SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by 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 Materials Pursuant to S 240.14a-11(c) or
S 240.14a-12
El Chico Restaurants, Inc.
(Name of Registrant as Specified in Its Charter)
El Chico 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).
_ $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 0-11:1
4) Proposed maximum aggregate value of transaction:
1 Set forth 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:
<PAGE>
4) Date Filed:
<PAGE>
EL CHICO RESTAURANTS, INC.
12200 Stemmons
Suite 100
Dallas, Texas 75234
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 2, 1996
To the Shareholders
of El Chico Restaurants, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of
shareholders of El Chico Restaurants, Inc. (the "Company"), will
be held at The Texas Commerce Bank Tower, 2200 Ross Avenue, 7th
Floor, Dallas, Texas, on Thursday, May 2, 1996, at 10:00 a.m.,
Dallas time, for the following purposes.
1. To elect five directors of the Company to
hold office until their respective
successors shall have been duly elected
and qualified.
2. To consider and approve the El Chico
Restaurants, Inc., 1995 Stock Plan and to
ratify the grant of the stock options
outstanding thereunder.
3. To transact such other business as may
properly come before the meeting or any
adjournments thereof.
The Board of Directors has fixed the close of business on
Thursday, March 14, 1996, as the record date for determination of
shareholders entitled to notice of and to vote at the annual
meeting.
Whether or not you expect to attend the meeting in person,
you are urged to mark, sign, and date the enclosed form of proxy
and return the same promptly so that your shares of stock may be
represented and voted at the meeting. You may revoke your proxy
at any time before it is voted.
BY ORDER OF THE
BOARD OF DIRECTORS
JOHN A. CUELLAR
Secretary
Dallas, Texas
April 4, 1996
<PAGE>
EL CHICO RESTAURANTS, INC.
12200 Stemmons
Suite 100
Dallas, Texas 75234
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 2, 1996
SOLICITATION AND REVOCABILITY OF PROXIES
The accompanying proxy is solicited by the Board of
Directors of El Chico Restaurants, Inc., a Texas corporation (the
"Company"), to be voted at the meeting of the shareholders of the
Company (the "Meeting") to be held Thursday, May 2, 1996, at the
time and place and for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders (the "Notice"). When
proxies in the accompanying form are properly executed and
received, the shares thereby will be voted at the Meeting in
accordance with the directions noted thereon; if no direction is
indicated, such shares will be voted for the election of
directors and in favor of proposal 2.
Management does not intend to present any business at the
Meeting for a vote other than the matters set forth in the Notice
and has no information that others will do so. If other matters
requiring a vote of the shareholders properly come before the
Meeting, it is the intention of the persons named in the
accompanying form of proxy to vote the shares represented by the
proxies held by them in accordance with their judgment on such
matters.
Any shareholder giving a proxy may revoke that proxy at
any time before it is voted. A proxy may be revoked by filing
with the Secretary of the Company a written revocation or duly
executed proxy bearing a date subsequent to the proxy being
revoked. Any shareholder may attend the Meeting and vote in
person whether or not such shareholder has previously returned a
properly executed proxy to the Company.
In addition to the solicitation of proxies by use of the
mail, officers and other employees of the Company may solicit the
return of proxies. Brokerage houses and other custodians,
nominees and fiduciaries will be requested to forward
solicitation material to the beneficial owners of stock.
The cost of preparing, printing, assembling and mailing
the Notice, this Proxy Statement, the form of proxy enclosed
herewith and any additional solicitation material, as well as the
cost of forwarding solicitation material to the beneficial owners
<PAGE>
of stock, is to be borne by the Company. This Proxy Statement
and the accompanying Notice are first being sent to the
shareholders of the Company on or about April 4, 1996.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of common stock, $.10 par
value, of the Company ("Common Stock") entitled to vote is
necessary to constitute a quorum with respect to each matter to
be considered at the Meeting. If a quorum is not present or
represented at the Meeting, the shareholders entitled to vote
thereat, present in person or represented by proxy, may adjourn
the Meeting from time to time without notice or other
announcement until a quorum is present or represented. Assuming
the presence of a quorum, the affirmative vote of the holders of
a plurality of the shares of Common Stock voting at the Meeting
is necessary for the election of directors and the affirmative
vote of the holders of a majority of the shares of Common Stock
present in person or by proxy and entitled to vote is necessary
for the approval of the El Chico Restaurants, Inc. 1995 Stock
Plan and the ratification of the grants of options outstanding
thereunder. An automated system administered by the Company's
transfer agent tabulates the votes. Abstentions and broker non-
votes are each included in the determination of the number of
shares present for determining a quorum. Each proposal is
tabulated separately. Abstentions and broker non-votes are each
included in the determination of the number of shares present for
determining a quorum. Abstentions are counted in tabulations of
the votes cast on proposals presented to shareholders, whereas
broker non-votes are each counted as voting for purposes of
determining whether a proposal has received the necessary number
of votes for approval of the proposal.
The record date for the determination of shareholders
entitled to notice of and to vote at the Meeting was the close of
business on March 14, 1996. At that date, there were 4,094,380
shares of Common Stock issued and outstanding. Each of such
shares is entitled to one vote in each matter to be acted upon at
the Meeting. The Company's Articles of Incorporation deny
cumulative voting.
PRINCIPAL SHAREHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 14, 1996,
unless otherwise indicated, (i) the stock ownership of the
persons or entities known by management beneficially to own more
than 5% of the Common Stock, (ii) the number of shares of Common
Stock beneficially owned by each director and nominee, (iii) the
number of shares owned by each of the persons named in the
Summary Compensation Table, and (iv) the number of shares of
Common Stock beneficially owned by all directors and executive
officers of the Company as a group.
2
<PAGE>
Amount and Nature of
Percent
Name Beneficial Ownership(1) o f
Class
Wallace A. Jones 51,500 (2) 1.2%
Lawrence E. White 53,259 (2) 1.3%
John A. Cuellar (3) 72,625 (2) 1.8%
Carmen C. Summers (3) 15,600 (2) *
Charles A. Cooper 34,943 (2) *
Gary R. Rustmann 4,000 (2) *
Grahame N. Clark, Jr. 7,000 (2) *
Jack D. Knox 17,000 (2) *
Joseph V. Mariner, Jr. 8,796 (2) *
Joseph S. Thomson 33,500 (2) *
Fleming Capital Management, Inc.523,400 (4) 12.8%
Dimensional Fund Advisors Inc. 266,000 (5) 6.5%
Fleet Financial Group, Inc. 247,000 (6) 6.0%
All directors and executive officers as
a group (12 persons) 333,756 (2) 7.7%
* Less than one percent.
(1) Beneficial ownership as reported in the above table has been
determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Except as noted, the listed individuals have sole
investment power and sole voting power as to all shares of
stock of which they are identified as being the beneficial
owners.
(2) Includes shares which may be acquired within 60 days of the
record date pursuant to the exercise of stock options as
follows: Mr. Jones - 50,000 shares; Mr. White - 50,000
shares; Mr. Cuellar - 32,500 shares; Mr. Rustmann - 4,000
shares; Ms. Summers - 2,000 shares; Mr. Cooper - 28,750
shares; Mr. Clark - 5,000 shares; Mr. Knox - 15,000 shares;
Mr. Mariner - 5,000 shares; Mr. Thomson - 15,000 shares;
and all directors and executive officers as a group -
239,000 shares. Also includes 5,000 shares awarded to Mr.
Cuellar for a total of 7,500 shares awarded to all directors
and executive officers as a group under the earn-out
provisions of the 1990 Long-Term Incentive Plan which are
restricted and subject to the vesting and forfeiture
provisions of such plan. Also includes 2,000 shares owned
by Mr. Thomson's minor son, and with respect thereto, Mr.
Thomson disclaims beneficial ownership.
(3) Carmen C. Summers and John A. Cuellar are first cousins.
There is no other family relationship among any of the
directors and any executive officers of the Company.
3
<PAGE>
(4) The principal business address of Fleming Capital
Management, Inc. ("Fleming") is 1285 Avenue of the Americas,
16th Floor, New York, NY 10019. The shares consist of
shares held as of December 31, 1995 by one or more Fleming
affiliates in their capacities as investment managers or
advisors with respect to one or more collective investment
funds and/or separate investment accounts.
(5) The principal business address of Dimensional Fund Advisors,
Inc. ("Dimensional") is 1299 Ocean Avenue, 11th Floor, Santa
Monica, CA 90401. Dimensional, a registered investment
advisor, is deemed to have beneficial ownership of 266,000
shares of Common Stock as of December 31, 1995, all of which
shares are held in portfolios of DFA Investment Dimensions
Group Inc., a registered open-end investment company, or in
series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation
Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment
manager. Dimensional disclaims beneficial ownership of all
such shares.
(6) The principal business address of Fleet Financial Group,
Inc. ("Fleet") is One Federal Street, Boston, MA 02109.
The shares consist of shares held as of December 31, 1995 by
Fleet, a Parent Holding Company, for the benefit of other
persons who have the right to receive dividends and proceeds
from the sale of such shares.
ELECTION OF DIRECTORS
(Proposal 1)
The persons named in the enclosed form of proxy, unless such
proxy specifies otherwise, intend to vote the shares represented
by such proxy for the election of the nominees listed below to
hold office until their respective successors shall have been
duly elected and qualified.
The Company's Bylaws fix the number of directors at seven,
and five directors will be elected. Proxies cannot be voted for
a greater number of persons than the nominees named. Each of the
nominees listed below is currently a director of the Company.
Information regarding each nominee is set forth in the table
and text below.
Nominee Age P o s i t i o n w i t h
Company
Joseph S. Thomson (1) 66 Chairman of the Board
Wallace A. Jones (2) 44 President, Chief Executive
Officer and
Director
4
<PAGE>
Grahame N. Clark, Jr. (1) 53 Director
Jack D. Knox (1) 58 Director
Joseph V. Mariner, Jr. (1) 75 Director
___________________
(1) Member of the Executive Committee, Compensation and Benefits
Committee, and the Audit Committee.
(2) Member of the Executive Committee.
If any of the nominees for director should become unavailable
to stand for election as a director, the shares represented by
the proxy will be voted for such person or persons as may be
nominated by the Board of Directors. The Company has no reason
to believe that any of the nominees will be unavailable to serve
as a director.
Directors are elected annually by the Company's shareholders
and hold office until their successors are elected and qualified.
Officers are elected annually by the Board of Directors and serve
at the pleasure of the Board.
Joseph S. Thomson was elected as Chairman of the Board of the
Company in November 1994. Mr. Thomson has been a franchisee of
the Company since 1969 and currently owns and operates seven
franchised El Chico restaurants located in Conway, Arkansas; Fort
Smith, Arkansas; Fayetteville, Arkansas; Marshall, Texas;
Meridian, Mississippi; and two locations in Jackson, Mississippi.
Mr. Thomson has been involved in the operation of several other
franchised restaurant concepts since June 1993 and in residential
and commercial real estate development since the late 1950s and
has owned and operated the Century 21/Page One Real Estate
Company in Texarkana, Texas since 1976. He has been a director
of the Company since September 1987.
Wallace A. Jones has been involved in the restaurant industry
for over 20 years. From 1974 to October 1986 he held various
positions at Casa Bonita, Inc., owner of the Taco Bueno chain of
restaurants. From October 1986 to January 1989 he served as
President and Chief Executive Officer of Prufrock Restaurants,
Inc., owner of the Black-eyed Pea chain of restaurants. From
March 1989 to October 1989, he served as Chief Operating Officer,
and from October 1989 to May 1990, he served as President and
Chief Executive Officer of Warburtons, Inc., a bakery cafe chain.
From May 1990 to May 1991, he was self employed developing a new
restaurant project. From May 1991 to November 1994, Mr. Jones
was employed with Good Eats Restaurant Group, serving as
President and Chief Operating Officer from July 1993 to November
1994 and Vice President from May 1991 to July 1993. Mr. Jones
5
<PAGE>
was elected President and Chief Executive Officer of the Company
in November 1994.
Grahame N. Clark, Jr., has been employed by BancTec, Inc. (a
computer systems manufacturer), since August 1980. Within that
corporation he has been a director since September 1985, and
Chairman and Chief Executive Officer since April 1987. Mr. Clark
has been a director of the Company since February 1990.
Jack D. Knox is presently Chairman of the Board and an 80%
shareholder of Sixx Holdings, Inc., a NASDAQ-listed company
which owns an Italian-themed restaurant concept and two
restaurants. He also serves as General Partner of Six Flags Over
Texas Fund, Ltd., which is the owner of a major amusement park
complex in Arlington, Texas. Mr. Knox formerly served as
Chairman and Chief Executive Officer of Summit Energy, Inc. (an
AMEX-listed oil and gas company). He has been a director of the
Company since February 1991.
Joseph V. Mariner, Jr., an engineer, has managed his personal
investments since 1978, when he retired as Chief Executive
Officer and a director of Hydrometals, Inc. (a conglomerate
engaged in electronics, plumbing and non-powered hand tools). He
presently serves as a director of Temtex Industries (a
manufacturer of fabricated metal products and structural clay
products), Peerless Manufacturing Company (a specialist in
gas/liquid separation and pulsation dampening), and Dyson Kissner
Moran Corporation (a major New York investment firm). Mr.
Mariner is also a director of three privately held corporations.
Mr. Mariner has completed terms as a director for First Republic
Bank (now NationsBank of Texas, N.A.) and Varo, Inc. (a major
defense electronics manufacturer). Mr. Mariner has been a
director of the Company since December 1988.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
EACH OF THE INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.
Meeting Attendance and Committees of the Board
The Company has standing Executive, Audit, and Compensation
and Benefits Committees of the Board. All members of these
Committees are noted in the above table. Except as restricted by
6
<PAGE>
applicable law, the Executive Committee has all the powers of the
Board of Directors between meetings of the Board.
The Audit Committee of the Board reviews the scope of the
independent auditors' examinations and receives and reviews their
reports. In addition, any transaction between the Company and
officers or directors and their affiliates, or any related party,
must be approved in advance by the Audit Committee as being in
the best interest of the Company and on terms no less favorable
than the Company could receive from third parties. Lawrence E.
White, Chief Financial Officer of the Company, is an ex-officio
member of the Audit Committee.
The Compensation and Benefits Committee is responsible for
reviewing the compensation of the officers of the Company. In
addition, the Compensation and Benefits Committee administers the
Company's 1983 Stock Option Plan, the Stock Option Plan for
Nonemployee Directors, the 1986 Employee Stock Bonus Plan, the
1990 Long-Term Incentive Plan, and the 1992 Stock Option Plan.
Mr. Jones makes recommendations to the Compensation and Benefits
Committee regarding salaries, grants of stock options and stock
grants.
During Fiscal 1995 the Board of Directors met on six
occasions; the Audit Committee met on two occasions; the
Compensation and Benefits Committee met on two occasions; and the
Executive Committee met on three occasions. All directors
attended at least seventy-five percent of all meetings of the
Board and all committees of which they are members either in
person or by telephone as permitted under the Texas Business
Corporation Act.
The Company dissolved the Nominating Committee in May, 1995.
The Nominating Committee was comprised of the nonemployee
directors.
Director Compensation
Effective April 1, 1995, those directors who are not employees
(other than the Chairman of the Board) of the Company receive an
annual retainer of $20,000 payable quarterly, and $500 for each
Committee and Board of Directors meeting attended, plus
reimbursement of travel and other incidental expenses incurred in
connection with attendance at such meetings. The Chairman of
the Board receives an annual retainer of $30,000 and the same
meeting fee as the other directors. Upon depletion of the annual
retainer, directors are entitled to compensation based upon a
$1,250 per diem for any consulting or other time spent on behalf
of the Company. In addition, the Nonemployee Director Stock
Bonus Plan provides for a grant of 500 shares to each nonemployee
director on February 1 of each year. As of March 14, 1996,
7
<PAGE>
Grahame N. Clark, Jr., Jack D. Knox, Joseph V. Mariner, Jr., and
Joseph S. Thomson have been granted 2,000 shares each pursuant to
this plan.
Pursuant to the Company's Stock Option Plan for Nonemployee
Directors, which was approved by the shareholders on October 12,
1988 (but effective as of December 8, 1987), those directors who
are not employees or officers of the Company are issued 10-year
options, upon their election to the board, to purchase 10,000
shares of Common Stock at the fair market value thereof on the
date of the grant. An aggregate of 100,000 shares was authorized
for issuance under the plan, and 50,000 shares remain available
for grant; if the 1995 Stock Plan is approved, this Plan will be
cancelled (see "Proposal to Approve the El Chico Restaurants,
Inc. 1995 Stock Plan"). Grahame N. Clark, Jr., Jack D. Knox,
Joseph V. Mariner, Jr., and Joseph S. Thomson have been granted
options under the plan. Mr. Clark and Mr. Mariner exercised all
of their options in March 1993. The granted options are fully
vested.
Each director who is not an employee of the Company was
granted an option to purchase 15,000 shares of Common Stock on
September 15, 1994, at the fair market value thereof on the date
of the grant.
Each non-employee director will receive certain compensation
in the form of stock options and restricted stock grants under
the 1995 Stock Plan, which awards will replace future grants of
the aforementioned awards as well as any shares available for
grant under the aforementioned plans (see "Proposal to Approve
the El Chico Restaurants, Inc. 1995 Stock Plan").
COMPENSATION TO EXECUTIVE OFFICERS
The following table sets forth for the years presented, the
compensation of the Company's Chief Executive Officer and the
Company's four other most highly compensated Executive Officers
serving during 1995.
Summary Compensation Table
L o n g
T e r m
Compens
ation
A n n u a l
Compensation AwardsPayouts
8
<PAGE>
<TABLE>
<CAPTION>
Name and Principal
Position Calendar
Year Salary
($) Bonus
($) Other
Annual
Compensa
tion
($) Res
tri
cte
d
Sto
ck
Awa
rds
($)Securit
ies
Underly
ing
OptionsLTIP
Payou
ts
($) A l l
Other
Compens
ation
(1)
($)
Wallace A. Jones (2)
President, Chief
Executive
Officer and Director1995
<C> <C> <C> <C>
1994 250,000
20,192 7,200
582 (3)
(3) 250,000
Lawrence E. White
Executive Vice
President and Chief
Financial Officer 1995
1994
1993 167,877
160,000
160,000 60,536
40,000(4) 25,000(6)
420
57,473(5)
John A. Cuellar
Senior Vice
President, General
Counsel, Secretary
and Director 1995
1994
1993 113,611
108,280
108,280 29,263
27,070(4) 382
325
Charles A. Cooper
Vice President of
Development 1995
1994
1993 150,000
150,000
150,000 56,752
52,500(4) 420
Gary R. Rustmann
Vice President of
Operations (7) 1995 131,058 6,508 (3) 50,000(8)
___________________
</TABLE>
(1) Represents employer matching contributions under the
Profit Sharing Plan, except as otherwise noted.
(2) Mr. Jones was appointed Chief Executive Officer of the
Company on November 11, 1994, with his first day of
employment being November 28, 1994.
(3) Annual auto allowance. The amount shown for Mr. Jones in
1994 and Mr. Rustman in 1995 represents the prorata
portion of such allowance.
9
<PAGE>
(4) Includes stock awards in the following amounts: White 259
shares with a value of $2,266, Cuellar 125 shares with a
value of $1,094, Cooper 243 shares with a value of
$2,126.
(5) Amount paid on behalf of Mr. White for relocation
expenses. Includes $426 of employer matching contribution
under the Profit Sharing Plan.
(6) Subject to shareholder approval at the May 2, 1996
Shareholders' Meeting. (See "Proposal to Approve the El
Chico Restaurants, Inc. 1995 Stock Plan").
(7) Mr. Rustmann was appointed Vice President of Operations in
January 1995. Mr. Rustmann's compensation package
includes annual base compensation of $145,000, an annual
auto allowance of $7,200, plus an annual bonus based on
the Company's earnings improvement from the prior year,
which bonus shall have a target payout of 35% of base
salary for achieving certain financial results, and a
maximum of 52.5% for surpassing those results.
(8) 30,000 of the option grants are subject to shareholder
approval at the May 2, 1996 Shareholders' Meeting, (See
"Proposal to Approve the El Chico Restaurants, Inc. 1995
Stock Plan").
10
<PAGE>
Option Grants in 1995
Individual
Grants Potential
Realizable
Value
at Assumed
Annual Rates
of Stock
P r i c e
Appreciation
for Option
Term (1)
<TABLE>
<CAPTION>
Name Number of
Securities
Underlying
Options Granted % of Total
O p t i o n s
Granted
to Employees
in 1995
(2) Exercise
Price
($/Sh)Expiratio
n
Date 5% ($) 10% ($)
Gary R. Rustmann
G a r y R .
Rustmann
Lawrence E.
<S> <C> <C> <C> <C> <C> <C>
White 20,000 (3)
30,000 (3), (4)
25,000 (3), (4) 8.5%
12.7%
10.6% 10.50
10.00
10.00 02/01/05
10/27/05
10/27/05 132,000
188,700
157,250 334,600
478,200
398,500
___________________
</TABLE>
(1) The numbers shown reflect the values accumulated over a
10-year period.
(2) Includes 138,000 option grants subject to shareholder
approval at the May 2, 1996 Shareholders' Meeting (see
"Proposal to Approve the El Chico Restaurants, Inc., 1995
Stock Plan").
(3) The exercise price for each option is the fair market
value of the Common Stock on the date of grant. The
options are exercisable, cumulatively, 20% per anniversary
date of grant. In addition, the options become
exercisable in full upon a change in control of the
Company, whether by reorganization, consolidation, merger
or otherwise, or upon a sale, lease, exchange or other
disposition of all or substantially all of the assets of
the Company.
(4) Subject to Shareholder approval at the May 2, 1996
Shareholders' Meeting (see "Proposal to Approve the El
Chico Restaurants, Inc. 1995 Stock Plan").
11
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
a n d Y e a r - E n d O p t i o n V a l u e s
Number ofValue of Unexercised
Securities Underlying in-the-Money
Unexercised Options Options at
December 31, 1995 December 31, 1995 ($) (1)
Shares
Acquired Value
On Exercise (#)Realized ($)Exercisable/UnexercisableExercisable/Unexercisable
<S> <C> <C> <C> <C> <C>
Wallace A. Jones - - 50,000/200,000 (2) 0/0
Lawrence E. White - - 50,000/0 (4) 0/0
0/25,000 (6), (7) 0/0
John A. Cuellar - - 7,500/42,500 (3) 0/0
25,000/0 (4) 0/0
Charles A. Cooper - - 3,750/21,250 (3) 0/0
25,000/0 (4) 0/0
Gary R. Rustmann - - 0/20,000 (5) 0/0
0/30,000 (6), (7) 0/0
</TABLE>
(1) Stock price closed at $9.50 on December 29, 1995
(2) Exercise price is $12.13
(3) Exercise price is $9.63
(4) Exercise price is $9.56
(5) Exercise price is $10.50
(6) Exercise price is $10.00
(7) Subject to shareholder approval at the May 2, 1996
Shareholders' Meeting (see "Proposal to Approve the El Chico
Restaurants, Inc. 1995 Stock Plan").
There were no Option/SAR repricings, nor long-term incentive
plan awards during 1995. Accordingly, disclosure tables are not
presented.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation and Benefits Committee is or
has been an officer or employee of the Company or any of its
subsidiaries or had any relationship requiring disclosure
pursuant to Item 404 of Regulation S-K. In 1995, no executive
officer of the Company served on the Compensation and Benefits
Committee, or similar committee, or as a director of another
entity, one of whose executive officers served on the
Compensation and Benefits Committee or on the Company's Board of
Directors.
12
<PAGE>
Section 16(a) Compliance
Section 16(a) of the Exchange Act requires the Company's
officers and directors, and persons who own more than 10 percent
of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities
and Exchange Commission (the "SEC"). Officers, directors and
greater than 10-percent shareholders are required by SEC
regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies
of such forms received by it, or written representation from
certain reporting persons that no Forms 5 were required for those
persons, the Company believes that, from January 1, 1995 to
December 31, 1995, all filing requirements applicable to its
officers, directors, and greater than 10-percent beneficial
owners were timely met.
13
<PAGE>
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefits Committee of the Board of
Directors, comprised of the four undersigned outside directors of
the Company, has responsibility for determining compensation
plans for all officers of the Company. During 1995, the
Committee met to consider compensation for certain newly hired
executive officers, short-term bonus plans, and a new stock
compensation plan (see Proposal to Approve the El Chico
Restaurants, Inc. 1995 Stock Plan).
The Committee has adopted a long-standing policy, which was
based on review of recommendations by an outside consulting firm,
that the Companys executive compensation plan should have three
principal components:
- Competitive base salaries. In order to attract and
retain high-quality management the Company should offer
appropriate salaries commensurate with their skills and
experience. The Committee considers recommendations by
the Chief Executive Officer in determining other
executive base salaries, as well as information on
industry practice as provided by the outside consulting
firm and other available sources.
- A short-term bonus plan. To encourage and reward near-
term improvements in the Companys performance, the
Committee determined to offer an annual bonus plan based
on pre-tax earnings improvements from the prior year.
The plan considers Company budget objectives and awards
participating executives a percentage of their base
salary up to targets determined by a review of industry
practice. Bonuses for profit improvements up to a target
level are paid in cash, and profit improvements above the
target level are paid half in cash and half in stock.
- A long-term incentive plan. The Committee determined to
establish a long-term incentive plan to accomplish the
following objectives:
reward sustained performance;
balance short-term and long-term focus;
attract and retain qualified management;
build executive equity ownership;
align executive and shareholder interests; and
minimize adverse financial statement impact of
awards.
To these ends, the Committee determined that stock option
awards are most effective in accomplishing the desired
objectives.
14
<PAGE>
The Company has not made significant use of supplemental
executive benefits and perquisites such as supplemental
retirement benefits, executive physical exams, or financial
planning services, as is done in many companies in its industry.
Instead, compensation has emphasized the above described plans.
The Committee is responsible for reviewing and recommending
base salary changes for officers. In 1995, no increases were
made to the base salary of the Chief Executive Officer. Mr.
Jones base salary was negotiated as part of an employment
agreement entered into upon his joining the Company in November
1994, and no changes have been made. As reported previously, the
base salaries of two executive officers named in the compensation
tables, Mr. Cuellar and Mr. White, were increased in 1995 based
on recommendations of the Committee in 1994. The Committee also
reviewed recommendations by the Chief Executive Officer for
compensation packages for two newly hired executive officers,
including one named in the compensation tables, Mr. Rustmann, and
recommended approval of those packages to the Board of Directors.
Various considerations were reviewed in the determination of
these packages including industry practice based on advice from
the executive search firm retained to recruit candidates for
these positions and the present compensation of actual
candidates, as well as existing Company compensation practices.
Initial compensation of these officers included base salaries,
stock options, and participation in the executive short-term
bonus plan with targets established commensurate with the
individuals responsibilities based on a study done in 1992 by an
outside consulting firm.
The executive short-term bonus plan for 1995 was based on a
pre-determined formula designed to pay bonuses ratably as pre-tax
profits improved over a base improvement of 12.5% above actual
1994 pre-tax profits. The ratable payout formula had a target of
a pre-tax profit improvement based on the Companys 1995 operating
budget as approved by the Board of Directors. The target payout
was at a pre-tax profit improvement of 22.5% over 1994. Because
the base profit improvement was not achieved, no bonuses were
awarded under the plan.
The Committee also recommends awards under stock option
plans. An initial stock option grant of 20,000 shares was made
to a newly hired named executive officer, Mr. Rustmann.
Additionally, the Board is recommending shareholder approval of a
new plan and ratification of certain awards under that plan (see
Proposal to Approve the El Chico Restaurants, Inc. 1995 Stock
Plan). Included in the awards recommended to be ratified are
stock options for two named executive officers, Mr. Rustmann
(30,000 shares) and Mr. White (25,000 shares). No other stock
option grants were made nor existing stock options repriced in
1995 to named executive officers, and none of the present named
executive officers exercised any stock options in 1995.
Federal income tax legislation has limited the deductibility
of certain compensation paid to the Chief Executive Officer and
15
<PAGE>
covered employees to the extent the compensation exceeds
$1,000,000. Performance-based compensation and certain other
compensation, as defined, is not subject to the deduction
limitation of this regulation section 162(m). It is not
currently anticipated that any covered employee would earn annual
compensation in excess of the one million dollar definition under
existing or proposed compensation plans. The Company continually
reviews its compensation plans to minimize or avoid potential
adverse effects of this legislation. The Committee will consider
recommending such steps as may be required to qualify either
annual or long-term incentive compensation for deductibility if
that appears appropriate at some time in the future.
The accompanying graph of total return performance for the
Companys Common Stock compared with the NASDAQ broad market index
of U.S. companies, and the peer group index of NASDAQ restaurant
companies is an integral part of this report. The peer group
index is determined and constructed independently by the Center
for Research in Security Prices of the University of Chicago.
Members of the Compensation and
Benefits Committee
Grahame N. Clark, Jr., Chairman
Jack D. Knox
Joseph V. Mariner, Jr.
Joseph S. Thomson
16
<PAGE>
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
Performance Graph for
EL CHICO RESTAURANTS, INC.
Prepared by the Center for Research in Security Prices
Produced on 02/28/95 including data to 12/30/94
[GRAPH GOES HERE]
<TABLE>
<CAPTION>
12/29/89 12/31/90 12/31/91 12/31/92 12/31/93 12/30/94
E l C h i c o
<S> <C> <C> <C> <C> <C> <C>
Restaurants, Inc.100.0 74.1 111.1 377.8 466.7 259.3
NASDAQ 100.0 84.9 136.3 158.6 180.9 176.9
Eating and
drinking places 100.0 81.6 135.9 189.9 192.5 139.1
</TABLE>
Notes:
A. The lines represent monthly index levels derived from
compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market
capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is
not a trading day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on
12/29/89.
17
<PAGE>
PROPOSAL TO APPROVE THE EL CHICO RESTAURANTS, INC.
1995 STOCK PLAN
(Proposal 2)
General
On October 27, 1995, the Board of Directors of the Company
adopted the El Chico Restaurants, Inc. 1995 Stock Plan (the "1995
Plan"), which became effective on the date of adoption by the
Board of Directors, subject to shareholder approval. The purpose
of the 1995 Plan is to provide an incentive to key employees and
directors of the Company and its subsidiaries to remain in the
service of the Company and its subsidiaries, to extend to such
persons the opportunity to acquire a proprietary interest in the
Company so that they will apply their best efforts for the
benefit of the Company, and to aid the Company in attracting able
persons to enter the service of the Company and its subsidiaries.
Shareholder approval of the 1995 Plan is necessary for
qualification of the 1995 Plan under Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (the "1934 Act").
If the 1995 Plan is not approved by the holders of a majority of
the outstanding shares of Common Stock present or represented by
proxy and entitled to vote at the 1996 Annual Meeting, none of
the options granted under the 1995 Plan shall constitute
incentive options and, in the event that the 1995 Plan is not so
approved at the 1996 Annual Meeting, any awards or options
granted under the 1995 Plan before the date such shareholders do
approve the 1995 Plan to individuals subject to potential
liability under the "short-swing" profit provisions of
Section 16(b) of the 1934 Act shall be null, void, and of no
force and effect as of their date of grant.
The 1995 Plan was intended to replace and cancel the
Company's (i) 1986 Employee Stock Bonus Plan; (ii) 1987 Non-
Employee Director Stock Option Plan; (iii) 1990 Restaurant
General Managers' Restricted Stock Bonus Plan; (iv) 1992 Non-
Employee Director Stock Bonus Plan and (v) 1992 Non-Incentive
Stock Option Plan. As of March 14, 1996 these plans presently
have 282,769 shares available for grant that will be canceled
upon approval of the 1995 Plan.
The description of the 1995 Plan contained herein is a
summary of its principal terms and provisions and is qualified in
its entirety by reference to the 1995 Plan which is attached
hereto as Exhibit A.
18
<PAGE>
Grant, Term and Restrictions on Awards
The 1995 Plan is an arrangement under which certain
individuals may be granted awards ("Awards") for incentive stock
options, nonstatutory stock options and restricted stock. Awards
granted under the 1995 Plan may include incentive stock options,
which are qualified under section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), nonstatutory stock
options, which are not qualified under section 422 of the Code,
and restricted stock. Restricted stock is Common Stock that may
not be disposed of or encumbered in any way until the periods of
restriction on the stock have elapsed. Discretionary Awards may
be granted by the Committee or, in limited circumstances, the
chief executive officer of the Company. In some circumstances,
the Committee may also make discretionary cash awards in
connection with the grant of a discretionary stock Award.
Each Award is granted under an agreement (the "Agreement")
between the Company and the individual receiving the Award. The
Agreement specifies the exercise periods of options and the
restriction periods of restricted stock. The rights under the
Agreement are not transferable by the individual except under the
laws of descent and distribution. During the lifetime of the
individual receiving an Award, Awards are exercisable only by him
or his legal representative.
Administration of the 1995 Plan
The 1995 Plan is administered by a committee comprised of
all the nonemployee directors of the Company (the "Committee").
The Committee is authorized to designate recipients of
discretionary Awards granted under the 1995 Plan, to interpret
and construe the provisions of the 1995 Plan and any
discretionary Awards granted thereunder, and to do all things
necessary or appropriate to administer the 1995 Plan in
accordance with its terms.
Awards; Outstanding Stock Options
Awards. The 1995 Plan provides for (i) the discretionary
granting of incentive stock options to certain key employees and
employee directors of the Company, (ii) the discretionary
granting of nonstatutory stock options to certain key employees
and employee directors of the Company, and (iii) the
discretionary award of restricted stock to certain key employees
and employee directors of the Company.
Additionally, certain formula grants of nonstatutory stock
options and awards of restricted stock are provided for
nonemployee directors of the Company (i.e., members of the
Committee). These formula grants include (i) an initial
nonstatutory stock option to purchase 2,500 shares of Common
Stock to each current member of the Committee, such grant to be
effective at the first Board of Directors meeting following the
1996 Annual Meeting; (ii) an initial nonstatutory stock option to
19
<PAGE>
purchase 10,000 shares to future members of the Committee, such
grant to be effective upon such person's first attendance at a
meeting of the Committee following his or her appointment
thereto; (iii) an additional nonstatutory stock option to
purchase 2,500 shares of Common Stock to each person who is a
member of the Committee both before and after any annual meeting
of shareholders (beginning with the 1996 Annual Meeting), such
grant to be effective as of the first meeting of the Board of
Directors in the calendar year following each such annual meeting
of shareholders; and (iv) an annual Award of 500 shares of
restricted stock granted each February, with the first such Award
being granted at the first Board of Directors meeting following
the 1996 Annual Meeting (but to be effective as of February 1,
1996). Each of the formula nonstatutory stock options granted to
Committee members under the 1995 Plan will be granted with an
exercise price equal to the fair market value of the Common Stock
on the last business day prior to the date of grant. Such
nonstatutory stock options become exercisable with respect to 20%
of the underlying Common Stock on each of the first five
anniversaries of the date of grant. Each formula Award of
restricted stock to a Committee member under the 1995 Plan has a
restricted period of six (6) months following the date of grant
thereof.
Outstanding Stock Options. In connection with its approval
of the 1995 Plan, the Committee approved the granting of the
following nonstatutory stock options under the 1995 Plan (the
"Outstanding Stock Options"): (i) nonstatutory stock options to
acquire an aggregate of 54,000 shares of Common Stock to six non-
officer/non-director employees of the Company; (ii) nonstatutory
stock options to acquire an aggregate of 4,000 shares of Common
Stock to one employee director of the Company; and (iii)
nonstatutory stock options to acquire an aggregate of 80,000
shares of Common Stock to three executive officers of the
Company, two of whom are Named Executive Officers. Each of the
Outstanding Stock Options has an exercise price of $10.00 per
share, the fair market value of the Common Stock on the day
immediately prior to the date of grant of each of such
Outstanding Stock Options. The Outstanding Stock Options vest
20% on each of the first five anniversaries of the date of grant.
The Outstanding Stock Options are subject to ratification by the
shareholders at the Annual Meeting. If not ratified, the
Outstanding Stock Options granted to Ms. Summers (4,000 shares),
Mr. White (25,000 shares), Mr. Rustmann (30,000 shares) and
Mr. Sick (25,000 shares) will be null and void, but the
Outstanding Stock Options granted to the six non-officer/non-
director employees of the Company (54,000 shares) will remain
outstanding.
Eligibility
Discretionary Awards may be granted under the 1995 Plan to
key employees of the Company, including officers and employee
directors, but not to nonemployee directors of the Company. The
Committee and the chief executive officer of the Company, in
20
<PAGE>
their discretion as outlined in the 1995 Plan, determine which
eligible individuals will receive discretionary Awards under the
1995 Plan.
The formula Awards described in "Awards; Outstanding Stock
OptionsAwards" above are granted only to nonemployee directors of
the Company.
The approximate number of individuals who are eligible to
receive discretionary Awards under the 1995 Plan is 3,900. The
number of nonemployee directors of the Company who are eligible
to receive formula Awards under the 1995 Plan is four. No
individual may receive awards for more than 100,000 shares in any
single year.
Stock Subject to the Plan
The total number of shares of Common Stock that may be
issued under the 1995 Plan is 400,000 shares, which includes the
138,000 shares already reserved for issuance in connection with
the Outstanding Stock Options. The net increase in shares
available under approved plans is 117,231 after cancellation of
existing plan shares available for grant. However, this 400,000
share figure is subject to adjustment upon the occurrence of a
recapitalization, stock split or similar event. See "Merger
Acquisition, Etc. of the Company."
Description and Value of the Outstanding Stock Options
As of March 14, 1996, the aggregate value of the 138,000
shares of Common Stock reserved for issuance upon the exercise of
the Outstanding Stock Options was $1,225,000, based on the
closing sales price of $8.88 per share for the Common Stock on
March 14, 1996 as reported by The Wall Street Journal. Such
aggregate value includes attributing a value of $8.88 per share
to the Outstanding Stock Options, none of which was in the money
as of March 14, 1996. The Outstanding Stock Options will not
begin to be in the money until the market price of the Common
Stock increases 12.7% from the March 14, 1996 closing price.
The following table sets forth as of March 14, 1996 the
dollar value of the Outstanding Stock Options with respect to the
Named Executive Officers, all current executive officers as a
group, all current directors who are not executive officers as a
group, and all employees, including all current officers who are
not executive officers, as a group.
The Outstanding Stock
Options
Shares of
Common Stock
Underlying the
21
<PAGE>
Name and Position Dollar Value(1)
Outstanding Options
Wallace A. Jones $ --
--
Lawrence E. White 0 25,000
John A. Cuellar --
--
Charles A. Cooper -- --
Gary Rustmann 0 30,000
Executive Group(2) 0
80,000
Non-Executive Director Group 0
4,000
Non-Executive Officer Employee Group(3) 0
58,000
_______________
(1) Based on the difference between the closing sales price per
share of Common Stock on March 14, 1996 ($8.875) as
reported, by The Wall Street Journal and the $10.00
exercise price for such options.
(2) Includes 55,000 shares underlying the options for
Messrs. White and Rustmann, who are also Named Executive
Officers.
(3) Includes 4,000 shares underlying the options for Ms. Carmen
Summers, who is a director of the Company but not an
executive officer.
Exercise Price
The exercise price for each share of Common Stock covered by
an incentive stock option granted under the 1995 Plan shall be
not less than the greater of the par value of the Common Stock or
100% of the fair market value of such share on the business day
immediately prior to the date that the incentive option is
granted. The purchase price for each share of Common Stock
covered by a nonstatutory stock option granted under the 1995
Plan shall be not less than the greater of the par value of the
Common Stock or 50% of the fair market value of such share on the
business day immediately prior to the date that the nonstatutory
stock option is granted. The exercise price of any stock option
granted under the 1995 Plan may be paid by cash, check or, with
the consent of the Committee, shares of Common Stock owned for at
least six months by the person exercising such option. Awards of
restricted stock are granted without a purchase or exercise
price.
22
<PAGE>
Termination of Awards
Discretionary Awards. Awards of incentive stock options
granted under the 1995 Plan terminate with respect to any portion
of the incentive stock option not previously exercised by an
individual after ten years from the date that the incentive
option is granted, unless the option terminates sooner by reason
of termination of employment, disability or death as described
therein. Although the 1995 Plan permits flexibility in this
area, the Company anticipates that each Agreement governing a
discretionary Award will provide the following terms with respect
to termination of such Awards: (i) the unexercised or restricted
portion of a discretionary Award will terminate immediately if an
individual's employment is terminated for reason of misconduct;
(ii) if employment is voluntarily terminated by the employee,
such portion of the Award will terminate 30 days after employment
is terminated; (iii) if employment is terminated by the Company
for reasons other than misconduct, such portion of the Award
shall terminate 90 days after employment is terminated; and (iv)
the unexercised or restricted portion of a discretionary Award
will terminate 12 months after the occurrence of the disability
or death of an individual. The Outstanding Stock Options, each
of which was a discretionary Award, contain termination
provisions substantially similar to those described above.
Formula Awards. With respect to formula Awards granted to
the nonemployee directors of the Company, the 1995 Plan provides
that the unexercised or restricted portion of such formula Award
will terminate 30 days after such nonemployee director ceases to
be a director of the Company.
Merger, Acquisition, Etc. of the Company
The 1995 Plan contains antidilution provisions applicable in
the event of any change in the number of outstanding shares of
Common Stock of the Company that is (i) effective without receipt
of consideration by the Company, by reason of a stock dividend,
split or other recapitalization or merger in which the Company is
the surviving entity, (ii) by reason of a spinoff to the
shareholders of a part of the Company into a separate entity, or
(iii) by reason of assumptions and conversions of outstanding
Awards due to an acquisition of the Company. In any such event,
appropriate adjustments will be made in the maximum number of
shares that may be issued under the 1995 Plan and the number of
shares under and exercise price of outstanding Awards.
In addition, in the case of (i) a dissolution or liquidation
of the Company, (ii) a merger or consolidation in which the
Company is not the surviving entity, or (iii) a transaction in
which another entity becomes the owner of at least 50% of the
total voting power of all classes of stock of the Company, every
Award made pursuant to the 1995 Plan shall terminate. However,
immediately prior to such a transaction, the holders of such
Awards shall have the right to exercise all options and the
23
<PAGE>
restrictions applicable to the holders of restricted stock shall
lapse.
Tax Consequences
An individual who receives an Award of restricted stock is
taxed at the time that the Award is no longer subject to a
substantial risk of forfeiture or becomes transferable, whichever
occurs first. At such time, he will include in gross income the
excess of the then fair market value of the restricted stock over
the amount, if any, paid for such stock. However, the individual
may elect to include the fair market value of restricted stock
(determined without regard to any restriction, other than a
restriction which by its terms will never lapse) in his gross
income for the taxable year in which he first receives such stock
by filing an election with the IRS under Section 83(b) of the
Code within 30 days after such receipt. The Company shall
receive a deduction from income in the same tax year that the
individual recognizes tax on the restricted stock that is in the
same amount as the amount on which such individual is taxed.
An individual who receives a nonstatutory stock option
generally will be taxed at the time that he exercises the
nonstatutory option. At such time, he will include in gross
income the difference between the exercise price and the fair
market value of the stock at the time of exercise. The Company
shall receive a deduction from income in the same tax year that
the individual recognizes tax on exercise of the nonstatutory
option that is in the same amount as the amount on which such
individual is taxed.
An individual who receives an incentive stock option shall
not be taxed at the time of receipt or exercise of the incentive
stock option. The amount subject to taxation is amount of gain
recognized upon the disposition of the stock purchased with the
incentive option, provided the statutory holding period is
satisfied. The Company receives no deduction from income in
connection with the Award of an incentive option.
Amendments
The Board of Directors or the Committee may at any time,
without the consent of the holders of Awards, alter, amend,
revise, suspend or discontinue the 1995 Plan, provided that such
action shall not adversely affect Awards previously granted under
the 1995 Plan. Any amendments to the 1995 Plan which would (i)
materially increase the benefits accruing to Individuals
participating in the 199 Plan, (ii) materially increase the
number of shares of Common Stock subject to the 1995 Plan or
(iii) materially modify the requirements as to eligibility for
participation in the 1995 Plan must be approved, directly or
indirectly, by a majority of the shareholders of the Company
represented and entitled to vote thereon at a meeting of the
shareholders of the Company.
24
<PAGE>
Registration
The Company anticipates registering the shares issuable
pursuant to Awards made under the 1995 Plan with the Securities
and Exchange Commission during 1996.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
APPROVAL OF THE 1995 PLAN AND RATIFICATION OF THE GRANT OF THE
STOCK OPTIONS OUTSTANDING THEREUNDER.
25
<PAGE>
CERTAIN TRANSACTIONS
During 1985, the Company leased property from Frank Cuellar
and Sons, Inc. ("FC&S") for use as a Company restaurant, which
opened in May 1987. The lease expires in May 1998, provides for
one renewal of five years and requires monthly rental payments of
$4,500 (the base rent) plus 5% of monthly gross sales exceeding
$90,000. During 1995, the Company made payments to FC&S of
approximately $76,043 under the lease. John A. Cuellar, an
officer and a director of the Company, owns 45.6% of FC&S. The
foregoing transactions were approved by the disinterested
directors after the Audit Committee found them to be in the best
interests of the Company and on terms no less favorable than
could have been obtained from independent parties.
Carmen C. Summers, a director of the Company, has been
employed by the Company in various management capacities since
July 1986. During 1995, the Company paid Ms. Summers
approximately $74,164 as compensation. Management of the Company
advises the Compensation and Benefits Committee of the Board of
Directors as to Ms. Summers' compensation.
Joseph S. Thomson, Chairman of the Board of the Company,
owns 100% of the stock of two corporations that own and operate
seven franchised El Chico restaurants located in Conway,
Arkansas; Fort Smith, Arkansas; Fayetteville, Arkansas; Marshall,
Texas; Meridian, Mississippi; and two locations in Jackson,
Mississippi. Each of these franchises was initially granted
before Mr. Thomson was elected a director, and all seven
franchises were granted on the same terms as franchises granted
to other independent parties. Effective January 1, 1993, each
franchise agreement was renewed and extended using the Company's
new form of franchise agreement, as amended. The foregoing
transactions were approved by the disinterested directors after
the Audit Committee found them to be in the best interests of the
Company and on terms no less favorable then could have been
obtained from independent parties. During Fiscal 1995, total
royalty and marketing fees paid to the Company under the
franchise agreements entered into with Mr. Thomson were
approximately $536,049.
PROPOSALS OF SHAREHOLDERS
Shareholders of the Company who intend to present a proposal
for action at the 1997 annual meeting of shareholders of the
Company must notify the Company's management of such intention by
notice received at the Company's principal executive offices not
less than 120 days in advance of April 4, 1997 for such proposal
to be considered for inclusion in the Company's proxy statement
and form of proxy relating to such meeting.
26
<PAGE>
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Company's Independent Public Accountants for the year
ended December 31, 1995, were the firm of KPMG Peat Marwick LLP.
It is expected that one or more representatives of such firm will
attend the Meeting, will be given the opportunity, if they so
desire, to make statements and will be available to respond to
appropriate questions. The Board of Directors, on recommendation
of the Audit Committee, has selected the firm of KPMG Peat
Marwick LLP as the Company's Independent Accountants for the year
ending December 31, 1996.
ANNUAL REPORT
The 1995 Annual Report is being mailed to shareholders with
this Proxy Statement. The Annual Report is not to be regarded as
proxy soliciting material.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPH S. THOMSON
Chairman of the Board
April 4, 1996
Dallas, Texas
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS, WHO DO NOT EXPECT TO ATTEND THE MEETING AND WISH
THEIR STOCK TO BE VOTED, ARE URGED TO DATE, SIGN, AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
27
<PAGE>
EXHIBIT "A"
EL CHICO RESTAURANTS, INC.
1995 STOCK PLAN
Scope and Purpose of Plan
This El Chico Restaurants, Inc. 1995 Stock Plan (the "Plan")
provides for the granting of:
(a) Incentive Options (hereinafter defined) to certain
key employees of El Chico Restaurants, Inc., a Texas
corporation (the "Corporation"), or of its Affiliates
(hereinafter defined); and
(b) Nonstatutory Stock Options (hereinafter defined)
to certain key employees, employee directors and nonemployee
directors of the Corporation or of its Affiliates;
(c) Restricted Stock (hereinafter defined) to certain
key employees and nonemployee directors of the Corporation
or of its Affiliates.
The purpose of the Plan is to provide an incentive for key
employees and directors of the Corporation or its Affiliates to
remain in the service of the Corporation or its Affiliates, to
extend to them the opportunity to acquire a proprietary interest
in the Corporation so that they will apply their best efforts for
the benefit of the Corporation, and to aid the Corporation in
attracting able persons to enter the service of the Corporation
and its Affiliates.
SECTION 1. Definitions
1.1 "Act" shall mean the Securities Exchange Act of
1934, as amended.
1.2 "Affiliates" shall mean (a) any corporation, other
than the Corporation, in an unbroken chain of corporations ending
with the Corporation if each of the corporations, other than the
Corporation, owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
1
<PAGE>
the other corporations in such chain and (b) any corporation,
other than the Corporation, in an unbroken chain of corporations
beginning with the Corporation if each of the corporations, other
than the last corporation in the unbroken chain, owns stock
possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
1.3 "Agreement" shall mean the written agreement
between the Corporation and a Holder evidencing the Award granted
by the Corporation and the understanding of the parties with
respect thereto.
1.4 "Award" shall mean an award granted in accordance
with the provisions of the Plan in the form of an Option,
Restricted Stock or any combination thereof.
1.5 "Board of Directors" shall mean the board of
directors of the Corporation.
1.6 "Code" shall mean the Internal Revenue Code of
1986, as amended.
1.7 "Committee" shall mean the committee appointed
pursuant to Section 3 hereof by the Board of Directors to
administer this Plan.
1.8 "Eligible Individuals" shall mean (a) key
employees, including officers and directors who are also
employees of the Corporation or any of its Affiliates and
(b) nonemployee directors of the Corporation or of any of its
Affiliates. Notwithstanding the foregoing provisions of this
Section 1.8, to ensure that the requirements of the third
sentence of Section 3.1 are satisfied, the Board of Directors may
from time to time specify individuals who shall not be eligible
for the Awards or the grant of options or stock appreciation
rights or allocations of stock under any other plan of the
Corporation or its affiliates (as such terms are used in
Subsection (d)(3) of Rule 16b-3 promulgated under the Act);
provided, however, the Board of Directors may at any time
determine that any individual who has been so excluded from
eligibility shall become eligible for Awards and grants of such
options or stock appreciation rights or allocations of stock
under any other plans of the Corporation and its Affiliates as it
may specify.
2
<PAGE>
1.9 "Fair Market Value" shall mean:
(a) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges on any national or
regional securities exchange at the date of determining the
Fair Market Value, the last reported sale price on such
exchange on the last business day prior to the date in
question; or
(b) If shares of Stock of the same class shall not be
listed or admitted to unlisted trading privileges as
provided in Subsection 1.9(a) and sales prices therefor in
the over-the-counter market shall be reported by the
National Association of Securities Dealers, Inc. Automated
Quotations, Inc. ("NASDAQ") National Market System at the
date of determining the Fair Market Value, the last reported
sale price so reported on the last business day prior to the
date in question; or
(c) If Shares of Stock of the same class shall not be
listed or admitted to unlisted trading privileges as
provided in Subsection 1.9(a) and sales prices therefor
shall not be reported by the NASDAQ National Market System
as provided in Subsection 1.9(b), and bid and asked prices
therefor in the over-the-counter market shall be reported by
NASDAQ (or, if not so reported, by the National Quotation
Bureau Incorporated) at the date of determining the Fair
Market Value, the average of the closing bid and asked
prices on the last business day prior to the date in
question; and
(d) If shares of Stock of the same class shall not be
listed or admitted to unlisted trading privileges as
provided in Subsection 1.9(a) and sales prices or bid and
asked prices therefor shall not be reported by NASDAQ (or
the National Quotation Bureau Incorporated) as provided in
Subsection 1.9(b) or Subsection 1.9(c) at the date of
determining the Fair Market Value, the value determined in
good faith by the Board of Directors.
For purposes of valuing Incentive Options, the Fair Market
Value of Stock shall be determined without regard to any
restriction other than one which, by its terms, will never lapse.
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1.10 "Holder" shall mean an Eligible Individual to whom
an Award has been granted.
1.11 "Incentive Options" shall mean stock options that
are intended to satisfy the requirements of section 422 of the
Code.
1.12 "Nonstatutory Options" shall mean stock options
that do not satisfy the requirements of section 422 of the Code.
1.13 "Options" shall mean either Incentive Options or
Nonstatutory Options, or both.
1.14 "Restricted Stock" shall mean Stock delivered
under the Plan that is subject to (i) the requirements of Section
6 and (ii) such other restrictions as the Committee deems
appropriate or desirable.
1.15 "Restriction Period" shall mean the period or
periods specified in this Agreement or in the Restricted Stock
Agreement of the Holder, which shall specify a period commencing
on the date an Award is granted and ending on such date as the
Committee shall determine.
1.16 "Stock" shall mean the Corporation's authorized
$.01 par value common stock, together with any other securities
with respect to which Options granted hereunder may become
exercisable.
SECTION 2. Stock and Maximum Number of Shares Subject to
the Plan
2.1 Description of Stock and Maximum Shares Allocated.
Both Restricted Stock and Stock which Options granted hereunder
give a Holder the right to purchase may be unissued or reacquired
shares of Stock, as the Board of Directors may, in its sole and
absolute discretion from time to time determine.
Subject to the adjustments in Section 7.6 hereof, the
aggregate number of (i) shares of Restricted Stock that may be
the subject of an Award hereunder and (ii) shares of Stock that
may be issued pursuant to the exercises of all Options granted
hereunder shall not exceed 400,000 shares of Stock.
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2.2 Restoration of Unpurchased Shares. If an Award
hereunder expires or terminates for any reason during the term of
this Plan and prior to the completion of the Restriction Period
or exercise of an Option in full or if all of the shares of Stock
subject to an Award have not for any other reason been issued
pursuant to the Award, the shares of Stock subject to but not
issued or otherwise used under such Award shall be "restored" to
the Plan by again being available for Awards granted after the
shares' restoration
2.3 Maximum Number of Shares and Awards that May be
Granted to Committee Members. Notwithstanding any other
provision in the Plan or any Agreement, other than the provisions
of Subsection 3.1(a) concerning "disinterested persons," the
maximum number of shares that any Committee member who is not a
disinterested person (as specified in Section 3) may acquire
hereunder pursuant to an Award to any Committee member who is not
a disinterested person is 0 shares. In addition, the maximum
period that may be specified in the Agreement of a Committee
member who is not a disinterested person within which an Option
or Award granted hereunder may be exercised is ten (10) years.
2.4 Issuance of stock in Name of Holder. Upon
issuance of Stock to any Holder pursuant to the terms of this
Plan and any Holder's Agreement, such Stock shall only be issued
into the name of the Holder or his or her legal representative.
SECTION 3. Administration of the Plan
3.1 Committee. The Plan shall be administered by the
Committee. The Committee shall consist of all non-employee
members of the Board of Directors. In the event that the Stock
is registered under Section 12 of the Act, all members of the
Committee shall be "disinterested persons," as defined in Rule
16b-3 promulgated under the Act, and shall be subject to the
following limitations:
(a) Except for awards granted pursuant to Section
3.1(b) or pursuant to other plans of the Corporation or its
Affiliates that meet the requirements of Rule 16b-3(c),
members of the Committee shall not be eligible to receive
stock options, stock appreciation rights, or an allocation
of stock under any plan of the Corporation or its Affiliates
(as such terms are used in Rule 16b-3) while they are
serving as members of the Committee, and they must not have
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received such options, stock appreciation rights, or an
allocation of stock under any plan of the Corporation or its
Affiliates within one year prior to their appointment to the
Committee.
(b) Awards shall be granted to each current and future
member of the Committee as follows:
3.1.1 An option to purchase 2,500 shares of Stock will
be granted to current members of the Committee and
an option to purchase 10,000 shares of Stock will
be granted to future members of the Committee upon
appointment and participation as a member thereof.
Said Option may be exercised with respect to 20
percent of said Stock on each of the first five
anniversaries of the date of such grant. This
grant shall be effective as of the first meeting
of the Committee at which such member shall attend
in person and vote; provided, however, that for
those persons who are members of the Committee at
the date the shareholders of the Corporation
approve this section, this grant shall be
effective as of the first meeting of the Board of
Directors in the calendar year following the date
of such approval by the shareholders.
3.1.2 For each person who is a member of the Committee
both before and after the regular annual meeting
of shareholders of the Corporation each year
(beginning with the annual meeting in 1996), an
Option to purchase 2,500 shares of Stock will be
granted. Said Option may be exercised with
respect to 20 percent of said Stock on each of the
first five anniversaries of the date of such
grant. The grant shall be effective as of the
first meeting of the Board of Directors in each
calendar year following each such annual meeting
of shareholders.
3.1.3 For each person who is a member of the Committee,
both before and after the annual meeting of
shareholders of the Corporation in 1996 and,
thereafter, who is a member of the Committee on
February 1 of each calendar year, 500 shares of
Restricted Stock will be granted. Such Restricted
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Stock shall be subject to a Restriction Period of
six (6) months. The initial Award will be granted
as of the first meeting of the Board of Directors
following the annual meeting in 1996, and,
thereafter, successive Awards will be granted as
of February 1 of each calendar year.
3.1.4 The Options granted pursuant to this section shall
be exercisable at 100 percent of Fair Market Value
at the effective date of the grant.
3.1.5 With respect to Options granted hereunder, the
number of shares exercisable hereunder and
exercise prices shall be adjusted according to the
provisions of Section 7 and any other relevant
provisions hereof.
3.1.6 These provisions may not be amended more than once
every six months, other than to comport with
changes in the Code, the Act, or the regulations
thereunder.
3.2 Duration, Removal, Etc.. The members of the
Committee shall serve at the pleasure of the Board of Directors,
which shall have the power, at any time and from time to time, to
remove members from the Committee or to add members thereto.
Vacancies on the Committee, however caused, shall be filled by
action of the Board of Directors.
3.3 Meetings and Actions of Committee. The Committee
shall elect one of its members as its Chairman and shall hold its
meetings at such times and places as it may determine. All
decisions and determinations of the Committee shall be made by
the majority vote or decision of all of its members present at a
meeting; provided, however, that any decision or determination
reduced to writing and signed by all of the members of the
Committee shall be as fully effective as if it had been made at a
meeting duly called and held. The Committee may make any rules
and regulations for the conduct of its business that are not
inconsistent with the provisions hereof and with the bylaws of
the Corporation as it may deem advisable.
3.4 Committee's Powers. Subject to the express
provisions hereof, the Committee shall have the authority, in its
sole and absolute discretion, (a) to adopt, amend, and rescind
administrative and interpretive rules and regulations relating to
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the Plan; (b) to determine the terms and provisions of the
respective Agreements (which need not be identical), including,
but not limited to provisions defining or otherwise relating to
(i) subject to Section 7 of the Plan, the term and the period or
periods and extent of exercisability of the Options, (ii) the
extent to which the transferability of shares of Stock issued
upon exercise of Options is restricted, (iii) the extent to which
the transferability of shares of Restricted Stock shall be
restricted, (iv) the restrictions that shall be placed upon
Restricted Stock at the time of its Award, (v) the effect of
termination of employment upon the exercisability of the Options
and the termination of the Restrictions Period with respect to
Restricted Stock, and (vi) the effect of approved leaves of
absence (consistent with any applicable regulations of the
Internal Revenue Service); (c) to accelerate the time of
exercisability of any Option that has been granted; (d) to
construe the respective Agreements and the Plan; and (e) to make
all other determinations and perform all other acts necessary or
advisable for administering the Plan, including the delegation of
such ministerial acts and responsibilities as the Committee deems
appropriate. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any
Agreement in the manner and to the extent it shall deem expedient
to carry it into effect, and it shall be the sole and final judge
of such expediency. The Committee shall have full discretion to
make all determinations on the matters referred to in this
Section 3.4, and such determinations shall be final, binding and
conclusive.
SECTION 4. Eligibility and Participation
4.1 Eligible Individuals. Awards may be granted
hereunder only to persons who are Eligible Individuals at the
time of the grant thereof.
Notwithstanding any provision contained herein to the
contrary, a person shall not be eligible to receive an Incentive
Option hereunder unless he is an employee of the Corporation or
an Affiliate, nor shall a person be eligible to receive an
Incentive Option hereunder if he, at the time such Option is
granted, would own (within the meaning of sections 422 and 425 of
the Code) stock possessing more than ten percent (10%) of the
total combined voting power or value of all classes of stock of
the Corporation or of an Affiliate, unless at the time such
Incentive Option is granted, (i) the exercise price per share of
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Stock is at least one hundred and ten percent (110%) of the Fair
Market Value of each share of stock to which the Incentive Option
relates and (ii) the Incentive Option is not exercisable after
the expiration of five (5) years from the date it is granted.
4.2 Notwithstanding any provision contained herein to
the contrary, there shall be no grant in excess of 100,000 shares
to any one individual in any one year.
4.3 No Right to Award. The adoption of the Plan shall
not be deemed to give any person a right to be granted an Option
nor to receive an Award.
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SECTION 5. Grant of Awards and Certain Terms of the
Agreements
Subject to the express provisions hereof, the Committee
shall determine which Eligible Individuals shall be granted
Awards hereunder from time to time. In making grants, the
Committee shall take into consideration the contribution the
potential Holder has made or may make to the success of the
Corporation or its Affiliates and such other considerations as
the Board of Directors may from time to time specify. The
Committee shall also determine the number of shares subject to
each such Award and shall authorize and cause the Corporation to
grant Awards in accordance with such determinations.
The date on which the Committee completes all action
constituting an offer of an Award to an individual, including the
specification of the number of shares of Stock to be subject to
the Award, shall be the date on which the Award covered by an
Agreement is granted, even though certain terms of the Agreement
may not be at such time determined and even though the Agreement
may not be executed until a later time. For purposes of the
preceding sentence, an offer shall not be deemed made until the
Committee has communicated the grant thereof to the potential
Holder. In no event, however, shall an Optionee gain any rights
in addition to those specified by the Committee in its grant,
regardless of the time that may pass between the grant of the
Award and the actual execution of the Agreement by the
Corporation and the Holder.
Each Award granted hereunder shall be evidenced by an
Agreement, executed by the Corporation and the Eligible
Individual to whom the Award is granted, incorporating such terms
as the Committee shall deem necessary or desirable. More than
one Award may be granted hereunder to the same eligible
Individual and be outstanding concurrently hereunder. In the
event an Eligible Individual is granted any combination of one or
more Incentive Options, one or more Nonstatutory Options and one
or more grants of restricted Stock, such grants shall be
evidenced by separate Agreements, one for each of the Incentive
Option grants, one for each of the Nonstatutory Option grants and
one or each of the Restricted Stock awards.
Each Agreement may contain or otherwise provide for
conditions giving rise to the forfeiture of the Stock acquired
pursuant to an Award granted hereunder or otherwise, and such
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restrictions on the transferability of shares of the Stock
acquired pursuant to an Award granted hereunder or otherwise as
the Committee in its sole and absolute discretion shall deem
proper or advisable. Such conditions giving rise to forfeiture
may include, but need not be limited to, the requirement that the
Holder render substantial services to the Corporation, or its
Affiliates for a specified period of time. Such restrictions on
transferability may include, but need not be limited to, options
and rights of first refusal in favor of the Corporation and
shareholders of the Corporation other than the Holder of such
shares of Stock who is a party to this particular Agreement or a
subsequent holder of the shares of Stock who is bound by such
Agreement.
In addition, the Committee may grant cash awards payable in
connection with the exercise of an Award the terms and conditions
of such awards to be such as the Committee in it sole discretion
deems appropriate; provided, however, that no such cash award
shall be effective unless it can comply and does comply with any
applicable requirements for exemption from liability pursuant to
Rule 16b-3 promulgated under the Act.
Notwithstanding the foregoing provisions of this Section 5,
the Chief Executive Officer of the Corporation may, from time to
time, at his sole discretion but subject to the following
provisions of this Section 5, grant Awards to individuals who are
not at the time of grant subject to liability under Section 16(b)
of the Act. The total number of shares of the Restricted Stock or
other Stock, as appropriate, that shall at any time be subject to
grant pursuant to the immediately preceding sentence shall be
specified from time to time by resolution of the Board of
Directors, and such number of shares shall be included within the
number of shares stated in Section 2.1. The Board of Directors
may further limit the authority of the Chief Executive Officer to
grant Awards and may prescribe some or all of the terms of any
such Awards to such an extent as the Board of Directors deems
appropriate.
SECTION 6. Restricted Stock
6.1 Methods of Acquisition. Restricted Stock may be
received by an Eligible Individual either as an Award or as the
result of an exercise of an Option. Restricted Stock shall be
subject to a Restriction Period, after which restrictions will
lapse.
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6.2 Restrictions on Disposal. Except as otherwise
provided in this Section 6 and Section 7 of the Plan, no shares
of Restricted Stock received by an Eligible Individual shall be
sold, exchanged, transferred, pledged, hypothecated or otherwise
disposed of during the Restriction Period.
6.3 Custody of Stock During Restriction Period. The
Committee may require under such terms and conditions as it deems
appropriate or desirable that the certificates for Restricted
Stock delivered under the Plan may be held in custody by a bank
or other institution, or that the Corporation may itself hold
such shares in custody until the Restriction Period expires or
until restrictions thereon otherwise lapse, and may require, as a
condition of receipt of any Restricted Stock that the Eligible
Individual shall have delivered a stock power endorsed in blank
relating to the Restricted Stock.
6.4 Limited Exchange of Restricted Stock. Nothing in
this Section 6 shall preclude an Eligible Individual from
exchanging any shares of Restricted Stock subject to the
restrictions contained herein for any other shares of Stock that
are similarly restricted, but only to the extent such exchanges
are permitted under the terms of this Plan or this Agreement at
the time of the exchange.
SECTION 7. Terms and Conditions of Awards
All Awards granted hereunder shall comply with, be deemed to
include, and shall be subject to the following terms and
conditions:
7.1 Number of Shares. Each Agreement shall state the
number of shares of Stock to which it relates.
7.2 Option Exercise Price. Each Incentive Stock
Option Agreement and Nonstatutory Stock Option Agreement shall
state the exercise price per share of Stock. The exercise price
per share of Stock subject to an Incentive Option shall not be
less than the greater of (a) the par value per share of the Stock
or (b) 100% of the Fair Market Value per share of the Stock on
the date of the grant of the Option. The exercise price per
share of Stock subject to a Nonstatutory Option shall not be less
than fifty percent (50%) of the Fair Market Value per share of
the Stock on the date of the grant of the Option.
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7.3 Medium and Time of Payment, Method of Exercise,
and Withholding Taxes. The exercise price of an Option shall be
payable upon the exercise of the Option (i) in cash, (ii) by
check payable to the order of the Corporation, (iii) with the
consent of the Committee, with shares of Stock of the Corporation
owned by the Holder for at least six (6) months, or (iv) by a
combination of cash and such shares.
Exercise of an Option shall not be effective until the
Corporation has received written notice of exercise. Such notice
must specify the number of whole shares to be purchased and be
accompanied by payment in full of the aggregate exercise price of
the number of shares purchased. The Corporation shall not in any
case be required to sell, use, or deliver a fractional share of
Stock with respect to any Award.
The Committee may, in its discretion, require a Holder to
pay to the Corporation at the time of exercise of an Option or
portion thereof or the lapse of a Restriction Period, as
applicable, the amount that the Corporation deems necessary to
satisfy its obligation to withhold federal, state or local income
or other taxes incurred by reason of the exercise. Where the
exercise of an Option or lapse of a Restriction Period does not
give rise to an obligation to withhold federal income or other
taxes on the date of exercise, the Corporation may, in its
discretion, require a Holder to place unrestricted shares of
Stock, which may be the shares received upon exercise of the
Option or released by the lapse of the Restriction Period, in
escrow for the benefit of the Corporation until such time as
federal income or other tax withholding is no longer required
with respect to such shares or until such withholding is required
on amounts included in the gross income of the Holder as a result
of the exercise of an Option, the disposition of shares of Stock
acquired pursuant thereto or the lapse of the Restriction Period.
At such later time, the Corporation, in its discretion, may
require a Holder to pay to the Corporation the amount that the
Corporation deems necessary to satisfy its obligation to withhold
federal, state or local income or other taxes incurred by reason
of the exercise of the Option, the disposition of shares of Stock
or the lapse of the Restriction Period. Upon receipt of such
payment by the Corporation, such shares of Stock shall be
released from escrow to the Holder.
7.4 Term, Time of Exercise, and Transferability of
Awards and Options. In addition to such other terms and
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conditions as may be included in a particular Agreement granting
an Award, the rights of a Holder under an Award shall be
exercisable during a Holder's lifetime only by him or her or by
his or her guardian or legal representative. Each Award shall
also be subject to the following terms and conditions:
(a) Termination of Employment or Directorship. The
provisions of this Section 7.4(a) shall apply to the extent
a Holder's Agreement does not expressly provide otherwise.
If a Holder ceases to be employed by at least one of the
employers in the group of employers consisting of the
Corporation and its affiliates because the Holder
voluntarily terminates employment with such group of
employers and the Holder does not remain or thereupon become
a director of the Corporation or one or more of its
Affiliates, or if a Holder voluntarily ceases to be a
director of at least one of the corporations in the group of
corporations consisting of the Corporation and its
Affiliates and the Holder does not remain or thereupon
become an employee of the Corporation or one or more of it's
Affiliates, the Holder shall have the right for thirty (30)
days after such termination or cessation to exercise the
Option with respect to that portion thereof that has become
exercisable and, with respect to Restricted Stock, receive
an additional thirty (30) days for restrictions on such
Restricted Stock to lapse pursuant to the Holder's Agreement
as of the date of the Holder's termination of employment or
cessation of directorship, whichever occurs latest, and
thereafter (i) that portion of the Option shall terminate
and cease to be exercisable and (ii) the shares of
Restricted Stock with respect to which the restrictions
applicable to such Restricted Stock have not lapsed shall
revert to the Corporation.
If a Holder ceases to be employed by at least one of the
employers in the group of employers consisting of the
Corporation and its Affiliates because any of such entities
terminates the Holder's employment for misconduct, (i) the
portion, if any, of an Award or Option that remains
unexercised, including that portion, if any, that pursuant
to the Agreement is not yet exercisable, at the time of the
Holder's termination of employment, shall terminate and
cease to be exercisable as of such time and (ii) the shares
of Restricted Stock with respect to which the restrictions
applicable to such Restricted Stock have not lapsed shall
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revert to the Corporation. "Misconduct" shall be defined in
the Corporation's Personnel Policy and Procedures Manual.
If a Holder ceases to be employed by at least one of the
employers in the group of employers consisting of the
Corporation and its affiliates because one or more of such
entities terminates the employment of the Holder, but not
for misconduct, and the Holder does not remain or thereupon
become a director of the Corporation or one or more of it's
affiliates, the Holder shall have the right for ninety (90)
days after such termination or cessation to exercise the
Option with respect to that portion thereof that has become
exercisable and, with respect to Restricted Stock, receive
an additional ninety (90) days for restrictions on such
Restricted Stock to lapse pursuant to the Holder's Agreement
as of the date of the Holder's termination of employment or
cessation of directorship, whichever occurs latest, and
thereafter (i) that portion of the Option shall terminate
and cease to be exercisable and (ii) the shares of
Restricted Stock with respect to which the restrictions
applicable to such Restricted Stock have not lapsed shall
revert to the Corporation.
With respect to nonemployee director holders, if such a
Holder ceases to be a director of at least one of the
corporations in the group of corporations consisting of the
Corporation and its Affiliates, the Holder shall have the
right for thirty (30) days after such cessation to exercise
the options with respect to that portion thereof that has
become exercisable.
That portion of an Option which is not exercisable on
the date of termination of employment or cessation of
directorship shall terminate and be forfeited to the
Corporation on the date of such termination or cessation.
(b) Disability. The provisions of this Section 7.4(b)
shall apply to the extent a Holder's Agreement does not
expressly provide otherwise. If a Holder ceases to be
employed by at least one of the employers in the group of
employers consisting of the Corporation and its Affiliates
by reason of disability (as defined in section 22(e)(3) of
the Code) and does not remain or thereupon become a director
of the Corporation or one or more of its Affiliates, or if
the Holder is only a director and ceases by reason of such
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disability to be a director of at least one of the
corporations in the group of corporations consisting of the
Corporation and its Affiliates, the Holder shall have the
right for twelve (12) months after the date of termination
of employment with or cessation of directorship of such
group of employers by reason of disability, whichever occurs
latest, to exercise an Option to the extent such Option is
exercisable and, with respect to Restricted Stock, receive
an additional twelve (12) months for restrictions on such
Restricted Stock to lapse pursuant to the terms of the
Holder's Agreement on the date of his termination of
employment or cessation of directorship, and thereafter (i)
the Option shall terminate and cease to be exercisable and
(ii) the shares of Restricted Stock with respect to which
the restrictions applicable to such Restricted Stock have
not lapsed shall revert to the Corporation.
(c) Death. The provisions of this Section 7.4(c)
shall apply to the extent a Holder's Agreement does not
expressly provide otherwise. If a Holder dies while in the
employ of the Corporation or an Affiliate or dies while a
director of the Corporation or an Affiliate, an Option shall
be exercisable by the Holder's legal representatives, heirs,
legatees, or distributees for twelve (12) months following
the date of the Holder's death to the extent such Option is
exercisable and, with respect to Restricted Stock, receive
an additional twelve (12) months for restrictions on such
Restricted Stock to lapse pursuant to the Holder's Agreement
on the Holder's date of death, and thereafter (i) the Option
shall terminate and cease to be exercisable and (ii) the
shares of Restricted Stock with respect to which the
restrictions applicable to such Restricted Stock have not
lapsed shall revert to the Corporation.
Notwithstanding any other provision of this Plan, including
the provisions of items (a), (b), and (c) of this Section 7.4, no
Incentive Option shall be exercisable after the expiration of the
later of ten (10) years from the date it is granted, or the
period specified in Section 4.1, if applicable.
The Committee shall have authority to prescribe in any
Option Agreement that the Option evidenced thereby may be
exercised in full or in part as to any number of shares subject
thereto at any time or from time to time during the term of the
Option, or in such installments at such times during said term as
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the Committee may prescribe. Except as provided above and unless
otherwise provided in any Agreement, an Option may be exercised
at any time or from time to time during the term of the Option.
Such exercise may be as to any or all whole (but no fractional)
shares that have become purchasable under the Award or Option.
Within a reasonable time or such time as may be permitted by
law after (i) the Corporation receives written notice that the
Holder has elected to exercise all or a portion of an Option,
such notice to be accompanied by payment in full of the aggregate
Option exercise price of the number of shares of Stock purchased
or (ii) the Restriction Period with respect to a Holder's
Restricted Stock has lapsed, the Corporation shall deliver a
certificate representing such shares and pay any other amounts
payable in consequence of such exercise. In the event that a
Holder is entitled to receive shares due to his exercise of any
combination of an Incentive Option, or portion thereof, or a
Nonstatutory Stock Option, or a portion thereof and the lapse of
a Restriction Period, separate Stock certificates shall be
issued, one for the Stock subject to the Incentive Option one for
the Stock subject to the Award or Nonstatutory Stock Option, and
one for the released Restricted Stock. The number of the shares
of Stock transferrable due to an exercise of an Option or the
lapse of a Restriction Period under this Plan shall not be
increased due to the passage of time, except as may be provided
in an Agreement. However, this number of such shares of Stock
which are transferrable may increase due to the occurrence of
certain events which are fully described in Section 7.6.
Nothing herein or in any award granted hereunder shall
require the Corporation to issue any shares pursuant to such
Award if such issuance would, in the opinion of counsel for the
Corporation, constitute a violation of the Securities Act of
1933, as amended, or any similar or superseding statute or
statutes, or any other applicable statute or regulation, as then
in effect. At the time of receipt of shares pursuant to an
Award, the Corporation may, as a condition precedent, require
from the Holder of the Award (or in the event of his death, his
legal representatives, heirs, legatees, or distributees) such
written representations, if any, concerning his intentions with
regard to the retention or disposition of the shares being
acquired pursuant to such Award and such written covenants and
agreements, if any, as to the manner of disposal of such shares
as, in the opinion of counsel to the Corporation, may be
necessary to ensure that any disposition by such Holder (or in
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the event of his death, his legal representatives, heirs,
legatees, or distributees), will not involve a violation of the
Securities Act of 1933, as amended, or any similar or superseding
statute or statues, or any other applicable state or federal
statute or regulation, as then in effect.
7.5 Limitation on Aggregate Value of Shares That May
Become First Exercisable During Any Calendar Year Under an
Incentive Option. Except as is otherwise provided in the second
paragraph of Section 7.6 hereof, with respect to any Incentive
Option granted under this Plan, the sum of:
(a) the aggregate Fair Market Value of shares of Stock
subject to such Incentive Option that first become
purchasable in a calendar year under such Incentive Option,
and
(b) the aggregate Fair Market Value of shares of Stock
or stock of any Affiliate (or a predecessor of the
Corporation or an Affiliate) subject to any other incentive
stock option (within the meaning of section 422 of the Code)
of the Corporation or its Affiliates (or a predecessor
corporation of any such corporation), that first become
purchasable in a calendar year under such incentive stock
option
may not (with respect to any Holder) exceed $100,000 or such
other amount as may be specified by section 422 of the Code, with
such Fair Market Value to be determined as of the date the
Incentive Option or such other incentive stock option is granted.
For purposes of this Section 7.5, "predecessor corporation"
means (i) a corporation that was a party to a transaction
described in section 425(a) of the Code (or which would be so
described if a substitution or assumption under such section had
been effected) with the Corporation, (ii) a corporation that, at
the time the new incentive stock option (within the meaning of
section 422 of the Code) is granted, is an Affiliate of the
Corporation or a predecessor corporation of any such
corporations, or (iii) a predecessor corporation of any such
corporations.
7.6 Adjustments Upon Changes in Capitalization,
Merger, Etc. Notwithstanding any other provision hereof, in the
event of any change in the number of outstanding shares of Stock
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(a) effected without receipt of consideration therefor
by the Corporation, by reason of a stock dividend, or split,
combination, exchange of shares or other recapitalization,
merger, or otherwise, in which the Corporation is the
surviving corporation;
(b) by reason of a spin-off to the shareholders of a
part of the Corporation into a separate entity; or
(c) by reason of assumptions and conversions of
outstanding grants due to an acquisition by the Corporation
of a separate entity, then:
(i) the aggregate number and class of the reserved shares, (ii)
the number and class of shares subject to each outstanding Award
and (iii) the exercise price of each outstanding Option shall be
automatically adjusted to accurately and equitably reflect the
effect thereon of such change; provided, however, that any
fractional share resulting from such adjustment may be
eliminated. In the event of a dispute concerning such
adjustment, the Committee has full discretion to determine the
resolution of the dispute. Such determination shall be final,
binding and conclusive. The number of reserved shares or the
number of shares subject to any outstanding Award shall be
automatically reduced by any fraction included therein which
results from any adjustment made pursuant to this Section 7.6.
The following provisions of this Section 7.6 shall apply
unless a Holder's Agreement provides otherwise. The occurrence
of:
(a) a dissolution or liquidation of the Corporation;
(b) a merger or consolidation (other than a merger
effecting a reincorporation of the Corporation in another
state or any other merger or a consolidation in which the
shareholders of the surviving corporation and their
proportionate interests therein immediately after the merger
or consolidation are substantially identical to the
shareholders of the Corporation and their proportionate
interests therein immediately prior to the merger or
consolidation) in which the Corporation is not the surviving
corporation (or survives only as a subsidiary of another
corporation in a transaction in which the shareholders of
the parent of the Corporation and their proportionate
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interests therein immediately after the transaction are not
substantially identical to the shareholders of the
Corporation and their proportionate interests therein
immediately prior to the transaction);
(c) a transaction in which any person becomes the owner
of 50% or more of the total combined voting power of all
classes of stock of the Corporation
shall cause every Award then outstanding to terminate, but (i)
the Holders of each such then outstanding Options shall, in any
event, have the right, immediately prior to such dissolution,
liquidation, merger, consolidation, or transaction, to exercise
such Options, to the extent not theretofore exercised, without
regard to the determination as to the periods and installments of
exercisability made pursuant to a Holder's Agreement if (and only
if) such Options have not at that time expired or been terminated
and (ii) the restrictions applicable to the Holders of Restricted
Stock pursuant to every such terminating award shall lapse
immediately prior to such dissolution, liquidation, merger,
consolidation, or transaction without regard to the determination
as to the periods and installments of vesting of Restricted Stock
made pursuant to a Holder's Agreement if (and only if) such
Restricted Stock has not at that time otherwise reverted to the
Corporation.
7.7 Rights as a Shareholder. A Holder shall have no
right as a shareholder with respect to any shares covered by his
Award until a certificate representing such shares is issued and
delivered to him. No adjustment shall be made for dividends
(ordinary, or extraordinary, whether in cash or other property)
or distributions or other rights for which the record date is
prior to the date such certificate is issued, except as provided
in Section 7.6 hereof.
7.8 Modification, Extension and Renewal of Awards.
Subject to the terms and conditions of and within the limitations
of the Plan, the Committee may modify, extend or renew
outstanding Awards granted under the Plan, or accept the
surrender of Awards outstanding hereunder (to the extent not
theretofore exercised) and authorize the granting of new Awards
hereunder in substitution therefor (to the extent not theretofore
exercised). The Committee may not, however, without the consent
of the Holder, modify any outstanding Awards so as to specify a
higher or lower exercise price as to Options or accept the
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surrender of outstanding Incentive Options and authorize the
granting of new Awards in substitution therefor specifying a
higher or lower exercise price. In addition, no modification of
an Award granted hereunder shall, without the consent of the
Holder, alter or impair any rights or obligations under any Award
theretofore granted hereunder to such Holder under the Plan,
except as may be necessary, with respect to Incentive Options, to
satisfy the requirements of section 422 of the Code.
7.9 Furnish Information. Each Holder shall furnish to
the Corporation all information requested by the Corporation to
enable it to comply with any reporting or other requirement
imposed upon the Corporation by or under any applicable statute
or regulation.
7.10 Obligation to Exercise. The granting of an Option
hereunder shall impose no obligation upon the Holder to exercise
the same or any part thereof.
7.11 Agreement Provisions. The Agreements authorized
under the Plan shall contain such provisions in addition to those
required by the Plan (including, without limitation, restrictions
or the removal of restrictions upon (i) the exercise of an Option
and the retention or transfer or shares thereby acquired and (ii)
Restricted Stock and the lapse of the Restriction Period) as the
Committee shall deem advisable. Each Option Agreement shall
identify the Option evidenced thereby as an Incentive Option or a
Nonstatutory Option, as the case may be, and no Agreement shall
cover both an Incentive Option and a Nonstatutory Option or both
either type of Option and Restricted Stock. Each Agreement
relating to an Incentive Option granted hereunder shall contain
such limitations and restrictions upon the exercise of the
Incentive Option to which it related as shall be necessary for
the Incentive Option to which such Agreement relates to
constitute an incentive stock option, as defined in section 422
of the Code.
7.12 Non-Transferability of Award. An Award granted
under this Plan shall not be transferable except by will or by
the laws of descent and distribution. The Holder may not make
any disposition of an Award or any interest therein. As used in
this Plan, "disposition" means any sale, transfer, encumbrance,
gift, donation, assignment, pledge, hypothecation, or other
disposition, whether similar or dissimilar to those previously
enumerated, whether voluntary or involuntary, and whether during
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the Holder's lifetime or upon or after his death, including, but
not limited to, any disposition by operation of law, by court
order, by judicial process, or by foreclosure, levy, or
attachment, except a transfer by will or by the laws of descent
or distribution. Any attempted disposition in violation of this
Section 7.12 shall be void and ineffective for all purposes.
SECTION 18. Remedies
8.1 Remedies. The Corporation shall be entitled to
recover from a Holder reasonable attorneys' fees incurred in
connection with the enforcement of the terms and provisions of
the Plan and any Agreement whether by an action to enforce
specific performance or for damages for its breach or otherwise.
8.2 Specific Performance. The Corporation shall be
entitled to enforce the terms and provisions of this Section 8,
including the remedy of specific performance, in Dallas, Dallas
County, Texas.
SECTION 9. Duration of Plan
No Awards may be granted hereunder after the date that is
ten (10) years from the earlier of (i) the date the Plan is
adopted by the Board of Directors or (ii) the date the Plan is
approved by the shareholders of the Corporation.
SECTION 10. Amendment of Plan
The Board of directors may, insofar as permitted by law,
with respect to any shares at the time that are not subject to
Awards, suspend or discontinue the Plan or revise or amend it in
any respect whatsoever; provided, however, that, without the
approval of the holders of a majority of the outstanding shares
of voting stock of all classes of the Corporation present and
voting in person or by proxy at a meeting of shareholders, no
such revision or amendment shall (i) cause the Plan to no longer
comply with the requirements of Section 16(b) of the Act, any
rule promulgated thereunder, any successor statute or rule or
other such regulatory requirements, or in any manner cause
Incentive Options issued under it to fail to satisfy the
requirements applicable to incentive stock options as defined in
section 422 of the Code.
SECTION 11. General
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11.1 Application of Funds. The proceeds received by
the Corporation from the sale of shares pursuant to Awards and
Options shall be used for general corporate purposes.
11.2 Right of the Corporation and Affiliates to
Terminate Employment. Nothing contained in the Plan, or in any
Agreement, shall confer upon any Holder the right to continue in
the employ of the Corporation or any Affiliate, or interfere in
any way with the rights of the Corporation or any Affiliate to
terminate his employment any time.
11.3 No Liability for Good Faith Determinations.
Neither the members of the Board of Directors nor any member of
the Committee shall be liable, even if negligent, for any act,
omission, or determination taken or made in good faith with
respect to the Plan or any Award granted under it, and members of
the Board of Directors and the Committee shall be entitled to
indemnification and reimbursement by the Corporation in respect
of any claim, loss, damage, or expense (including attorneys'
fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the
Corporation, and amounts paid in satisfaction of a judgment,
except a judgment based on a finding of bad faith) arising
therefrom to the full extent permitted by law and under any
directors' and officers' liability or similar insurance coverage
that may from time to time be in effect.
11.4 Information Confidential. As partial
consideration for the granting of each Award hereunder, the
Agreement may, in the Committee's sole and absolute discretion,
provide that the Holder shall agree with the Corporation that he
will keep confidential all information and knowledge that he has
relating to the manner and amount of his participation in the
Plan; provided, however, that such information may be disclosed
as required by law and may be given in confidence to the Holder's
spouse, tax and financial advisors, or to a financial institution
to the extent that such information is necessary to secure a
loan. In the event any breach of this promise comes to the
attention of the Committee, it shall take into consideration such
breach in determining whether to recommend the grant of any
future Award to such Holder as a factor militating against the
advisability of granting any such future Award to such
individual.
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11.5 Other Benefits. Participation in the Plan shall
not preclude the Holder from eligibility in any other stock
option of the Corporation or any Affiliate or any old age
benefit, insurance, pension, profit sharing, retirement, bonus,
or other extra compensation plans that the Corporation or any
Affiliate has adopted, or may, at any time, adopt for the benefit
of its employees.
11.6 Execution of Receipts and Releases. Any payment
of cash or any issuance or transfer of shares of Stock to the
Holder, or to his or her legal representative, heir, legatee, or
distributee, in accordance with the provisions hereof, shall, to
the extent thereof, be in full satisfaction of all claims of such
persons hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition
precedent to such payment, to execute a release and receipt
therefor in such form as it shall determine.
11.7 No guarantee of Interests. The Committee, the
Board of Directors and the Corporation, individually and
collectively, do not guarantee the Stock of the Corporation from
loss or depreciation.
11.8 Payment of Expenses. All expenses incident to the
administration, termination, or protection of the Plan,
including, but not limited to, legal and accounting fees, shall
be paid by the Corporation or its Affiliates; provided, however,
that the Corporation or any Affiliate may recover any and all
damages, fees, expenses, and/or costs arising out of any actions
taken by the Corporation to enforce its rights hereunder.
11.9 Corporation Records. Records of the Corporation
or its Affiliates regarding the Holder's period of employment,
termination of employment and the reason therefor, leaves of
absence, re-employment, and other matters shall be conclusive for
all purposes hereunder, unless determined by the Committee to be
incorrect.
11.10 Information. The Corporation and its Affiliates
shall, upon request or as may be specifically required hereunder,
furnish or cause to be furnished, all of the information or
documentation that is necessary or required by the Committee to
perform its duties and functions under the Plan.
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11.11 No Liability of Corporation. The Corporation
assumes no obligation or responsibility to the Holder or his or
her legal representatives, heirs, legatees, or distributions for
any act of, or failure to act on the part of, the Committee.
11.12 Corporation Action. Any action of the Corporation
shall be by resolution of its Board of Directors or by a person
authorized to act by resolution of the Board of Directors.
11.13 Severability. If any provision of this Plan is
held to be illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions hereof, but
such provision shall be fully severable, and the Plan shall be
construed and enforced as if the illegal or invalid provision had
never been included herein.
11.14 Notices. Whenever any notice is required or
permitted hereunder, such notice must be in writing and
personally delivered or sent by mail or by a nationally
recognized courier service. Any notice required or permitted to
be delivered hereunder shall be deemed to be delivered on the
date on which it is personally delivered, or, if mailed, whether
actually received or not, on the third business day after it is
deposited in the United States mail, certified or registered,
postage prepaid, addressed to the person who is to receive it at
the address which such person has previously specified by written
notice delivered in accordance herewith or, if by courier,
twenty-four (24) hours after it is sent, addressed as described
in this Section. The Corporation or a Holder may change, at any
time and from time to time, by written notice to the other, the
address which it or he or she had previously specified for
receiving notices. Until changed in accordance herewith, the
Corporation and each Holder shall specify as its and his or her
address for receiving notices the address set forth in the
Agreement pertaining to the shares to which such notice relates.
11.15 Waiver of Notice. Any person entitled to notice
hereunder may waive such notice.
11.16 Successors. The Plan shall be binding upon the
Holder, his or her legal representatives, heirs, legatees and
distributees upon the Corporation, its successors, and assigns,
and upon the Committee, and its successors.
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11.17 Headings. The titles and headings of Sections are
included for convenience of reference only and are not to be
considered in construction of the provisions hereof.
11.18 Governing Law. All questions arising with respect
to the provisions of the Plan shall be determined by application
of the laws of the State of Texas except to the extent Texas law
is preempted by federal law. Questions arising with respect to
the provisions of an Agreement that are matters of contract law
shall be governed by the laws of the state specified in the
Agreement, except to the extent preempted by federal law and
except to the extent that Texas corporate law conflicts with the
contract law of such state, if different, in which event Texas
corporate law shall govern. The obligation of the Corporation to
sell and deliver Stock hereunder is subject to applicable laws
and to the approval of any governmental authority required in
connection with the authorization, issuance, sale, or delivery of
such Stock.
11.19 Word Usage. Words used in the masculine shall
apply to the feminine where applicable, and wherever the context
of this Plan dictates, the plural shall be read as the singular
and the singular as the plural.
SECTION 12. Approval of Shareholders
The Plan shall take effect on the date it is approved by the
Board of Directors of the Corporation, subject to approval by the
shareholders of the Corporation. If this Plan is not approved by
the holders of a majority of the holders of shares of equity
securities of the Corporation having voting rights and present
and voting in person or by proxy at a meeting of shareholders and
within the period beginning on the date the Board of Directors
adopts the Plan and ending twelve (12) months after the date the
Plan is adopted by the Board of Directors, none of the Options
granted hereunder shall constitute Incentive Options and in the
event that the Plan is not so approved on or before the first
annual meeting of shareholders of the Corporation following the
date the Board of Directors adopts the Plan, if any Awards or
Options are granted under the Plan before the date such
shareholders do approve the Plan to individuals subject to suit
under Section 16b of the Act at the time of grant, such Awards or
Options shall be null, void, and of no force and effect as of
their grant date. If subsequent to the adoption of this Plan,
the rules and regulations promulgated under the Act associated
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with the beneficial treatment of certain events under Section
16(b) of the Act are amended so as to remove a requirement for
shareholder approval listed in this Section 12 or in Section 10,
and the Code does not require shareholder approval, that
requirement for shareholder approval in this Section 12 and
Section 10 shall be automatically deleted from this Plan.
IN WITNESS WHEREOF, El Chico Restaurants, Inc., acting by
and through its officers hereunto duly authorized, has executed
this El Chico Restaurants, Inc. 1995 Stock Plan on this the ___
day of ___________, 1995.
EL CHICO RESTAURANTS, INC.
By:
Print Name:
Title:
P R O X Y
EL CHICO RESTAURANTS, INC.
12200 Stemmons
Suite 100
Dallas, Texas 75234
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints Clayton Killam and Susan Holland
and each of them, as proxies, with power to appoint substitutes,
and hereby authorizes each of them to represent and vote, as
designated below, all of the shares of the common stock, par
value $.10 per share, of El Chico Restaurants, Inc. (the
"Company") held of record by the undersigned at the close of
business on March 14, 1996, at the Annual Meeting of Shareholders
to be held on May 2, 1996, and any adjournment(s) thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE NOMINEES UNDER PROPOSAL 1, FOR PROPOSAL 2
AND AT THE DISCRETION OF THE PROXIES WITH RESPECT TO ANY OTHER
MATTER THAT IS PROPERLY BROUGHT BEFORE THE MEETING.
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SEE REVERSE
SIDE
[X] Please mark your SHARES
IN YOUR NAME
votes as in this example.
FOR WITHHOLD
1. Proposal to elect as
directors of the Company [ ] [ ]
the following persons, to hold office until the
next Annual Meeting of Shareholders of the Company
or until their respective successors have been
duly elected and shall have qualified: Wallace A.
Jones, Grahame N. Clark, Jr., Jack D. Knox, Joseph
V. Mariner, Jr., Joseph S.Thomson.
(Instruction: To withhold authority to vote for
any individual nominee, write that nominee's name
on the space provided below.)
__________________________________________________
FOR AGAINST ABSTAIN
2. Proposal to consider and
approve the El Chico [ ] [ ] [ ]
Restaurants, Inc. 1995
Stock Plan and to ratify
the grant of the stock options
outstanding thereunder.
FOR WITHHOLD
3. In their discretion,
the proxies are authorized [ ] [ ]
to vote upon such other business
as may properly
come before the meeting.
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Please sign exactly as name appears on your stock certificate(s).
When shares are held by joint tenants or tenants in common, both
should sign below. When signing as attorney, executor,
administrator, receiver, trustee or guardian, please so specify
below. When signing as a corporation, please sign in full
corporate name and have signed by the president or other duly
authorized officer(s). If a partnership, please have signed in
the partnership name by the authorized person(s).
SIGNATURE(S)______________________________________________
DATE_________________
SIGNATURE(S)______________________________________________
DATE_________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED
ENVELOPE.
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