<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1997
-----------------------
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to _______________
Commission File Number 1-9684
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CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
- --------------------------------------------------------------------------------
(Full title of plan)
CHART HOUSE ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Name of issuer of securities held pursuant to the plan)
640 North LaSalle Street, Suite 295, Chicago, IL 60610
- --------------------------------------------------------------------------------
(Address of principal executive offices of issuer of securities)
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
CHART HOUSE ENTERPRISES, INC.
RESTAURANT EMPLOYEES 401(k) PLAN
By: The 401(k) Plan Committee
/s/ LEWIS M. JACKSON
Date: June 12, 1998 ____________________________________
Lewis M. Jackson
Chairman
/s/ JOHN L. ANDERSON
____________________________________
John L. Anderson
Member
/s/ CANDACE R. FORSYTHE
____________________________________
Candace R. Forsythe
Member
/s/ KEITH L. HINDENLANG
____________________________________
Keith L. Hindenlang
Member
/s/ SUSAN M. MORLOCK
____________________________________
Susan M. Morlock
Member
/s/ WILLIAM M. SULLIVAN
____________________________________
William M. Sullivan
Member
-2-
<PAGE>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
FINANCIAL STATEMENTS AS OF
DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Chart House Enterprises, Inc.:
We have audited the accompanying statements of net assets available for plan
benefits of the CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
as of December 31, 1997 and 1996, and the related statement of changes in net
assets available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Chart
House Enterprises, Inc. Restaurant Employees 401(k) Plan as of December 31, 1997
and 1996, and the changes in net assets available for plan benefits for the
years then ended, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
San Diego, California
May 15, 1998
<PAGE>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
Statements of Net Assets Available for Plan Benefits
As of December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Cash $ 38 $ -
---------- ----------
Receivable from Trustee 71,125 -
---------- ----------
71,163 -
---------- ----------
Investments, at Market Value:
Total Investment in Master Trust 1,771,421 -
---------- ----------
Total Assets 1,842,584 1,523,567
Less - Excess Contributions Payable (34,517) (744)
Non-Allocable Forfeitures (2,782) (1,810)
Overdeposit of Contribution (22,681) (5,530)
---------- ----------
Net Assets Available for Plan Benefits $1,782,604 $1,515,483
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
Statements of Changes in Net Assets Available for Plan Benefits
For the Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Net Assets Available for Plan Benefits at Beginning of Year $1,515,483 $ -
Transfer from Chart House Enterprises, Inc. Corporate
Employees 401(k) Plan (See Note 1) - 1,523,602
---------- ----------
Receivable from Trustee 1,593 -
Contributions -
Company 66,738 51,484
Participant 324,656 318,072
---------- ----------
392,987 369,556
---------- ----------
Dividend Income and Capital Gain Distributions 42,587 15,106
Net Appreciation in Fair Value from Master
Trust Investments 149,537 16,068
---------- ----------
192,124 31,174
---------- ----------
Net Transfer of Funds - -
---------- ----------
Distributions from Termination, Withdrawals and Excess
Contributions (312,311) (405,761)
---------- ----------
Non-Allocable Forfeitures (5,679) (3,088)
---------- ----------
Net Increase (Decrease) 267,121 (8,119)
---------- ----------
Net Assets Available for Plan Benefits at End of Year $1,782,604 $1,515,483
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
CHART HOUSE ENTERPRISES, INC. RESTAURANT EMPLOYEES 401(k) PLAN
--------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1997 AND 1996
--------------------------
(1) PLAN DESCRIPTION
----------------
Chart House Enterprises, Inc. (the "Company") established the Chart House
Enterprises, Inc. 401(k) (formerly "Thrift") Plan (the "Plan") effective January
1, 1986. The Plan is a defined contribution plan and is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The
Plan is administered by William Mercer Incorporated (the "Administrator") and
all plan investments are held by SBS Trust Company, a division of Smith Barney
Shearson Company (the "Trustee"). Participation in the Plan is available to
substantially all restaurant employees of the Company and its subsidiaries, with
a job title classification of J01 through J99, who have completed at least one
year and 1,000 hours of service and who have reached the age of 21.
Effective January 1, 1996, the assets and liabilities of Chart House Enterprises
Corporate Employees 401(k) Plan (Formerly the Chart House Enterprises, Inc.
401(k) Plan), pertaining to employees with job classification titles from J01
through J99, were transferred to the Plan.
Contributions to the Plan are made by the participants and are matched by the
Company. Participants may contribute from 1% to 10% of their gross pay. The
Company will make a basic matching contribution of 25% of the first 5% of a
participant's contribution, not to exceed 2.5% of employees' earnings or $1,250
for the Plan year, whichever is less, and will make a supplemental quarterly
matching contribution of an additional 25% of the first 5% of a participant's
contribution, not to exceed $1,250 or 1.25% of earnings, whichever is less, if
the Company meets or exceeds targeted results of operations, as determined by
the Board of Directors. Participant contributions are invested by the Plan's
trustee in one or more specified funds (see Note 2) as designated by each
participant. Company contributions are invested based upon the participant's
election to their investment account.
Participants are immediately vested in their own contributions and any
investment earnings thereon. Vesting in the Company's matching contributions
and any investment earnings thereon (the "Employer Accounts") is based on years
of service. A participant vests at the rate of 20% per year and becomes fully
vested after five years of service; however, in the event of termination due to
retirement, disability or death, participants become fully vested regardless of
years of service.
Each participant's account is credited with the participant's contributions and
the participant's share of the Company's contributions, together with earnings
and losses thereon. Forfeitures of non-vested amounts are to be used solely to
offset future Company matching contributions.
Upon termination of service due to retirement or disability, a participant may
elect to receive distribution of benefits in either a lump sum or partial
payments, with remaining balance distributed at the end of the quarter. If the
termination of services is for any other reason, distribution of benefits will
be made in a lump sum payment. Participants may apply for hardship
distributions under certain circumstances.
<PAGE>
The Company reserves the right to amend or terminate the Plan at any time. In
the event of termination of the Plan, the value of each participant's account
will become fully vested and non-forfeitable. In no event may the assets of the
Plan revert to the Company.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Description and Valuation of Investments
- ----------------------------------------
Investment funds available to the participants include (1) an equity fund
(managed by Provident Investment Council) which invests primarily in equity
securities with emphasis on capital appreciation; (2) a balanced fund (managed
by Value Line Asset Management) which invests in both common stocks and higher
quality fixed-income securities with equal emphasis on current income and
capital appreciation; (3) an income fund (managed by Howe & Rusling Investment
Management) which invests in high quality debt securities with emphasis on
current income; (4) a money market fund (managed by Boston Safe Deposit and
Trust Company), which invests in short-term U.S. Government Securities with
emphasis on current income to the extent consistent with preservation of
capital; and (5) the Company stock fund.
Plan investments are held by SBS Trust Company (a division of Smith Barney
Shearson Company) under a trust agreement effective July 1, 1993. Investments
in securities are valued at their quoted market prices.
Master Trust Allocation
- -----------------------
Investment income and administrative expenses relating to the Master Trust are
allocated to the individual plans based on average monthly balances invested by
each plan. The Plan's interest in the assets of the Master Trust is included in
the accompanying statements of net assets available for plan benefits. A
summary of the net assets of the Master Trust as of December 31, 1997 and 1996
is as follows:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Investments, at Market Value:
Equity Account $2,957,197 $2,296,609
Balanced Account 2,217,987 1,686,413
Income Account 503,030 465,498
Money Market Account 906,963 1,001,660
Company Stock 1,030,752 882,151
Contribution and Disbursement (195) 4,500
---------- ----------
7,615,734 6,336,831
Receivables 205,648 11,475
Liabilities (156,196) (65,105)
---------- ----------
Net Assets of the Master Trust $7,665,186 $6,283,201
========== ==========
</TABLE>
<PAGE>
Allocations of the net assets of the Master Trust to participating plans as of
December 31, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
1997 1996
------------------- -------------------
Amount Percent Amount Percent
---------- ------- ---------- -------
<S> <C> <C> <C> <C>
Chart House Enterprises, Inc.
Corporate Employees 401(k) Plan $5,882,582 76.74 $4,767,718 75.88
Chart House Enterprises, Inc.
Restaurant Employees 401(k) Plan 1,782,604 23.26 1,515,483 24.12
---------- ------ ---------- ------
$7,665,186 100.00 $6,283,201 100.00
========== ====== ========== ======
</TABLE>
Income from the Master Trust allocated to the participating plans for the years
ended December 31, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Interest Income $ 50,382 $ 1,623
Income on Equity Account 23,877 20,158
Income on Balanced Account 33,736 31,894
Income on Income Account 33,370 36,948
Income on Money Market Account 40,985 38,592
Income on Common Stock Account 337 453
Income on Contribution and Disbursement Account 402 443
Net Appreciation in Fair Value of Investments 820,514 138,434
---------- --------
Net Investment Income $1,003,603 $268,545
========== ========
</TABLE>
The net appreciation in the fair value of investments in the Master Trust by
major investment category for the years ended December 31, 1997 and 1996 is as
follows:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Equity Account $251,178 $ 384,114
Balanced Account 301,410 226,977
Income Account 7,912 (32,320)
Money Market Account - 11,071)
Common Stock Account 259,884 (443,534)
Contribution and Disbursement Account 130 (7,874)
-------- ---------
Net Appreciation in Fair Value of Investments $820,514 $ 138,434
======== =========
</TABLE>
<PAGE>
Income Tax Status
- -----------------
The Company intends to apply for a determination letter from the Internal
Revenue Service. The Plan administrator and tax counsel believe that the Plan
is currently designed and being operated in compliance with the qualification
requirements of the Internal Revenue Code, and the related trust was tax exempt
as of the financial statement date.
Distributions Due to Terminated Participants
- --------------------------------------------
Account balances for participants that have terminated but have yet to be paid
as of the end of the year have been included in the net assets available for
plan benefits. This amount will be presented as a distribution in the statement
of changes in net assets available for plan benefits when actually paid. At
December 31, 1997 this amount totalled $195.
(3) ADMINISTRATIVE EXPENSES
-----------------------
The Plan's administrative expenses are paid by the Company. These expenses
include, but are not limited to, trustee, legal and accounting fees.
Transaction related costs, such as commissions, are deducted from proceeds at
the time of the transaction.
(4) PARTY-IN-INTEREST AND REPORTABLE TRANSACTIONS
---------------------------------------------
No prohibited transactions with "parties-in-interest", as defined under ERISA,
occurred during 1997.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
of our report included in this Annual Report on Form 11-K for the Chart House
Enterprises, Inc. Restaurant Employees 401(k) Plan into the Chart House
Enterprises Inc.'s previously filed Registration Statement File No. 33-34947 for
the Plan.
ARTHUR ANDERSEN LLP
San Diego, California
June 24, 1998
