for the subsequent year is attained. Mr. Beall earned 15,000 shares
during Fiscal 1994 pursuant to the terms of the performance-based stock
incentive program.
Board of Directors and Compensation Committee
The Board of Directors of the Company has a standing Compensation
Committee whose purpose is to review and make recommendations concerning the
base salaries of all officers of the Company and to authorize all other forms
of compensation. Members of the Compensation Committee also administer the
Company's stock-based incentive plans. The Committee met one time during the
fiscal year. The Board of Directors approved all decisions of the
Compensation Committee during Fiscal 1994. The members of the Compensation
Committee are named below.
Wallace R. Bunn, Chairman Donald Ratajczak
John B. McKinnon Robert J. Theis, Sr.
Dolph W. von Arx Benjamin F. Payton
Claire L. Arnold *
_______________
* Ms. Arnold was appointed to the Compensation Committee on June 30, 1994 and
did not take part in any deliberations with respect to executive compensation
for Fiscal 1994.
CERTAIN TRANSACTIONS
In June 1994, the Company sold its 35.9% interest in Morrison-Crothall
Support Services, Inc., to J. B. Byrum, President of the Company's Hospitality
Division, for a $400,000 promissory note payable in $50,000 quarterly
installments in fiscal years 1996 and 1997. The promissory note bears
interest at 8% per annum and is secured by 11,157 shares of Common Stock. Any
commissions earned by Mr. Byrum pursuant to his salary continuation agreement
described under "Executive Compensation - Contracts with Executives" above,
will be paid by means of a setoff by the Company of the last installments of
the promissory note. In addition, in case of default, the Company has the
right to require Mr. Byrum to effect a cashless exercise of stock options held
by him and apply all pre-tax cash proceeds to the repayment of the promissory
note.
PERFORMANCE GRAPH
The Common Stock commenced trading on the New York Stock Exchange
("NYSE") on October 21, 1993 and the Company has changed the comparison
indices for the purposes of the Performance Graph to indices comprising NYSE
listed companies. In accordance with Securities and Exchange Commission
rules, the Company is required to present in this Proxy Statement a
Performance Graph comparing the performance of the Common Stock with the
performance of both the indices used in last year's Performance Graph in
addition to the new indices. Accordingly, the following chart and table
compare the five-year cumulative total return of the Company's Common Stock
with the cumulative total return of the Nasdaq Stock Market Index, NYSE Stock
Market Index, Nasdaq Retail Trade Index and the NYSE Eating and Drinking
Places Index.
FIVE-YEAR PERFORMANCE GRAPH TO BE INSERTED
Comparison of Five-Year Cumulative Total Return*
Among Morrison Restaurants Inc., Nasdaq Stock Market, NYSE Stock Market,
Nasdaq Retail Trade, and NYSE Eating & Drinking Places Indices.
The Performance graph is omitted and is represented by the following table:
<TABLE>
<CAPTION>
YEAR ENDED MAY
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Morrison Restaurants Inc. $100.00 $90.60 $86.61 $147.46 $173.62 $199.79
Nasdaq Stock Market Index $100.00 $104.47 $118.65 $139.30 $167.39 $175.43
NYSE Stock Market Index $100.00 $114.07 $127.27 $140.94 $158.52 $165.31
Nasdaq Retail Trade Index $100.00 $112.91 $149.29 $167.95 $167.39 $170.10
NYSE Eating & Drinking
Places Index $100.00 $103.48 $105.14 $124.50 $139.70 $169.50
* Assumes $100 invested in the common stock of Morrison Restaurants
Inc. and comparison groups on May 31, 1989. Assumes reinvestment of
dividends.
</TABLE>
PROPOSAL 2.
INCREASE OF AUTHORIZED COMMON STOCK
Article IV of the Company's Certificate of Incorporating presently
provides that the Company is authorized to issue 50,000,000 shares of
Common Stock and 250,000 shares of preferred stock, $.01 par value per
share. The Board of Directors adopted an amendment to the Certificate of
Incorporation to increase the authorized Common Stock of the Company from
50,000,000 to 100,000,000 shares and recommends that the stockholders
approve such amendment. The additional shares of Common Stock for which
authorization is sought would be a part of the Company's existing class of
Common Stock and, if and when issued, would have the same rights and
privileges as the shares of Common Stock now outstanding.
The text of the resolution that will be presented for a vote of the
stockholders at the Meeting will be substantially as follows:
RESOLVED, that Article IV of the Certificate of
Incorporation of the Corporation be, and it hereby is, amended
by deleting paragraph (a) thereof in its entirety and
substituting the following in lieu thereof:
(a) The total number of shares of capital stock
which the Corporation shall have authority to issue is
One Hundred Million Two Hundred Fifty Thousand
(100,250,000), divided into two classes as follows:
(1) One Hundred Million
(100,000,000) shares of common stock,
$.01 par value per share ("Common
Stock"); and
(2) Two Hundred Fifty Thousand
(250,000) shares of preferred stock,
$.01 par value per share ("Preferred
Stock").
As of August 5, 1994, there were 35,310,937 shares of Common Stock
issued and outstanding and 8,332,563 shares of Common Stock held as
treasury stock. As of such date, there were 6,356,500 authorized but
unissued shares of Common Stock, of which 6,093,066 shares were reserved
for issuance pursuant to the Company's various employee benefit plans and
its dividend reinvestment plan.
Although the Board of Directors has no present plans for the issuance
of Common Stock, the additional shares of Common Stock that would be
authorized but unissued and not reserved for issuance would be available to
the Company for issuance in connection with general corporate purposes
including, without limitation, stock splits, stock dividends, dividend
reinvestment plan and other employee benefit plans, raising additional
capital or acquisitions. The Board of Directors believes that additional
authorized Common Stock would give the Company greater flexibility by
allowing the Company to issue shares of Common Stock without the expense
and delay of a stockholders' meeting to authorize additional shares if and
when the need arises.
The issuance of additional shares of Common Stock by the company may,
depending upon the circumstances under which the shares are issued, reduce
stockholders' equity per share and may reduce the percentage of ownership
of Common Stock of existing stockholders. The issuance of additional
shares of Common Stock in payment of a stock dividend or to effect a stock
split, however, would not reduce the percentage of ownership of the Company
by existing stockholders or reduce any stockholder's interest in the
earnings of the Company. Stockholders have no preemptive right to
subscribe for or purchase any additional shares of Common Stock issued by
the Company.
The proposed amendment to the Certificate of Incorporation is not
being recommended in response to any specific effort of which management is
aware to obtain control of the Company. However, shares of authorized and
unreserved Common Stock could be issued to a holder who might thereby
obtain sufficient voting power to create voting impediments that would
frustrate third parties seeking to gain control of the Company against the
wishes of the Board of Directors, whether or not such a takeover bid is in
the best interest of the stockholders. The Company has no agreements,
understandings, commitments or plans with respect to the sale or issuance
of additional shares of Common Stock other than pursuant to its employee
benefit plans and its dividend reinvestment plan.
If the proposal is approved by the stockholders, the amendment to the
Certificate of Incorporation would become effective upon the filing of a
Certificate of Amendment to the Certificate of Incorporation with the
Secretary of State of Delaware, which would occur as soon as practicable
following the approval of the proposal by the stockholders.
PROPOSAL 3.
MORRISON RESTAURANTS INC. STOCK INCENTIVE AND DEFERRED
COMPENSATION PLAN FOR DIRECTORS
The Company currently maintains the Morrison Restaurants Inc. Stock
Incentive and Deferred Compensation Plan for Directors (the "Prior Plan"),
which was approved by the stockholders at the 1992 Annual Meeting of
Stockholders, to reward its existing non-management directors with
restricted stock awards and to permit the Company's non-management
directors to elect to receive all or a portion of his or her retainer (the
"Retainer") in options to purchase shares of Common Stock. Subject to
adjustment in the event of a stock split, stock dividend or similar event,
no more than 225,000 shares of Common Stock may be issued under the Prior
Plan.
The Board of Directors has approved an amendment and restatement of
the Prior Plan (the "Directors' Plan") to encourage further Company stock
ownership by non-management directors, provided the stockholders approve
the amended plan. From the original 225,000 shares available under the
Prior Plan, 207,184 shares of Common Stock remain available under the
Directors' Plan for issuance pursuant to Stock Awards, Restricted Stock
Awards or upon exercise of Options (each of which is described below). The
Company's non-management directors are subject to Section 16 of the
Securities Exchange Act of 1934. If the Directors' Plan is not approved by
the stockholders, the Restricted Stock Awards, Stock Awards and Option
grants or exercises could be deemed "purchases" of Common Stock for
purposes of the short-swing profit recovery provision of Section 16(b).
The full text of the Directors' Plan is attached as Appendix A to this
Proxy Statement.
Deferrals of Compensation. The Directors' Plan permits non-management
directors to continue to defer all or a portion (in 25 percent increments)
of their Retainer (other than any portion of the Retainer allocated to
Stock Awards, as described below) and/or any additional meeting and
committee fees, as permitted under the Prior Plan, to a Deferred
Compensation Account. Elections to defer compensation to Deferred
Compensation Accounts may be revoked or modified as of the first day of the
fiscal quarter following the date the revocation or modification is
received by the committee that administers the Directors' Plan (the
"Committee"). As under the Prior Plan, Deferred Compensation Accounts will
continue to be credited as of the last day of each fiscal quarter with an
assumed rate of income equal to 90-day U.S. Treasury bills, based on the
weighted average balance of that account during that fiscal quarter.
Amounts credited to a director's Deferred Compensation Account will be
distributed not sooner than the earlier of the first January 15 or July 15
following (i) the date of the director's seventieth birthday, or (ii) the
date the director ceases to be a member of the Board. Each director is
permitted to elect, at the time he or she first elects to participate in
this portion of the Directors' Plan, whether his or her Deferred
Compensation Account will be distributed in a lump sum on the date
described in the preceding sentence, or in a series of not more than five
annual installments beginning on the date described in the preceding
sentence.
Stock Awards. The Directors' Plan provides that each non-management
director who has not attained the "Target Ownership Level", as defined
below, will be deemed to have elected to direct that 60 percent of his or
her Retainer payable for each fiscal quarter following the effective date
of this amendment and restatement be allocated to the purchase of Common
Stock on his or her behalf. Each non-management director who has attained
the Target Ownership Level may elect to direct, in 10 percent increments,
that up to 60 percent of his or her Retainer for each fiscal quarter
following the effective date of this amendment and restatement be allocated
to the purchase of Common Stock on his or her behalf (collectively, the
"Stock Awards"). A deemed election will continue in effect until that
director, after attaining the Target Ownership Level, modifies or revokes
the election in the manner described below for discretionary elections.
Discretionary elections shall not take effect until the first day of
the fiscal quarter that is at least six months after the date it is filed
with the Committee. However, the Committee may permit, in its sole
discretion, to allow the discretionary election to be effective on a date
prior to the date that is six months after the date the election is filed
with the Committee. Any discretionary election made must be irrevocable
until the new Securities and Exchange Commission (the "SEC") Section 16(b)
rules take effect. After the new SEC section 16(b) rules apply to the
Company, a non-management director that has attained the Target Ownership
Level may revoke or modify his or her election to purchase Common Stock by
filing a new election six months (or such other period as may be required
by the new Section 16(b) rules) prior to the first day of the fiscal
quarter to which the new election relates. However, the Committee may
allow a modification or revocation of a discretionary election to be
effective on an earlier date; provided the modification or revocation would
not result in short-swing profit recovery pursuant to Section 16(b). Each
election shall be treated as a standing election and thus shall remain in
effect until so modified or revoked.
A director will be treated as having attained the "Target Ownership
Level" for a fiscal quarter if he or she owns, on the first day of that
fiscal quarter, at least a number of shares of Common Stock with a fair
market value, as determined by the closing price on the last trading date
prior to such date ("Fair Market Value"), equal to 10 multiplied by that
director's annual Retainer.
Each director who has elected, or who has been deemed to have elected,
to purchase Stock Awards for a fiscal quarter, shall be issued the number
of shares of Common Stock equal to the amount of the Retainer elected to be
so allocated, multiplied by 1.15 and divided by the Fair Market Value of a
share of Common Stock. For example, if a director's Retainer for the
fiscal quarter is $5,000 and that director has been deemed to have elected
to allocate 60 percent of his Retainer for the purchase of Common Stock and
the Fair Market Value of a share of Common Stock is $25, that director will
be issued, as of the first day of the fiscal quarter, 138 shares of Common
Stock ($3,000 times 1.15 divided by $25). Common Stock so purchased may
not be transferred within three years of the date of purchase, except in
the event of death, disability, retirement on or after age 70 or unless the
Committee waives this restriction.
Options. The Directors' Plan provides that each non-management
director who receives Stock Awards, whether through a deemed election or a
discretionary election, shall be awarded an option to purchase shares of
Common Stock (the "Options") equal to three times the number of shares
issued pursuant to the discretionary election or deemed election, as the
case may be. The number of shares of Common Stock subject to Options
issued under the Directors' Plan will be adjusted in the event of a stock
split, stock dividend or similar event.
Options issued under the Directors' Plan will be granted on the first
day of each fiscal quarter for which an election for a Stock Award is in
effect; will become fully exercisable six months following the date of
grant; and will be exercisable at the Fair Market Value of the Common
Stock. Each Option shall expire upon the fifth anniversary of the date on
which it was granted, unless an optionee dies before that anniversary. In
the event of death, all Options held by the deceased director which are not
exercised by the director's legal representative prior to the first
anniversary of death shall be deemed exercised on the first anniversary of
the date of death to the extent the then Fair Market Value of the Common
Stock subject to those options exceeds the applicable Option exercise
price, and payment of that exercise price shall be effected by withholding
a number of shares of Common Stock otherwise issuable pursuant to the
Option(s) deemed exercised, the Fair Market Value of which on such
anniversary is equal to the applicable exercise price. If the Fair Market
Value of the Common Stock on the first anniversary of the optionee's death
equals or is less than the applicable Option exercise price, then those
Option(s) shall be deemed to have expired unexercised.
Except as otherwise described above for options automatically
exercised on the first anniversary of the death of an Optionee, payment for
options may be made in cash, by delivery of a number of shares of Common
Stock owned by the holder for at least six months prior to the date of
exercise with an aggregate Fair Market Value equal to the exercise price of
the shares being exercised, or in a cashless exercise through a broker.
Options may not be transferred except by will or the laws of descent and
are exercisable only by the Optionee, or, in the event of the Optionee's
death or disability, by the Optionee's legal representative.
Restricted Stock Awards. If the Directors' Plan is approved by the
stockholders, a one-time Restricted Stock Award of 5,000 shares of Common
Stock will be made under the Directors' Plan to each of the Company's non-
management directors who is first elected as a director on or after
September 29, 1993. The shares of Common Stock thus awarded may not be
transferred, sold, assigned or otherwise disposed of by a director until
the earliest to occur of one of the vesting dates, as described in the
paragraph below.
One-third of the Common Stock subject to any Restricted Stock Award
shall vest on each of the first three anniversary dates of the date the
director is first elected to the Board of Directors if the individual is a
non-management director on the applicable anniversary date. However,
shares subject to the Restricted Stock Award shall become 100 percent
vested on any earlier to occur of the following additional vesting dates:
the date the individual ceases to be a non-management director on account
of death, disability, attainment of age 70 or upon a Change in Control (as
defined in the Directors' Plan). Any director who ceases to be a director
prior to any of the vesting dates described above will forfeit all of the
unvested shares of Common Stock subject to his Restricted Stock Award.
Plan Administration. The Directors' Plan will be administered by the
Committee which has discretionary authority to interpret the Directors'
Plan and to issue stock incentive agreements evidencing the Restricted
Stock Awards and Options granted under the Directors' Plan. The Company
has determined that those persons serving as management directors from time
to time shall serve as the Committee. Depending on when the new SEC
Section 16(b) rules actually become effective with respect to the Company's
benefit plans, non-management directors will be permitted to make deemed or
discretionary elections to purchase Common Stock under the Directors' Plan
as early as for the first fiscal quarter commencing after the 1994 Annual
Meeting of Stockholders. Elections to defer Retainer or other meeting fees
to Deferred Compensation Accounts made under the Prior Plan will continue
to be effective until revoked or otherwise revised under the Directors'
Plan. Although the Directors' Plan may be amended by the Board of
Directors without stockholder approval, the Board also may condition any
such amendment upon stockholder approval if stockholder approval is deemed
necessary or appropriate in consideration of tax, securities or other laws.
Nevertheless, provisions of the Directors' Plan that relate to Restricted
Stock Awards or Stock Awards issued pursuant to deemed elections may not be
amended more frequently than once every six months.
Tax Considerations. Directors who receive a Restricted Stock Award
generally will not recognize income upon the grant of such award or at any
time prior to the time the award becomes vested with respect to the Common
Stock subject to the award. At the time a director becomes vested with
respect to Common Stock which is subject to a Restricted Stock Award, he
will recognize compensation taxable as ordinary income in an amount equal
to the fair market value on the date such stock vests, and the Company will
then be entitled to a corresponding deduction. However, if a director
elects at the time of receipt of a Restricted Stock Award, he may include
the fair market value of the Common Stock subject to such award in income
at that time, and the Company will be entitled to a corresponding deduction
at that time.
Directors generally will not be taxed on their compensation deferred
under the Director's Plan at the time it is deferred. To the extent that a
director's compensation is deferred to that director's Deferred
Compensation Account, the director will recognize compensation taxable as
ordinary income with respect to all compensation allocated to his or her
Deferred Compensation Account and all income credited thereto at the time
it is paid or made available to him or her, and the Company will then be
entitled to a corresponding deduction.
To the extent a director's compensation is allocated to Stock Awards,
a director will recognize compensation taxable as ordinary income upon
receipt of the Common Stock so issued. The Company will be entitled to a
deduction in a like amount for compensation paid to the director. A
subsequent taxable disposition of the shares of Common Stock held as a
capital asset will result in capital gain or loss measured by the
difference between the fair market value of the Common Stock on the date of
transfer and the amount realized upon the later disposition. Generally,
the gain or loss will be long-term if such shares are held for more than
one year.
A director will not recognize income upon the grant of or at any time
prior to the exercise of an Option or a portion thereof. At the time a
director exercises an Option or a portion thereof, he or she will recognize
compensation taxable as ordinary income in an amount equal to the excess of
the fair market value of the Common Stock on the date the Option is
exercised over the amount paid by the director upon exercise, and the
Company will then be entitled to a corresponding deduction.
The Directors' Plan is not qualified under Section 401(a) of the
Internal Revenue Code of 1986.
PROPOSAL 4.
INCENTIVE BONUS PLAN
FOR THE CHIEF EXECUTIVE OFFICER
The Company currently has a performance-based incentive bonus program
for certain of its executives which was adopted by the Compensation Committee
and ratified by the Board of Directors in June 1993. The executives covered
by this program originally included the Chief Executive Officer. Subsequent
to the adoption of this bonus program by the Compensation Committee, the
Internal Revenue Code was amended to add a new Section 162(m) which limits
the amount of individual compensation that may be deducted by an employer for
tax purposes in any one fiscal year to $1,000,000 unless such compensation
constitutes performance-based compensation paid on account of the attainment
of one or more pre-established, objective performance goals approved by the
employer's stockholders and certain other requirements are satisfied. The
Compensation Committee has determined that it is in the best interests of the
Company and its stockholders to limit the existing bonus program, beginning
with Fiscal 1995, to executives other than the Chief Executive Officer and
to establish a separate incentive bonus plan (the "Bonus Plan") for the Chief
Executive Officer, designed to more clearly satisfy the requirements of the
exception to the deductibility limitation contained in Section 162(m) of the
Internal Revenue Code. Subject to approval by the stockholders at the
Meeting, the Bonus Plan will be applicable to fiscal years following, and
including, Fiscal 1995, unless and until terminated by the Compensation
Committee. The terms of the Bonus Plan are substantially the same as the
terms of the bonus program for executives as such terms would have been
applicable to the Chief Executive Officer had the Chief Executive Officer
remained eligible to participate in such bonus program. The Bonus Plan being
presented to the stockholders for approval restates the provisions of the
bonus program for executives that were previously applicable to the Chief
Executive Officer in a more formal plan, formalizes interpretations of such
provisions developed by the Compensation Committee and contains certain
additional terms and conditions designed to comply with the requirements
of Section 162(m) and proposed Treasury regulations thereunder for
performance-based compensation.
Performance Goals and Determination of Awards. Pursuant to the Bonus
Plan, if the Company achieves a predetermined minimum percentage growth in
pre-tax income for a fiscal year, the Chief Executive Officer may earn a cash
bonus determined as a percentage of his base salary if predetermined levels
of growth in earnings per share are achieved by the Company. For Fiscal
1995, the Chief Executive Officer will earn a bonus equal to 12.5 percent,
50 percent, 100 percent or 125 percent of his base salary if the Company
achieves or exceeds the "threshold", "target", maximum" and "maximum plus"
earnings per share growth level, respectively, in that fiscal year, with a
proportional increase in the bonus for every one-tenth of a percent increase
in earnings per share growth between such performance levels. The bonus that
would be payable to the Chief Executive Officer for Fiscal 1995 would be
$70,612 at the threshold level, $282,450 at the target level, $564,900 at the
maximum level and $706,125 at the maximum plus level. The maximum bonus that
may be earned by the Chief Executive Officer under the Bonus Plan in any
given fiscal year is $850,000.
Payment of Awards. Before any award may be paid pursuant to the Bonus
Plan, the Compensation Committee must certify that the performance goals have
been achieved and that any other requirements of the Bonus Plan have been
satisfied.
Partial Annual Bonus Awards. In the event of the Chief Executive
Officer's death, termination of employment due to disability or termination
of employment due to a change of control, the Chief Executive Officer (or the
legal representative of the Chief Executive Officer, as the case may be)
shall be entitled to payment of an adjusted annual bonus award. The amount
of the adjusted annual bonus award shall be determined by multiplying the
annual bonus award that would have been payable to the Chief Executive
Officer had he remained an employee through the last day of the fiscal year
of the Company by a fraction the numerator of which shall be the number of
days during the fiscal year during which he was an employee and the
denominator of which shall be 365; provided, however, that in the case of a
termination of employment following a change of control, the payment of any
annual bonus award under the Bonus Plan thereafter shall be determined in
accordance with the terms of the Chief Executive Officer's change of control
agreement.
Administration. The Bonus Plan will be administered by the
Compensation Committee as long as the composition of the Compensation
Committee consists solely of two or more "outside directors" as that term is
defined in Section 162(m) of the Internal Revenue Code. The Compensation
Committee has the authority to establish performance goals and targets under
the Bonus Plan.
Amendment and Termination. The Compensation Committee at any time may
amend or terminate the Bonus Plan without stockholder approval; provided,
however, that the Compensation Committee may condition any amendment on the
approval of stockholders of the Company if such approval is necessary or
advisable with respect to tax, securities or other applicable laws.
The Compensation Committee is specifically authorized to amend the
Bonus Plan as necessary or appropriate to comply with Section
162(m) of the Internal Revenue Code and the regulations issued thereunder.
INDEPENDENT AUDITORS
The firm of Ernst & Young served as the Company's independent auditors
for Fiscal 1994. Representatives of Ernst & Young will be present at the
Meeting to respond to appropriate questions and will have an opportunity to
make a statement if they so desire.
The appointment of auditors is a matter for determination by the Board
of Directors for which no stockholder approval or ratification is
necessary. The Board of Directors has selected, upon the recommendation of
the Audit Committee, the firm of Ernst & Young to audit the books of the
Company for Fiscal 1995.
STOCKHOLDER PROPOSALS
Any stockholder of the Company wishing to submit a proposal for action
at the Company's 1995 Annual Meeting of Stockholders and desiring the proposal
to be considered for inclusion in the Company's proxy materials must provide
a written copy of the proposal to the management of the Company at its
principal executive office not later than April __, 1995, and must otherwise
comply with rules of the Securities and Exchange Commission relating to
stockholder proposals.
GENERAL
Management does not know of any other business to come before the
Meeting. If, however, other matters do properly come before the Meeting, it
is the intention of the persons named in the accompanying proxy to vote on
such matters in accordance with their best judgment.
A list of stockholders entitled to be present and vote at the Meeting
will be available at the offices of the Company, 4721 Morrison Drive, Mobile,
Alabama 36609, for inspection by stockholders during regular business hours
from September 19, 1994, to the date of the Meeting.
The Annual Report of the Company for Fiscal 1994 (which is not part of
the proxy soliciting material) is being mailed with this proxy statement to
all stockholders of record as of the record date for the Meeting.
THE COMPANY WILL, UPON THE WRITTEN REQUEST OF ANY STOCKHOLDER, FURNISH
WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED JUNE 4, 1994. REQUESTS
FOR COPIES SHOULD BE DIRECTED TO PFILIP G. HUNT, SECRETARY, MORRISON
RESTAURANTS INC., POST OFFICE BOX 160266, MOBILE, ALABAMA 36625.
Pfilip G. Hunt
Senior Vice President,
General Counsel
and Secretary
August __, 1994
Mobile, Alabama
01773147.W51<PAGE>
MORRISON RESTAURANTS INC.
STOCK INCENTIVE AND
DEFERRED COMPENSATION PLAN
FOR DIRECTORS
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . A-1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . A-1
SECTION 2 THE STOCK INCENTIVE AND DEFERRED COMPENSATION PLAN. . . . . . A-3
2.1 The Purpose of the Plan . . . . . . . . . . . . . . . . . A-3
2.2 Stock Subject to the Plan . . . . . . . . . . . . . . . . A-4
2.3 Administration of the Plan. . . . . . . . . . . . . . . . A-4
2.4 Eligibility . . . . . . . . . . . . . . . . . . . . . . . A-4
SECTION 3 RESTRICTED STOCK AWARDS . . . . . . . . . . . . . . . . . . . A-4
3.1 Awards. . . . . . . . . . . . . . . . . . . . . . . . . . A-4
3.2 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . A-4
3.3 Escrow of Shares. . . . . . . . . . . . . . . . . . . . . A-5
3.4 Limitations on Transfer . . . . . . . . . . . . . . . . . A-5
SECTION 4 DEFERRAL OF COMPENSATION. . . . . . . . . . . . . . . . . . . A-5
4.1 Deferral to Deferred Compensation Accounts. . . . . . . . A-5
4.2 Revocation of Elections . . . . . . . . . . . . . . . . . A-5
4.3 Revocation of Prior Elections . . . . . . . . . . . . . . A-5
SECTION 5 DEFERRED COMPENSATION ACCOUNTS. . . . . . . . . . . . . . . . A-6
5.1 Establishment of Accounts . . . . . . . . . . . . . . . . A-6
5.2 Crediting of Deferrals. . . . . . . . . . . . . . . . . . A-6
5.3 Crediting Income. . . . . . . . . . . . . . . . . . . . . A-6
5.4 Distribution of Accounts. . . . . . . . . . . . . . . . . A-6
5.5 Distribution upon Death . . . . . . . . . . . . . . . . . A-6
5.6 Statement of Account. . . . . . . . . . . . . . . . . . . A-7
5.7 Participant's Rights Unsecured. . . . . . . . . . . . . . A-7
SECTION 6 STOCK AWARDS AND GRANT OF OPTIONS . . . . . . . . . . . . . . A-7
6.1 Elections to Purchase Shares. . . . . . . . . . . . . . . A-7
6.2 Number of Shares Issued . . . . . . . . . . . . . . . . . A-8
6.3 Option Grants . . . . . . . . . . . . . . . . . . . . . . A-8
6.4 Option Term . . . . . . . . . . . . . . . . . . . . . . . A-8
6.5 Payment . . . . . . . . . . . . . . . . . . . . . . . . . A-8
6.6 Non-Transferability . . . . . . . . . . . . . . . . . . . A-9
SECTION 7 GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . A-9
7.1 Changes in Capitalization; Merger; Liquidation. . . . . . A-9
7.2 Right to Remove Director. . . . . . . . . . . . . . . . . A-10
7.3 Restrictions on Delivery and Sale of Shares; Legends. . . A-10
7.4 Non-alienation of Benefits. . . . . . . . . . . . . . . . A-10
7.5 Termination and Amendment of the Plan . . . . . . . . . . A-10
7.6 Stockholder Approval. . . . . . . . . . . . . . . . . . . A-11
7.7 Choice of Law . . . . . . . . . . . . . . . . . . . . . . A-11
7.8 Effective Date of Plan. . . . . . . . . . . . .. . . . . A-11
MORRISON RESTAURANTS INC.
STOCK INCENTIVE AND DEFERRED COMPENSATION PLAN
FOR DIRECTORS
The Morrison Restaurants Inc. Stock Incentive and Deferred Compensation
Plan for Directors contained herein constitutes an amendment and restatement
of the Morrison Incorporated Stock Incentive and Deferred Compensation Plan
for Directors which was effective on September 30, 1992 (the "Prior Plan").
The Prior Plan constituted, in part, an amendment and restatement of the
Morrison Incorporated Deferred Compensation Plan for Directors.
SECTION 1 DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun
shall be deemed to include the feminine, and the singular to
include the plural, unless the context clearly indicates
otherwise, and the following capitalized words and phrases are
used herein with the meaning thereafter ascribed:
(a) "Annual Retainer Compensation" means the retainer fee
payable to a Participant by the Company for the then current
fiscal year of the Company, but shall not include any meeting or
committee fees or expense reimbursements paid to a Participant,
as determined on the first day of the fiscal year or, if later,
as of the first day an individual becomes a Participant.
(b) "Board of Directors" means the board of directors of
the Company.
(c) "Change in Control" means any event that pursuant to
the Company's Certificate of Incorporation, as amended from time
to time, requires the affirmative vote of the holders of not less
than eighty percent (80%) of the Voting Stock (as defined
therein); provided, however, that no event shall constitute a
Change of Control if approved by the Board of Directors a
majority of whom are present directors and new directors. For
purposes of the preceding sentence, the term "present directors"
means individuals who as of the date this Plan is adopted were
members of the Board of Directors and the term "new directors"
means any director whose election by the Board of Directors in
the event of vacancy or whose nomination for election was
approved by a vote of at least three-fourths of the directors
then still in office who are present directors and new directors;
provided that any director initially elected to the Board of
Directors solely to avoid or settle a threatened or actual proxy
contest shall in no event be deemed to be a new director.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means the committee appointed by the Board
of Directors to administer the Plan or, in the absence of
appointment of such committee, the Board of Directors.
(f) "Company" means Morrison Restaurants Inc., a Delaware
corporation.
(g) "Compensation" means Nonretainer Compensation and Annual
Retainer Compensation.
(h) "Deferred Compensation Account" means an account
established and maintained on behalf of each Participant and Prior Participant
which shall be credited with certain amounts deferred by Participants under the
Plan and with a rate of return as described in Plan Section 5.3.
(i) "Disability" means that condition described in Code Section
22(e)(3), as amended from time to time. In the event of a dispute, the
determination of Disability shall be made by the Board of Directors and shall
be supported by advice of a physician competent in the area to which such
Disability relates.
(j) "Disposition" means any conveyance, sale, transfer,
assignment, pledge or hypothecation, whether outright or as security,
inter vivos or testamentary, with or without consideration, voluntary
or involuntary.
(k) "Effective Date" means the date the Plan, as amended and
restated herein, is approved by the stockholders of the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "Fair Market Value" with regard to a date means the closing
price of the Stock on the last trading date prior to that date as reported by
the New York Stock Exchange (or, if applicable, as reported by any other
national securities exchange selected by the Committee on which the shares of
Stock are then actively traded).
(n) "Nonretainer Compensation" means the meeting and committee
fees paid to a Participant by the Company, but does not include any
Retainer Compensation or expense reimbursement paid to a Participant.
(o) "Old Plan" means the Morrison Incorporated Deferred
Compensation Plan for Directors as it existed prior to its initial
amendment and restatement as the Morrison Incorporated Stock Incentive
and Deferred Compensation Plan for Directors.
(p) "Option" means an option granted under the Plan to buy
shares of Stock as set forth in Plan Section 6.
(q) "Participant" means an individual who, pursuant to Plan
Section 2.4, is eligible to participate in the Plan.
(r) "Plan" means the Morrison Restaurants Inc. Stock Incentive
and Deferred Compensation Plan for Directors (formerly known as the
Morrison Incorporated Stock Incentive and Deferred Compensation Plan
for Directors) as amended and restated herein.
(s) "Prior Participant" means a former Participant whose
benefits have not been fully distributed from the Plan.
(t) "Restricted Stock Award" means a restricted stock award
under Plan Section 3.1.
(u) "Retainer Compensation" means the quarterly retainer fee
paid to a Participant by the Company, but shall not include any meeting or
committee fees or expense reimbursements paid to a Participant.
(v) "Stock" means the Company's common stock, $.01 par value.
(w) "Stock Awards" means the shares of Stock issued pursuant
to Section 6.2.
(x) "Stock Incentive Agreement" means an agreement between the
Company and a Participant or other documentation evidencing an award of a
Stock Incentive.
(y) "Stock Incentives" means Options, Stock Awards and
Restricted Stock Awards.
(z) "Target Ownership Level" means the number of shares of Stock
owned by the Participant with a Fair Market Value equal to ten (10) multiplied
by the Annual Retainer Compensation payable to that Participant. The Target
Ownership Level shall be determined as of the first day of any fiscal quarter
or, if later, as of the first day an individual becomes a Participant. The
vested shares under restricted stock awards issued pursuant to the Plan and
the shares of Stock owned by a Participant's spouse and children under age 21
will be included in determining whether a Participant has attained the Target
Ownership Level.
SECTION 2 THE STOCK INCENTIVE AND DEFERRED COMPENSATION PLAN
2.1 The Purpose of the Plan. The Plan is intended to (a) provide
incentive to non-employee directors of the Company to stimulate their efforts
toward the continued success of the Company and to manage the business of the
Company in a manner that will provide for the long-term growth and
profitability of the Company; (b) encourage stock ownership by non-employee
directors by providing them with a means to acquire a proprietary interest in
the Company; and (c) provide a means of obtaining and rewarding non-employee
directors.
2.2 Stock Subject to the Plan. Subject to adjustment in accordance with
Section 7.1, 225,000 shares of Stock (the "Maximum Plan Shares") are hereby
reserved exclusively for issuance pursuant to Stock Incentives. At no time
shall the aggregate of (a) shares of Stock issuable pursuant to outstanding
Options; (b) shares of Stock issued pursuant to Options; (c) shares of Stock
issued as Restricted Stock Awards; and (d) shares of Stock issued pursuant to
Stock Awards exceed the Maximum Plan Shares. If an Option expires or
terminates for any reason without being exercised in full, the unpurchased
shares subject to such Option shall again be available for purposes of the
Plan.
2.3 Administration of the Plan. The Plan shall be administered by the
Committee. Subject to the provisions of the Plan, the Committee shall have
full and conclusive authority to interpret the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms and
provisions of the respective Stock Incentive Agreements consistent with the
provisions of the Plan and to make all other determinations necessary or
advisable for the proper administration of the Plan. The Committee's
decisions shall be final and binding on all Participants. The Plan shall be
interpreted in view of the intention that the grant of Stock Awards, the grant
of Restricted Stock Awards and the grant and exercise of Options are intended
to qualify as exempt transactions under Rule 16b-3 under the Exchange Act.
2.4 Eligibility. Any member of the Board of Directors who is not an
employee of the Company shall be a Participant.
SECTION 3 RESTRICTED STOCK AWARDS
3.1 Awards. Subject to Plan Section 7.6, each Participant who first is
elected to the Board of Directors on or after September 29, 1993 shall receive
a Restricted Stock Award for 5,000 shares of Stock as of the date the
individual is first elected to the Board of Directors or, if later, as of the
Effective Date. Each Restricted Stock Award shall be evidenced by a Stock
Incentive Agreement which shall incorporate the applicable terms of the Plan.
3.2 Vesting. One-third of the shares of Stock subject to a Restricted
Stock Award shall vest on each of the first three (3) anniversary dates of the
date the Participant was first elected to the Board of Directors, provided the
Participant remains a member of the Board of Directors as of the applicable
anniversary date. In the event a Participant ceases to be a member of the
Board of Directors prior to the third anniversary of the Participant's
election to the Board of Directors, any unvested shares shall be forfeited.
Notwithstanding the preceding, all shares of Stock subject to the Restricted
Stock Award shall become vested on the date the Participant ceases to be a
member of the Board of Directors on account of death, Disability, upon
attaining age 70 or upon a Change in Control.
3.3 Escrow of Shares. Any certificates representing the shares of Stock
awarded pursuant to a Restricted Stock Award shall be issued in the
Participant's name, but shall be held by a custodian designated by the
Committee (the "Custodian") until such time as such shares of Stock become
vested or are forfeited. Each Stock Incentive Agreement governing a
Restricted Stock Award shall appoint the Custodian as the attorney-in-fact for
the Participant until such time as shares of Stock become vested or are
forfeited in accordance with Plan Section 3.2 with full power and authority
in the Participant's name, place and stead to transfer, assign and convey to
the Company any shares of Stock held by the Custodian for such Participant if
the Participant forfeits such shares. In the event the shares of Stock
subject to the Restricted Stock Award become vested, the Custodian shall
deliver the certificate for such shares to the Participant. In the event the
Participant forfeits any or all of the shares of Stock subject to the
Restricted Stock Award, the Custodian shall deliver the certificate for such
shares to the Company. During the period that the Custodian holds the shares
subject to this Section, the Participant shall be entitled to all rights,
except as provided in the Stock Incentive Agreement, applicable to shares of
Stock not so held.
3.4 Limitations on Transfer. The Participant shall not have the right
to make or permit to exist any Disposition of the shares of Stock held by the
Custodian until the applicable vesting date determined pursuant to Plan
Section 3.2 and any Disposition attempted prior to that date shall be void.
The Company shall not recognize and shall not have the duty to recognize any
Disposition not made in accordance with the Plan.
SECTION 4 DEFERRAL OF COMPENSATION
4.1 Deferral to Deferred Compensation Accounts. Each Participant may
elect to defer his or her Nonretainer Compensation, the portion of his
Retainer Compensation that is not used to purchase Stock pursuant to Plan
Section 6 or both, each in twenty-five percent (25%) increments, to his or her
Deferred Compensation Account. An election to defer Compensation hereunder
shall be in writing and shall be made effective only with respect to
Compensation earned on or after the commencement of the first fiscal quarter
of the Company following the receipt of a Participant's election by the
Committee.
4.2 Revocation of Elections. A Participant may revoke or modify an
election made pursuant to Plan Section 4.1 as of a date no earlier than the
first day of the first fiscal quarter that commences following receipt of the
revocation by the Committee and subject to such other rules as may be
established by the Committee.
4.3 Revocation of Prior Elections. Participants' deferral elections
under the Prior Plan or under the Prior Plan, as applicable, shall continue
to be effective until a Participant makes his or her election under Plan
Section 4.1 and shall be deemed to be revoked by any such election.
SECTION 5 DEFERRED COMPENSATION ACCOUNTS
5.1 Establishment of Accounts. A Deferred Compensation Account shall be
established for each Participant and each Prior Participant.
5.2 Crediting of Deferrals. A Participant's Deferred Compensation
Account shall be credited with that portion of the Participant's Compensation
that the Participant has elected to defer to his or her Deferred Compensation
Account pursuant to Plan Section 4.1 as of the date such Compensation would
otherwise have been paid to the Participant.
5.3 Crediting Income. Each Deferred Compensation Account shall be
credited as of the last day of each fiscal quarter of the Company with an
assumed rate of income equal to the then prevailing rate payable with respect
to ninety (90) day U.S. Treasury Bills, based on the weighted average balance
of such account during such fiscal quarter.
5.4 Distribution of Accounts. Amounts credited to a Participant's or
Prior Participant's Deferred Compensation Account shall be distributed in
either a single lump sum or annual installments (not to exceed five (5)), as
designated by the Participant or the Prior Participant in his or her initial
election under the Plan, Prior Plan or Old Plan, as applicable. Distribution
of a Deferred Compensation Account shall be made (in the case of a lump sum
payment) or commence (in the case of installment payments) upon the January 15
or July 15 following the Participant's or Prior Participant's seventieth
(70th) birthday, or, if earlier, the January 15 or July 15 following the date
the Participant ceases to be a member of the Board of Directors. However, if
the Participant or Prior Participant so elects in his or her initial election
under the Plan, Prior Plan or Old Plan, as applicable, the distribution (in
the case of a lump sum payment) or the commencement of the distribution (in
the case of installment payments) of the Participant's or Prior Participant's
Deferred Compensation Account shall occur on any subsequent January 15 or
July 15. If a Participant elects to have his or her Deferred Compensation
Account distributed in installments, the amount of the first installment shall
be a fraction of the value of the Participant's Deferred Compensation Account,
the numerator of which is one and the denominator of which is the total number
of installments elected, and the amount of each subsequent installment shall
be a fraction of the value (including income credited pursuant to Plan
Section 5.3) on the date preceding each subsequent payment, the numerator of
which is one and the denominator of which is the total number of installments
elected minus the number of installments previously paid.
5.5 Distribution upon Death. In the event of the death of a Participant
or Prior Participant prior to the distribution of his or her Deferred
Compensation Account in full, the value of such Deferred Compensation Account
shall be determined as of the day immediately following the Participant's or
Prior Participant's death and such amount shall be distributed in a single
lump sum payment to the Participant's or Prior Participant's designated
beneficiary as soon as administratively feasible thereafter.
5.6 Statement of Account. During March and September of each year after
the Effective Date, each Participant and Prior Participant shall be provided
with statements of his or her Deferred Compensation Account as of the end of
the third and first fiscal quarters of the Company, respectively.
5.7 Participant's Rights Unsecured. The right of any Participant or
Prior Participant to receive future distributions under the provisions of Plan
Section 5 shall constitute an unsecured claim against the general assets of
the Company.
SECTION 6 STOCK AWARDS AND GRANT OF OPTIONS
6.1 Elections to Purchase Shares.
(a) Each Participant that has not attained his Target Ownership
Level will be deemed to have elected to direct that sixty percent (60%) of
his or her Retainer Compensation payable for each fiscal quarter of the
Company following the Effective Date be allocated to the purchase of shares
of Stock on his or her behalf pursuant to this Section 6. Once a Participant
has been deemed to have elected to purchase Stock pursuant to this
subsection (a), such deemed election will continue in effect until that
Participant modifies or revokes this deemed election, in accordance with
the provisions of Section 6.1(b), after attaining the Target Ownership
Level.
(b) Each Participant who has attained his Target Ownership Level as
of the first day of a fiscal quarter may make a discretionary election
directing that up to sixty percent (60%) of his or her Retainer
Compensation, in ten percent (10%) increments, be allocated to the purchase
of Stock on his or her behalf. Such a discretionary election will be
effective on the first day of the fiscal quarter of the Company that is at
least six (6) months after the date it is filed with the Committee in the
manner required by the Committee. Discretionary elections are irrevocable,
as required by Rule 16b-3 under the Exchange Act as in effect prior to the
effective date of Rule 16b-3 as adopted in 1991. As of the date the new
Rule 16b-3 which was adopted in 1991 applies to the Company, discretionary
elections may be revoked or modified effective on the first day of the
fiscal quarter of the Company that begins at least six (6) months following
the date the modified election is filed with the Committee in the manner
required by the Committee. Notwithstanding the preceding, a discretionary
election or a modification or revocation of a discretionary election may
be given effect on an earlier date, if the Committee, in its sole
discretion, permits, provided the Committee is satisfied such election,
modification or revocation would not trigger the recovery of short-swing
profits under Section 16 of the Exchange Act.
(c) In the event a Participant ceases to be a member of the Board of
Directors prior to earning that portion of his or her Retainer Compensation
with respect to which the Participant has elected to purchase Stock under
the Plan, the direction to purchase Stock shall terminate. For purposes
of this Section, a Participant shall be deemed to have earned the Retainer
Compensation payable for a fiscal quarter of the Company if he or she
serves as a member of the Board of Directors of the Company for at least
one day of that fiscal quarter.
(d) Participants' elections under the Prior Plan, other than an
election made under Section 4.1 of the Prior Plan, shall be rendered null
and void as of the Effective Date, provided stockholder approval of the
Plan is obtained.
6.2 Number of Shares Issued. As of the first day of each fiscal quarter
for which a Participant has elected or is deemed to have elected to direct
that Retainer Compensation be used for the purchase of Stock pursuant to Plan
Section 6.1, the Participant shall be issued a number of shares of Stock equal
to the amount, if any, of the Participant's Retainer Compensation allocated
to the purchase of Stock, multiplied by 1.15 and divided by the Fair Market
Value of a share of Stock as of the issue date. Any Stock issued to a
Participant pursuant to this Section 6.2 may not be transferred within three
(3) years of the date of purchase, except in the event of death, Disability,
retirement on or after age 70 or unless the Committee waives this restriction.
6.3 Option Grants. As of the first day of each fiscal quarter for which
a Participant has been issued Stock pursuant to Plan Section 6.2, the
Participant shall be granted an Option to purchase a number of shares of Stock
equal to three (3) times the number of shares of Stock issued pursuant to Plan
Section 6.2 for such fiscal quarter (the "Option Shares"). The Option Shares
shall be exercisable at Fair Market Value as of the date of the option grant.
Each Option granted pursuant to the Plan shall be evidenced by a Stock
Incentive Agreement.
6.4 Option Term. Each Option granted hereunder shall be exercisable six
(6) months from the date of grant with respect to all or any number of the
Option Shares. Once exercisable, each Option granted hereunder shall
thereafter remain exercisable until the fifth (5th) anniversary of the date
of grant; provided, however, that in the event of a Participant's death prior
to the expiration of the Option term, the Option may continue to be exercised
by the Participant's legal representative until the first anniversary of the
Participant's death. An Option that is not exercised prior to the first
anniversary of the Participant's death shall be deemed exercised on the first
anniversary of the date of death to the extent the then Fair Market Value of
the Option Shares exceeds the exercise price of the Option Shares. Payment
of such exercise price shall be effected by withholding a number of shares of
Stock otherwise issuable pursuant to the Option the Fair Market Value of which
on such anniversary is equal to the exercise price. If the Fair Market Value
of the Stock on the first anniversary of the Participant's death equals or is
less than the Option exercise price, then the Option shall be deemed to have
expired unexercised.
6.5 Payment. Payment for all shares of Stock purchased pursuant to
exercise of an Option shall be made (a) in cash; (b) by delivery to the
Company of a number of shares of Stock which have been owned by the holder for
at least six (6) months prior to the date of exercise having an aggregate Fair
Market Value of not less than the product of the exercise price multiplied by
the number of Option Shares the Participant intends to purchase; or (c) in a
cashless exercise through a broker. Payment shall be made at the time that
the Option or any part thereof is exercised, and no shares shall be issued or
delivered upon exercise of an Option until full payment has been made by the
Participant. The holder of an Option, as such, shall have none of the rights
of a stockholder.
6.6 Non-Transferability. An Option shall not be transferable or
assignable except by will or by the laws of descent and distribution and shall
be exercisable, during the Participant's lifetime, only by the Participant,
or in the event of the Disability of the Participant, by the legal
representative of the Participant.
SECTION 7 GENERAL PROVISIONS
7.1 Changes in Capitalization; Merger; Liquidation.
(a) The number of shares of Stock reserved with respect to Stock
Incentives and the number of shares of Stock reserved for issuance upon the
exercise of each outstanding Option and upon vesting of each outstanding
Restricted Stock Award and the exercise price of each outstanding Option shall
be proportionately adjusted for any increase or decrease in the number of
issued shares of Stock resulting from a subdivision or combination of shares
or the payment of a stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the number
of shares of Stock outstanding effected without receipt of consideration by
the Company.
(b) If the Company shall be the surviving corporation in any merger
or consolidation, recapitalization, reclassification of shares or similar
reorganization, an appropriate adjustment shall be made in each Stock
Incentive Agreement such that the Participant shall be entitled to purchase
or receive the number and class of securities to which a holder of the number
of shares of Stock subject to the Stock Incentive Agreement at the time of
such transaction would have been entitled to receive as a result of such
transaction, and a corresponding adjustment shall be made in the exercise
price of each outstanding Option. A dissolution or liquidation of the Company
shall cause Options to terminate as to any portion thereof not exercised as
of the effective date of the dissolution or liquidation. In the event of a
sale of substantially all the Stock or property of the company or the merger
or consolidation of the Company into another corporation where the purchaser
does not agree to the assumption of the Options, the Committee shall be
authorized to terminate the Option in consideration of the payment to the
optionee of the difference between the then Fair Market Value of the Stock and
the exercise price of the Option.
(c) The existence of the Plan and the Stock Incentives granted
pursuant to the Plan shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization
or other change in its capital or business structure, any merger or
consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer of all or any
part of its business or assets, or any other corporate act or proceeding.
7.2 Right to Remove Director. Nothing in the Plan or in any Stock
Incentive Agreement shall confer upon any Participant the right to continue
as a member of the Board of Directors or affect the right of the Company to
terminate a Participant's directorship at any time.
7.3 Restrictions on Delivery and Sale of Shares; Legends. Each Stock
Incentive is subject to the condition that if at any time the Committee, in
its discretion, shall determine that the listing, registration or
qualification of the shares covered by such Stock Incentive upon any
securities exchange or under any state or federal law is necessary or
desirable as a condition of or in connection with the granting of such Stock
Incentive or the purchase or delivery of shares thereunder, the delivery of
any or all shares pursuant to such Stock Incentive may be withheld unless and
until such listing, registration or qualification shall have been effected.
If a registration statement is not in effect under the Securities Act of 1933
or any applicable state securities laws with respect to the shares of Stock
purchasable or otherwise deliverable under Stock Incentives then outstanding,
the Participant shall, as a condition of exercise of any Option or as a
condition to any other delivery of Stock pursuant to a Stock Incentive,
represent, in writing, that the shares received pursuant to the Stock
Incentive are being acquired for investment and not with a view to
distribution and agree that the shares will not be disposed of except pursuant
to an effective registration statement, unless the Company shall have received
an opinion of counsel that such disposition is exempt from such requirement
under the Securities Act of 1933 and any applicable state securities laws.
The Company may include on certificates representing shares delivered pursuant
to a Stock Incentive such legends referring to the foregoing representations
or restrictions or any other applicable restrictions on resale as the Company,
in its discretion, shall deem appropriate.
7.4 Non-alienation of Benefits. Other than as specifically provided with
regard to the death of a Participant, no benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge; and any attempt to do so shall be void. No
such benefit shall, prior to receipt by the Participant, be in any manner
liable for or subject to the debts, contracts, liabilities, engagements or
torts of the Participant.
7.5 Termination and Amendment of the Plan. The Board of Directors at any
time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the
approval of stockholders of the Company if such approval is necessary or
advisable with respect to tax, securities or other applicable laws.
Notwithstanding the foregoing, in no event shall the Board of Directors amend
the provisions of the Plan that relate to Stock Awards contemplated pursuant
to Plan Section 6.1(a) or to Restricted Stock Awards more than once every six
(6) months, other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, or the rules thereunder. No
termination, modification or amendment of the Plan, without the consent of a
Participant who has been awarded a Stock Incentive or with respect to whom
amounts have been credited to a Deferred Compensation Account, shall adversely
affect the rights of that Participant under such Stock Incentive or with
respect to such Deferred Compensation Account.
7.6 Stockholder Approval. The Plan shall be submitted to the
stockholders of the Company for their approval within twelve (12) months after
the adoption of the Plan by the Board of Directors of the Company. If such
approval is not obtained, this amendment and restatement shall be deemed null
and void and the Prior Plan shall remain as in effect immediately prior to
this amendment and restatement.
7.7 Choice of Law. The laws of the State of Alabama shall govern the
Plan, to the extent not preempted by federal law.
7.8 Effective Date of Plan. The Plan shall become effective on the
Effective Date.
MORRISON RESTAURANTS INC.
By:
Title:
ATTEST:
Secretary
[CORPORATE SEAL]
01773147.W51
MORRISON RESTAURANTS INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated August ___, 1994, and does hereby
appoint E. E. Bishop and A. R. Outlaw, and either of them, with full power of
substitution, as proxy or proxies of the undersigned to represent the
undersigned and to vote all shares of Morrison Restaurants Inc. Common Stock
which the undersigned would be entitled to vote if personally present at the
Annual Meeting of Stockholders of Morrison Restaurants Inc., to be held at the
Stouffer Concourse Hotel, 1 Hartsfield Center Parkway, Atlanta, Georgia 30354,
at 10:30 a.m., local time on September 28, 1994, and at any adjournment(s)
thereof:
1. TO ELECT THREE CLASS III DIRECTORS FOR A TERM OF THREE YEARS.
SAMUEL E. BEALL, III, DONALD RATAJCZAK AND CLAIRE L. ARNOLD
___ FOR all nominees above ___ WITHHOLD AUTHORITY
(except as marked to the contrary above) to vote for ALL nominees
listed above
INSTRUCTION: To withhold authority for any individual nominee, mark the first
box above and line through that nominee's name as it appears above.
2. TO APPROVE AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF STOCK FROM 50,000,000 TO 100,000,000
SHARES.
___ YES ___ NO ___ ABSTAIN
3. TO APPROVE THE AMENDED AND RESTATED STOCK INCENTIVE AND DEFERRED
COMPENSATION PLAN FOR DIRECTORS.
___ YES ___ NO ___ ABSTAIN
4. TO APPROVE THE INCENTIVE BONUS PLAN FOR THE CHIEF EXECUTIVE OFFICER.
___ YES ___ NO ___ ABSTAIN
The Board of Directors recommends a vote FOR all director nominees listed in
Proposal 1, FOR Proposal 2, FOR Proposal 3, and FOR Proposal 4.
(Continued on reverse side)
(Continued from reverse side)
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before this meeting.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY.
This proxy, when properly executed, will be voted in accordance with the
directions given by the undersigned stockholder. If no direction is made, it
will be voted FOR all director nominees listed in Proposal 1, FOR Proposal 2,
FOR Proposal 3, and FOR Proposal 4.
PROXY NUMBER NUMBER OF SHARES Dated: ______________, 1994.
Signature
Signature, if held jointly
Please sign exactly as your name(s)
appear hereon. If shares are held
jointly, each stockholder named
should sign. When signing as
attorney, executor, administrator,
trustee or guardian, give your full
title as such. If the signatory is
a corporation, sign the full
corporate name by a duly authorized
officer.
PLEASE COMPLETE, DATE, SIGN AND
RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
ANNEX
TO
MORRISON RESTAURANTS INC.
PROXY STATEMENT FOR
THE 1994 ANNUAL MEETING OF STOCKHOLDERS
Note:The Morrison Restaurants Inc. Chief
Executive Officer's Incentive Bonus Plan is
being filed as an Appendix to the
Company's 1994 Proxy Statement pursuant
to Instruction 3 of Item 10 of Schedule 14A
under the Securities Exchange Act of 1934
and will not be distributed to the
stockholders.<PAGE>
MORRISON RESTAURANTS INC.
CHIEF EXECUTIVE OFFICER'S
INCENTIVE BONUS PLAN
The purpose of the Morrison Restaurants Inc. Chief Executive Officer's
Incentive Bonus Plan is to motivate and reward its chief executive officer for
good performance by making a proportion of his cash compensation dependent on
growth in earnings per share of Morrison Restaurants Inc. (the "Company"). The
Plan is designed to ensure that the annual bonus paid hereunder to the
eligible participant, as an executive officer of the Company is deductible
under Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations and interpretations promulgated thereunder.
SECTION 1 DEFINITIONS
1.1 Definitions. Whenever used herein, unless the context clearly
indicates otherwise, and the following capitalized words and phrases are used
herein with the meaning thereafter ascribed:
(a) "Base Salary Multipliers" means a series of multipliers
determined by the Committee for a fiscal year each of which corresponds to a
separate Earnings Per Share Target, as determined by the Committee in its
discretion no later than the ninetieth day of the fiscal year; provided that
such determination shall be made while the outcome remains substantially
uncertain.
(b) "Board of Directors" means the board of directors of the
Company.
(c) "Change of Control" means that definition of the term "Change
of Control" as defined in that certain Change of Control Agreement between the
Company and the Participant as approved by the Board of Directors on December
18, 1989 (the "Change of Control Agreement").
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the committee administering the Plan and
consisting solely of at least two outside directors of the Company who qualify
as such under the requirements of Code Section 162(m). Members of the
committee shall be appointed by the Board of Directors.
(f) "Company" means Morrison Restaurants Inc., a Delaware
corporation.
(g) "Disability" means that condition described in Code Section
22(e)(3), as amended from time to time. In the event of a dispute, the
determination of Disability shall be made by the Committee and shall be
supported by advice of a physician competent in the area to which such
Disability relates.
(h) "Earnings Per Share Targets" means those targets determined
by the Committee for a fiscal year for growth in earnings per share of the
Company each expressed as a percentage increase over earnings per share
determined as of the last day of the immediately preceding fiscal year and as
reported by the Company in its audited consolidated annual financial
statements, adjusted by the Committee in its discretion for significant
unusual items which are unusual as to their frequency or size as determined
under generally accepted accounting principles; provided that no such
adjustment shall be made later than the ninetieth day of the fiscal year for
which the target has been established and only if the outcome remains
substantially uncertain at the time of the adjustment.
(i) "Effective Date" means the date the Plan is approved by the
stockholders of the Company.
(j) "Participant" means the individual who, pursuant to Plan
Section 2, is eligible to participate in the Plan.
(k) "Pre-Tax Income" means income of the Company before provision
for income taxes as reported by the Company in its audited consolidated annual
financial statements.
(l) "Plan" means the Morrison Restaurants Inc. Chief Executive
Officer's Incentive Bonus Plan.
SECTION 2 ELIGIBILITY
The sole individual entitled to any bonus payment hereunder shall be the
chief executive officer of the Company, Samuel E. Beall, III.
SECTION 3 ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee shall have full and conclusive authority
to interpret the Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of performance
goals and target levels under the Plan consistent with the provisions of the
Plan; to determine whether established performance goals and target levels
have been met; and to make all other determinations necessary or advisable for
the proper administration of the Plan. The Committee's decisions shall be
final and binding on the Participant. The Plan shall be interpreted in view
of the intention that any grant of compensation pursuant to the Plan is
intended to qualify as performance-based compensation with the meaning of Code
Section 162(m) and the regulations and interpretations promulgated thereunder.
SECTION 4 ANNUAL BONUS AWARDS
4.1 Calculation of Annual Bonus Award. The Participant shall be
eligible to receive an annual bonus award for each fiscal year of the Company
ending after the Effective Date, subject to the amendment or termination of
the Plan pursuant to Plan Section 5.4. The payment of any annual bonus award
shall be conditioned upon: (a) the achievement during the fiscal year of the
Company of a ten percent (10%) growth in Pre-Tax Income for the fiscal year
as compared to its immediately preceding fiscal year; (b) the achievement of
the minimum Earnings Per Share Target for the fiscal year; and (c) except as
provided in Section 4.3 below, the Participant's continuance in employment
with the Company through the last day of the fiscal year. The amount of any
bonus payment shall be the product of (i) the Participant's base salary in
effect for the fiscal year, multiplied by (ii) the applicable Base Salary
Multiplier.
4.2 Payment of Annual Bonus Award. Annual bonus awards shall be paid
by the Company in cash within thirty (30) days following the close of the
fiscal year for which the bonus was earned.
4.3 Partial Annual Bonus Awards. In the event of the Participant's
death, a termination of employment due to Disability or a termination of
employment due to a Change of Control, the Participant (or the legal
representative of the Participant, as the case may be) shall be entitled to
payment of an adjusted annual bonus award. The amount of the adjusted annual
bonus award shall be determined by multiplying the annual bonus award that
would have been payable to the Participant had he remained an employee through
the last day of the fiscal year of the Company by a fraction, the numerator
of which shall be the number of days during the fiscal year during which he
was an employee and the denominator of which shall be 365; provided, however,
that in the case of a termination of employment following a Change of Control,
the payment of any annual bonus award under the Plan thereafter shall be
determined in accordance with the terms of the Change of Control Agreement.
4.4 Maximum Annual Bonus Award. No annual bonus award otherwise earned
pursuant to the Plan shall be payable to the Participant if and to the extent
the amount of the annual bonus award exceeds $850,000.
4.5 No Other Bonus Awards. The Participant shall be ineligible to
participate in any other annual bonus program maintained by the Company for
the period during which the Plan remains in force and effect.
4.6 Certification of Achievement of Performance Goals. No annual bonus
award shall be paid unless and until the Committee certifies in writing that
the Pre-Tax Income condition and appropriate Earnings Per Share Target were
achieved for the fiscal year of the Company in question.
4.7 Participant's Rights Unsecured. The right of the Participant to
receive annual bonus payments under the Plan shall constitute an unsecured
claim against the general assets of the Company.
4.8 Withholding Taxes. The Company shall have the right to deduct from
each bonus payment any federal, state and local taxes required by such laws
to be withheld with respect to the payment.
SECTION GENERAL PROVISIONS
5.1 Changes in Capitalization. Earnings Per Share Targets shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of common stock of the Company resulting from a subdivision or
combination of shares or the payment of a stock dividend in shares of common
stock of the Company to holders of outstanding shares of common stock of the
Company or any other increase or decrease in the number of shares of common
stock of the Company outstanding effected without receipt of consideration by
the Company. The existence of the Plan shall not affect in any way the right
or power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or equity securities
having preferences or priorities as to the common stock of the Company or the
rights thereof, the dissolution or liquidation of the Company, any sale or
transfer of all or any part of its business or assets, or any other corporate
act or proceeding.
5.2 Right to Remove Chief Executive Officer. Nothing in the Plan shall
confer upon the Participant the right to continue as an employee of the
Company or the right of the Company to terminate the Participant's employment
at any time.
5.3 Non-alienation of Benefits. Other than as specifically provided
with regard to the death of the Participant, no benefit under the Plan shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge; and any attempt to do so shall be
void. No such benefit shall, prior to receipt by the Participant, be in any
manner liable for or subject to the debts, contracts, liabilities, engagements
or torts of the Participant.
5.4 Termination and Amendment of the Plan. The Committee at any time
may amend or terminate the Plan without stockholder approval, including any
amendment necessary or appropriate to comply with Code Section 162(m) and the
regulations thereunder; provided, however, that the Committee may condition
any amendment on the approval of stockholders of the Company if such approval
is necessary or advisable with respect to tax, securities or other applicable
laws. No termination, modification or amendment of the Plan, without the
consent of the Participant, shall adversely affect the rights of the
Participant with respect to any annual bonus award previously earned, except
as contemplated by Section 5.5 below.
5.5 Stockholder Approval. The Plan shall be submitted to the
stockholders of the Company for their approval prior to the date that payment
of any compensation becomes due to the Participant hereunder. If such
approval is not obtained, the Plan shall be deemed null and void and no
compensation shall be payable to the Participant under the Plan.
5.6 Choice of Law. The laws of the State of Alabama shall govern the
Plan, to the extent not preempted by federal law.
5.7 Effective Date. The Plan shall become effective on the Effective
Date.
MORRISON RESTAURANTS INC.
By:
[CORPORATE SEAL]
Title:
ATTEST:
Secretary
