<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other that the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
FOODMAKER, INC.
(Name of Registrant as Specified in its Charter)
FOODMAKER, INC.
(Name of Person(s) Filing Proxy Statement)
Paying of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-7(i)(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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / 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 of the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
FOODMAKER
January 12, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Foodmaker, Inc. to be held at 2:00 p.m. on Friday, February 16, 1996, at the
Radisson Hotel, Royal Ballroom, 1433 Camino del Rio South, San Diego,
California.
We hope you will attend in person. If you plan to do so, please indicate
in the space provided on the enclosed proxy. Whether you plan to attend the
meeting or not, we urge you to sign, date and return the enclosed proxy as
soon as possible in the postage-paid envelope provided. This will ensure
representation of your shares in the event that you are unable to attend the
meeting.
The matters expected to be acted upon at the meeting are described in
detail in the attached Notice of Meeting and Proxy Statement.
The Directors and Officers of the Company look forward to meeting with
you.
Sincerely,
JACK W. GOODALL
Jack W. Goodall
Chairman, Chief Executive
Officer and President
<PAGE>
FOODMAKER, INC.
9330 Balboa Avenue
San Diego, California 92123
____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on February 16, 1996
The Annual Meeting of Stockholders of Foodmaker, Inc. will be held at
2:00 p.m. on Friday, February 16, 1996, at the Radisson Hotel, Royal
Ballroom, 1433 Camino del Rio South, San Diego, California. The meeting will
be held to vote upon the following proposals:
1. To elect nine directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified;
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
accountants; and
3. To act upon such other matters as may properly come before the meeting
or any postponement or adjournment thereof.
Only stockholders of record at the close of business on December 29,
1995, will be entitled to vote at the meeting.
By Order of the Board of Directors
WILLIAM E. RULON
William E. Rulon, Secretary
San Diego, California
January 12, 1996
<PAGE>
FOODMAKER, INC.
9330 Balboa Avenue
San Diego, California 92123
____________________
PROXY STATEMENT
____________________
ANNUAL MEETING OF STOCKHOLDERS
February 16, 1996
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Foodmaker, Inc., a Delaware corporation
("Foodmaker" or the "Company"), for use at the Annual Meeting of Stockholders
(the "Meeting") to be held at 2:00 p.m. on Friday, February 16, 1996, and all
adjournments and postponements thereof. This Proxy Statement and form of
proxy were mailed to stockholders on or about January 12, 1996.
The cost of preparing, assembling and mailing the Notice of Annual
Meeting of Stockholders, Proxy Statement and form of proxy and the
solicitation of proxies will be paid by Foodmaker.
VOTING
The close of business on December 29, 1995 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote
at the Meeting. On that date, there were 38,802,195 shares of Foodmaker
common stock, $.01 par value (the "Common Stock"), outstanding. Each share is
entitled to one vote on any matter that may be presented for consideration
and action by the stockholders.
Proxies will be voted FOR management's nominees for election as directors
and FOR Proposal 2, unless the stockholder otherwise directs in the proxy.
Where the stockholder has appropriately directed how the proxy is to be
voted, it will be voted accordingly. The proxy may be revoked at any time
before it is voted at the Meeting by submitting written notice of revocation
to the Secretary of Foodmaker, or by filing a duly executed proxy bearing a
later date. A proxy will not be voted if the stockholder who executed it is
present at the Meeting and elects to vote the shares represented thereby in
person.
-1-
<PAGE>
NOMINEES FOR ELECTION AS DIRECTORS
The directors of Foodmaker are elected annually. The term of office of
all present directors expires on the date of the Meeting, at which time all
nine directors are to be elected to serve for the ensuing year and until
their successors are elected and qualified. The nominees of management for
election as directors are set forth below along with certain information
regarding these nominees. Should any nominee become unavailable to serve as a
director, the proxies will be voted for such other person as the Board of
Directors shall designate. To the best of Foodmaker's knowledge, all nominees
are and will be available to serve.
The following table provides certain information about each of the
Company's directors as of January 1, 1996:
Director
Name Age Positions with the Company Since
- ---------------------------- --- -------------------------- --------
Michael E. Alpert(5) 53 Director 1992
Paul T. Carter(2)(5) 73 Director 1991
Charles W. Duddles 55 Executive Vice President, 1988
Chief Administrative Officer,
Chief Financial Officer and
Director
Edward Gibbons(1)(2)(3)(4)(5) 59 Director 1985
Jack W. Goodall(1) 57 Chairman of the Board, 1985
Chief Executive Officer
and President
Leonard I. Green(1)(2)(3)(4) 62 Director 1985
Robert J. Nugent 54 Executive Vice President, 1988
President and Chief Operating
Officer of Jack In The Box
Division and Director
L. Robert Payne(1)(2)(4)(5) 62 Director 1986
Christopher V. Walker 49 Director 1988
__________________________
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Stock Option and Compensation Committees.
(4) Member of the Investment Committee.
(5) Member of the Corporate Oversight Committee.
During the past five years, the business experience, principal
occupations, and the employment of the nominees has been as follows:
Mr. Alpert was a partner in the San Diego Office of the law firm of
Gibson, Dunn & Crutcher for more than five years prior to his retirement on
August 1, 1992. He is currently Advisory Counsel to Gibson, Dunn & Crutcher.
Gibson, Dunn & Crutcher provides legal services from time to time to the
Company.
Mr. Carter has been an insurance consultant for the Government Division
of Corroon & Black Corporation since February 1987. From February 1987 until
December 1990, he was also a consultant to the San Diego Unified School
District on insurance matters. He retired in February 1987 as Chairman and
Chief Executive Officer of Corroon & Black Corporation, Southwestern Region
and as Director and Senior Vice President of Corroon & Black Corporation, New
York.
Mr. Duddles has been Executive Vice President and Chief Administrative
Officer of the Company since May 1988. He has been Chief Financial Officer of
the Company since October 1985 and was Senior Vice President from October
1985 to May 1988. He was previously Vice President and Controller of the
Company from August 1979 to July 1981 and Senior Vice President, Finance and
Administration from August 1981 to October 1985.
-2-
<PAGE>
Mr. Gibbons has been a general partner of Gibbons, Goodwin, van
Amerongen ("GGvA"), successor to Gibbons, Green, van Amerongen ("Gibbons
Green"), an investment banking firm specializing in management buyouts, for
more than five years preceding the date hereof. Mr. Gibbons is also a
director of Robert Half International, Inc.
Mr. Goodall has been President of the Company since April 1970, Chief
Executive Officer of the Company since February 1979 and Chairman since
October 1985. He was also Chairman and Chief Executive Officer of Family
Restaurants, Inc. from January 1994 until his resignation in 1995. He was a
director of Grossmont Bank, a wholly-owned subsidiary of Bancomer, S.A., from
1980 until October 1995, and has been a director of Van Camp Seafood Company,
Inc. since April 1992 and a director of Thrifty Payless, Inc. since October
1992. He has been a director of Ralcorp Holdings, Inc. since March 1994.
Mr. Green has been a general partner of Leonard Green & Partners, an
investment firm, since June 1989. Until June 28, 1989 and for more than five
years preceding that date, he was a partner of Gibbons Green. Mr. Green is
also a director of Horace Mann Companies, Kash n' Karry Food Stores, Inc.,
Australian Resources N.L., Carr-Gottstein Foods Co., Thrifty Payless, Inc.
and United Merchandising Corp.
Mr. Nugent has been Executive Vice President of the Company since
February 1985 and President and Chief Operating Officer of the Jack In The
Box Division of the Company since May 1988. He was Executive Vice President-
Operations and Marketing from February 1985 to May 1988. He was previously
Division Vice President of the Company from August 1979 to April 1982 and
Corporate Vice President-Restaurant Operations from April 1982 through
January 1985.
Mr. Payne was Chairman of the Board of Grossmont Bank, a wholly-owned
subsidiary of Bancomer, S.A., from February 1974 until October 1995, and
President and Chief Executive Officer of Multi-Ventures, Inc. since February
1976. Multi-Ventures, Inc. is a real estate development and investment
company that is also the managing partner of the San Diego Mission Valley
Hilton. He was a principal in the Company prior to its acquisition by its
former parent Ralston Purina Company in 1968.
Mr. Walker has been a Managing Director of Trust Company of the West
since April 1995. He was a general partner of Leonard Green & Partners, an
investment firm, from September 1989 until March 1995. He was associated with
Gibbons Green from November 1985 and was a partner thereof from January 1989
until September 1989.
-3-
<PAGE>
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
During fiscal 1995, the Board of Directors had an Executive Committee,
an Audit Committee, a Stock Option Committee, an Investment Committee, a
Corporate Oversight Committee and a Compensation Committee. Foodmaker does
not have a Nominating Committee.
The Executive Committee, consisting of Messrs. Gibbons, Goodall, Green
and Payne, may exercise all the authority of the Board in the management of
the Company in the intervals between meetings of the Board of Directors. In
1995, the Executive Committee held two meetings.
The Audit Committee, consisting of Messrs. Carter, Gibbons, Green, and
Payne, directs the internal and external audit activities of Foodmaker as
deemed appropriate. The Audit Committee held one meeting in 1995.
The Stock Option Committee and the Compensation Committee, both
consisting of Messrs. Gibbons and Green, held no formal meetings in 1995.
However, stock options were granted on several occasions by unanimous written
consents.
The Investment Committee, consisting of Messrs. Gibbons, Green and
Payne, held no meetings in 1995 but took action by unanimous written consent
on one occasion.
The Corporate Oversight Committee, consisting of Messrs. Alpert, Carter,
Gibbons and Payne, which was established to report to the Board of Directors
regarding any conflicts of interest which may arise in the relationship
between the Company and Family Restaurants, Inc., held no meetings in 1995.
In 1995, the Board of Directors held four general meetings and on one
occasion acted by unanimous written consent. Each director, other than Mr.
Gibbons, attended more than 75% of the aggregate of the general meetings and
the meetings of committees on which such director serves.
Directors who are also officers of Foodmaker or its subsidiaries receive
no additional compensation for their services as directors. The independent
directors of the Company receive compensation consisting of an $18,000 annual
retainer and $1,500 for each Board of Directors' meeting attended in person.
No additional compensation is paid for actions taken by the Board of
Directors by written consent or participating in telephonic meetings. Under
the Company's Deferred Compensation Plan for Non-Management Directors, each
independent director may defer any portion or all of such compensation.
Amounts deferred under the plan's equity option are immediately converted to
stock equivalents at the then current market price of the Company's common
stock and matched at a 25% rate by the Company. A director's stock equivalent
account is distributed in cash, based upon the ending number of stock
equivalents and the market value of the Company's common stock, at the
conclusion of the director's service as a member of the Board of Directors.
All of the independent directors have elected to defer their compensation
pursuant to this plan since its adoption on February 17, 1995.
Pursuant to the Company's Non-Employee Director Stock Option Plan,
commencing February 17, 1995 and annually thereafter upon election to the
Board, each independent director also receives a stock option to purchase
10,000 shares of the Company's common stock at the market value, as defined,
on the date of grant.
Additionally, the Company paid Mr. Carter $15,000 in fiscal 1995 and
intends to pay him the same amount in fiscal 1996 for consultation services
relating to insurance matters. Except as described below under "Compensation
Committee Interlocks and Insider Participation", no additional compensation
is paid to other members of the Board of Directors.
-4-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 15, 1995, information
with respect to beneficial ownership of voting securities of the Company by
(i) each person who is known to the Company to be the beneficial owner of
more than 5% of any class of the Company's voting securities, (ii) each
director of the Company, (iii) each executive officer listed in the executive
compensation table herein and (iv) all directors and executive officers of
the Company as a group.
Number of Shares Percent
Beneficially of
Name Owned(1) Class(1)
- --------------------------------------------- ---------------- ---------
The Capital Group Companies, Inc.(2). . . . . . . . 4,262,100 11.0%
The Prudential Insurance Company of America(3). . . 4,132,617 10.7%
Jack W. Goodall . . . . . . . . . . . . . . . . . . 1,088,973 2.8%
Robert J. Nugent. . . . . . . . . . . . . . . . . . 704,771 1.8%
Charles W. Duddles. . . . . . . . . . . . . . . . . 494,793 1.3%
Kenneth R. Williams . . . . . . . . . . . . . . . . 431,206 1.1%
Edward Gibbons(4) . . . . . . . . . . . . . . . . . 349,736 *
Paul L. Schultz . . . . . . . . . . . . . . . . . . 171,903 *
Leonard I. Green(5) . . . . . . . . . . . . . . . . 166,695 *
L. Robert Payne . . . . . . . . . . . . . . . . . . 71,000 *
Paul T. Carter. . . . . . . . . . . . . . . . . . . 28,750 *
Christopher V. Walker . . . . . . . . . . . . . . . 22,000 *
Michael E. Alpert . . . . . . . . . . . . . . . . . 10,000 *
All directors and executive officers
as a group (20 persons) . . . . . . . . . . . . . 4,166,909 10.4%
_________________________
* Less than one percent
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares as of a given date which such person
has the right to acquire within 60 days after such date. For purposes of
computing the percentage of outstanding shares held by each person or
group of persons named above on a given date, any security which such
person or persons has the right to acquire within 60 days after such date
is deemed to be outstanding, but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person. Messrs.
Goodall, Nugent, Duddles, Williams, Gibbons, Schultz, Green, Payne,
Carter, Walker and Alpert have the right to acquire within 60 days of the
above date, 385,000, 200,000, 135,000, 150,000, 10,000, 75,833, 10,000,
46,000, 16,750, 10,000 and 10,000, respectively, of the shares reflected
above as beneficially owned.
(2) According to the most recent filing on Schedule 13G, Capital Guardian
Trust Company and Capital Research and Management Company, operating
subsidiaries of The Capital Group Companies, Inc., exercised as of
December 31, 1994, investment discretion with respect to 2,432,100 and
1,830,000 shares, respectively, and sole voting power with respect to
1,735,700 of such shares, all of which are owned by various institutional
investors. The address of The Capital Group Companies, Inc. is 333
South Hope Street, Los Angeles, CA 90071.
(3) According to the most recent filing on Schedule 13G, The Prudential
Insurance Company of America ("Prudential"), as of November 30, 1995, held
4,114,617 shares in its general account and another 18,000 shares in
various accounts for the benefit of its clients but over which Prudential
may have direct or indirect voting and/or investment discretion.
Prudential's address is Prudential Plaza, Newark, NJ 07102-3777.
(4) Includes 25,000 shares owned by Mr. Gibbons' wife.
(5) Includes 107,235 shares owned by TG Limited, a general partnership in
which Mr. Green is the managing partner.
-5-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the annual and
long-term compensation of the Company's chief executive officer and the other
four most highly compensated executive officers of the Company for services
in all capacities to the Company and its subsidiaries during the fiscal years
indicated. Bonus amounts were accrued during the year and paid shortly
thereafter.
<TABLE>
<CAPTION>
Securities All Other
----------Annual Compensation-------- Underlying Compensa-
Name and Position Year Salary($) Bonus($) Other($)<F1> Options(#) -tion($)<F2>
- ----------------------------------------- ---- --------- -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jack W. Goodall <F3> 1995 648,867 120,000 27,436 - 1,344
Chairman of the Board, Chief Executive 1994 631,951 - 62,138 35,000 1,344
Officer and President 1993 563,077 - 87,943 - 1,344
Robert J. Nugent 1995 382,370 70,000 4,613 - 1,344
Executive Vice President, President and 1994 371,165 - 19,659 25,000 1,344
Chief Operating Officer of 1993 328,461 - 42,380 - 1,344
Jack In The Box Division and Director
Charles W. Duddles 1995 282,370 50,000 8,986 - 1,344
Executive Vice President, Chief 1994 271,165 - 21,438 20,000 1,344
Administrative Officer, Chief Financial 1993 234,615 - 44,666 - 1,344
Officer and Director
Kenneth R. Williams 1995 282,370 40,625 10,087 25,000 1,344
Senior Vice President, Executive Vice 1994 271,165 - 30,075 15,000 1,344
President of Jack In The Box Division 1993 234,615 - 47,588 - 1,344
Paul L. Schultz 1995 208,171 29,250 7,992 22,500 1,032
Vice President, Vice President of 1994 198,420 - 19,462 10,000 787
Operations of Jack In The Box Division 1993 168,923 - 39,094 - 787
- ----------------------------------------
<FN>
<F1> Other annual compensation in 1994 includes approximate automobile
allowances, which were discontinued February 7, 1994, of $17,000 for Mr.
Goodall and $11,000 for Messrs. Nugent, Duddles, Williams and Schultz,
and in 1993, $48,000 for Mr. Goodall, $32,000 for Messrs. Nugent,
Duddles and Williams, and $28,000 for Mr. Schultz. Also included are the
Company's matching contributions to the deferred compensation plan,
which for Mr. Goodall were $19,466 in 1995, $18,959 in 1994 and $28,142
in 1993, for Mr. Williams $8,135 in 1994 and for Mr. Duddles $11,088 in
1993; and reimbursement for executive health benefits for Mr. Goodall of
$7,494 in 1995 and $25,543 in 1994 and for Mr. Williams $10,735 in 1994.
Other included amounts do not exceed 25% of the total other annual
compensation in years when such compensation exceeds the limits of the
lesser of 10% of salary and bonus or $25,000.
<F2> All other compensation represents the premiums on term life insurance
for the benefit of the named executive officer. The Company has no
interest in such insurance policies.
<F3> From January 1994 through April 1995, approximately 50% of Mr. Goodall's
listed annual compensation was charged to Family Restaurants, Inc. where
he also served as Chairman of the Board and Chief Executive Officer. See
"Compensation Committee Interlocks and Insider Participation - Family
Restaurants, Inc. Transactions".
</FN>
</TABLE>
-6-
<PAGE>
Stock Option Grants in Fiscal 1995
Set forth below is information with respect to options granted to Mr.
Williams and Mr. Schultz during the 1995 fiscal year. No options were granted
during the year to the other named executive officers in the Summary
Compensation Table.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
Number of % of Total of Stock Price
Securities Options/SARs Appreciation For
Underlying Granted to Exercise or Option Term
Options/SARs Employees Base Price Expiration --------------------------
Name Granted (#) in Fiscal Year ($/Share) Date 5% 10%
- ------------------- ------------- -------------- ---------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Kenneth R. Williams . . . 25,000 3.1% $5.125 12/11/04 $80,577 $204,198
Paul L. Schultz . . . . . 12,500 1.5% 5.000 01/02/05 39,306 99,609
10,000 1.2% 6.500 08/28/05 40,878 103,593
</TABLE>
Option Exercises in Fiscal 1995 and Fiscal Year-End Values
Set forth below is information with respect to options exercised by the
named executive officers during the 1995 fiscal year, and the number and
value of unexercised stock options held by the named executive officers at
the end of the fiscal year.
<TABLE>
<CAPTION>
Number of
Securities Underlying
Unexercised Value of Unexercised
Options/SARs Held at In-the-Money Options/SARs
Shares Fiscal Year-End at Fiscal Year-End
Acquired on Value ---------------------------- ----------------------------
Name Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jack W. Goodall . . . . . 0 $ 0 385,000 0 $1,050,935 $ 0
Robert J. Nugent. . . . . 0 0 200,000 0 419,143 0
Charles W. Duddles. . . . 0 0 135,000 0 333,919 0
Kenneth R. Williams . . . 0 0 137,500 12,500 232,013 7,813
Paul L. Schultz . . . . . 0 0 66,250 16,250 81,557 4,688
</TABLE>
Report of the Board of Directors and Stock Option Committee on Executive
Compensation
The Board of Directors has the primary responsibility for determining
executive compensation. There are also Compensation and Stock Option
Committees each composed of not less than two non-employee independent
directors. Executive compensation is designed to (a) provide compensation
opportunities that will attract, motivate and retain highly qualified
managers and executives, and (b) provide salary and other rewards that are
closely linked to Company, team, and individual performance, focused on
achievement of annual business plans and longer term incentives linked to
increases in stockholder value. The Chief Executive Officer recommends the
compensation to be paid to executive officers of the Company other than
himself; final determination of the amount of compensation rests with the
non-employee members of the Board of Directors. Board members who are also
executive officers do not participate in discussions about, nor do they vote
on, recommendations concerning their respective compensation.
The Company's executive officer compensation program is comprised of base
salary, bonus opportunity, long-term incentive compensation in the form of
stock options, and other benefits such as health insurance.
It is the objective of the Company to maintain base salaries that are
within the upper mid-range of amounts paid to senior executives with
comparable qualifications, experience and responsibilities at other companies
engaged in the same or similar business as the Company. The Performance Bonus
Plan provides for a bonus as a percent of base salary which is dependent upon
the Company's performance level achieved and the job classification of the
individual.
-7-
<PAGE>
The purpose of the Performance Bonus Plan is to reward key employees,
executives and officers for achievement of corporate and/or division goals
relating to earnings. The performance bonuses for the named executives for
fiscal 1995 were considered appropriate based on the Company's recovery to
profitable operations in the last half of the year and are reflected in the
Summary Compensation Table.
The 1992 Employee Stock Incentive Plan forms the basis for the Company's
long-term incentive plan for officers and key managers. The purpose of the
Plan is to enable the Company and its subsidiaries to attract, retain and
motivate employees by providing for or increasing the proprietary interests
of such employees in the Company. During 1995, a stock option was granted to
Mr. Williams for the purchase of 25,000 shares of Common Stock at $5.125 per
share, exercisable 50% on May 11, 1995 and November 11, 1995. Mr. Schultz
also received stock options for the purchase of 12,500 shares of Common Stock
at $5.00 per share, exercisable 50% on June 2, 1995 and December 2, 1995, and
10,000 shares at $6.50 per share, exercisable one-third on October 2, 1995,
1996 and 1997. All options were granted at the market price on the dates of
grant.
This report is submitted by the Board of Directors and the Stock Option
Committee.
Board of Directors Stock Option Committee
---------------------------------------------- ----------------------
Michael E. Alpert Leonard I. Green Edward Gibbons
Paul T. Carter Robert J. Nugent Leonard I. Green
Charles W. Duddles L. Robert Payne
Edward Gibbons Christopher V. Walker
Jack W. Goodall
This report will not be deemed to be incorporated by reference in any
filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this report by reference.
Compensation Committee Interlocks and Insider Participation
During fiscal 1995, the members of the Board of Directors were primarily
responsible for determining executive compensation. Mr. Goodall, who is an
executive officer and also a member of the Board of Directors, participated
in discussions to the extent of making recommendations concerning the
compensation of executive officers other than himself. In addition, the
Company is a party to the transactions described below in which Edward
Gibbons, Leonard I. Green and/or Christopher V. Walker, who are members of
the Board of Directors, have a material interest.
Transactions with GGvA - Pursuant to an agreement which expired on
December 31, 1994, the Company paid GGvA a monthly fee of $75,000 plus
expenses. Under this agreement, subject to certain conditions, GGvA provided
management consulting and financial planning services to the Company,
including assistance in strategic planning, negotiating and structuring bank
loans and exploring potential acquisitions, mergers and restructurings for
the Company. The contacts and expertise provided in these areas enhanced the
Company's opportunities and management's expertise in these matters.
Mr. Gibbons, who is a director of Foodmaker, is a general partner of GGvA and
GGvA is the general partner of The Fulcrum III Limited Partnership and The
Second Fulcrum III Limited Partnership (collectively "Fulcrum III"), Delaware
limited partnerships. Fulcrum III owned 17,521,106 shares, or approximately
45%, of the Company's common stock until such stock was distributed to the
Fulcrum III partners in November 1995. The specialized consulting services
provided by GGvA did overlap somewhat with Mr. Gibbon's role as director, for
which he did not receive any additional compensation. Since the expiration of
this agreement, the Company has compensated Mr. Gibbons on the same basis as
other independent directors. The amount of the fee paid to GGvA was
determined by negotiations between the management of the Company and GGvA,
and approved by the Board of Directors of the Company. The Company believes
that the terms of its agreement with GGvA were comparable to what could have
been obtained from an unrelated, but equally qualified, third party. Family
Restaurants, Inc. Transactions - On January 27, 1994, Foodmaker, Apollo FRI
Partners, L.P. ("Apollo") and Green Equity Investors, L.P. ("GEI"), whose
general partner is Leonard Green & Partners, acquired Restaurant Enterprises
Group, Inc. ("REGI"), a company that owns, operates and franchises various
restaurant chains
-8-
<PAGE>
including El Torito, Carrows and Coco's. Contemporaneously, REGI changed its
name to Family Restaurants, Inc. ("FRI"). Concurrently, Foodmaker contributed
its entire Chi-Chi's Mexican restaurant chain to FRI in exchange for a 39%
equity interest in FRI, valued at $62 million, a five-year warrant to acquire
111,111 additional shares at $240 per share, which would increase its equity
interest to 45%, and approximately $173 million in cash ($208 million less the
face amount of Chi-Chi's debt assumed, aggregating approximately $35 million).
Apollo and GEI, respectively, contributed $62 million and $29 million in cash
and held approximate 39% and 18% equity positions in FRI. Management of FRI
hold the remaining equity positions in FRI. The net cash received was used by
Foodmaker to repay all of the debt outstanding under its then existing bank
credit facility, which was terminated, and to reduce other debt, to the
extent permitted by the Company's financing agreements, and to provide funds
for capital expenditures and general corporate purposes.
As a result of negative publicity regarding the nutritional value of
Mexican food, and resulting sales declines, FRI wrote off the goodwill
attributable to Chi-Chi's in their fourth quarter ended December 25, 1994.
The Company recorded in its first quarter of 1995 the complete write-down of
its 39% investment in FRI as a result of the goodwill write-off.
During 1995 Mr. Goodall resigned as Chief Executive Officer of FRI and
disposed of his equity interest in FRI for a nominal amount. As part of Mr.
Goodall's separation agreement, FRI forgave the unpaid balance of
approximately $700,000 under the note originally issued by Mr. Goodall as
partial payment for his shares.
Because of FRI's continuing substantial losses and resulting increased
borrowing requirements, the major FRI stockholders were required to purchase
a participation with respect to any additional advances by the banks to FRI.
Rather than become liable for these advances, the Company, by an agreement
dated November 20, 1995, transferred all of its stock and warrants to Apollo.
Since the Company's investment in FRI was previously written off in fiscal
1995, the consummation of this agreement subsequent to the date of the
financial statements will have no effect on the financial condition or
results of operations of the Company.
Pension Table
Retirement Plan. The Company maintains a retirement plan (the "Retirement
Plan"), which was adopted effective October 21, 1985 and restated effective
as of January 1, 1989. The Retirement Plan is a defined benefit plan covering
eligible regular employees employed in an administrative, clerical, or
restaurant hourly capacity who have completed 1,000 Hours of Service and
reached age 21. The Retirement Plan provides that a participant retiring at
age 65 will receive an annual retirement benefit equal in amount to one
percent of Final Average Pay multiplied by Benefit Service plus .4% of Final
Average Pay in excess of Covered Compensation multiplied by Benefit Service,
subject to grandfathered minimum benefit accruals under the previous plan as
of December 31, 1988. The .4% portion of the calculation is limited to a
maximum of 35 years of service. The Employee Retirement Income Security Act
of 1974 ("ERISA") and various tax laws may cause a reduction in the annual
retirement benefit payable under the Retirement Plan. (The preceding
capitalized terms are defined in the Retirement Plan.)
Although normal retirement is age 65, benefits may begin as early as age
55 if service requirements defined in the Retirement Plan are met. Benefits
payable are reduced for early commencement.
Supplemental Retirement Plan. The Company established a non-qualified
supplemental retirement plan for selected executives effective April 2, 1990,
known as the Supplemental Executive Retirement Plan. The plan provides for a
percentage of replacement income based on Service and Final Average
Compensation (each as defined in the plan). The target replacement income
from all Company funded sources based upon a maximum of 30 full years of
service is 60% of Final Average Compensation. For those executives whose
service lengths are less than 30 years, the target percentage of 60% is
reduced by applying a factor determined by dividing the number of full years
of actual service by 30. The plan is unfunded and represents an unsecured
claim against the Company.
Easy$aver Plus Plan. Effective October 21, 1985, the Company adopted the
Foodmaker Savings Investment Plan, currently named the Foodmaker Easy$aver
Plus Plan (the "E$P"), which includes a cash-or-deferred arrangement under
Section 401(k) of the Internal Revenue Code. Eligible regular full-time
employees who have completed at least one year of service and reached age 21
qualify for the E$P. Participants in the E$P may defer up
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<PAGE>
to 12% of their pay on a pre-tax basis. In addition, the Company contributes on
a participant's behalf an amount equal to 50% of the first 4% of compensation
that is deferred by the participant.
Deferred Compensation Plan. Since January 1, 1989, all executive officers
and certain other members of management of the Company have been excluded
from participation in the E$P. Effective April 2, 1990, all such persons were
offered an opportunity to participate in a non-qualified deferred
compensation plan established by the Company. Participants of the plan, known
as the Capital Accumulation Plan for Executives, may defer up to 15% of base
and/or bonus pay. The Company matches 100% of the first 3% of participant
deferrals. Benefits paid under such plan also include an interest component.
The plan is unfunded and participant accounts represent unsecured claims
against the Company.
Summary of Retirement and Other Deferred Benefits. The following table
shows estimated annual benefits payable to participants as a straight life
annuity. The benefits are derived from some or all of the following Company
funded sources: Retirement Plan, Company match dollars in the E$P, Company
match dollars in the Deferred Compensation Plan, Supplemental Retirement Plan
and Social Security (50% of primary insurance amount).
Estimated Annual Benefits Based on Years of Service
Average Annual ---------------------------------------------------
Earnings 10 15 20 25 30
- ------------- -------- -------- -------- -------- --------
$ 100,000. . . . $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000
200,000. . . . 40,000 60,000 80,000 100,000 120,000
300,000. . . . 60,000 90,000 120,000 150,000 180,000
400,000. . . . 80,000 120,000 160,000 200,000 240,000
500,000. . . . 100,000 150,000 200,000 250,000 300,000
600,000. . . . 120,000 180,000 240,000 300,000 360,000
800,000. . . . 160,000 240,000 320,000 400,000 480,000
1,000,000. . . . 200,000 300,000 400,000 500,000 600,000
1,200,000. . . . 240,000 360,000 480,000 600,000 720,000
At October 1, 1995, the number of years of service under the retirement
plans for Messrs. Goodall, Nugent, Duddles, Williams and Schultz was 27, 16,
22, 25 and 20, respectively; and the amount of eligible compensation for each
of these individuals approximates the amounts reflected as salary and bonus
in the Summary Compensation Table.
CERTAIN TRANSACTIONS
At the beginning of the fiscal year, Sharon Payne, daughter of
L. Robert Payne, a director of the Company, held a 20.6% equity interest in
Foodmex, Inc. ("Foodmex"), which franchises and operates ten Jack In The Box
restaurants in Mexico. The majority of the funds invested by Ms. Payne in
Foodmex were loaned to her by Mr. Payne; the loan was secured by Ms. Payne's
equity position in Foodmex. During the year, Mr. Payne acquired the interest
of his daughter in Foodmex and, in December 1995, entirely disposed of all
interest to other Foodmex shareholders. He retains no equity or other
interest in Foodmex.
As a franchisee of the Company, Foodmex has various financial
obligations to the Company for franchise fees and other trade accounts
payable, which had been approximately $280,000 per month but have declined to
approximately $120,000 per month. As a result of the devaluation of the
Mexican Peso, Foodmex encountered severe financial difficulties and became
unable to meet its obligations on a current basis. Therefore, Foodmex has
been required to pay in advance for its food and supplies purchased from the
Company and has entered into an agreement for the payment, over an extended
period without interest, of the accumulated arrearage of approximately
$830,000 and a portion of the royalties accruing during 1996. In addition,
the Company has agreed to waive late charges accrued through December 1995,
upon timely and satisfactory completion of the established payment schedule.
The Company believes the terms of the credit and franchise agreements are no
more favorable to the franchisee than could have been obtained by an entirely
unrelated third party.
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<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of the
Company's Common Stock at the end of each fiscal year since the initial
public offering on March 4, 1992 with the Standard & Poor's ("S&P") 500 Index
and Nations Restaurant News ("NRN") Stock Index for the same period. The
comparison assumes $100 was invested on March 4, 1992 in the Company's Common
Stock and in each of the comparison groups, and assumes reinvestment of
dividends. The Company paid no dividends during the periods.
[A LINE GRAPH CHART WAS INCLUDED HEREIN WHICH GRAPHICALLY
REFLECTED THE FOLLOWING DATA]
March 4, September 27, October 3, October 2, October 1,
1992 1992 1993 1994 1995
-------- ------------- ---------- ---------- ----------
Foodmaker, Inc. 100 70 65 38 38
S&P 500 Index 100 101 113 113 143
NRN Stock Index 100 102 122 124 177
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<PAGE>
COMPLIANCE WITH REPORTING OBLIGATIONS
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, each
executive officer, director and beneficial owner of more than 10% of the
Company's Common Stock is required to file certain forms with the Securities
and Exchange Commission. A report of beneficial ownership of the Company's
Common Stock on Form 3 is due at the time such person becomes subject to the
reporting requirements and a report on Form 4 or Form 5 must be filed to
reflect changes thereafter. Based on written statements and copies of forms
provided to the Company by persons subject to the reporting requirements, the
Company believes that all such reports required to be filed by such persons
during fiscal 1995 were filed on a timely basis, except that late Forms 4
were filed by William F. Motts reflecting the transfer of stock pursuant to a
marital termination agreement; and L. Robert Payne and the Payne Family Trust
upon purchasing stock.
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP as
independent accountants to examine the consolidated accounts of the Company
for the fiscal year ending September 29, 1996, subject to ratification by
stockholders. KPMG Peat Marwick LLP has acted as accountants for Foodmaker
since 1986. The firm will be represented at the Meeting and will have the
opportunity to make a statement and respond to appropriate questions from
stockholders.
OTHER BUSINESS
Foodmaker's management is not aware of any other matters to come before
the Meeting. If any matter not mentioned herein is properly brought before the
Meeting, the persons named in the enclosed proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
best judgment.
STOCKHOLDER PROPOSALS FOR
1997 ANNUAL MEETING
Any stockholder proposal intended to be presented at the 1997 Annual
Meeting of Stockholders and to be included in the Company's proxy statement
and form of proxy for that meeting must be received by the Company, directed
to the attention of the Secretary, on or before September 16, 1996. Any such
proposals must comply in all respects with the rules and regulations of the
Securities and Exchange Commission.
1995 ANNUAL REPORT AND FORM 10-K
A copy of the 1995 Annual Report to Stockholders accompanies this Proxy
Statement. Foodmaker's Annual Report on Form 10-K for the year ended
October 1, 1995, as filed with the Securities and Exchange Commission,
contains detailed information concerning Foodmaker and its operations which
is not included in the 1995 Annual Report. A COPY OF THE 1995 FORM 10-K WILL
BE FURNISHED TO STOCKHOLDERS WITHOUT CHARGE UPON REQUEST IN WRITING TO:
Foodmaker Treasury Department, 9330 Balboa Avenue, San Diego, California
92123-1516.
By Order of the Board of Directors,
WILLIAM E. RULON
WILLIAM E. RULON
Secretary
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<PAGE>
Proxy side one ----------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOODMAKER, INC.
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 16, 1996 AT 2:00 P.M.
RADISSON HOTEL, ROYAL BALLROOM, 1433 CAMINO DEL RIO SOUTH, SAN DIEGO, CA
The undersigned hereby appoints Jack W. Goodall, Charles W. Duddles and
William E. Rulon and each of them, acting by a majority or by one of them if
only one is acting, as lawful proxies, with full power of substitution, for
and in the name of the undersigned, to vote on behalf of the undersigned,
with all the powers the undersigned would possess if personally present at
the Annual Meeting of Stockholders of Foodmaker, Inc., a Delaware corporation
("Foodmaker"), on February 16, 1996, and any postponements or adjournments
thereof. The above named proxies are instructed to vote all the undersigned's
shares of stock on the proposals set forth in the Notice of Annual Meeting
and Proxy Statement as specified on the other side hereof and are authorized
in their discretion to vote upon such other business as may properly come
before the meeting or any postponement or adjournment thereof. This proxy
when properly executed will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted
"FOR" all nominees listed and "FOR" Proposal 2. The Board of Directors
recommends a vote FOR the above proposals.
(Continued, and to be marked, dated and signed, on the other side)
- -------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
FOODMAKER, INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 16, 1996 AT 2:00 P.M.
RADISSON HOTEL, ROYAL BALLROOM
1433 CAMINO DEL RIO SOUTH, SAN DIEGO, CA
Proxy side two --------------------------------------------------------------
Please mark
your votes as
indicated in /X/
this example.
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees AUTHORITY
Nominees: Michael E. Alpert, Paul T. listed (except to vote for all
Carter, Charles W. Duddles, as withheld) nominees listed
Edward Gibbons, Jack W. / / / /
Goodall, Leonard I. Green,
Robert J. Nugent, L. Robert
Payne and Christopher V.
Walker.
(Instruction: To withhold authority to
vote for any individual
nominee, write that nominees
name below.)
- ------------------------------------------
2. Ratification of appointment of KPMG Peat FOR AGAINST ABSTAIN
Marwick LLP as independent accountants. / / / / / /
3. In their discretion, the Proxies are authorized
to vote upon such other business as may
properly come before the meeting.
I plan to attend the meeting. YES NO
/ / / /
STOCKHOLDER
ADDRESS &
SHARE OWNERSHIP
Signature(s)________________________________________ Dated: _____________,1996
Stockholder(s), please sign above exactly as name appears hereon; in the case
of joint holders, all should sign. Fiduciaries should add their full title to
their signature. Corporations should sign in full corporate name by an
authorized officer. Partnerships should sign in partnership name by an
authorized person.
PLEASE SIGN, DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
________________________________________________________________________________
^ FOLD AND DETACH HERE ^
<PAGE>
BALLOT FOODMAKER, INC. BALLOT
Annual Meeting of Stockholders, February 16, 1996
The undersigned votes________________________________(________________________)
shares of stock, with respect to the following:
1. Election of Directors: Michael E. Alpert, Paul T. Carter, Charles W.
Duddles, Edward Gibbons, Jack W. Goodall, Leonard I. Green, Robert J.
Nugent, L. Robert Payne and Christopher V. Walker.
/ / FOR all nominees listed.
/ / FOR all nominees listed except____________________________________
/ / WITHHOLD AUTHORITY to vote for all nominees listed.
2. Ratification of appointment of KPMG Peat Marwick LLP as independent
accountants. / / FOR / / AGAINST / / ABSTAIN
______________________________________________
Stockholder's signature
INSTRUCTION: If ballot is cast by proxy, print stockholder name above or, if
multiple stockholders, print "Proxies Filed" above.
______________________________________________
Proxy signature (if ballot is cast by proxy)
