<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than 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 Section 240.14a-11(c) or Section 240.14a-12
CHART HOUSE ENTERPRISES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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, 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:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF CHART HOUSE]
CHART HOUSE ENTERPRISES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 2, 1995
To the Stockholders of Chart House Enterprises, Inc.:
The Annual Meeting of Stockholders of Chart House Enterprises, Inc., a
Delaware corporation (the "Company"), will be held at the Del Mar Hilton Hotel,
15575 Jimmy Durante Boulevard, Del Mar, California, on Tuesday, May 2, 1995 at
10:00 a.m. for the following purposes:
1. To elect two directors; and
2. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 17, 1995 as
the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting and any adjournment thereof. A list of such
stockholders will be available for examination by any stockholder, for any
purpose germane to the meeting, during ordinary business hours at the offices
of the Company at 115 South Acacia Avenue, Solana Beach, California, or at the
place where the meeting is to be held, during the ten days prior to the
meeting.
In order to constitute a quorum for the conduct of business at the Annual
Meeting, holders of a majority of all outstanding shares of the Company's
Common Stock must be present in person or be represented by proxy. WE HOPE THAT
YOU WILL TAKE THIS OPPORTUNITY TO TAKE AN ACTIVE PART IN THE AFFAIRS OF THE
COMPANY BY VOTING ON THE BUSINESS TO COME BEFORE THE MEETING, EITHER BY
EXECUTING AND RETURNING THE ENCLOSED PROXY IN THE POSTAGE PAID, RETURN ENVELOPE
PROVIDED OR BY CASTING YOUR VOTE IN PERSON AT THE MEETING.
By Order of the Board of Directors
/s/ William R. Kuntz, Jr.
William R. Kuntz, Jr.
Secretary
Solana Beach, California
March 30, 1995
<PAGE>
CHART HOUSE ENTERPRISES, INC.
115 SOUTH ACACIA AVENUE
SOLANA BEACH, CA 92075
----------------
PROXY STATEMENT
----------------
1995 ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 1995
GENERAL INFORMATION ON THE MEETING
This proxy statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Chart House Enterprises,
Inc., a Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders of the Company to be held on Tuesday, May 2, 1995, at 10:00 a.m.,
at the Del Mar Hilton Hotel, 15575 Jimmy Durante Boulevard, Del Mar,
California, and at any adjournment thereof.
The entire cost of soliciting proxies will be borne by the Company, including
expenses in connection with preparing and mailing proxy solicitation materials.
In addition to the use of the mails, proxies may be solicited by certain
officers, directors and regular employees of the Company, without extra
compensation, by telephone, facsimile transmission or personal interview.
Although there is no formal agreement to do so, the Company will reimburse
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in sending proxies and proxy material to the beneficial
owners of the Company's Common Stock. This proxy statement and accompanying
proxy are first being sent to the stockholders on or about March 29, 1995.
RECORD DATE AND VOTING
Only stockholders of record at the close of business on March 17, 1995 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof. As of March 17, 1995, 8,208,348 shares of the Company's Common Stock
were issued and outstanding, all of which are entitled to be voted at the
meeting. Each stockholder is entitled to one vote for each share of Common
Stock held on all matters to come before the meeting. A list of stockholders
will be available for examination by stockholders at the Annual Meeting.
The presence, either in person or by proxy, of persons entitled to vote a
majority of the outstanding shares of the Company's Common Stock is necessary
to constitute a quorum for the transaction of business at the Annual Meeting. A
stockholder giving a proxy may revoke it at any time before it is voted by
filing with the Secretary of the Company written notice of revocation or by
appearing at the meeting and voting in person. A prior proxy is automatically
revoked by a stockholder giving a valid proxy bearing a later date. Shares
represented by all valid proxies will be voted in accordance with the
instructions contained in the proxies. In the absence of instructions, shares
represented by valid proxies will be voted for all nominees listed herein under
"Election of Directors."
The election of directors will be determined by a plurality of the votes
cast, while approval of any other items will require the affirmative vote of
the holders of a majority of the shares present in person or by proxy and
entitled to vote at the meeting. In the case of shares that are present at the
Annual Meeting for quorum purposes, not voting those shares for a particular
nominee for director (including by withholding authority on the proxy) will not
operate to prevent the election of that nominee if he otherwise receives
affirmative votes; but, not voting those shares on any other item (including by
abstaining on the proxy, or due to a broker "non-vote" which results when a
broker holding shares for a beneficial owner has not received timely voting
instructions from the beneficial owner) will operate to prevent approval of the
item to the same extent as a vote against approval of the item.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 17, 1995 (unless otherwise
indicated in a footnote), information concerning the beneficial ownership of
voting securities of the Company by the persons who are known by the Company to
own beneficially more than 5% of the outstanding shares of the Company's voting
stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
-------------- ------------------- ----------------- --------
<S> <C> <C> <C>
Common Stock........ Metropolitan Life Insurance Co. 1,908,225(2) 22.1%
One Madison Avenue
New York, New York 10010-3690
Common Stock........ Robert L. Emerson 1,637,000(3) 19.9%
375 Park Avenue
New York, New York 10152
Common Stock........ ICM Asset Management, Inc. 697,300(4) 8.5%
West 601 Main Ave., Suite 917
Spokane, Washington 99201
Common Stock........ John M. Creed 560,153(5) 6.8%
115 South Acacia Avenue
Solana Beach, California 92075
</TABLE>
--------
(1) Unless otherwise indicated in a footnote, each person listed as a
beneficial owner has sole voting and investment power.
(2) Includes 1,477,575 shares owned directly by Metropolitan Life Insurance
Company ("Metropolitan") and 430,650 shares which Metropolitan has the
right to acquire upon exercise of a warrant which became exercisable on
September 7, 1993 and expires on September 6, 1997.
(3) As of February 14, 1995, Mr. Emerson, a registered investment adviser, had
sole voting and investment power as to these shares, based on information
set forth in a Schedule 13G statement.
(4) As of December 31, 1994, ICM Asset Management, Inc., a registered
investment adviser, had sole voting power as to 19,000 shares, shared
voting power as to 239,000 shares and shared investment power as to 697,300
shares, based on information set forth in a Schedule 13G statement.
(5) Includes 475,353 shares owned directly by Mr. Creed, 1,800 shares owned by
Mr. Creed in an individual retirement account, 52,000 shares owned by an
independent trustee under trusts established for the benefit of Mr. Creed's
two daughters, and 31,000 shares which Mr. Creed has the right to acquire
upon exercise of vested stock options granted to him under the Company's
1989 Non-Qualified Stock Option Plan and 1992 Stock Option Plan. Mr. Creed
disclaims beneficial ownership as to the 52,000 shares held by the trustee.
2
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of seven members, divided into
three classes of directors serving staggered three-year terms. Two directors
are to be elected at the Annual Meeting to serve for terms expiring at the 1998
Annual Meeting of Stockholders. The term of each director will continue until
his successor is elected and has qualified.
Pursuant to a favorable recommendation by the Nominating Committee, the Board
of Directors has nominated John M. Creed and William M. Diefenderfer III for
election at the Annual Meeting. Each of the nominees is now a director of the
Company with a term expiring at the Annual Meeting and has agreed to serve if
elected. The proxy holders will vote the proxies received by them for the two
nominees, or, in the unlikely event that any nominee becomes unable to serve as
a director, for other persons designated by the Board of Directors.
The following tables set forth certain information with respect to each
nominee and each director whose term of office will continue after the Annual
Meeting.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR TERM
NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRES
---- --- -------------------- --------- -------
<S> <C> <C> <C> <C>
John M. Creed........... 58 Chairman of the Board, President 1985 1995
and Chief Executive Officer of
the Company
William M. Diefenderfer 49 Partner, Wunder, Diefenderfer, 1991 1995
III.................... Cannon & Thelen
</TABLE>
John M. Creed has been President and Chief Executive Officer and a director
of the Company since November 1985 and was named Chairman of the Board in
August 1987.
William M. Diefenderfer III has been a partner in the Washington law firm of
Wunder, Diefenderfer, Cannon & Thelen since May 1991. Mr. Diefenderfer was
Deputy Director of the Office of Management and Budget from February 1989 to
May 1991.
DIRECTORS WHOSE TERMS CONTINUE AFTER THE ANNUAL MEETING
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR TERM
NAME AGE PRINCIPAL OCCUPATION SINCE EXPIRES
---- --- -------------------- --------- -------
<S> <C> <C> <C> <C>
William E. Mayer..... 54 Dean, College of Business and 1990 1997
Management, University of
Maryland
Alan S. McDowell..... 56 Private Investor 1990 1997
Arthur J. Nagle...... 56 Managing Director, Vestar Capital 1985 1996
Partners, Inc.
Harry F. Roberts..... 52 Vice President, Starbucks Coffee 1993 1997
Company
Patrick W. Rose...... 52 Vice Chairman, President and Chief 1989 1996
Executive Officer of Van Camp
Seafoods, Inc.
</TABLE>
3
<PAGE>
William E. Mayer has been Dean of the College of Business and Management,
University of Maryland, since October 1992. From September 1991 to July 1992,
he was Dean of the Simon Graduate School of Business, University of Rochester.
Mr. Mayer was the Chairman of the Board and Chief Executive Officer of CS First
Boston Merchant Bank from January 1990 until January 1991. From December 1988
until January 1990, he was President and Chief Executive Officer of The First
Boston Corporation, an investment banking firm. He is also a director of
Riverwood International Corporation and Hambrecht & Quist, Inc. and a trustee
of the Colonial Group of Mutual Funds.
Alan S. McDowell has been a private investor focusing on the restaurant
industry since 1984. From 1978 to 1983, he started and developed what became
the largest franchisee network of Godfather's Pizza, which he sold to the
franchisor in 1983. Mr. McDowell is also a director of Buffets, Inc., a
restaurant company, and AGCO Corporation, a farm equipment manufacturer.
Arthur J. Nagle has been a Managing Director of Vestar Capital Partners Inc.,
an investment banking firm, since April 1988. From 1978 to April 1988, Mr.
Nagle was a Managing Director of The First Boston Corporation, an investment
banking firm. Mr. Nagle is also a director of La Petite Academy, Inc.
Harry F. Roberts has been Vice President of Starbucks Coffee Company since
July 1993. From 1990 to July 1993, Mr. Roberts was President and Chief
Executive Officer of EvansGroup Portland, which is part of the EvansGroup
multi-state marketing communications network. In 1982 Mr. Roberts founded the
Roberts Group, which merged with the existing Portland office of EvansGroup in
1990.
Patrick W. Rose has been Vice Chairman, President and Chief Executive Officer
of Van Camp Seafoods, Inc. since October 1992. From September 1989 to October
1992, he was a private investor. From 1982 to September 1989, Mr. Rose was
President and Chief Executive Officer of Bumble Bee Seafoods, Inc. Mr. Rose is
also a director of International House of Pancakes, Inc. and Van Camp Seafoods,
Inc.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held six meetings during 1994, two of which were
actions by unanimous written consent. Each director attended at least 75% of
the total number of meetings of the Board of Directors and of Board committees
of which he was a member.
The Board of Directors has established three standing committees, the Audit
Committee, the Compensation Committee and the Nominating Committee.
Audit Committee. The Audit Committee, which held one meeting in 1994, has the
primary responsibility for ensuring the integrity of the financial information
reported by the Company. The Committee's functions include: (i) to make
recommendations concerning the selection of independent auditors; (ii) to
review the scope of the annual audit to be performed by the independent
auditors; (iii) to review the results of those audits; and (iv) to meet
periodically with management and the Company's independent public accountants
to review financial, accounting and internal control matters. The Audit
Committee consists of Messrs. Diefenderfer, McDowell, Roberts and Rose.
Compensation Committee. The Compensation Committee reviews and makes
recommendations to the Board on the compensation and benefits payable to the
officers and key employees of the Company and is responsible for administering
the Company's stock option and incentive compensation plans. The Compensation
Committee held four meetings in 1994. The Compensation Committee consists of
Messrs. Mayer, Nagle, Roberts and Rose.
4
<PAGE>
Nominating Committee. The Nominating Committee, which held one meeting in
1994, is responsible for (i) recommending nominees for election as directors
and for appointment as directors to fill vacancies; (ii) considering any
nominations for election as director submitted by stockholders; and (iii)
making recommendations concerning the organization and size of the Company's
Board of Directors and committees of the Board. The Committee consists of
Messrs. Diefenderfer, Mayer, McDowell and Nagle. Stockholders who want to
submit recommendations of nominees for election as directors should submit the
recommendations to the Company at its executive offices stating in detail the
qualifications of the proposed candidates.
COMPENSATION OF DIRECTORS
The Company pays its outside directors a $2,000 fee plus expenses for each
meeting of the Board of Directors they attend and for each meeting of any
committee of the Board of Directors they attend. If more than one of those
meetings is held on the same or successive days, only one payment is made. A
$1,000 fee is paid in the case of meetings held by conference telephone. No fee
is paid in the case of actions taken by unanimous written consent of the
directors.
EXECUTIVE COMPENSATION
The following table sets forth compensation for services in all capacities to
the Company for the fiscal years ended December 31, 1994, 1993, and 1992, of
those persons who were, at December 31, 1994 (i) the chief executive officer
and (ii) the other four most highly compensated executive officers of the
Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL
COMPENSATION(1) AWARDS
NAME AND PRINCIPAL ----------------------- ------------- ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(2) COMPENSATION($)(3)
------------------ ---- --------- -------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
John M. Creed 1994 235,000 113,141 10,000 1,250
Chairman, President and 1993 225,000 108,013 10,000 2,500
Chief Executive Officer 1992 225,000 39,586 -- 1,250
Harold E. Gaubert, Jr. 1994 155,000 37,000 11,000 1,250
Vice President, Treasurer 1993 150,000 32,652 4,500 2,500
and Chief Financial Officer 1992 130,000 26,359 4,000 1,250
William R. Kuntz, Jr. 1994 155,000 37,000 12,000 1,250
Vice President, General 1993 150,000 32,652 4,500 2,500
Counsel and Secretary 1992 135,000 23,605 6,000 1,250
Douglas E. Kollus 1994 155,000 35,714 16,000 1,250
Vice President; President and 1993 150,000 23,191 4,000 2,500
Chief Operating Officer of 1992 150,000 38,915 3,000 1,250
Islands Restaurants, Inc.
David S. McCoart 1994 145,000 34,285 11,000 1,250
Vice President; Executive 1993 140,000 20,191 4,000 2,500
Vice President--Operations 1992 140,000 28,133 3,000 1,250
of Chart House, Inc.
</TABLE>
--------
(1) Amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers under the Company's 401(k) Plan and Executive Benefit and Wealth
Accumulation Plan.
(2) Non-qualified stock options were granted on February 25, 1992, February 22,
1993, February 14, 1994 and August 4, 1994, have an exercise price equal to
fair market value on those dates ($12.25, $5.875, $12.875 and $7.25
respectively), vest at a rate of 20% per year over five years, and expire
ten years from date of grant.
5
<PAGE>
(3) Includes Company matching contributions on behalf of the executive officer
to the Company's 401(k) Plan and Executive Benefit and Wealth Accumulation
Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERM
INDIVIDUAL GRANTS (2)
----------------------------------------- ------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES PRICE EXPIRATION
NAME (#)(1) IN 1994 ($/SH) DATE 5% ($) 10% ($)
---- ---------- ---------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
John M. Creed........... 10,000 6.1% $12.875 2/14/2004 $ 80,970 $ 205,194
Harold E. Gaubert, Jr... 4,000 2.4% $12.875 2/14/2004 $ 32,388 $ 82,078
7,000 4.3% $ 7.25 8/4/2004 $ 31,916 $ 80,882
William R. Kuntz, Jr.... 5,000 3.1% $12.875 2/14/2004 $ 40,485 $ 102,597
7,000 4.3% $ 7.25 8/4/2004 $ 31,916 $ 80,882
Douglas E. Kollus....... 8,000 4.9% $12.875 2/14/2004 $ 64,776 $ 164,155
8,000 4.9% $ 7.25 8/4/2004 $ 36,476 $ 92,437
David S. McCoart........ 3,000 1.8% $12.875 2/14/2004 $ 24,291 $ 61,558
8,000 4.9% $ 7.25 8/4/2004 $ 36,476 $ 92,437
</TABLE>
--------
(1) Non-qualified stock options were granted on February 14, 1994 and August 4,
1994, have an exercise price equal to fair market value on those respective
dates, vest at a rate of 20% per year over five years, and expire ten years
from date of grant.
(2) Potential realizable value amounts are based on an assumption that the
Company's stock price will appreciate at the annual compounded rates shown
over the ten year option term. There can be no assurances that the stock
price will appreciate at these rates or experience any appreciation at all.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1994 (#)(1) DECEMBER 31, 1994 ($)(2)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John M. Creed........... 0 $ 0 27,000 18,000 $ 7,000 $28,000
Harold E. Gaubert, Jr... 2,167 $11,019 17,500 17,000 $ 3,150 $27,475
William R. Kuntz, Jr. .. 5,000 $23,450 33,300 19,200 $109,125 $27,475
Douglas E. Kollus....... 0 $ 0 12,000 21,000 $ 2,800 $28,200
David S. McCoart........ 5,000 $29,800 24,570 16,000 $ 62,111 $28,200
</TABLE>
--------
(1) Options include incentive stock options issued in 1985 at an exercise price
of $1.54, an option for the purchase of shares issued to Mr. Kuntz in 1988
at an exercise price of $2.31, and non-qualified stock options issued in
1989, 1992, 1993 and 1994 (twice) at exercise prices of $13.50, $12.25,
$5.875, $12.875 and $7.25, respectively.
(2) Value is based on the closing price on the New York Stock Exchange of the
Company's common stock on that date ($9.375). There is no negative value
attributed to options which have exercise prices higher than the closing
market price.
6
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
INTRODUCTION
The Compensation Committee of the Board of Directors is responsible for
reviewing and determining the compensation of the executive officers of the
Company, administering the Company's executive compensation plans, including
incentive compensation, stock option and other employee benefit plans, and
making recommendations to the Board of Directors regarding the adoption of new
executive compensation plans. The Committee consists of four directors who are
not employees of the Company.
COMPENSATION PHILOSOPHY
The Committee's primary objective in developing and administering the
Company's executive compensation system is to attract and motivate a quality
management team to increase stockholder value. The Company's compensation
system emphasizes incentives tied to the attainment of financial performance
goals.
The executive compensation system consists of three major components: base
salary, annual incentive and long-term incentive.
Base Salary. Base salaries for executives are established at a level
commensurate with the executive's position in the Company and relative to
peers in other companies. Annual salary increases generally are made in
recognition of added duties or responsibilities taken on by the executive and
to reflect cost of living increases.
Annual Incentive Compensation. The Company has traditionally relied on
incentive bonus compensation as the most important component of executive
compensation. From the early 1970's through 1992, the Company or its
predecessors maintained for executives and other senior administrative
employees a 5% Bonus Plan, under which quarterly bonus payments were made to
participants from a bonus pool if the Company, or the participant's restaurant
division, achieved budgeted financial goals relating primarily to pre-tax
income before interest expense. In 1993, the 5% Bonus Plan was replaced by a
new Incentive Compensation Plan, which is described below.
Long-Term Incentive. Long-term incentives are provided to Company executives
in the form of annual stock option grants under the Company's 1992 Stock
Option Plan and stock options previously granted under the 1985 and 1989 stock
option plans. The 1992 Stock Option Plan authorizes the grant of options for
the purchase of up to 310,000 shares of Common Stock. As of December 31, 1994,
63,600 shares remained available for option grants under the 1992 Stock Option
Plan. In February and March 1994, the Committee approved the grant of options
for the purchase of a total of 95,000 shares of Common Stock. In August 1994,
the Committee approved a special grant of options for the purchase of 68,000
shares, with the understanding that the special grant would be in lieu of the
regular annual grant of options in February 1995. The Compensation Committee
believes that equity incentives are an effective way of motivating management
to increase value to the stockholder and that stock options are the most
appropriate type of equity incentive given the characteristics of the Company
and its management team.
INCENTIVE COMPENSATION PLAN
During 1992, the Compensation Committee re-evaluated the effectiveness of
the annual incentive component of the Company's executive compensation system
and concluded that the effectiveness of the 5% Bonus Plan, which had been in
place for 20 years, had eroded. During that period Chart House evolved from a
division of another public restaurant company, to a highly leveraged
independent company, and finally to a public company with several operating
divisions. The 5% Bonus Plan had been modified from time to time to keep pace
with the Company's evolution with the result that, by 1992, the plan had
become complicated, difficult to administer and not clearly understood by
participants.
In December 1992, the Compensation Committee, working with management,
approved a new Incentive Compensation Plan, which was then approved by the
Board of Directors effective beginning in 1993. Under the new Incentive
Compensation Plan, annual bonus payments are made to participants (executive
officers
7
<PAGE>
and senior administrative employees) at year-end from a bonus pool equal to
12% of the Company's net income as reported to stockholders. The Compensation
Committee determined that 12% of net income would produce a bonus pool
approximately equal in size to the bonus pool calculated under the 5% Bonus
Plan in a year in which the Company achieves operating results at a level
comparable to its best year of operations. Each participant has a percentage
interest in the bonus pool allocated by the Compensation Committee at the
beginning of the year. In addition to the allocated percentage interests,
approximately 25% of the bonus pool is reserved for the payment of
discretionary bonuses based on outstanding individual performance as
determined by the Compensation Committee based on recommendations made by
management.
The Committee believes that the Incentive Compensation Plan advances three
important objectives: (1) simplicity--it can be easily communicated to and
understood by participants and is simple to administer; (2) team approach--
annual incentive compensation paid to all participants is based on the
financial performance of the Company as a whole rather than any single
restaurant division; and (3) identification with stockholders--the bonus pool
is calculated based on annual net income as audited by the Company's
independent accountants and reported to stockholders in public reports, rather
than an internal calculation of adjusted pre-tax operating income as was the
case under the 5% Bonus Plan. Based on the two years of experience derived
from application of the plan, the Committee is satisfied that the new plan is
achieving these objectives.
1994 EXECUTIVE OFFICER COMPENSATION
Salaries paid to executive officers in 1994 were slightly higher than in
1993, generally in line with increases in the cost of living.
Bonus compensation paid to executive officers for 1992 was determined
primarily based on the formula established under the 5% Bonus Plan and for
1993 and 1994 was determined under the Incentive Compensation Plan. Bonus
compensation increased from 1992 to 1993 as a result of the Company's improved
financial performance and the determination of bonuses under the new Incentive
Compensation Plan based on the Company's net income. Bonus compensation also
increased from 1993 to 1994 as the Company's net income increased.
In addition, in accordance with the provisions of the Incentive Compensation
Plan, several executive officers received year-end discretionary bonus
payments out of the bonus pool established under that plan in recognition of
individual performance.
1994 CEO COMPENSATION
Compensation to Mr. Creed for 1994 was determined according to the
principles set forth above. Mr. Creed's salary for 1994 increased by $10,000
over 1993. For 1992, his bonus compensation was determined by application of
the formula calculation under the Company's 5% Bonus Plan. Because the Company
failed to achieve established financial performance targets for the year-to-
date as of the end of the third and fourth quarters of 1992, Mr. Creed
received bonus payments only for the first and second quarters, and those
payments were less than budgeted amounts. For 1993 and 1994, Mr. Creed
received an annual bonus determined based on his allocated share of the bonus
pool established under the Incentive Compensation Plan, which was 12% of the
Company's consolidated net income. Stock options for the purchase of 10,000
shares were granted to Mr. Creed in each of 1993 and 1994.
Compensation Committee:
William E. Mayer
Arthur J. Nagle
Harry F. Roberts
Patrick W. Rose
8
<PAGE>
PERFORMANCE GRAPH
The following graph compares cumulative total stockholder return on the
Company's Common Stock with the performance of the Dow Jones Equity Market
Index and a restaurant industry peer group index (Standard Industrial
Classification (SIC) Code 5812--Eating Places) for the five year period ended
December 31, 1994. The graph assumes that the value of an investment in the
Company's Common Stock and each index was $100 on December 31, 1989.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG COMPANY, DOW JONES EQUITY
MARKET INDEX AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period CHART HOUSE DOW JONES
(Fiscal Year Covered) ENTERPRISES MARKET INDEX Peer Group
------------------- ----------- ------------ ----------
<S> <C> <C> <C>
Measurement Pt- / /89 $100 $100 $100
FYE / /90 $71.84 $95.92 $85.88
FYE / /91 $66.99 $124.12 $122.26
FYE / /92 $52.43 $129.96 $156.23
FYE / /93 $93.20 $147.56 $179.39
FYE / /94 $72.82 $144.69 $157.11
</TABLE>
9
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 17, 1995, information concerning
the number of shares of the Company's Common Stock beneficially owned by each
of the directors and nominees for election as director, the executive officers
named in the Summary Compensation Table and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
---------------- -------------------- --------
<S> <C> <C>
John M. Creed................................. 560,153(1) 6.8%
William M. Diefenderfer III................... 14,575(2) *
William E. Mayer.............................. 19,199 *
Alan S. McDowell.............................. 1,000 *
Arthur J. Nagle............................... 29,900 *
Harry F. Roberts.............................. 1,275 *
Patrick W. Rose............................... 10,300(3) *
Harold E. Gaubert, Jr......................... 92,746(4) 1.1%
Douglas E. Kollus............................. 79,933(5) 1.0%
William R. Kuntz, Jr.......................... 86,235(6) 1.0%
David S. McCoart.............................. 88,697(7) 1.1%
All directors and executive officers as a
group (12 persons)........................... 991,584(8) 11.9%
</TABLE>
--------
* Less than one percent.
(1) Includes 475,353 shares owned directly by Mr. Creed, 1,800 shares owned by
Mr. Creed in an individual retirement account, 52,000 shares owned by an
independent trustee for the benefit of Mr. Creed's two daughters and 31,000
shares which Mr. Creed has the right to acquire upon exercise of vested
stock options. Mr. Creed disclaims beneficial ownership as to the 52,000
shares held by the trustee.
(2) Includes 3,000 shares owned directly by Mr. Diefenderfer, 3,255 owned by
Mr. Diefenderfer in an individual retirement account, 720 shares owned in a
supplemental executive retirement plan, 2,100 shares owned by an
independent trustee for the benefit of Mr. Diefenderfer's two sons, and
5,500 owned by his wife. Mr. Diefenderfer disclaims beneficial ownership of
the 5,500 shares owned by his wife.
(3) Includes 5,300 shares owned by Mr. Rose and his wife as trustees of a
family trust and 5,000 shares owned by Mr. Rose in an individual retirement
account.
(4) Includes 69,981 shares owned directly by Mr. Gaubert, 460 shares owned by
Mr. Gaubert in an individual retirement account, 210 shares owned by his
wife in an individual retirement account, 1,065 shares owned by his
daughter, 1,030 shares owned by his son, and 20,000 shares which Mr.
Gaubert has the right to acquire upon exercise of vested stock options.
(5) Includes 64,933 shares owned directly by Mr. Kollus and 15,000 shares which
Mr. Kollus has the right to acquire upon exercise of vested stock options.
(6) Includes 49,835 shares owned directly by Mr. Kuntz and 36,400 shares which
Mr. Kuntz has the right to acquire upon exercise of vested stock options.
(7) Includes 62,127 shares owned directly by Mr. McCoart and 26,570 shares
which Mr. McCoart has the right to acquire upon exercise of vested stock
options.
(8) Includes a total of 136,470 shares which executive officers of the Company
have the right to acquire upon the exercise of vested stock options.
10
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of its Common
Stock, to file reports of ownership and changes of ownership with the
Securities and Exchange Commission and the New York Stock Exchange. Officers,
directors and greater than ten percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on the Company's review of the copies of those forms received by
the Company, or written representations from directors and officers that no
Forms 5 were required to be filed, it appears that no director or officer
failed to file a monthly report of a transaction on a timely basis.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP was the Company's certified public accountant for the
year ended December 31, 1994. During the past fiscal year, the Company also
engaged Arthur Andersen LLP to render certain nonaudit professional services
involving assistance on tax planning matters and general consultations.
The appointment of auditors is approved annually by the Board of Directors,
which is based in part on the recommendations of the Audit Committee. In making
its recommendations, the Audit Committee reviews both the audit scope and
estimated audit fees for the coming year. Arthur Andersen LLP has been selected
by the Audit Committee and approved by the Board of Directors for the current
year. Stockholder approval is not sought in connection with this selection.
Each professional service performed by Arthur Andersen LLP during fiscal 1994
was approved, and the possible effect of such service on the independence of
such firm was considered, by the Audit Committee. Representatives of Arthur
Andersen LLP will be present at the Annual Meeting of Stockholders and will be
given an opportunity to make a statement if they desire to do so and will
respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Any stockholder proposal to be considered for presentation at the 1996 Annual
Meeting of Stockholders must be received by the Company at its executive
offices on or before December 1, 1995 for inclusion in the Company's Proxy
Statement and form of Proxy.
11
<PAGE>
MISCELLANEOUS
The Company knows of no matters other than the foregoing to be brought before
the Annual Meeting, but if any other matter properly comes before the meeting
or any adjournment thereof, it is the intention of the persons named in the
accompanying form of Proxy to vote the proxies in accordance with their best
judgment.
The Annual Report of the Company for the fiscal year ended December 31, 1994
accompanies this Proxy Statement.
EACH STOCKHOLDER WHO DOES NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON
IS URGED TO EXECUTE THE PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
/s/ William R. Kuntz, Jr.
William R. Kuntz, Jr.
Secretary
March 30, 1995
12
<PAGE>
CHART HOUSE ENTERPRISES, INC.
115 South Acacia Avenue
Solana Beach, California 92075
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 2, 1995
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints John M. Creed and Harold E. Gaubert, Jr., or
either of them, as proxies, each with the power to appoint his substitute, to
vote all the shares of common stock of Chart House Enterprises, Inc. held of
record by the undersigned on March 17, 1995, at the Annual Meeting of
Stockholders to be held on May 2, 1995, or any adjournment thereof, as indicated
on the reverse hereof on the proposal for Election of Directors described in the
proxy statement for the meeting, and as those proxies may determine in the
exercise of their best judgment on any other matters which may properly come
before the meeting. IN THE ABSENCE OF SPECIFIC INSTRUCTIONS, THIS PROXY WILL BE
VOTE FOR THE ELECTION OF ALL NOMINEES LISTED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND
MAIL PROMPTLY IN THE ENCLOSED ENVELOPE
-------------
SEE REVERSE
SIDE
-------------
--------------------------------------------------------------------------------
[X] Please mark
votes as in
this example
1. ELECTION OF DIRECTORS:
NOMINEES: John M. Creed and William M. Diefenderfer III
FOR WITHHELD
BOTH FROM BOTH
NOMINEES NOMINEES
[_] [_]
MARK HERE
[_] ________________________________________ FOR ADDRESS
For both nominees, except vote withheld from CHANGE AND
the above nominee: NOTE AT LEFT [_]
Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such.
Signature: ________________________ Date ____________
Signature: ________________________ Date ____________
