<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995.
Commission File Number 1-9079
U.S. RESTAURANT PROPERTIES MASTER L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 41-1541631
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
5310 Harvest Hill Rd., Suite 270, LB 168, Dallas, Texas 75230
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
214-387-1487
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
<S> <C>
Units Representing Limited Partnership New York Stock Exchange
Interests and Evidenced by Depository Receipts
</TABLE>
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
------ ------
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. X
-----
The aggregate market value of the Units (based upon the closing price of
the Units on February 29, 1996, on the New York Stock Exchange) held by
non-affiliates of the Registrant was $111,176,855.
As of February 29, 1996, there were 4,987,003 Units outstanding.
<PAGE>
PART I
ITEM 1. BUSINESS
Reference is made to the information set forth under the caption entitled
"Business and Properties" in Amendment No. 1 to the Registration Statement on
Form S-3 (Registration No. 333-02675) filed by U.S. Restaurant Properties
Master L.P. (the "Partnership") with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended, which
is incorporated herein by reference.
ITEM 2. PROPERTIES
Reference is made to the information set forth under the caption entitled
"Business and Properties" in Amendment No. 1 to the Registration Statement on
Form S-3 (Registration No. 333-02675) filed by the Partnership with the
Commission pursuant to the Securities Act of 1933, as amended, which is
incorporated herein by reference.
PART II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Reference is made to the information set forth under the captions entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Overview," "- Comparison of Year Ended December 31, 1995 to Year
Ended December 31, 1994," "- Comparison of Year Ended December 31, 1994 to
Year Ended December 31, 1993," and "- Liquidity and Capital Resources" in
Amendment No. 1 to the Registration Statement on Form S-3 (Registration No.
333-02675) filed by the Partnership with the Commission pursuant to the
Securities Act of 1933, as amended, which is incorporated herein by reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
The Partnership is a limited partnership (of which U.S. Restaurant
Properties, Inc. is the Managing General Partner) and has no directors or
officers. The executive officers of the Managing General Partner are Robert
J. Stetson, President and Chief Executive Officer, and Fred H. Margolin,
Chairman of the Board, Secretary and Treasurer. They have served in such
positions and as directors since the acquisition of the Managing General
Partner on May 27, 1994. Messrs. Stetson and Margolin are controlling
stockholders and serve as executive officers and directors of the Managing
General Partner (subject to election by its board of directors). The
following is a biographical summary of the experience of the directors and
executive officers of the Managing General Partner.
ROBERT J. STETSON. Mr. Stetson is the President, Chief Executive Officer
and a director of the Managing General Partner. Since 1978, Mr. Stetson has
been primarily engaged in restaurant chain management, including the
acquisition and management of restaurant properties. Prior to 1987, Mr.
Stetson served in several positions with PepsiCo Inc. and its subsidiaries,
including Chief Financial Officer of Pizza Hut. From 1987 until 1992, Mr.
Stetson served as a senior executive in restaurant and retailing subsidiaries
of Grand Metropolitan PLC, the ultimate parent corporation of Burger King.
During this period, Mr. Stetson served as the Chief Financial Officer and
later President - Retail Division of Burger King and Chief Financial Officer
and later Chief Executive Officer of Pearle Vision. As Chief Financial
Officer of Burger King, Mr. Stetson was responsible for managing more than
750 restaurants that Burger King leased to tenants. Mr. Stetson is also a
director of Bayport Restaurant Group and Bugaboo Creek Steakhouse Inc., both
publicly-traded restaurant companies. Mr. Stetson received a Bachelor of Arts
degree from Harvard College and an M.B.A. from Harvard Business School. Mr.
Stetson is 45 years old.
FRED H. MARGOLIN. Mr. Margolin is the Chairman, Secretary, Treasurer and
a director of the Managing General Partner. In 1977, Mr. Margolin founded
Intercon General Agency, a national insurance agency specializing in the
development and marketing of insurance products for financial institutions.
Mr. Margolin served as the Chief Executive Officer of Intercon General Agency
from its inception until its sale to a public company in 1982. In 1979, Mr.
Margolin founded and became the President of American Eagle Premium Finance
Company, one of the largest independent premium finance companies in Texas.
From 1982 through 1988, Mr. Margolin developed and then leased or sold
shopping centers having an aggregate cost of approximately $50,000,000. Mr.
Margolin received a Bachelor of Science degree from the Wharton School of the
University of Pennsylvania and an M.B.A. from Harvard Business School. Mr.
Margolin is 46 years old.
GERALD H. GRAHAM. Mr. Graham is a director of the Managing General
Partner. Mr. Graham is a professor and the Dean of the Barton School of
Business at Wichita State University. Mr. Graham is 58 years old.
DAVID K. ROLPH. Mr. Rolph is a director of the Managing General Partner.
Mr. Rolph is the President of the Tex-Mex restaurant chain, "Carlos O'Kellys"
and the Vice President of Sasnak Management Corp., a restaurant management
company. Mr. Rolph is 47 years old.
DARREL L. ROLPH. Mr. Rolph is a director of the Managing General
Partner. Mr. Rolph is the Secretary of "Carlos O'Kellys" and the President of
the Sasnak Management Corp., a restaurant management company. Mr. Rolph is 59
years old.
EUGENE G. TAPER. Mr. Taper is a director of the Managing General
Partner. Mr. Taper is a certified public accountant and a business consultant
and retired partner, since 1993, of Deloitte & Touche LLP, an international
public accounting firm. Mr. Taper is 59 years old.
SECTION 16(a) REPORTS. Section 16(a) of the Securities and Exchange Act
of 1934, as amended, requires the Managing General Partner, its directors and
executive officers, and persons who beneficially own more than 10 percent of
the Units to file with the SEC initial reports of Unit ownership and reports
of changes in ownership therein. The Managing General Partner, directors and
executive officers of the Managing General Partner, and greater than 10
percent owners of the Units are required by SEC regulation to furnish the
Partnership with copies of all Section 16(a) forms they file.
To the Partnership's knowledge, based solely upon a review of the copies
of such reports furnished to the Partnership and written representations that
no other reports were required during the year ended December 31, 1995, the
Partnership believes that all Section 16(a) filing requirements applicable to
the foregoing Managing General Partner, director, executive officers, and
greater than 10 percent owners were complied with.
The year end report is not required to be filed if there are no
previously unreported transactions or holding to report. Nevertheless, the
Partnership is required to disclose the names of directors, executive
officers and greater than 10 percent owners who did not file the year end
report, unless the Partnership has received a written statement that no
filing was required. As of the date of this report, the Partnership has not
received any such statements.
1
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The Partnership pays the Managing General Partner a non-accountable (no
support is required for payment) annual allowance designed to cover the costs
that the Managing General Partner incurs in connection with the management of
the Partnership and the Properties (other than reimbursements for
out-of-pocket expenses paid to third parties). The allowance is adjusted
annually to reflect any cumulative increases in the Consumer Price Index
occurring after January 1, 1986, and was $585,445 for the year ended December
31, 1995. The allowance is paid quarterly, in arrears.
In addition, to compensate the Managing General Partner for its efforts
and increased internal expenses resulting from additional properties, the
Partnership will pay the Managing General Partner, with respect to each
additional property purchased: (i) a one-time acquisition fee equal to 1% of
the purchase price for such property and (ii) an annual fee equal to 1% of
the purchase price for such property, adjusted for increases in the Consumer
Price Index. For 1995, the one-time acquisition fee equaled $109,238 which
was capitalized and the increased annual fee equaled $29,375. In addition, if
the Rate of Return (as defined in the Partnership Agreement) on the
Partnership's equity in all additional properties exceeds 12% per annum for
any fiscal year, the Managing General Partner will be paid an additional fee
equal to 25% of the cash flow received with respect to such additional
properties in excess of the cash flow representing a 12% rate of return
thereon. However, to the extent the Managing General Partner receives
distributions in excess of those provided by its 1.98% Partnership interest,
such distributions will reduce the fee payable with respect to such excess
cash flow from any additional properties. See "Partnership Allocations" under
"Item 1. Business." Except as provided above, such payments are in addition
to distributions made by the Partnership to the Managing General Partner in
its capacity as a partner in the Partnership. The Partnership may pay or
reimburse the Managing General Partner for payments to affiliates for goods
or other services if the price and the terms for providing such goods or
services are fair to the Partnership and not less favorable to the
Partnership than would be the case if such goods or services were obtained
from or provided by an unrelated third party.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Managing General Partner is responsible for managing the business and
affairs of the Partnership. The Partnership pays the Managing General Partner
a non-accountable (no support is required for payment) annual allowance
(adjusted annually to reflect increases in the Consumer Price Index), plus
reimbursement of out-of-pocket costs incurred to other parties for services
rendered to the Partnership. The allowance for the years ended December 31,
1993, 1994, and 1995 was $528,000, $542,508, and $585,445, respectively. The
allowance is payable quarterly, in arrears. The Partnership's accounts payable
balance includes $187,204 and $135,627 for this allowance as of December 31,
1995 and 1994, respectively. The Managing General Partner paid no
out-of-pocket costs to other parties on behalf of the Partnership during
1993, 1994, and 1995.
To compensate the Managing General Partner for its efforts and increased
internal expenses with respect to additional properties, the Partnership will
pay the Managing General Partner, with respect to each additional property
purchased: (i) a one-time acquisition fee equal to one percent of the
purchase price for such property and (ii) an annual fee equal to one percent
of the purchase price for such property, adjusted for increases in the
Consumer Price Index. For 1995, the one-time acquisition fee equaled
$109,238, which was capitalized, and the increase in the non-accountable
annual fee for 1995 equaled $29,375. In addition, if the Rate of Return (as
defined) on the Partnership's equity in all additional properties exceeds 12
percent per annum for any fiscal year, the Managing General Partner will be
paid an additional fee equal to 25 percent of the cash flow received with
respect to such additional properties in excess of the cash flow representing
a 12 percent Rate of Return thereon. However, to the extent such
distributions are ultimately received by the Managing General Partner in
excess of those provided by its 1.98 percent Partnership interest, they will
reduce the fee payable with respect to such excess flow from any additional
properties.
Pursuant to the terms of the Partnership Agreement, the Managing General
Partner is required to make available to the Partnership an unsecured,
interest-free, revolving line of credit in the principal amount of $500,000
to provide the Partnership with the necessary working capital to minimize or
avoid seasonal fluctuation in the amount of quarterly cash distributions. No
loans were made or were outstanding at any time during the years ended
December 31, 1993, 1994, and 1995. For further information, see "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."
A note receivable of $255,000 from Arkansas Restaurants #10 L.P. was
outstanding at December 31, 1995. The note receivable is due on September 1,
1996, and has an interest rate of 9.0% per annum. As of December 31, 1995,
the Managing General Partner owned 90% of Arkansas Restaurants #10 L.P.
On March 17, 1995, the limited partners granted the Managing General
Partner options to acquire up to 400,000 units, subject to certain
adjustments under anti-dilution provisions. The initial exercise price of
each option is $15.50 which is the average closing price of the depository
receipts for the Units on the New York Stock Exchange for the five trading
days immediately after the date of grant. The options are non-transferable
except by operation of law and are currently fully exercisable. The options
expire on the tenth anniversary of the date as of which the exercise price
is determined.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 23, 1996 U.S. RESTAURANT PROPERTIES MASTER L.P.
By: U.S. RESTAURANT PROPERTIES, INC.,
its Managing General Partner
By: s/Robert J. Stetson
-------------------
Robert J. Stetson
President, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Managing General Partner of the Partnership and in the capacities and on the
dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
s/Robert J. Stetson Director of U.S. Restaurant May 23, 1996
- ------------------- Properties, Inc. (Principal
Robert J. Stetson Executive Officer, Chief Financial
Officer and Principal Accounting
Officer)
s/Fred H. Margolin Director of U.S. Restaurant May 23, 1996
- ------------------ Properties, Inc.
Fred H. Margolin
s/Eugene G. Taper Director of U.S. Restaurant May 23, 1996
- ----------------- Properties, Inc.
Eugene G. Taper
s/Gerald H. Graham Director of U.S. Restaurant May 23, 1996
- ------------------ Properties, Inc.
Gerald H. Graham
s/Darrel Rolph Director of U.S. Restaurant May 23, 1996
- -------------- Properties, Inc.
Darrel Rolph
s/David Rolph Director of U.S. Restaurant May 23, 1996
- ------------- Properties, Inc.
David Rolph
3
<PAGE>
EXHIBIT INDEX
2.1 Amended and Restated Purchase and Sale Agreement dated as of February
3, 1986. (Incorporated by reference to Exhibit 10(a) to Amendment No. 2
to the Registration Statement).
3.1 The original Certificate of Limited Partnership of U.S. Restaurant
Properties Master L.P. (Incorporated by reference to Exhibit 4.3 to
the Registration Statement). Amendments filed on July 1, 1994,
November 7, 1994 and November 30, 1994. (Incorporated by reference to
Exhibit 3.1 to the Registrant's 10-K Annual Report for the year ended
December 31, 1994.)
3.2 Second Amended and Restated Agreement of Limited Partnership of U.S.
Restaurant Properties Master L.P. dated as of March 17, 1995.
(Incorporated by reference to Exhibit 3.2 to the Registrant's 10-K
Annual Report for the year ended December 31, 1994.)
3.3 Certificate of Limited Partnership of U.S. Restaurant Properties
Operating L.P. (Incorporated by reference to Exhibit 4.4 to the
Registrant Statement.) Amendments filed on July 26, 1994 and November
30, 1994. (Incorporated by reference to Exhibit 3.3 to the Registrant's
10-K Annual Report for the year ended December 31, 1994.)
3.4 Second Amended and Restated Agreement of Limited Partnership of U.S.
Restaurant Properties Operating L.P. dated as of March 17, 1995.
(Incorporated by reference to Exhibit 3.4 to the Registrant's 10-K
Annual Report for the year ended December 31, 1994.)
4.1 Deposit Agreement and Form of Depositary Receipt and Application for
Transfer of Depositary Units. (Incorporated by reference to Exhibit
4.5 to Amendment No. 3 to the Registration Statement.) First Amendment
to Deposit Agreement. (Incorporated by reference to Exhibit (4)A to
Registrant's 8-K Current Report dated September 30, 1987.)
10.1 Amendment No. 91 - Burger King Corporation Withdrawal as Special General
Partner and Name Change (Incorporated by reference to Exhibit 10.1 to
the Registrant's 10-Q Report for the period ended September 30, 1994.)
10.2 Consulting Agreement dated April 30, 1987. (Incorporated by reference
to Exhibit 10.2 to the Registrant's 10-K Annual Report for the year
ended December 31, 1987.)
#10.3 Option Agreement, dated as of March 24, 1995, between U.S. Restaurant
Properties Master L.P. and QSV Properties Inc. (Incorporated by
reference to Exhibit 10.3 to the Registrant's 10-K Annual Report for the
year ended December 31, 1994.)
4
<PAGE>
#10.4 Agreement between BKC and Robert J. Stetson regarding sale of QSV
Properties Inc. (Incorporated by reference to Exhibit 10.1 to the
Registrant's 10-Q Report for the period ended June 30, 1994.)
10.5 Letter re change of Registrar and Stock Transfer Agent. (Incorporated by
reference to Exhibit 10.2 to the Registrant's 10-Q Report for the
period ended September 30, 1994.)
10.6 Amended and Restated Secured Loan Agreement dated as of February 15,
1996 between Registrant and various banks. (Incorporated by reference
to Exhibit 10.6 to the Registrant's 10-K Annual Report for the year
ended December 31, 1995.)
10.7 Demand Promissory Note dated as of August 15, 1995, executed by
Arkansas Restaurants #10 L.P. for the benefit of U.S. Restaurant
Properties Operating L.P. (Incorporated by reference to Exhibit 10.7
to the Registrant's Registration Statement on Form S-3, Registration
No. 333-02675.)
10.8 Mortgage Warehouse Facility dated as of May 1996 between the
Registrant and Morgan Keegan Mortgage Company, Inc. (Incorporated by
reference to Exhibit 10.8 to the Registrant's Registration Statement
on Form S-3, Registration No. 333-02675.)
12.1 Subsidiaries of the Registrant. (Incorporated by reference to Exhibit
22.1 to the Registrant's 10-K Annual Report for the year ended December
31, 1994.)
27.1 Financial Data Schedule
__________________
# Management compensatory document.
5
