UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 11, 1999
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
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Commission file number 0-12343
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VICORP Restaurants, Inc.
------------------------
(Exact name of registrant as specified in its charter)
COLORADO 84-0511072
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 West 48th Avenue, Denver, Colorado 80216
--------------------------------------------
(Address of principal executive offices)
(Zip Code)
(303) 296-2121
--------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
The registrant had 8,843,204 shares of its $.05 par value Common Stock
outstanding as of August 17, 1999.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VICORP Restaurants, Inc.
BALANCE SHEETS
(in thousands)
<TABLE>
July 11, November 1,
1999 1998
--------- -----------
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash $ 11,938 $ 10,262
Receivables 2,516 3,655
Inventories 6,111 7,501
Deferred income taxes 3,617 3,617
Prepaid expenses and other 2,345 2,192
------- -------
Total current assets 26,527 27,227
------- -------
Property and equipment, net 134,930 128,648
Deferred income taxes 31,462 35,547
Other assets 9,097 8,248
------- -------
Total assets $ 202,016 $ 199,670
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt
and capitalized lease obligations $ 1,403 $ 1,711
Accounts payable, trade 18,038 21,847
Accrued compensation 7,203 6,013
Accrued taxes 10,676 8,629
Accrued insurance 3,131 3,354
Other accrued expenses 6,102 5,208
------- -------
Total current liabilities 46,553 46,762
------- -------
Long-term debt (Note 3) 38 87
Capitalized lease obligations 4,514 5,696
Non-current accrued insurance 2,333 3,199
Other non-current liabilities and credits 5,584 5,919
Shareholders' equity
Series A Junior Participating Preferred
Stock, $.10 par value, 200,000 shares
authorized, no shares issued ----- -----
Common stock, $.05 par value, 20,000,000
shares authorized, 8,843,204 and 9,258,898
shares issued and outstanding 443 455
Paid-in capital 80,639 84,148
Retained earnings 61,912 53,404
------- -------
Total shareholders' equity 142,994 138,007
------- -------
Total liabilities and shareholders' equity $ 202,016 $ 199,670
======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
<TABLE>
Twelve Three Thirty-six Nine
Weeks Months Weeks Months
ended ended ended ended
July 11, July 31, July 11, July 31,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues
Restaurant operations $ 83,030 $ 87,318 $ 247,497 $ 255,886
Franchise operations 679 861 2,159 2,616
------ ------ ------- -------
Total Revenues 83,709 88,179 249,656 258,502
Costs and expenses
Restaurant operations
Food 24,528 26,329 75,527 79,113
Labor 27,254 28,565 80,207 83,434
Other operating 20,345 22,018 60,651 64,958
General and administrative 6,559 6,579 19,516 19,056
------ ------ ------ ------
Operating Profit 5,023 4,688 13,755 11,941
Interest expense 230 320 704 1,212
Other (income) expense, net (162) (71) (347) (258)
------ ------ ------ ------
Income before income tax expense 4,955 4,439 13,398 10,987
Income tax expense 1,808 1,652 4,890 4,010
------ ------ ------ ------
Net income $ 3,147 $ 2,787 $ 8,508 $ 6,977
====== ====== ====== ======
Basic earnings per share $ .35 $ .30 $ .95 $ .76
====== ====== ====== ======
Diluted earnings per share $ .35 $ .30 $ .94 $ .75
====== ====== ====== ======
Weighted average common shares and
dilutive common share equivalents 8,921 9,262 9,017 9,253
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
<TABLE>
Thirty-six Nine
Weeks Months
ended ended
July 11, July 31,
1999 1998
-------- --------
<S> <C> <C>
Operations
Net income $ 8,508 $ 6,977
Reconciliation to cash provided by operations
Depreciation and amortization 13,345 14,702
Deferred income tax provision 4,085 3,302
(Gain) loss on disposition of assets (70) 217
Other, net (538) (389)
Change in assets and liabilities
Trade receivables 253 1,857
Inventories 1,390 1,252
Accounts payable, trade (3,669) 857
Other current assets and liabilities 3,502 2,224
Non-current accrued insurance (866) (339)
------ ------
Cash provided by operations 25,940 30,660
------ ------
Investing activities
Purchase of property and equipment (20,220) (12,949)
Purchase of other assets (1,002) (96)
Disposition of property 514 1,398
Collection of non-trade receivables 1,019 1,280
------ ------
Cash (used for) investing activities (19,689) (10,367)
------ ------
Financing activities
Issuance of debt -- 300
Payment of debt and capitalized lease obligations (1,217) (13,607)
Purchase of common stock (3,637) --
Issuance of common stock 115 1,606
Other, net 164 80
------ ------
Cash used for financing activities (4,575) (11,621)
------ ------
Increase in cash 1,676 8,672
Cash at beginning of period 10,262 1,464
------ ------
Cash at end of period $ 11,938 $ 10,136
====== ======
Supplemental information
Cash paid during the period for
Interest (net of amount capitalized) $ 718 $ 1,276
Income taxes 773 292
</TABLE>
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
NOTES TO FINANCIAL STATEMENTS (unaudited)
- -----------------------------------------
1. The accompanying unaudited financial statements of VICORP Restaurants,
Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial statements and with
the instructions to Form 10-Q and Article 10 of Regulation S-X. In the
opinion of management all adjustments considered necessary (which are of
a normal and recurring nature) for fair presentation have been included.
These financial statements should be read in conjunction with the audited
financial statements and notes thereto for the year ended November 1, 1998,
filed with the Securities and Exchange Commission in the Company's Annual
Report on Form 10-K.
2. Effective fiscal 1999, the Company has decided to adopt reporting on a
52/53 week fiscal year ending on the last day in October. In conjunction
with that change, the Company's last fiscal quarter of 1999 will consist
of sixteen weeks and all other quarters will consist of twelve weeks.
Prior to that, the Company utilized a fiscal year which ended on the last
day in October. Fiscal quarters in 1998 consisted of three months.
The Company determined that a significant amount of estimation would be
required to restate quarterly 1998 operating results to correspond with
the twelve week quarterly reporting. Therefore, restatements of results
were not made and the quarterly results for 1999 and 1998 are not
comparable. The following table highlights the differences in time periods:
<TABLE>
Fiscal 1999 Fiscal 1998
---------------------------------- ---------------------------------
Time Period Days Time Period Days
------------ ---- ----------- ----
<S> <C> <C> <C> <C>
1st Quarter Nov. 2, 1998-Jan. 24, 1999 84 Nov. 1, 1997-Jan. 31, 1998 92
2nd Quarter Jan. 25, 1999-Apr. 18, 1999 84 Feb. 1, 1998-Apr. 30, 1998 89
3rd Quarter Apr. 19, 1999-Jul. 11, 1999 84 May 1, 1998-July 31, 1998 92
4th Quarter July 12, 1999-Oct. 31, 1999 112 Aug. 1, 1998- Nov. 1, 1998 93
--- ---
364 366
=== ===
</TABLE>
3. As of July 11, 1999, the Company had no borrowings outstanding and
$1,850,000 of letters of credit placed under its bank credit facility.
The Company's bank credit agreement expires on February 28, 2001.
4. Basic earnings per share is calculated using the average number of common
shares outstanding. Diluted earnings per share is computed on the basis
of the average number of common shares outstanding plus the effect of
outstanding stock options using the "treasury stock" method.
<TABLE>
Twelve Three Thirty-six Nine
Weeks Months Weeks Months
ended ended ended ended
July 11, July 31, July 11, July 31,
1999 1998 1999 1998
-------- -------- -------- -------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net income available to common shareholders(A) $ 3,147 $ 2,787 $ 8,508 $ 6,977
====== ====== ====== ======
Weighted average common shares outstanding:
Basic (B) 8,890 9,231 8,994 9,186
Dilutive stock options 31 31 23 67
----- ----- ----- -----
Diluted (C) 8,921 9,262 9,017 9,253
===== ===== ===== =====
Earnings per share:
Basic (A/B) $ 0.35 $ 0.30 $ 0.95 $ 0.76
===== ===== ===== =====
Diluted (A/C) $ 0.35 $ 0.30 $ 0.94 $ 0.75
===== ===== ===== =====
</TABLE>
5. The Company has stock option plans which generally provide for the
granting of options to all employees and non-employee directors of the
Company at exercise prices not less than the market value of the common
stock on the date of the grant. The options generally vest over three
years and expire ten years after the date of grant or three months after
employment termination, whichever occurs first.
The following table summarizes information about the stock options
outstanding and exercisable as of July 11, 1999:
<TABLE>
Options Outstanding Options Exercisable
------------------------ ------------------------
Weighted Number
Average Weighted Exercisable Weighted
Remaining Average At Average
Range of Options Contractual Exercise July 11, Exercise
Exercise Prices Outstanding Life Price 1999 Price
- --------------- ----------- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C>
$11.50-$11.50 100,000 7.11 years $11.50 50,000 $11.50
$12.25-$12.25 14,000 7.77 years $12.25 14,000 $12.25
$14.25-$14.25 100,000 9.23 years $14.25 -- $00.00
$14.50-$17.00 138,000 3.45 years $16.08 138,000 $16.08
$18.25-$26.00 106,000 6.27 years $20.98 81,000 $21.82
------- -------
$11.50-$26.00 458,000 6.30 years $15.70 283,000 $16.72
======= =======
</TABLE>
6. In the fourth quarter of 1994, the Company adopted a plan to dispose of
50 restaurant locations in trade areas that were no longer considered
appropriate for the Company's existing concepts. As part of the disposal
plan, the carrying value of those restaurants' assets was written down to
net realizable value. The Company also accrued for expected carrying
costs pending disposition and sublease disposition losses. In the third
quarter of fiscal 1996, the Company recorded an asset disposal charge
related to a decision to close and dispose of six of its Angel's Diners.
As of the end of fiscal 1996, the Company had closed all the restaurants
related to both disposal plans. Consequently, operating results for the
third quarter of fiscal 1998 and 1999 did not include any amounts for
these units. Fifty-five stores have been disposed of through sublease,
lease termination or sale. One store was converted and opened as a
Village Inn restaurant.
During the first three quarters of 1999, $263,000 of closure and carrying
costs were charged against the liability established for such costs. As
of July 11, 1999, the Company had $2,753,000 of reserves remaining to
provide for the disposal of three closed properties and eight subleased
properties. Units classified as subleased may return to closed status
upon sublease termination. The reserves consisted of $1,922,000 to
reduce the disposal property to net realizable value and $831,000 to
provide for expected carrying costs and sublease losses.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
- ---------------------
The Company's quarterly financial information is subject to seasonal
fluctuation. Also, the third quarters of 1998 and 1999 are not comparable
because of differences in time periods presented (see Note 2 of Notes to the
Financial Statements). The third quarter of 1998 consisted of three months
or 92 days, while the third quarter of 1999 consisted of twelve weeks, or 84
days. The fiscal three quarters of 1998 consisted of nine months, or 273
days while the fiscal three quarters of 1999 consisted of thirty-six weeks,
or 252 days.
Restaurant operations
The following table sets forth certain operating information for the
Company's operating concepts and the Company as a whole.
<TABLE>
Third Quarter Year-to-Date
---------------------------- -----------------------------
Twelve Three Thirty-six Nine
Weeks ended Months ended Weeks ended Months ended
July 11, July 31, July 11, July 31,
1999 1998 1999 1998
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Bakers Square
Restaurant sales $ 50,463,000 $ 52,814,000 $ 150,264,000 $ 154,791,000
Restaurant operating profit 5,336,000 4,326,000 14,583,000 10,795,000
Restaurant operating profit % 10.6% 8.2% 9.7% 7.0%
Divisional administrative costs 1,152,000 1,385,000 3,955,000 3,812,000
Divisional operating profit 4,184,000 2,941,000 10,628,000 6,983,000
Restaurants at quarter-end 150 150
Village Inn
Restaurant sales $ 32,567,000 $ 34,504,000 $ 97,233,000 $ 101,095,000
Restaurant operating profit 5,567,000 6,080,000 16,529,000 17,586,000
Restaurant operating profit % 17.1% 17.6% 17.0% 17.4%
Franchise income 679,000 861,000 2,159,000 2,616,000
Divisional administrative costs 1,098,000 1,217,000 3,170,000 3,507,000
Divisional operating profit 5,144,000 5,724,000 15,513,000 16,695,000
Restaurants at quarter-end 102 98
Consolidated
Restaurant sales $ 83,030,000 $ 87,318,000 $ 247,497,000 $ 255,886,000
Food cost % 29.6% 30.2% 30.5% 30.9%
Labor cost % 32.8% 32.7% 32.4% 32.6%
Other operating cost % 24.5% 25.2% 24.5% 25.4%
Restaurant operating profit % 13.1% 11.9% 12.6% 11.1%
Restaurant operating profit 10,903,000 10,406,000 31,112,000 28,381,000
Franchise income 679,000 861,000 2,159,000 2,616,000
Divisional general and
administrative costs 2,250,000 2,602,000 7,125,000 7,319,000
---------- ---------- ---------- ----------
Divisional operating profit 9,332,000 8,665,000 26,146,000 23,678,000
---------- ---------- ---------- ----------
Unallocated general and
administrative costs 4,309,000 3,977,000 12,391,000 11,737,000
---------- ---------- ---------- ----------
Operating profit $ 5,023,000 $ 4,688,000 $ 13,755,000 $ 11,941,000
========== ========== ========== ==========
</TABLE>
Consolidated restaurant sales decreased $4.3 million, or 4.9%, during the
third fiscal quarter and decreased $8.4 million, or 3.3% for the first three
quarters of fiscal 1999 compared to last year. The sales decrease was
attributable to eight and twenty-one fewer days in the third quarter and the
first three quarters of 1999, respectively.
During the third quarter of fiscal 1999, sales increased 3.7% and guest counts
increased .6% on a comparable same store basis. Same store sales for Village
Inn increased .5% and Bakers Square's same stores sales increased by 5.6%.
Comparable guest counts for Village Inn decreased 1.8% while Bakers Square
improved 2.6%. Restaurant remodel programs, broadened advertising coverage,
and continued improved execution at Bakers Square contributed to the
improvement in sales.
For the first three quarters of fiscal 1999, comparable same store sales
increased 3.7%, reflective of a 5.3% increase for Bakers Square and a 1.2%
increase for Village Inn. Comparable guest counts increased .4%, reflective
of a 1.4% increase for Bakers Square and a .8% decrease for Village Inn.
The Company continues to focus on increasing the guest counts at its Bakers
Square concept. Bakers Square Midwest units were remodeled in a significant
campaign to enhance the dining experience. In both Midwest and West Coast
Baker Square markets overall field and store management ranks have been
strengthened considerably. In addition, both tactical marketing programs and
special incentive programs in the local restaurants have been expanded to
increase customer awareness and improve service levels.
Consolidated restaurant operating profit increased by $.5 million, or 4.8%,
and increased as a percentage of restaurant sales from 11.9% to 13.1% in the
third quarter of 1999 versus the third quarter of 1998. The third quarter of
fiscal 1999 had eight fewer days than the third quarter of fiscal 1998.
Bakers Square contributed to the improvement with its percentage improving
from 8.2% to 10.6%, of sales, while Village Inn decreased by .5 percentage
points over the same quarter of 1998. The improved consolidated operating
profit was due to higher sales and increased operating efficiencies. The
decrease at Village Inn is attributable to start up costs associated with new
restaurant openings.
Consolidated restaurant operating profit increased by $2.7 million, or 9.6%
and increased as a percentage of restaurant sales from 11.1% to 12.6% for the
first three quarters of fiscal 1999 compared to 1998's first three quarters.
The first three quarters of fiscal 1999 had twenty-one fewer days than the
first three quarters of fiscal 1998. Bakers Square contributed to the
improvement with its percentage improving from 7.0% to 9.7%, while Village
Inn decreased by .4 percentage points over the same quarter of 1998. The
overall improvement was largely due to higher sales and increased operating
efficiencies in food, labor and other costs. The decrease at Village Inn is
largely attributable to new restaurant openings.
The following presents select quarterly trend data related to the operations
of Bakers Square and Village Inn:
<TABLE>
Bakers Square Village Inn
------------- -----------
Comparable Comparable
Comparable Store Store Comparable Store Store
Store Guest Operating Store Guest Operating
Sales Counts Margin Sales Counts Margin
------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1998:
1st Qtr 6.5% 4.0% 6.8% 5.1% 4.9% 17.0%
2nd Qtr 7.3% 4.8% 5.8% 3.7% 2.0% 17.6%
3rd Qtr 9.9% 4.8% 8.2% 5.1% 2.0% 17.6%
4th Qtr 9.7% 4.3% 7.1% 3.4% 1.6% 17.2%
1999:
1st Qtr 5.5% .5% 9.7% 2.0% (.4%) 17.0%
2nd Qtr 4.7% 1.0% 8.8% 0.8% (.8%) 16.9%
3rd Qtr 5.6% 2.6% 10.6% 0.5% (1.8%) 17.1%
</TABLE>
Other revenues and expense
- --------------------------
Compared to 1998's third quarter, franchise revenue in 1999's third quarter
decreased by $182,000. For the first three quarters of fiscal 1999,
franchise revenue decreased by $457,000 compared to the first three quarters
of 1998. Average daily franchise revenue decreased 13.6% in the third
quarter of 1999 versus the third quarter last year due to increased franchise
development costs. For the first three quarters of 1999, average daily
franchise revenue decreased 10.6%.
As a percent of sales, general and administrative expense increased slightly
in the third quarter of 1999 from the comparable 1998 third quarter. Actual
general and administrative expense increased $20,000 during the third quarter
and $460,000 year-to-date over the corresponding 1998 periods. The year-to-
date increase is due to higher divisional management expenses, higher
incentive compensation, increased head count, fees and depreciation
associated with the Company's Y2K system implementation and increased store
manager training program investment. Year-to-date, general and administrative
expense as a percent of revenues was 7.8% and 7.3% for 1999 and 1998,
respectively.
Interest expense declined 28.1%, or $90,000, for the third quarter and 41.9%,
or $508,000, for the first three quarters of 1999 as compared to fiscal 1998
due to a substantial reduction in long-term debt.
The Company's effective tax rate for the first three quarters of 1999 was
36.5% representing statutory tax rates offset somewhat by the effect of FICA
tax credits.
Liquidity and capital resources
- -------------------------------
Operating cash flows decreased $4.7 million in the first three quarters of
1999 versus the first three quarters of 1998. The decrease resulted from a
combination of 21 less business days in the current period, as well as an
increase in working capital requirements related to a reduction in days
payables outstanding.
As of July 11, 1999, no advances were outstanding under the Company's bank
credit facility and approximately $38.2 million was available for additional
direct advances, subject to limitations on combined balances of direct
advances and letters of credit. On December 19, 1997 the Company accepted a
credit agreement which provided for an available credit limit of $40,000,000.
The Company's bank credit agreement expires on February 28, 2001.
During the first three quarters of 1999, the Company disposed of nine
properties, one through sale, three through sublease, four through lease
termination. Also, during that time, closure and carrying costs of $263,000
were charged against the liability established for such, and cash proceeds of
$777,000 were realized from the disposition of properties.
At July 11, 1999, the Company had nine closed properties remaining which it
was trying to sell or sublease. Four of those properties were owned in fee
and the rest were leased. The Company also had thirteen subleased properties.
The Company hopes to sell the fee properties over the next year and $1.3
million of proceeds are expected to be realized from their sale. The Company
does not anticipate significant proceeds from the disposition of the leased
properties. It is expected that the majority of the leased properties will
be subleased over the next twelve to eighteen months. Cash carrying costs of
approximately $800,000 are expected to be incurred over that period. The
Company expects to sublease two of the properties at rentals lower than the
Company's obligations under the prime leases. Those sublease losses will be
incurred over the remaining years of the leases and the Company does not
anticipate that the losses will materially affect the Company's liquidity.
As of July 11, 1999, authorizations granted by the Board of Directors for the
purchase of 453,375 common shares of the Company's common stock remained
available. During the first three quarters of 1999, 232,925 shares were
purchased. Future purchases with respect to the authorizations may be made
from time to time in the open market or through privately negotiated
transactions and will be dependent upon various business and financial
considerations.
Capital expenditures approximating $11.8 million are expected during the
remainder of the fiscal year. The level of planned expenditures may be
subject to change based on operating conditions. Cash provided by operations,
the unused portion of the Company's bank credit facility and other financing
sources are expected to be adequate to fund these expenditures and any cash
outlays for the purchase of the Company's common stock as authorized by the
Board.
The Company completed a review of its computer systems during fiscal 1997,
resulting in a decision to replace a large portion of the existing systems.
The total cost of this effort is expected to be approximately $14.0 million.
Approximately $7.5 million of this amount was spent in fiscal 1998. The
Company believes the new systems are Year 2000 compliant.
As of January 4, 1999, the Company implemented systems which the Company
believes are Year 2000 compliant at its corporate headquarters. These new
ERP (Enterprise Resource Planning) systems have been designed to provide the
infrastructure to support corporate and field-based systems.
A system-wide rollout to all restaurants of a new back-of-house point-of-sale
(POS) system, as well as a modification of front-of-house systems which the
Company believes to be Year 2000 compliant, began in March 1999 with a
targeted completion date of October 15, 1999. The Company is in the process
of developing a contingency plan for restaurant operations should the rollout
fall behind schedule.
The Company is currently conducting a review of its physical facilities in
order to identify potential areas of embedded technology (heating, lighting,
fixtures, and equipment, communications systems, waste treatment, emergency
backup systems, etc.) that may not be Year 2000 compliant. The Company
believes its exposure is limited in this area and is formulating plans to
address any issues that may surface.
With respect to third parties, the Company has been in contact with and has
sent written communications to all third parties considered critical to the
Company's ongoing operations. Written communication will request written
confirmation from mission critical third parties of reasonable assurance that
plans are being developed to ensure Year 2000 readiness. Reasonable
assurance will include verification that critical third-party vendors have a
plan in place for review of Year 2000 readiness for their supplier base. To
the extent that critical third-party vendors do not provide the Company with
satisfactory evidence of readiness, contingency plans will be developed and
implemented by the Company by December 31, 1999.
The Company has sent written notice to franchisees regarding the need for Year
2000 readiness. Approximately one-half of the Company's franchise restaurants
have plans in place to replace non-compliant restaurant-based systems with
the Company's new Year 2000 ready POS system. All installations are targeted
to be completed by October 1, 1999.
The Company does not believe the costs related to the Year 2000 readiness
project will be material to its financial position or results of operations.
However, the cost of the project and the date on which the Company plans to
complete the Year 2000 modifications are based on management's best estimates,
which were made utilizing numerous assumptions including the continued
availability of certain resources, third-party modification plans, and other
factors. Unanticipated failures by vendors and franchisees, as well as the
failure by the Company to execute its own remediation efforts, could have a
material adverse effect on the cost of the project and its completion date.
In addition, any such unforeseen occurrences, if combined with failures of
other third parties or public services beyond the Company's control, could
have a material adverse effect on the Company's financial condition or results
of operations. Consequently, there can be no assurance that the forward-
looking estimates contained herein will be achieved and the actual cost could
differ materially from the projections contained herein.
In the event they are needed, the Company's contingency plans, in management's
estimate, will be in place by December 31, 1999.
VICORP has guaranteed certain leases for approximately twenty-one restaurant
properties sold to others in 1986 and approximately eighteen restaurant leases
of certain franchisees and others. Certain of these guarantees may or may not
continue to be in force. Minimum future rental payments remaining under
these leases were approximately $7.3 million as of November 1, 1998. These
guarantees are included in the definition of financial instruments with off-
balance-sheet risk of accounting loss. Although the Company has been
required to take possession of one of these properties, which has since been
subleased, the Company has no reason to believe that any material liability
exists, or will exist, regarding these guarantees. The Company believes it is
impracticable to estimate the fair value of these financial guarantees (e.g.,
amounts the Company could pay to remove the guarantees) because the Company
has no present intention or need to attempt settlement of any of the guarantees.
Outlook
- -------
The Company is evaluating various alternative investment strategies for
utilizing cash flow from operations. These alternatives include, but may not
be limited to, new Village Inn or Bakers Square restaurant properties,
acquisition of new computer systems, repurchase of common stock, and
acquisition of restaurant concerns in the family style segment.
Certain matters discussed in this report are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as the Company "believes," "anticipates,"
"expects" or words of similar import. Similarly, statements that describe the
Company's future plans, objectives or goals are also forward-looking
statements. Such forward-looking statements are subject to certain risk and
uncertainties which are described in close proximity to such statements and
which could cause actual results to differ materially from those currently
anticipated. Shareholders, potential investors and other readers are urged
to consider these factors carefully in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such forward-
looking statements. The forward-looking statements made herein are only made
as of the date of this report and the Company undertakes no obligation to
publicly update such forward-looking statements to reflect subsequent events
or circumstances.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securities Holders.
On May 6, 1999, the Registrant held its Annual Meeting of Shareholders.
At that meeting, two proposals were submitted to the shareholders for
approval. Those proposals related to the election of directors and the
ratification of the appointment of the Company's independent auditors for
VICORP's 1999 fiscal year.
As to the first proposal, each of the nominees for directors were elected
based upon a vote for each nominee of 8,620,844 for and 17,298 against.
The selection of Arthur Andersen LLP to serve as the Company's independent
accountants for fiscal 1999 was ratified. The vote was 8,632,922 for; 122
against; 4,998 abstained; and no broker non-votes.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(10) Material Contracts
Deferred Stock Plan for Directors
(27) Financial data schedule.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VICORP Restaurants, Inc.
------------------------
(Registrant)
August 20, 1999 By:/s/ Charles R. Frederickson
---------------------------
Charles R. Frederickson,
Chairman of the Board,
President and Chief Executive Officer
August 20, 1999 By:/s/ Richard E. Sabourin
---------------------------
Richard E. Sabourin,
Executive Vice President and
Chief Financial Officer
VICORP RESTAURANTS, INC.
DEFERRED STOCK PLAN FOR DIRECTORS
- ------------------------------------------------------------------------------
Article I.
Purpose and Effectiveness
I.1 Purpose. The purpose of the VICORP Restaurants, Inc. Deferred
Stock Plan for Directors (the "Plan") is to promote the success of VICORP
Restaurants, Inc. (the "Company") by providing a Plan under which eligible
non-employee Directors of the Company will be awarded shares of Common Stock
of the Company, thereby increasing their proprietary interest in the Company's
business, encouraging them to remain as Directors of the Company, and
increasing their personal interest in the continued success and progress of
the Company. The Plan also is intended to aid in attracting persons of
exceptional ability to become Directors of the Company.
I.2 Effective Date. The Plan will be effective on July 1, 1999 (the
"Effective Date").
Article II.
Definitions
II.1 Certain Defined Terms. Capitalized terms not defined elsewhere in
the Plan will have the following meanings (whether used in the singular or
plural):
(a) "Approved Transaction" means a transaction in which (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned
directly or indirectly by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the total voting power
represented by the Company's then outstanding voting securities, or (ii)
during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof, or
(iii) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least eighty percent (80%) of the total voting power
represented by the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all
or substantially all the Company's assets.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Board or such other Committee consisting
of two or more Directors as may be appointed by the Board for this
purpose, where each Director on such Committee is a "Disinterested
Person" (or any successor designation for determining who may administer
plans, transactions or awards exempt under Section 16(b) of the Exchange
Act), as that term is used in Rule 16b-3 under the Exchange Act, as that
rule may be modified from time to time.
(d) "Common Stock" means the common stock of the Company.
(e) "Director" means a member of the Board who is not an employee
of the Company or any Subsidiary.
(f) "Disability" means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment that (i) can be expected to result in death or (ii) has
lasted or can be expected to last for a continuous period of at least 12
months.
(g) "Fair Market Value" of a share of Common Stock means the
average of the closing prices of the Stock on the five business days
immediately preceding the Fair Market Value determination date. The
closing price is the officially quoted closing price of the Stock on
NASDAQ or, if not reported on NASDAQ, as quoted by the National
Quotation Bureau Incorporated, or, if the Common Stock is listed on an
exchange, on the principal exchange on which the Common Stock is listed.
(h) "Subsidiary" means any corporation in which the Company owns
directly, or indirectly through subsidiaries, more than fifty percent
(50%) of the total combined voting power of all classes of Stock, or any
other entity (including, but not limited to, partnerships and joint
ventures) in which the Company owns more than fifty percent (50%) of the
combined equity thereof.
Article III.
Administration
III.1 Committee. The Plan will be administered by the Committee. The
Committee will hold its meetings at such times and places as it will deem
advisable. A majority of the members of the Committee will constitute a
quorum and all determinations will be made by a majority of such quorum. Any
determination reduced to writing and signed by all of the members of the
Committee will be fully as effective as if it had been made by a majority vote
at a meeting duly called and held.
III.2 Powers. The Committee will have full authority to administer the
Plan, including the authority: (a) to construe and interpret the terms of the
Plan; (b) to prescribe, amend and rescind rules and regulations relating to
the Plan, (c) to provide for conditions and assurances deemed necessary or
advisable to protect the interests of the Company; and (d) to make all other
determinations deemed necessary or advisable for the administration of the
Plan but only to the extent not contrary to the express provisions of the
Plan. Notwithstanding the foregoing, the Committee will have no authority,
discretion or power with respect to the selection of Directors to whom Common
Stock is to be granted, the timing of such grants, or the number of shares of
Common Stock to be granted, all of which will be as provided in this Plan and
the Committee will have no discretion as to such matters. Each action and
determination made or taken pursuant to the Plan by the Committee, including
any interpretation or construction of the Plan, will be final and conclusive
for all purposes and upon all persons. No member of the Committee will be
liable for any action or determination made or taken by him or the Committee
in good faith with respect to the Plan.
Article IV.
Shares Subject to the Plan
IV.1 Number of Shares. Subject to the provisions of this Article IV,
the maximum number of shares of Common Stock which may be granted during the
term of the Plan will be 150,000 shares (the "Maximum Shares"). Shares of
Common Stock will be made available from the authorized but unissued shares of
the Company.
IV.2 Adjustments. If the Company subdivides its outstanding shares of
Common Stock into a greater number of shares of Common Stock (by stock
dividend, stock split, reclassification or otherwise) or combines its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock (by reverse stock split, reclassification or otherwise), or if the
Committee determines that any stock dividend, extraordinary cash dividend,
reclassification, recapitalization, reorganization, split-up, split-off, spin-
off, combination, exchange of shares, warrants or rights offering to purchase
Common Stock, or other similar corporate event (including mergers or
consolidations other than those which constitute Approved Transactions)
affects the Common Stock such that an adjustment is required in order to
preserve the benefits or potential benefits intended to be made available
under this Plan, then the Committee shall, in such manner as the Committee may
deem equitable and appropriate, make such adjustments to the number and kind
of shares which thereafter may be granted; provided, however, that the number
of shares subject to any grant will always be a whole number.
Article V.
Grants of Awards
V.1 Generally. All grants of shares of Common Stock hereunder will be
automatic and non-discretionary and will be made strictly in accordance with
the following provisions:
(a) No person will have any discretion to select which Directors
will be granted shares of Common Stock or to determine the number of
shares of Common Stock granted to Directors.
(b) Effective as of the last day of each calendar quarter beginning
with the calendar quarter commencing on July 1, 1999, each Director will
be automatically granted a number of shares of Common Stock as of the
last day of each calendar quarter equal to the sum of $5,000 divided by
the Fair Market Value (determined as of the last day of each quarter) of
one share of Common Stock, rounded to the nearest whole share (with cash
paid in lieu of any fractional share).
(c) In the event that any grant of Common Stock under this Section
would cause the number of shares of Common Stock, when added to those
shares previously granted under the Plan, to exceed the Maximum Shares
set forth in Section 4.1, then each such automatic grant shall be for
that number of whole shares determined by dividing the total number of
shares of Common Stock remaining available for grant by the number of
Directors on the automatic grant date. No further grants shall be made
until such time, if any, as additional shares of Common Stock become
available for grant under the Plan through action of the Board to
increase the number of shares of Common Stock which may be issued under
the Plan.
V.2 Issuance or Deferral of Common Stock Grants.
(a) Deferral of Common Stock Grant: A Director may, no later than
the first day of the Plan Year (which will run from July 1 through the
following June 30) <F1>, elect to defer his or her receipt of the Common
Stock to be granted for such Plan Year by providing to the Committee a
signed and completed Deferral Agreement, in the form acceptable to the
Committee. Such deferral election will cause the Common Stock otherwise
granted for such Plan Year to be deferred and not issued, distributed, or
paid to the Director until the expiration of five years from the date of
such grant of Common Stock or the termination of the Director's status as
a Director (the "Deferral Period"), whichever is elected by the Director
on the Deferral Agreement. Shares of Common Stock subject to a Deferral
Agreement will not constitute issued and outstanding shares of Common
Stock for corporate purposes, and will be subject to the following
restrictions:
(i) Voting. The Director will have no right to vote the
Deferred Shares for any matter.
(ii) Dividends and Distributions. The Director will not
have the right to receive and retain any dividends or distributions
paid or distributed on such Deferred Shares until the Deferral
Period will have expired. During the Deferral Period, the Director
will be credited on the books of the Company (but no separate fund
or account will be established with respect to such credits) with
any dividends or distributions which otherwise would have been paid
on such Deferred Shares during the Deferral Period. Upon the
expiration of the Deferral Period, the Director will be paid an
amount equal to the dividends and distributions credited to such
Director on the books of the Company during the Deferral Period on
such Deferred Shares, without earnings or interest thereon.
(iii) Payment Upon Expiration of Deferral Period. At the
same time any Deferral Election is made, the Director will elect to
receive payment at the end of the Deferral Period either:
(A) in one lump sum payment of cash (equal to the Fair
Market Value of the deferred Common Stock as of the last
day of the Deferral Period) or the number of whole shares
of Common Stock deferred, without interest thereon, or
(B) in substantially equal installment payments of cash or
whole shares of Common Stock over a three year period
commencing within a reasonable period of time after the
expiration of the Deferral Period. If installment
payments of cash are elected, the Fair Market Value of the
Common Stock deferred will be determined as of the last
day of the Deferral Period, and such amount will be
credited with interest at the publicly announced prime
rate of interest charged by the Company's primary lender
(as determined by the Company) in effect on such date and
on each anniversary date thereafter with such interest
paid on each anniversary date. If the Director elects
installment payments in whole shares of Common Stock,
one-third of the number of shares of Common Stock deferred
will be distributed to the Director each year, without
interest thereon.
Notwithstanding any other provision of this (iii), the Director
may change his election as to the form of the distribution, but
not the timing of the distribution, at any time prior to the
date payments commence.
(iv) Possession of Certificate. The Director will not be
entitled to delivery of the stock certificate or certificates
representing such Deferred Shares until the Deferral Period will
have expired.
(v) Transferability. The Director may not sell, assign,
transfer, pledge, exchange, encumber or dispose of the Deferred
Shares or his interest in them during the Deferral Period.
(vi) Deferred Shares Part of Company's General Assets. All
Deferred Shares and other amounts payable in accordance with this
Plan under a Deferral Agreement will constitute a contractual
general unsecured obligation of the Company. Such amounts, as well
as any administrative costs relating to the Plan, will be paid out
of the general assets of the Company. The Company will not be
required to fund its obligations with respect to Deferred Shares
under this Plan and any Deferral Agreement in any manner, whether by
purchase of insurance or endowment contracts, or contributions to a
trust fund, or deposits in an escrow account, or otherwise; and if
the Company does choose to do so, then the Directors will not have
any right or interest in such contract, trust, or account but may
look only to the Company's unsecured promise to pay in accordance
with the provisions of this Plan. Nothing contained in this Plan
will be deemed to create a trust of any kind or to create any
fiduciary relationship.
(b) Election to Receive Common Stock Grant: If the Director fails
to timely execute a Deferral Agreement as provided in Section 5.2(a),
then, within a reasonable period of time after each grant date, the stock
certificate or certificates representing the shares of Common Stock
granted to the Director will be issued and registered in the name of the
Director to whom such shares have been granted, and such Director will
enjoy all of the rights and responsibilities of a holder of Common Stock.
Article VI.
General Provisions
VI.1 Acceleration of Payment of Deferred Shares.
(a) Death. If a Director dies during a Deferral Period, any
Deferred Shares will be issued within a reasonable period of time to the
Beneficiary named by the Director in the Deferral Form. If a Director
dies after the Deferral Period, but before all amounts due under this
Plan have been paid to the Director under Section 5.2(a)(iii), any
amounts or shares of Common Stock due will be paid or issued to the
Beneficiary named in the Deferral Form within a reasonable period of time
after the Director's death.
(b) Approved Transactions. In the event of any Approved
Transaction during a Deferral Period, any Deferred Shares will be issued
to the Director prior to the closing of the Approved Transaction so that
the Director may participate in the Approved Transaction as a holder of
Common Stock.
VI.2 No Right to Continued Directorship. Nothing contained in the Plan
or in any grant, and no action of the Company or the Committee with respect
thereto, will confer or be construed to confer on any Director any right to
continue as a Director or interfere in any way with the right of the Company
or its shareholders to terminate the Director's term as Director at any time,
with or without cause.
VI.3 Nonalienation of Benefits. No right or benefit under the Plan
(including any Deferred Shares and any future grants of Common Stock) will be
subject to anticipation, alienation, sale, assignment, hypothecation, pledge,
exchange, transfer, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or
charge the same will be void. No right or benefit hereunder will in any
manner be liable for or subject to the debts, contracts, liabilities or torts
of the person entitled to such benefits.
VI.4 Termination and Amendment. The Board or the Committee may at any
time terminate the Plan, and may, from time to time, suspend or discontinue
the Plan or modify or amend the Plan in such respects as it will deem
advisable; except that no such modification or amendment will be effective
prior to approval by the Company's shareholders to the extent shareholder
approval is required by applicable legal requirements. No modification,
extension, renewal or other change in any Common Stock granted under the Plan,
whether or not such Common Stock is deferred, will be made after the grant of
such Common Stock, unless the same is consistent with the provisions of the
Plan.
VI.5 Government and Other Regulations. The obligation of the Company
with respect to grants of Common Stock will be subject to all applicable laws,
rules and regulations and such approvals by any governmental agencies as may
be required.
VI.6 Withholding. The Company's obligation to deliver shares of Common
Stock under the Plan will be subject to applicable federal, state and local
tax withholding requirements. Federal, state and local withholding tax due at
the time of a grant of, or expiration of the Deferral Period with respect to,
Common Stock may, in the discretion of the Committee, be paid in shares of
Common Stock already owned by the Director or through the withholding of
shares otherwise issuable to such Director, upon such terms and conditions as
the Committee will determine. If the Director will fail to pay, or make
arrangements satisfactory to the Committee for the payment, to the Company of
all such federal, state and local taxes required to be withheld by the
Company, then the Company shall, to the extent permitted by law, have the
right to deduct from any payment of any kind otherwise due to such Director
an amount equal to any federal, state or local taxes of any kind required to
be withheld by the Company with respect to such Common Stock.
VI.7 Non-Exclusivity of the Plan. The adoption of the Plan by the Board
will not be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options and the awarding of stock
and cash otherwise then under the Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.
VI.8 Exclusion from Other Benefit Computation. By acceptance of a grant
of Common Stock, each Director will be deemed to have agreed the amount of any
compensation deemed to be received by a Director at the time of a grant of,
or upon the expiration of the Deferral Period with respect to, Deferred
Shares, will not constitute "earnings" with respect to which any other
employee or Director benefits of such person are determined, including without
limitation benefits under any pension, profit sharing, or life insurance plan.
In addition, each beneficiary of a deceased Director will be deemed to have
agreed that such grant or expiration of a Deferral Period will not affect the
amount of any life insurance coverage, if any, provided by the Company on the
life of the Director which is payable to such beneficiary under any life
insurance plan covering Directors of the Company.
VI.9 Governing Law. The Plan will be governed by, and construed in
accordance with, the laws of the State of Colorado.
VI.10 Company's Rights. The grant of Common Stock pursuant to the Plan
will not affect in any way the right or power of the Company to make
reclassifications, reorganizations or other changes of or to its capital or
business structure or to merge, consolidate, liquidate, sell or otherwise
dispose of all or any part of its business or assets.
VI.11 Successors. All obligations of the Company under the Plan, with
respect to grants of Common Stock and Deferred Shares hereunder, will be
binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
VI.12 Legal Construction. Except where otherwise indicated by the
context, any masculine term used herein also will include the feminine; the
plural will include the singular and the singular will include the plural.
VI.13 Severability. In the event any provision of the Plan will be held
illegal or invalid for any reason, the illegality or invalidity will not
affect the remaining parts of the Plan and the Plan will be construed and
enforced as if the illegal or invalid provision had not been included.
VI.14 Duration of Plan. The Plan will terminate at such time as may be
determined by the Board, and no Common Stock will be granted after such
termination. If not sooner terminated under the preceding sentence, the Plan
will fully cease and expire at midnight on the date that is ten years from the
Effective Date.
VICORP RESTAURANTS, INC.
DEFERRED STOCK PLAN FOR DIRECTORS
DEFERRAL AGREEMENT
- ---------------------------------------------------------------------------
Name of Director:_______________________________________________________
Grants of Common Stock to be Deferred: Grants from July 1, 1999, through
June 30, 2000
This Deferral Agreement must be signed and returned to the Company by the
first day of the Plan Year (July 1 - June 30) to which the Deferral Agreement
applies (except that, for the Plan Year commencing on July 1, 1999, the
Deferral Agreement must be returned by July 31, 1999).
- -----------------------------------------------------------------------------
THIS DEFERRAL AGREEMENT, dated the ___ day of __________, 19__, is
entered into between VICORP Restaurants, Inc., a Colorado corporation (the
"Company"), and the Director named above.
Under the terms of the VICORP Restaurants, Inc. Deferred Stock Plan for
Directors, a copy of which is attached hereto (the "Plan"), a Director may
elect to defer the receipt of Common Stock granted during the Plan Year
(July 1 - June 30) to the Director under the Plan. By signing this Deferral
Agreement, the Director agrees to defer the receipt of all of the Common Stock
granted to the Director during the Plan Year identified above (the
"Deferred Shares") as provided below. (Terms capitalized but not defined
herein are used as defined in the Plan.)
I agree to defer all of the Deferred Shares until: (Select (a) or (b))
____ (a) The date which is five years from the date of this Agreement.
____ (b) The date on which my term as a Director of the Company expires
for any reason.
I elect to have Deferred Shares distributed at the end of the Deferral
Period: (Select (a) or (b))
____ (a) In one lump sum in:
____ cash
____ whole shares of Common Stock
____ (b) In payments over a three year period in:
____ cash (interest will be credited as described in the Plan)
____ whole shares of Common Stock
1. No Rights as Shareholder Until End of Deferral Period. I
understand that I will not receive any dividends that may be paid on the
Deferred Shares and that I may not vote the Deferred Shares until the end of
the Deferral Period. I understand that I do not have any rights as a
shareholder of the Company until the end of the Deferral Period and until the
Deferred Shares are issued to me.
2. Payment Upon Death. Upon my death, I understand that the Deferral
Period will end and that my Deferred Shares will be issued within a
reasonable period of time after my death to the person(s) named in the
Beneficiary Designation attached hereto. If the Beneficiary Designation is
not completed, the Deferred Shares will be issued to my estate.
3. Incorporation of Plan by Reference. I agree that the Deferred
Shares will be subject to all of the restrictions, terms and conditions
specified in the Plan, and that all of such restrictions, terms and conditions
are incorporated, by reference, into this Agreement. To the extent that
there may be any conflict between any term or provision of the Plan and any
term or provision of this Agreement, the term or provision of the Plan shall
control.
4. Terms of Agreement Binding. The terms and provisions of this
Agreement shall be binding upon, and shall inure to the benefit of, the
Director and his executors or administrators, heirs, and personal and legal
representatives.
5. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado.
6. Entire Agreement. The Director and the Company agree that this
Agreement, together with the Plan, set forth all of the promises, agreements,
conditions, understandings, warranties, and representations between the
parties with respect to the Deferred Shares and that there are no promises,
agreements, conditions, understandings, warranties, or representations, oral
or written, express or implied between the parties with respect to the
Deferred Shares other than as set forth in such Plan and this Agreement. The
parties further agree that any modification or any waiver of any provision
contained in this Agreement or the Plan shall not be valid unless made in
writing and signed by the person or persons sought to be bound by such waiver
or modifications.
7. Tax Consequences. The Director agrees that the Company has made no
representations regarding the tax consequences to the Director of the grant,
deferral, or issuance of the Deferred Shares, and the Director agrees to hold
the Company harmless for any and all expenses, costs, and claims (including
reasonable attorneys' fees) that may arise as a result of the Director's tax
consequences under the Plan and this Agreement. The Director is encouraged to
seek his or her own tax advice regarding these transactions.
IN WITNESS WHEREOF, the Company and the Director have duly executed this
Agreement as of the day and year first above written.
VICORP RESTAURANTS, INC.
By: ___________________________________
Title:___________________________________
DIRECTOR:
_________________________________________
(Signature)
_________________________________________
(Date)
BENEFICIARY DESIGNATION FORM
- -----------------------------------------------------------------------------
INSTRUCTIONS: Complete the following table with information about your
principal beneficiary and your contingent (secondary) beneficiaries for your
Deferred Shares under the VICORP Restaurants, Inc. Deferred Stock Plan for
Directors (the "Plan"). This beneficiary designation will apply to the
Deferred Shares described in this Agreement at your death.
Subject to applicable state and federal law and pursuant to
the provisions of the Plan, I hereby revoke all previous
beneficiary designations with respect to the Deferred Shares
described in this Agreement, if any. I designate the following
as the beneficiary to receive the Deferred Shares described
in this Agreement upon my death.
Principal beneficiaries: % of
Full Name Birthday Relationship Distribution
--------- -------- ------------ ------------
_____________________________________________________________________________
_____________________________________________________________________________
Contingent beneficiaries (who will receive if the principal beneficiaries
predecease the employee):
% of
Full Name Birthday Relationship Distribution
--------- -------- ------------ ------------
_____________________________________________________________________________
This designation may be changed or revoked by you at any time. A beneficiary
designation, change, or revocation is effective upon receipt by the Company.
Payment will be made to a beneficiary only if such beneficiary survives the
Director.
__________________________ __________________________________
Date Director's Signature
--THE ELECTIONS MADE UNDER THIS FORM ARE NOT EFFECTIVE UNTIL
RECEIVED BY THE COMPANY--
DOCUMENT LOCATER PAGE
_______________________________
<F1> For the Plan Year commencing on the Effective Date of the Plan, the
Director may make the deferral election at any time within 30 days after the
Effective Date.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VICORP
RESTAURANTS, INC. BALANCE SHEETS AND STATEMENTS OF OPERATIONS AS OF JULY 11,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANACIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> JUL-11-1999
<CASH> 11,938
<SECURITIES> 0
<RECEIVABLES> 2,516
<ALLOWANCES> 0
<INVENTORY> 6,111
<CURRENT-ASSETS> 26,527
<PP&E> 306,427
<DEPRECIATION> 171,497
<TOTAL-ASSETS> 202,016
<CURRENT-LIABILITIES> 46,553
<BONDS> 1,403
0
0
<COMMON> 443
<OTHER-SE> 142,551
<TOTAL-LIABILITY-AND-EQUITY> 202,016
<SALES> 247,497
<TOTAL-REVENUES> 249,656
<CGS> 75,527
<TOTAL-COSTS> 75,527
<OTHER-EXPENSES> 140,858
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 704
<INCOME-PRETAX> 13,398
<INCOME-TAX> 4,890
<INCOME-CONTINUING> 8,508
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,508
<EPS-BASIC> .94
<EPS-DILUTED> .95
</TABLE>
