<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Morrison Restaurants Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Morrison Restaurants Inc.
------------------------------------------
(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.
(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 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,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[MORRISON LOGO APPEARS HERE]
August 26, 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.
/s/ Samuel E. Beall, III
-------------------------------
Samuel E. Beall, III
President and Chief Executive
Officer
MORRISON RESTAURANTS INC.
P.O. Box 160266 . 4721 Morrison Drive . Mobile, Alabama 36625-0001 . (205) 344-
3000 . Telefax (205) 344-3066
<PAGE>
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.
By Order of the Board of Directors
/s/ Pfilip G. Hunt
-----------------------------------
Pfilip G. Hunt
Senior Vice President,
General Counsel
and Secretary
August 26, 1994
Mobile, Alabama
<PAGE>
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 26, 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
35,306,096 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.
1
<PAGE>
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.
2
<PAGE>
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.
3
<PAGE>
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....................... 978,431 2.7
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.......................... 4,473 *
J. B. Byrum............................ 122,546 *
R. L. Tatum............................ 39,027 *
All directors and executive officers as
a group (18 persons).................. 7,186,303 19.1
</TABLE>
- - --------
(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.
4
<PAGE>
(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 6,160 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.
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 Board of 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
5
<PAGE>
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").
6
<PAGE>
TABLE I--SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
-------------------- -------------------- ------------
AWARDS PAYOUTS
-------- ----------- (1994 AND
OPTIONS/ LTIP 1993 ONLY)
NAME AND POSITION YEAR SALARY ($) BONUS ($) SARS (#) PAYOUTS ($) ($)(1)
- - ----------------- ---- ---------- --------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
S. E. Beall, III........ 1994 525,000 630,000 -0- 360,000(2) 27,609
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- 48,175
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- 21,470
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 N/A N/A N/A N/A N/A
Division (4) 1992 N/A N/A N/A N/A
J. B. Byrum............. 1994 184,500 186,750 38,874 -0- 28,981
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- 27,675
President, Family 1993 120,000 180,000 4,700 -0- 7,151
Dining Division 1992 114,070 75,696 13,263 -0-
</TABLE>
- - --------
(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; (b) executive group life and accidental death and
dismemberment insurance plan premiums paid by the Company for 1994 and
1993, respectively: 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; and (c) split-dollar life
insurance premiums paid by the Company for 1994: S. E. Beall, III, $20,313;
E. E. Bishop, $38,750; R. D. McClenagan, $12,500; J. B. Byrum, $21,250; and
R. L. Tatum, $21,042.
(2) Represents the value of 15,000 shares of Common Stock earned by Mr. Beall
in Fiscal 1994 pursuant to the performance stock rights awarded to him by
the Company in July 1993 and approved by the stockholders at the 1993
Annual Meeting of Stockholders. See "Table IV--Long-Term Incentive Awards
in Fiscal 1994" below. The value of such shares has been calculated based
on the market price of the Common Stock on the date of issuance of the
shares.
(3) Mr. Bishop retired as an executive officer on May 5, 1994.
(4) Mr. Johnson was elected as an executive officer of the Company effective
June 6, 1993.
7
<PAGE>
TABLE II--OPTIONS GRANTS IN FISCAL 1994
This table presents information regarding Fiscal 1994 grants of options to
purchase Common Stock. The Company has no outstanding SARs and granted no SARs
during Fiscal 1994.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE(3)
AT ASSUMED ANNUAL RATES OF STOCK
PRICE
APPRECIATION FOR OPTION TERM
---------------------------------
INDIVIDUAL GRANTS 5% ($) 10% ($)
---------------------------------------------- ---------------- ----------------
% OF MARKET MARKET
TOTAL PRICE PRICE
OPTIONS MARKET REQUIRED REQUIRED
GRANTED PRICE TO TO
TO ON DATE EXERCISE REALIZE REALIZE
OPTIONS EMPLOYEES OF OR BASE DOLLAR DOLLAR DOLLAR DOLLAR
GRANTED IN FISCAL GRANT PRICE EXPIRATION GAINS GAINS GAINS GAINS
NAME (#)(1) YEAR(2) ($/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
</TABLE>
- - -------
(1) The indicated options have a term of five 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 $19.8333 on the
date of the grant become exercisable after three years. The vesting of
these options may be accelerated up to one year if predetermined goals for
Fiscal 1994 and 1995 are achieved. All other options listed in the table
above become exercisable after two years. In the event of a change in
control of the Company, the Committee administering the plan may accelerate
vesting, otherwise adjust the options or cash out the options. Option
holders also have certain rights with respect to these options pursuant to
their Change of Control Agreements. See "Contracts with Executives."
(2) Based on an aggregate of 712,021 options granted in Fiscal 1994.
(3) The Potential Realizable Values are calculated as follows: [[Market Price
at Grant x (1 + Stock Price Appreciation Rate)] - Exercise Price] x Number
of Underlying Shares. Because these Potential Realizable Values are based
on annualized compound rates of increase over a five-year term, the total
potential appreciation on annual appreciation rates of 5 percent and 10
percent is 27.6 percent and 61.1 percent, respectively.
8
<PAGE>
TABLE III--AGGREGATED OPTION EXERCISES IN
FISCAL 1994 AND FISCAL YEAR-END VALUES
This table presents information regarding options exercised for shares of the
Company's Common Stock during Fiscal 1994 and the value of unexercised options
held at June 4, 1994. There were no SARs outstanding during Fiscal 1994.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT FY-END
FY-END (#) ($)(2)
SHARES VALUE -------------- ------------------
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) ($)(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
</TABLE>
- - --------
(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 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.
<TABLE>
<CAPTION>
PERFORMANCE STOCK PERFORMANCE PERIOD
RIGHTS UNTIL PAYOUT
NAME (# OF SHARES) (# OF YEARS)
---- ----------------- ------------------
<S> <C> <C>
S. E. Beall, III..................... 75,000 5(1)
</TABLE>
- - --------
(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.
9
<PAGE>
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.
10
<PAGE>
SUPPLEMENTAL PLAN
ESTIMATED ANNUAL BENEFITS FOR REPRESENTATIVE YEARS OF SERVICE TO AGE 65
<TABLE>
<CAPTION>
30 OR
ANNUAL AVERAGE BASE SALARY 10 15 20 25 MORE
-------------------------- -------- -------- -------- -------- --------
<S> <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
11
<PAGE>
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.
MANAGEMENT PLAN
ESTIMATED ANNUAL BENEFITS FOR REPRESENTATIVE YEARS OF SERVICE TO AGE 65
<TABLE>
<CAPTION>
30 OR
FINAL AVERAGE SALARY 15 20 25 MORE
-------------------- ------- ------- ------- -------
<S> <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. Events 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)
12
<PAGE>
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 to which 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 pretax sale 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;
13
<PAGE>
. A very significant portion of executive compensation will be tied to the
Company's success in meeting predetermined 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
14
<PAGE>
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 Stockholders, 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
15
<PAGE>
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>
AVERAGE
PERIOD ENDING MAY 31, PRICE LEVEL SHARES ISSUABLE
--------------------- ----------- ---------------
<S> <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 percent 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 percent 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.
16
<PAGE>
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 & Drinking Places Index.
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
[GRAPH APPEARS HERE]
<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
</TABLE>
- - --------
* Assumes $100 invested in the common stock of Morrison Restaurants Inc. and
comparison groups on May 31, 1989 and reinvestment of dividends.
17
<PAGE>
PROPOSAL 2.
INCREASE OF AUTHORIZED COMMON STOCK
Article IV of the Company's Certificate of Incorporation 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 35,306,096 shares of Common Stock issued and
outstanding and 8,337,404 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 6,087,325 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
18
<PAGE>
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
19
<PAGE>
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. (Purchases
made pursuant to deferred and discretionary elections are referred to,
collectively, as "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, a
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 who 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.
20
<PAGE>
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.
21
<PAGE>
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 million 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
22
<PAGE>
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 28, 1995, and must otherwise comply with
rules of the Securities and Exchange Commission relating to stockholder
proposals.
23
<PAGE>
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.
By Order of the Board of Directors,
/s/ Pfilip G. Hunt
-----------------------------------
Pfilip G. Hunt
Senior Vice President,
General Counsel
and Secretary
August 26, 1994
Mobile, Alabama
24
<PAGE>
APPENDIX A
MORRISON RESTAURANTS INC.
STOCK INCENTIVE AND
DEFERRED COMPENSATION PLAN
FOR DIRECTORS
A-i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
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-3
2.3 Administration of the Plan..................................... A-3
2.4 Eligibility.................................................... A-3
SECTION 3 RESTRICTED STOCK AWARDS....................................... A-3
3.1 Awards......................................................... A-3
3.2 Vesting........................................................ A-3
3.3 Escrow of Shares............................................... A-3
3.4 Limitations on Transfer........................................ A-4
SECTION 4 DEFERRAL OF COMPENSATION....................................... A-4
4.1 Deferral to Deferred Compensation Accounts..................... A-4
4.2 Revocation of Elections........................................ A-4
4.3 Revocation of Prior Elections.................................. A-4
SECTION 5 DEFERRED COMPENSATION ACCOUNTS................................. A-4
5.1 Establishment of Accounts...................................... A-4
5.2 Crediting of Deferrals......................................... A-4
5.3 Crediting Income............................................... A-4
5.4 Distribution of Accounts....................................... A-4
5.5 Distribution upon Death........................................ A-5
5.6 Statement of Account........................................... A-5
5.7 Participant's Rights Unsecured................................. A-5
SECTION 6 STOCK AWARDS AND GRANT OF OPTIONS.............................. A-5
6.1 Elections to Purchase Shares................................... A-5
6.2 Number of Shares Issued........................................ A-6
6.3 Option Grants.................................................. A-6
6.4 Option Term.................................................... A-6
6.5 Payment........................................................ A-6
6.6 Non-Transferability............................................ A-6
SECTION 7 GENERAL PROVISIONS............................................. A-7
7.1 Changes in Capitalization; Merger; Liquidation................. A-7
7.2 Right to Remove Director....................................... A-7
7.3 Restrictions on Delivery and Sale of Shares; Legends........... A-7
7.4 Non-alienation of Benefits..................................... A-8
7.5 Termination and Amendment of the Plan.......................... A-8
7.6 Stockholder Approval........................................... A-8
7.7 Choice of Law.................................................. A-8
7.8 Effective Date of Plan......................................... A-8
</TABLE>
A-ii
<PAGE>
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.
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(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.
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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
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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
Old 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
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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.
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(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.
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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 subject to the unexercised portion of
the Option and the aggregate exercise price.
(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.
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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]
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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 26, 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 [_] WITHHOLD AUTHORITY
to vote for ALL nominees
(except as marked to the contrary above) 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 Common 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
5.In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
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 OTHER SIDE)
(CONTINUED FROM REVERSE SIDE)
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.
