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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
AMENDMENT NO 1. TO FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the fiscal Year ended June 28, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from _______ to _________
Commission File Number: 0-16348
PREMIUM RESTAURANT COMPANY
(Name of Small Business Issuer in its Charter)
Minnesota 41-1564262
(State or Other Jurisdiction) (IRS Employer Identification No.)
5555 West 78th Street
Edina, MN 55439-2702
(Address of principal Executive Office)
Registrant's Telephone Number: (612) 941-0108
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, $.01
par value
Check whether the issuer (i) 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 such shorter period that the registrant was required to file such
reports), and (ii) has been subject to such filing requirements for the past 90
days. YES: X NO:
Check if there is no disclosure of delinquent filers in response to item 405 of
Regulation S-B in this form, and no disclosure will 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-KSB for any amendment to
this Form 10-KSB. YES: X NO:
The Company's revenues for its most recent fiscal year were $12,458,000.
On September 18, 1998, the Company has 1,845,939 shares of common stock, $.01
par value, outstanding. The aggregate market value of the shares of voting
stock held by non-affiliates of the Company (persons other than directors and
officers) computed at the average of OTC:BB closing bid and ask prices of $1.25
per share on September 18, 1998, was approximately $1,285,295.
DOCUMENTS INCORPORATED BY REFERENCE: None
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The Form 10-KSB is hereby amended as follows:
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT, is hereby amended to read as
follows:
The persons serving as directors of the Company, and certain information
pertaining to each of them, are as follows:
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
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<S> <C> <C>
L. E. Dan Danford, Jr. Chairman of the Board since 1981 1981
(54) Managing Director, Piper Jaffray Inc.
since 1988; President of the Company
from 1981 to 1988; cofounder of
the Company.
Phillip R. Danford President since 1992; Vice President 1981
(49) from 1983 until 1992; cofounder of
the Company.
Thomas A. Kelm President and CEO of North State Advisors, 1981
(68) Inc. (a Minnesota political consulting
group) since 1980.
</TABLE>
MEETINGS. The Board of Directors met three times during fiscal year 1998. Each
director attended 75% or more of the meetings of the Board of Directors and any
Board committees on which he served.
BOARD COMMITTEES. The AUDIT COMMITTEE, currently comprised of Mssrs. Dan
Danford and Kelm, reviews and evaluates significant matters relating to the
annual audit and internal controls of the Company, determines the scope, and
reviews the results of audits by, and the recommendations of, the Company's
independent auditors and approves additional services to be provided by the
auditors. The Committee did not meet in fiscal year 1998.
The COMPENSATION AND STOCK OPTION COMMITTEE administers the Company's Stock
Option Plan (as described below under "ITEM 10., EXECUTIVE COMPENSATION - STOCK
OPTIONS"). It is currently comprised of Mssrs. Dan Danford and Kelm. This
committee determines the employees to whom options are to be granted, the type
of option to be granted, and the number of shares and purchase price of common
stock covered by each option. The committee also determines the terms and
provisions of the respective option agreements, and construes and interprets the
Company's Plan. The Committee also determines the compensation of all of the
Company's officers. The Committee did not meet in fiscal year 1998.
REMUNERATION OF DIRECTORS. Non-employee directors, currently consisting of
Mssrs. Dan Danford and Kelm, are paid a fee of $1,000 per month for all of their
services. No additional compensation for serving as a director is paid to Mr.
Phillip Danford. Directors may also be reimbursed for out-of-pocket expenses,
if any, incurred in connection with attending meetings of the Board of
Directors. Each director also receives a food charge allowance of $220 per
month at the Company's restaurants. During fiscal year 1998, each of the two
non-employee directors received options to purchase 750 shares.
The Executive Officers of the company are listed in the section "Executive
Officers" in Item 1, "Business" of this Form 10-KSB
ITEM 10 EXECUTIVE COMPENSATION, is hereby amended to read as follows:
The following table depicts the compensation paid to the Company's President,
the sole officer qualifying for such reporting requirements under the rules of
the Securities and Exchange Commission, for services rendered to the Company in
all capacities during each of the past three fiscal years:
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SUMMARY COMPENSATION TABLE
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<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
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NAME AND OTHER ANNUAL STOCK
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS .
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<S> <C> <C> <C> <C> <C>
Phillip R. Danford, 1998 $96,000 0 - (1) 0 shares
President 1997 $96,000 0 - (1) 0
1996 $96,000 $800 - (1) 0
</TABLE>
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(1) Amount is less than reportable under the rules of the Securities and
Exchange Commission.
STOCK OPTIONS
Under the Company's 1984 STOCK OPTION PLAN (the "'84 Plan"), which was closed
for new option grants on November 9, 1993, a total of 21,454 options were, at
the end of fiscal year 1998, outstanding to current employees and non-employee
directors of the Company at prices ranging from $1.50 to $18.00 per share.
Shares of options granted under the '84 Plan, when canceled for any reason, are
no longer available for subsequent option grants.
Under the Company's current 1993 STOCK OPTION PLAN (the "'93 Plan"), a total of
13,500 options were outstanding at the end of fiscal year 1998 to current
employees and to non-employee directors of the Company at prices ranging from
$1.25 to $5.50 per share.
Under the '93 Plan, incentive stock options may be granted to key full-time,
salaried employees of the Company, including officers, to encourage their
continued association with the Company and to enhance their economic interest in
the Company. In addition, under the terms of the '93 Plan, each year on the
date of the Company's annual Shareholder Meeting, non-statutory options to
purchase a total of 1,500 shares are issued to the Company's non-employee
directors.
The '93 Plan is administered by two non-employee directors of the Company who
together serve as the Plan Administrator through the COMPENSATION AND STOCK
OPTION COMMITTEE. The Committee has complete discretion to select employee
optionees and to establish the terms and conditions of each option to an
employee, subject in all cases to the applicable provisions of the Internal
Revenue Code.
The '93 Plan provides a total of 100,000 shares of the Company's common stock be
made subject to options granted thereunder. The '93 Plan provides further that
the exercise price of each option granted is fixed by the Committee; provided,
however, that the option price of each incentive stock option granted may not be
less than 100% of the fair market value of the Company's common stock on the
date the option is granted (110% if granted to a person owning 10% or more of
the Company's outstanding stock) and that the term of an incentive stock option
may not exceed ten years (five years if granted to a shareholder owning 10% or
more of the Company's outstanding stock). Options granted under the '93 Plan
are not transferable and are subject to various other conditions and
restrictions. Shares of canceled options are available for subsequent option
grants under the '93 Plan.
The Committee also may grant options on terms and conditions inconsistent with
those of the Internal Revenue Code applicable to incentive stock options.
However, such grants will be identified as "non-statutory" stock options and are
treated differently for tax purposes than incentive stock options.
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted to the President of the Company during the fiscal
year ended June 28, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table reflects certain information regarding stock options
exercised by the President of the Company during the fiscal year ended June 28,
1998, and unexercised options held as of the end of that fiscal year:
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<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED (2)
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR-END FISCAL YEAR-END
ACQUIRED VALUE (1) --------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
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<S> <C> <C> <C> <C> <C> <C>
Phillip R. Danford 0 $0 8,115 625 $0 $0
</TABLE>
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(1) Market value of underlying securities on date of exercise minus
exercise price.
(2) Market value of underlying securities at year end minus exercise
price.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, is
hereby amended to read as follows:
The following table provides information as of September 25, 1998 concerning the
beneficial ownership of common stock of the Company by the only shareholders
known to the Company to hold more than five percent (5%) of the common stock of
the Company, and by all officers and directors of the Company as a group.
Unless otherwise indicated, all beneficial owners have sole voting and
investment power over the shares held.
<TABLE>
<CAPTION>
NAME AND ADDRESS EXERCISABLE PERCENT POSITION IN
OF BENEFICIAL OWNER SHARES OWNED STOCK OPTIONS, OF CLASS COMPANY
WARRANTS (1)
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<S> <C> <C> <C> <C>
L. E. "Dan" Danford, Jr. 574,796 (2) 404,475 43.5 Chairman,
c/o Premium Restaurant Company Director
5555 West 78th St.
Edina, MN 55439-2702
Phillip R. Danford 158,674 (3) 1,875 8.6 President,
c/o Premium Restaurant Company Director
5555 West 78th St.
Edina, MN 55439-2702
Thomas A. Kelm 87,650 (4) 3,225 4.8 Vice Chairman,
c/o North State Advisors Director
43 Main Street, No E 8-500
Minneapolis, MN 55414
All officers and directors 828,120 417,339 55.0
as a group (4 persons)
</TABLE>
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(1) Number of shares subject to stock options and warrants exercisable
within 60 days of September 1, 1998.
(2) Includes 2,125 shares held by Mr. L.E. Danford's wife to which Mr.
Danford disclaims beneficial ownership.
(3) Includes 2,125 shares held by Mr. P.R. Danford's wife to which Mr.
Danford disclaims beneficial ownership. Also includes 42,900 shares
held by a trust, over which Mr. Phillip Danford shares dispositive
and voting power.
(4) Includes 7,500 shares held by Kelm & Associates, Inc., which is
wholly owned by Mr. Kelm.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, is hereby amended to
read as follows:
On April 9, 1998, L.E. "Dan" Danford, Jr., the Chairman of the Board of
Directors of the Company, purchased 400,000 Units of the Company within the
context of a public offering of the same currently in progress. In addition,
in order to finance certain working capital requirements, during the period
of June 1997 through August 1997, the Company borrowed $400,000 from L.E.
"Dan" Danford, Jr., pursuant to an unsecured 10.5% Promissory Note that is
payable on December 31, 1998. The Company anticipates that it may be
necessary for it to borrow additional funds from Mr. Danford when needed by
the Company in the future. The Company believes that the terms of the
transactions with Mr. Danford were no less favorable to the Company that
those that would have been obtained from any unaffiliated third party for
similar transactions. All future material affiliated transactions and loans
will be made or entered into on terms that are no less favorable to the
Company that those that can be obtained from any
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unaffiliated third party. In addition, all future material affiliated
transactions and loans will be approved by the Company's independent
directors who do not have an interest in the transaction.
SIGNATURES
In accordance with Sections 13 or 15(d) of the Exchange Act, the registrant
causes this Amendment No. 1 on Form 10-KSB to be signed on its behalf by the
undersigned, thereto duly authorized:
Dated: October 25, 1998 Premium Restaurant Company
By /s/ PHILLIP R. DANFORD
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Phillip R. Danford,
President and Director
In accordance with the Exchange Act, this report has been signed bellow by the
following persons on behalf of the registrant and in the capacities indicated on
October 26, 1998.
(Power of Attorney)
Signature Title
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/s/ PHILLIP R. DANFORD President, Director
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Phillip R. Danford
*) /s/ SCOTT P. MCGUIRE Controller
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Scott P. McGuire
*) /s/ L.E. DAN DANFORD, JR. Chairman of the Board, Director
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L.E. "Dan" Danford, Jr.
*) /s/ THOMAS A. KELM Director
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Thomas A. Kelm
*) signed by Phillip R. Danford by Power of Attorney
