SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year end December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-12454
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
MORRISON RESTAURANTS INC. DEFERRED COMPENSATION PLAN
B. Name of issuer of the securities held pursuant to the Plan and
address of its principal executive office:
MORRISON RESTAURANTS INC.
P.O. Box 160266
Mobile, Alabama 36625
Exhibit index appears at page 18. This report contains a total of 19
pages.
Page 1 of 19
The following financial statements are included in this report:
Audited Financial Statements:
Page
Description Number
Report of Independent Auditors 4
Statements of Financial Condition
At December 31, 1994 and 1993 5
Statements of Income and Changes in Plan
Equity for the years ended December 31,
1994, 1993, and 1992 6
Notes to Financial Statements 7
Signatures 17
The written consent of Ernst & Young LLP with respect to the plan annual
financial statements is attached hereto as exhibit #23.
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Morrison Restaurants Inc. Deferred Compensation Plan
Financial Statements
Years ended December 31, 1994, 1993 and 1992
Contents
Report of Independent Auditors............................. 4
Audited Financial Statements
Statements of Financial Condition.......................... 5
Statements of Income and Changes in Plan Equity............ 6
Notes to Financial Statements.............................. 7
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Report of Independent Auditors
Employee Benefits Committee
Morrison Restaurants Inc.
We have audited the accompanying statements of financial condition of
the Morrison Restaurants Inc. Deferred Compensation Plan as of December
31, 1994 and 1993, and the related statements of income and changes in
plan equity for each of the three years in the period ended December
31, 1994. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial condition of the
Morrison Restaurants Inc. Deferred Compensation Plan at December 31,
1994 and 1993, and its income and changes in plan equity for each of
the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
Ernst & Young LLP
Birmingham, Alabama
April 7, 1995
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<PAGE>
<TABLE>
Morrison Restaurants Inc. Deferred Compensation Plan
Statements of Financial Condition
<CAPTION>
December 31
1994 1993
<S> <C> <C>
Assets
Cash $ 612,613 $ 4,086,869
Investments, at fair value:
Morrison Restaurants Inc.
common stock 9,322,740 7,950,705
Other securities:
Templeton Growth Fund 3,984,967 2,404,641
Guaranteed investment
contracts 3,840,503 1,235,652
17,760,823 15,677,867
Contributions receivable:
Participants 237,319 276,736
Employer 28,272 35,817
265,591 312,553
Dividends and interest
receivable 20,656 1,485
Total assets 18,047,070 15,991,905
Liabilities
Accrued administrative fees 1,416 -
Total liabilities 1,416 -
Plan equity $ 18,045,654 $ 15,991,905
See accompanying notes.
</TABLE>
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</PAGE>
<PAGE>
<TABLE>
Morrison Restaurants Inc. Deferred Compensation Plan
Statements of Income and Changes in Plan Equity
<CAPTION>
Year ended December 31
1994 1993 1992
<S> <C> <C> <C>
Net investment income:
Dividends on Morrison
Restaurants Inc.
common stock $ 112,963 $ 75,661 $ 37,003
Other dividends 444,089 141,580 12,109
Interest 259,268 389,243 429,713
816,320 606,484 478,825
Administrative expenses (76,308) (59,605) (85,315)
740,012 546,879 393,510
Net (depreciation) appreciation
in fair value of investments (953,914) 2,225,280 1,066,701
Contributions:
Participants 2,658,923 2,626,214 2,198,373
Employer 500,392 538,211 443,836
3,159,315 3,164,425 2,642,209
Withdrawals by participants (891,664) (450,692) (559,392)
Income and changes in
plan equity 2,053,749 5,485,892 3,543,028
Plan equity at
beginning of year 15,991,905 10,506,013 6,962,985
Plan equity at end of year $ 18,045,654 $ 15,991,905 $ 10,506,013
See accompanying notes.
</TABLE>
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</PAGE>
Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements
December 31, 1994 and 1993
1. Significant Accounting Policies
The financial statements of the Morrison Restaurants Inc. Deferred
Compensation Plan (the Plan) are presented on the accrual basis of
accounting.
Investments in common trust funds are stated at fair value based on quoted
redemption values on the last business day of the plan year. Guaranteed
investment contracts are stated at the contract value as determined by the
insurance companies based on the guaranteed rate of return. Morrison
Restaurants Inc. common stock is traded on the New York Stock Exchange and
is valued at the closing sales price on the last business day of the plan
year. Prior to October 21, 1993 Morrison Restaurants Inc. common stock was
traded on the over-the-counter market. The average cost of shares sold is
used to compute gain or loss.
Certain previously reported amounts have been reclassified to conform to the
current year's presentation. Such reclassifications have no effect on
previously reported plan equity.
2. Description of Plan
The Plan was established January 1, 1988 to provide additional incentive
and retirement security for a select group of management and certain highly
compensated employees of Morrison Restaurants Inc. and its subsidiaries (the
Company). The Plan was amended effective January 1, 1990 to provide for
investment direction by participants, including the ability to invest in
Company stock.
Effective January 1, 1993 the Plan was amended to continue to allow
participants to direct the investment of assets; however, the Plan document
will no longer require that the Trustee precisely follow the participants'
directions. Under this new approach, commonly referred to as a "phantom
plan," the manner in which assets are invested is determined by the Trustee,
who must achieve certain predetermined rates of return. Periodic earnings
shortages below the predetermined rate of return would be required to be
funded by the Company.
The general administration of the Plan is the responsibility of the Employee
Benefits Committee (the Committee) which consists of at least two persons
and not more than seven persons appointed by the Board of Directors. Costs
of administering the Plan are paid by the Company to the extent not paid by
the Trust. The Plan's assets are held by AmSouth Bank of Alabama, trustee
for the Plan.
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Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
2. Description of Plan (continued)
To participate in the Plan, the employee must have been designated for
participation in the Plan by the Plan Administrator. Additionally, the
employee must authorize, on a form prescribed by the Committee, the
deduction from his pay of the basic contribution as defined by the Plan.
Participants may contribute amounts ranging from 2% to 20% of their
compensation and specify the various investment alternatives to which the
Plan's assets will be directed.
These investment alternatives are:
Money Market Fund
The investment policy of the money market fund is to invest in
income-producing assets with relatively short terms and relatively high
security of principal. These assets can include government securities,
commercial paper (publicly traded or privately placed), other debt
securities, shares of money market mutual funds, units of participation in
the Trustee's short-term investment trust, and time deposits or certificates
of deposit of any bank or savings and loan association, the deposits of
which are insured by the Federal Deposit Insurance Corporation, including
the Trustee.
Equity Fund
The investment policy of the equity fund is to invest in relatively high
quality equity assets producing either income or capital appreciation, or
both. These assets can include common stocks and similar equity securities
(including warrants or rights to subscribe to or securities convertible into
stock or securities), and shares of mutual funds which invest in common
stock.
-8-
Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
2. Description of Plan (continued)
Fixed Income Fund
The investment policy of the fixed income fund is to achieve income through
investment in income-producing assets with relatively high security of
principal. These assets can include guaranteed investment contracts issued
by insurance companies, bonds, notes, debentures, mortgages, preferred
stocks, interests in leases of either real or personal property, or both,
contracts or other evidences of indebtedness, endowment or annuity
contracts, shares of mutual funds, or other tangible or intangible property
or interests in property, either real or personal, the income return from
which is fixed or limited by the terms of the instrument creating or
evidencing the property or interest in property.
Morrison Stock Fund
The investment policy of the stock fund is to allow participants to
participate in the ownership of the Company.
The Company matches 20% of contributions by participants with 3 to 9 years
of service, 30% for participants with 10 to 19 years, and 40% for
participants with 20 or more years of service or who are specifically
designated by the Plan Administrator as one of a select group of members to
receive a 40% matching contribution. Matching contributions for any plan
year shall be credited with respect to annual deferred amounts of up to the
maximum amount allowed under Internal Revenue Code Section 402(g)(1) ($9,240
for 1994). On April 25, 1990, the Company established a post-1989 Stock
Match Fund. Matching contributions are made to this fund and may be
invested entirely in Company stock.
Participants or their beneficiaries have a 100% vested interest in the value
of their respective contributions and employer matching accounts. The basic
form of distribution is a single lump sum payment in cash and Company stock.
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Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
3. Investments
The Plan's investments are held by a trust fund administered by AmSouth Bank
of Alabama.
The Plan's investments (including investments bought, sold and held during
the year) (depreciated) appreciated in value by $(953,914), $2,225,280 and
$1,066,701 during the years ended December 31, 1994, 1993 and 1992,
respectively, as follows:
<TABLE>
<CAPTION>
Year ended December 31
1994 1993 1992
<S> <C> <C> <C>
Morrison Restaurants Inc.
common stock $ (567,656) $ 1,870,730 $ 1,045,358
Templeton Growth Fund (386,258) 361,707 -
U.S. Treasury Note - (402) 3,709
Other securities:
Other common stocks - (6,755) 17,634
Totals $ (953,914) $ 2,225,280 $ 1,066,701
</TABLE>
The fair values of individual investments that represent 5% or more of plan
equity at December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Morrison Restaurants Inc.
common stock $9,322,740 $ 7,950,705
Principal Financial Group, guaranteed
investment contract 1,336,358 1,235,652
State Mutual Life Assurance, guaranteed
investment contract 1,251,259 -
Commonwealth Life, guaranteed investment
contract 1,252,886 -
Templeton Growth Fund 3,984,967 2,404,641
</TABLE>
The Plan's exposure to accounting loss with respect to these financial
instruments is limited to the carrying values stated above.
4. Income Tax Status
The Plan is a grantor type trust and is not qualified under Section 401 of
the Internal Revenue Code. Under Section 671 of the Internal Revenue Code,
items of income, deduction or credit in a grantor trust are treated as
belonging to the grantor. These items are reported on the income tax return
of the grantor, Morrison Restaurants Inc. Participants must include
distributions in taxable income at the time of withdrawal.
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Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
5. Transactions with Parties-In-Interest
Amounts of Morrison Restaurants Inc. common stock held by the Plan at
December 31, 1994 and 1993 totaled 380,520 and 302,884 shares, respectively,
with a market value of $9,322,740 or $24.50 per share, and $7,950,705 or
$26.25, respectively. On October 29, 1993 Morrison Restaurants Inc. paid a
3-for-2 stock split. All share data above has been adjusted to reflect the
split.
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<PAGE>
<TABLE>
Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
6. Investment Programs
The allocation of Plan assets and liabilities to the separate investment programs at December 31, 1994
was as follows:
<CAPTION>
Post-1989
Money Fixed Morrison Stock
Market Equity Income Stock Match
Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Assets
Cash $ 113,706 $ 53,624 $ 310,223 $ 112,350 $ 22,710 $ 612,613
Investments, at fair value:
Morrison Restaurants Inc.
common stock - - - 6,141,506 3,181,234 9,322,740
Other securities:
Templeton Growth Fund - 3,984,967 - - - 3,984,967
Guaranteed investment
contracts - - 3,840,503 - - 3,840,503
113,706 4,038,591 4,150,726 6,253,856 3,203,944 17,760,823
Contributions receivable:
Participants 6,269 51,786 22,160 157,104 - 237,319
Employer - - - - 28,272 28,272
6,269 51,786 22,160 157,104 28,272 265,591
Dividends and interest
receivable 469 18,322 1,512 217 136 20,656
Total assets 120,444 4,108,699 4,174,398 6,411,177 3,232,352 18,047,070
Liabilities
Accrued administrative
fees (1) (26) (1,275) (92) (22) (1,416)
Total liabilities (1) (26) (1,275) (92) (22) (1,416)
Plan equity $ 120,443 $ 4,108,673 $4,173,123 $6,411,085 $3,232,330 $18,045,654
</TABLE>
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</PAGE>
<PAGE>
<TABLE>
Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
6. Investment Programs (continued)
The allocation of Plan assets and liabilities to the separate investment programs at December 31, 1993
was as follows:
<CAPTION>
Post-1989
Money Fixed Morrison Stock
Market Equity Income Stock Match
Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Assets
Cash $ 110,082 $ 40,032 $3,833,878 $ 78,332 $ 24,545 $ 4,086,869
Investments, at fair value:
Morrison Restaurants Inc.
common stock - - - 4,995,919 2,954,786 7,950,705
Other securities:
Templeton Growth Fund - 2,404,641 - - - 2,404,641
Principal Financial
Group, guaranteed
investment contract - - 1,235,652 - - 1,235,652
110,082 2,444,673 5,069,530 5,074,251 2,979,331 15,677,867
Contributions receivable:
Participants 5,512 63,492 70,790 136,942 - 276,736
Employer - - - - 35,817 35,817
5,512 63,492 70,790 136,942 35,817 312,553
Dividends and interest
receivable 239 19 1,110 60 57 1,485
Plan equity $ 115,833 $ 2,508,184 $5,141,430 $5,211,253 $3,015,205 $15,991,905
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</TABLE>
</PAGE>
<PAGE>
<TABLE>
Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
6. Investment Programs (continued)
Plan income and changes in Plan equity for the year ended December 31, 1994, were allocated to the
separate investment program as follows:
<CAPTION>
Post-1989
Money Fixed Morrison Stock
Market Equity Income Stock Match
Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Plan equity at
December 31, 1993 $ 115,833 $ 2,508,184 $ 5,141,430 $ 5,211,253 $ 3,015,205 $ 15,991,905
Dividends on Morrison
Restaurants Inc.
common stock - - - 72,347 40,616 112,963
Other dividends - 444,089 - - - 444,089
Interest 5,316 2,536 244,354 5,797 1,265 259,268
Administrative expenses (4,989) (13,803) (31,192) (17,555) (8,769) (76,308)
Net (depreciation)
appreciation in fair
value of investments - (386,258) - (361,646) (206,010) (953,914)
Contributions:
Participants 44,720 653,427 551,496 1,409,280 - 2,658,923
Employer - - 4,600 - 495,792 500,392
44,720 653,427 556,096 1,409,280 495,792 3,159,315
Withdrawals by
participants (1,137) (90,408) (401,883) (302,425) (95,811) (891,664)
Interfund transfers (39,300) 990,906 (1,335,682) 394,034 (9,958) -
Plan equity at
December 31, 1994 $ 120,443 $ 4,108,673 $ 4,173,123 $ 6,411,085 $ 3,232,330 $ 18,045,654
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</TABLE>
</PAGE>
<PAGE>
<TABLE>
Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
6. Investment Programs (continued)
Plan income and changes in Plan equity for the year ended December 31, 1993, were allocated to the
separate investment program as follows:
<CAPTION>
Post-1989
Money Fixed Morrison Stock
Market Equity Income Stock Match
Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Plan equity at
December 31, 1992 $ 146,358 $ 1,455,058 $ 5,229,077 $ 1,907,147 $ 1,768,373 $ 10,506,013
Dividends on Morrison
Restaurants Inc.
common stock - - - 43,685 31,976 75,661
Other dividends - 141,580 - - - 141,580
Interest 2,668 4,274 378,414 2,840 1,047 389,243
Administrative expenses (887) (11,217) (29,388) (11,934) (6,179) (59,605)
Net appreciation
in fair value of
investments - 354,550 - 1,141,173 729,557 2,225,280
Contributions:
Participants 100,028 516,629 1,002,140 1,007,417 - 2,626,214
Employer 141 8,487 6,397 - 523,186 538,211
100,169 525,116 1,008,537 1,007,417 523,186 3,164,425
Withdrawals by
participants (11,041) (28,979) (195,007) (184,830) (30,835) (450,692)
Interfund transfers (121,434) 67,802 (1,250,203) 1,305,755 (1,920) -
Plan equity at
December 31, 1993 $ 115,833 $ 2,508,184 $ 5,141,430 $ 5,211,253 $ 3,015,205 $ 15,991,905
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</TABLE>
</PAGE>
<PAGE>
<TABLE>
Morrison Restaurants Inc. Deferred Compensation Plan
Notes to Financial Statements (continued)
6. Investment Programs (continued)
Plan income and changes in Plan equity for the year ended December 31, 1992, were allocated to the
separate investment program as follows:
<CAPTION>
Post-1989
Money Fixed Morrison Stock
Market Equity Income Stock Match
Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Plan equity at
December 31, 1991 $ 124,615 $ 498,461 $ 5,163,277 $ 377,691 $ 798,941 $ 6,962,985
Dividends on Morrison
Restaurants Inc.
common stock - - - 13,812 23,191 37,003
Other dividends - 12,109 - - - 12,109
Interest 4,482 20,711 401,620 1,548 1,352 429,713
Administrative expenses (1,968) (26,941) (41,786) (6,063) (8,557) (85,315)
Net appreciation
in fair value of
investments - 21,343 - 460,658 584,700 1,066,701
Contributions:
Participants 58,763 432,322 1,351,873 355,415 - 2,198,373
Employer 655 13,582 13,126 - 416,473 443,836
59,418 445,904 1,364,999 355,415 416,473 2,642,209
Withdrawals by
participants (12,405) (46,178) (416,017) (48,730) (36,062) (559,392)
Interfund transfers (27,784) 529,649 (1,243,016) 752,816 (11,665) -
Plan equity at
December 31, 1992 $ 146,358 $ 1,455,058 $ 5,229,077 $ 1,907,147 $ 1,768,373 $ 10,506,013
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</TABLE>
</PAGE>
SIGNATURES
Morrison Restaurants Inc. Deferred Compensation Plan.
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Compensation Committee of the Morrison
Restaurants Inc. Deferred Compensation Plan have duly caused
this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Morrison Restaurants Inc.
Deferred Compensation Plan
(Name of Plan)
Date April 26, 1995 /s/ Wallace R. Bunn
Wallace R. Bunn
Director; Chairman,
Compensation Committee
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EXHIBIT INDEX
Exhibit Page
Number Description Number
23 Consent of Independent Auditors 19
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CONSENT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-32697) pertaining to
the Deferred Compensation Plan of Morrison Restaurants Inc.
and in related Prospectus of our Report dated April 7, 1995,
with respect to the financial statements of the Morrison
Restaurants Inc. Deferred Compensation Plan included in
this Annual Report (Form 11-K) for the year ended December
31, 1994.
/s/ Ernst & Young LLP
Ernst & Young LLP
Birmingham, Alabama
April 26, 1995
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